http://www.tabletpc2.com/Compare.htm
Marketing 1 ends with "Tablets"!
Wednesday, December 29, 2010
Marketing & Life-cycle of Hi-Tech Products
There are two versions of the technology adoption lifecycle model. The original version (introduced in 1957 at Iowa State College) describes the market acceptance of new products in terms of innovators, early adopters, early majority, late majority, and laggards. The process of adoption over time is illustrated as a classic normal distribution or "bell curve."
The second version is an adaptation of the original that includes a gap in the bell curve, between early adopters and the early majority. This essentially splits the adoption process into three distinct phases, an early market and a mainstream market, separated by a period of time called the valley of death.
Both versions of the technology adoption lifecycle are useful tools for understanding the way markets unfold and mature. However the second (valley of death) version typically applies to discontinuous innovations, meaning the product forces the user to change behavior.
This is an area of great confusion because not all high-tech products are discontinuous, in which case the original technology adoption lifecycle applies more than its successor.
Another misinterpretation occurs when marketing folks refer to a market as characterized by "all late adopters." Because both technology adoption models are expressed in terms of a standard bell curve, it means statistically, a random sample of any given market or population must contain: 2.5% innovators, 13.5% early adopters, 33.4% early majority, 33.4% late majority, and 16.0% laggards. So even if an industry is conservative by nature, there will always be a sequence of adoption by different types of buyers.
In either case, the technology adoption model is like Chinese food--you'll be hungry for more guidance in a very short period of time.
The second version is an adaptation of the original that includes a gap in the bell curve, between early adopters and the early majority. This essentially splits the adoption process into three distinct phases, an early market and a mainstream market, separated by a period of time called the valley of death.
Both versions of the technology adoption lifecycle are useful tools for understanding the way markets unfold and mature. However the second (valley of death) version typically applies to discontinuous innovations, meaning the product forces the user to change behavior.
This is an area of great confusion because not all high-tech products are discontinuous, in which case the original technology adoption lifecycle applies more than its successor.
Another misinterpretation occurs when marketing folks refer to a market as characterized by "all late adopters." Because both technology adoption models are expressed in terms of a standard bell curve, it means statistically, a random sample of any given market or population must contain: 2.5% innovators, 13.5% early adopters, 33.4% early majority, 33.4% late majority, and 16.0% laggards. So even if an industry is conservative by nature, there will always be a sequence of adoption by different types of buyers.
In either case, the technology adoption model is like Chinese food--you'll be hungry for more guidance in a very short period of time.
Tuesday, December 28, 2010
Time to help each other....
Please check your mails and contribute:
https://spreadsheets.google.com/ccc?key=tTGebFHBQuVbGRXasfkslGw&hl=en&pli=1#gid=0
https://spreadsheets.google.com/ccc?key=tTGebFHBQuVbGRXasfkslGw&hl=en&pli=1#gid=0
Monday, December 27, 2010
Marketting mantras
The Value of Face-to-Face Marketing in a Virtual Age
An MPI survey found 40 percent of prospects converted to new customers through face-to-face meetings.
By Rob Murphy, Chief Marketing Officer, MC2
There are specific benefits to both face-to-face marketing and virtual communication. Face-to-face interaction will help form the strong bonds that lead to long-lasting business relationships, while virtual communication will keep dialogue going with prospects and customers fresh and lively year-round.
The popularity of communicating virtually—whether through e-mail, instant messaging, LinkedIn, Twitter, or other social media channels—has had a significant impact on the speed at which information can be obtained.
Making the Case for Face-to-Face
Whether considering a trade show, private event, or a mobile tour, face-to-face interactions provide some significant business benefits.
At its core, face-to-face engagement creates a personal connection and builds trust between a company and its target audience. A warm handshake, engaging conversation and getting to know customers and prospects on an individual level can play an important role in forming stronger, more meaningful and profitable business relationships.
The Virtues of Virtual
With all that being said, there is still a place in a company’s sales and marketing strategy for virtual interaction. The secret lies in knowing when tactics such as Webinars, virtual events, and social networking have the most value. Disseminating data, maintaining existing relationships, and connecting a global audience, even at the last minute, are just a few of the strategic ways virtual communication can be leveraged.
Smart Marketers Choose Both
Now that you’re sold on the benefits of both face-to-face and virtual strategies, here’s the good news: You don’t have to exclusively use one over the other. Savvy marketers are building integrated communications plans that marry the benefits of both approaches.
Pre-Show
Pre-show marketing plays an essential role in the success of any trade show program as it helps drive booth traffic and generate quality leads. Virtual communication is a natural fit here, as it lets companies connect with existing customers while also exposing them to prospective customers in a cost-effective manner. For example:
• Promote the event on your Website and in online advertising.
• Use direct e-mail to alert customers and prospects about your presence at a show and set appointments in advance.
• Seek out forums and groups on LinkedIn and participate in the discussion about the show and industry in general. Twitter offers similar opportunities. Be sure to use relevant hashtags so your tweets become part of the thread.
On-Site
While most communication at trade shows will be of the face-to-face variety, there are some interactive tools that can be leveraged to extend the experience virtually. For example:
• Share news with attendees—and those who couldn’t be there—using Twitter, Facebook, LinkedIn, and other social media.
• Publish blog posts each night to recap the day’s events and share interesting observations from the show floor.
• Stream a press conference that will announce important news on your Website.
Post-Show
Virtual communication tools are ideal for all post-event follow-up. They also provide an opportunity to keep customers and prospects engaged long after the show doors have closed.
• Add show photos to your Website or Flickr account, and don’t forget to tag.
• Post a virtual demonstration of new products launched at the show on a special page of your Website. Share the URL with customers and prospects you weren’t able to connect with on-site.
• Secure the final attendee database from show management and use direct e-mail to reach qualified prospects you did not meet at the show.
The Last Word
Clearly, there are specific benefits to both face-to-face marketing and virtual communication. Face-to-face interaction will help form the strong bonds that lead to long-lasting business relationships, while virtual communication will keep dialogue going with prospects and customers fresh and lively year-round.
Before embarking on any marketing program, take the time to carefully evaluate underlying business objectives, outline clear goals and metrics, and proceed with the strategy that will help you get the job done. We bet it will involve some quality face time, along with digital communication.
An MPI survey found 40 percent of prospects converted to new customers through face-to-face meetings.
By Rob Murphy, Chief Marketing Officer, MC2
There are specific benefits to both face-to-face marketing and virtual communication. Face-to-face interaction will help form the strong bonds that lead to long-lasting business relationships, while virtual communication will keep dialogue going with prospects and customers fresh and lively year-round.
The popularity of communicating virtually—whether through e-mail, instant messaging, LinkedIn, Twitter, or other social media channels—has had a significant impact on the speed at which information can be obtained.
Making the Case for Face-to-Face
Whether considering a trade show, private event, or a mobile tour, face-to-face interactions provide some significant business benefits.
At its core, face-to-face engagement creates a personal connection and builds trust between a company and its target audience. A warm handshake, engaging conversation and getting to know customers and prospects on an individual level can play an important role in forming stronger, more meaningful and profitable business relationships.
The Virtues of Virtual
With all that being said, there is still a place in a company’s sales and marketing strategy for virtual interaction. The secret lies in knowing when tactics such as Webinars, virtual events, and social networking have the most value. Disseminating data, maintaining existing relationships, and connecting a global audience, even at the last minute, are just a few of the strategic ways virtual communication can be leveraged.
Smart Marketers Choose Both
Now that you’re sold on the benefits of both face-to-face and virtual strategies, here’s the good news: You don’t have to exclusively use one over the other. Savvy marketers are building integrated communications plans that marry the benefits of both approaches.
Pre-Show
Pre-show marketing plays an essential role in the success of any trade show program as it helps drive booth traffic and generate quality leads. Virtual communication is a natural fit here, as it lets companies connect with existing customers while also exposing them to prospective customers in a cost-effective manner. For example:
• Promote the event on your Website and in online advertising.
• Use direct e-mail to alert customers and prospects about your presence at a show and set appointments in advance.
• Seek out forums and groups on LinkedIn and participate in the discussion about the show and industry in general. Twitter offers similar opportunities. Be sure to use relevant hashtags so your tweets become part of the thread.
On-Site
While most communication at trade shows will be of the face-to-face variety, there are some interactive tools that can be leveraged to extend the experience virtually. For example:
• Share news with attendees—and those who couldn’t be there—using Twitter, Facebook, LinkedIn, and other social media.
• Publish blog posts each night to recap the day’s events and share interesting observations from the show floor.
• Stream a press conference that will announce important news on your Website.
Post-Show
Virtual communication tools are ideal for all post-event follow-up. They also provide an opportunity to keep customers and prospects engaged long after the show doors have closed.
• Add show photos to your Website or Flickr account, and don’t forget to tag.
• Post a virtual demonstration of new products launched at the show on a special page of your Website. Share the URL with customers and prospects you weren’t able to connect with on-site.
• Secure the final attendee database from show management and use direct e-mail to reach qualified prospects you did not meet at the show.
The Last Word
Clearly, there are specific benefits to both face-to-face marketing and virtual communication. Face-to-face interaction will help form the strong bonds that lead to long-lasting business relationships, while virtual communication will keep dialogue going with prospects and customers fresh and lively year-round.
Before embarking on any marketing program, take the time to carefully evaluate underlying business objectives, outline clear goals and metrics, and proceed with the strategy that will help you get the job done. We bet it will involve some quality face time, along with digital communication.
Rob Murphy is the chief marketing officer of MC2,a leader in the exhibit and event marketing industry. Located in the Chestnut Ridge, NY
Saturday, December 4, 2010
Analysis of Reckitt Benckiser.
Going Down the Pyramid
CONCEPT OF THE COMPANY
1800 STARTS!!!
RECKITT COLMAN
Reckitt Benckiser is No. 1 worldwide in its fabric care,
surface care and automatic dishwashing divisions, which
comprise, respectively, 24 percent, 19 percent and 12
percent of its revenue. In the fabric care segment, Reckitt's
brands include stain remover Spray 'n Wash, Woolite fabric
wash for delicate clothing and with America's bubble bath
but rather a solution for limescale buildup in both washing
machines and laundry. Reckitt's surface care leaders include
Lysol, America's No. 1 disinfectant, and Neutra Air,
introduced in 2003, which provides the pleasant scent of an
air freshener as well as acting as a disinfectant--it
purportedly kills odor-causing airborne germs, thereby
freshening a room. The company's washing products are
marketed as Calgonit in most of Europe, and as Vanish in
India.
RECKITT BENCKISER
INDIA LTD.
Reckitt Benckiser India Ltd appointmented Mr. Stefan Gaa
as the Regional Marketing Director, South Asia.
Mr. Gaa, who is replacing Ms Anne Engerant, will be
responsible for the marketing functions in South Asia, which
includes India, Sri-Lanka, Bangladesh and Indonesia. India
is the headquarters for Reckitt Benckiser's South Asia
business and Mr Gaa will be based in the corporate head
office at Gurgaon.
"India is a key market for Reckitt Benckiser and has been
doing well, with double digit growth for the past couple of
years. I am looking forward to this assignment and aim to
drive Reckitt Benckiser India and South Asia to greater
heights," said Mr Stefan Gaa.
Mr Gaa joined Reckitt Benckiser Germany in October 2000
in the marketing team, where he initially worked on Airwick
(a leading air care brand internationally). He then moved on
to working on products such as the automatic dish washing
(ADWD) brand, Calgonit (Finish in India), then to the UK as
Global Brand Manager responsible for ADWD for North
America and developing markets. In April 2005, he moved
as Global Brand Manager, Innovation, before moving to join
the Indian team in September 2006.
SECTORAL SYNOPSIS:-
Fast Moving Consumer Goods
(FMCG)
FMCG IN INDIA
India's rural markets have seen a lot of activity in the last few years.
Since penetration levels are pretty high in most categories, future
growth can come only from deeper rural penetration. FMCG majors
are aggressively looking at rural India since it accounts for 70% of the
total Indian households Despite the strong presence of MNC players,
the unorganized sector has a significant presence in this industry. In
most categories, unorganized sector is almost as big as the organized
sector, if not bigger.
Penetration level as well as per capita consumption in most product
categories like toothpaste, air spray, shoe polish, skin care, hand wash
etc in India is low indicating the untapped market potential.
Around 70 per cent of the total households in India (188 million) reside
in the rural areas. The total number of rural households is expected to
rise from 135 million in 2001-02 to 153 million in 2009-10. This presents
the largest potential market in the world. The annual size of the rural
FMCG market was estimated at around US$ 10.5 billion in 2001-02.
With growing incomes at both the rural and the urban level, the market
potential is expected to expand further.
CLASSIFICATION OF FMCG PRODUCTS IN INDIA
1.Household Care Products
Fabric wash (laundry soaps and synthetic detergents); household
cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air
fresheners, insecticides and mosquito repellents, metal polish and
furniture polish).
2.Personal Care ProductsSkin care, personal wash (soaps); and toiletries; hygiene; paper floor
wash ; shoe polish ; hand wash products.
OVERVIEW
The consumer product sector mainly consists of personal care, and
home products segments. The sector can be further sub-divided into
soaps, detergents, surface cleaning products, skin care, hand care, and
toilet care products.
The sector is divided into two distinct segments - the premium segment
catering mostly to urban higher/upper middle class and the popular
segment with prices as low as 25%-30% of the premium segment,
catering to mass segments in urban and rural markets. The premium
segment is fewer prices sensitive and more brands conscious.
The industry is volume driven and is characterized by low margins. The
products are branded and backed by marketing, heavy advertising,
slick packaging and strong distribution networks. Also, raw material
prices play an important role in determining the pricing of the final
product.
Brand building and extensive distribution network is a key factor. A
successful brand is a precious asset, which could fetch a price many
times the cost of assets required to make the product
MAJOR COMPETITORS TO THE COMPANY:
Colgate-Palmolive India
Colgate Palmolive India is a 51 per cent subsidiary of Colgate Palmolive
Company, USA. It is the market leader in the Indian oral care market,
with a 51 per cent market share in the toothpaste segment, 48 per cent
market share in the toothpowder market and a 30 per cent share in the
toothbrush market. The company also has a presence in the premium
toilet soap segment and in shaving products, which are sold under the
Palmolive brand. Other well-known consumer brands include Charmis
skin cream and Axion dish wash. The company reported sales of US$
226 million in 2003-04. The company’s strategy is to focus on growing
volumes by improving penetration through aggressive campaigning and
consumer promotions. The company plans to launch new products in
oral and personal care segments and is prepared to continue spending
on advertising and marketing to gain market share. Margin gains are
being targeted through efficient supply chain management and bringing
down cost of operations.
Hindustan Lever Ltd (HLL)
Hindustan Lever Ltd is a 51 per cent owned subsidiary of the Anglo-
Dutch giant Unilever, which has been expanding the scope of its
operations in India since 1888. It is the country’s biggest consumer
goods company with net sales of US$ 2.4 billion in 2003. HLL is
amongst the top five exporters of the country and also the biggest
exporter of tea and castor oil. The product portfolio of the company
includes household and personal care products like soaps, detergents,
shampoos, skin care products, colour cosmetics, deodorants and
fragrances. It is also the market leader in tea, processed coffee, branded
wheat flour, tomato products, ice cream, jams and squashes. HLL
enjoys a formidable distribution network covering over 3,400
distributors and 16 million outlets. In the future, the company plans to
concentrate on its herbal health care portfolio (Ayush) and
confectionary business (Max). Its strategy to grow includes focusing on
the power brands’ growth through consumer relevant information,
cross category extensions, leveraging channel opportunities and
increased focus on rural growth.
Procter & Gamble Hygiene and Health Care Limited
Richardson Hindustan Limited (RHL), manufacturer of the Vicks
range of products, was rechristened ‘Procter & Gamble India’ in
October 1985, following its affiliation to the ‘Procter & Gamble
Company’, USA. Procter & Gamble Hygiene and Health Care Limited
(PGHHCL) acquired its current name in 1998, reflecting the two key
segments of its business. P&G, USA has a 65 per cent stake in
PGHHCL. The parent also has a 100 per cent subsidiary, Procter &
Gamble Home Products (PGHP). The overall portfolio of the company
includes healthcare; feminine-care; hair care and fabric care businesses.
PGHH operates in just two business segments - Vicks range of cough &
cold remedies and Whisper range of feminine hygiene. The detergent
and shampoo business has been relocated globally to Vietnam. The
company imports and markets most of the products from South East
Asian countries and China, while manufacturing, marketing and export
of Vicks and sanitary napkins has been retained in India. The company
reported sales of US$ 91 million in 2002-03. The parent company has
announced its plan to explore further external collaborations in India to
meet its global innovation and knowledge needs.
Nirma Limited
Nirma Ltd, promoted by Karsanbhai Patel, is a homegrown FMCG
major with a presence in the detergent and soap markets. It was
incorporated in 1980 as a private company and was listed in fiscal 1994.
Associate companies’ Nirma Detergents, Shiva Soaps and Detergents,
Nirma Soaps and Detergents and Nilnita Chemicals were merged with
Nirma in 1996-1997. The company has also set up a wholly owned
subsidiary Nirma Consumer Care Ltd, which is the sole marketing
licensee of the Nirma brand in India. Nirma also makes alfa olefin, fatty
acid and glycerin. Nirma is one of the most successful brands in the
rural markets with extremely low priced offerings. Nirma has plants
located in Gujarat, Madhya Pradesh and Uttar Pradesh. Its new LAB
plant is located in Baroda and the soda ash complex is located in
Gujarat. Nirma has strong distributor strength of 400 and a retail reach
of over 1 million outlets. The company reported gross sales of US$ 561
million in 2003-04. It plans to continue to target the mid and mass
segments for future growth.
PRODUCT OFFERING :
This is a list of the brands owned by Reckitt Benckiser. Not all brands
are sold in every country, and the same product may be sold under
different brands in different countries. In INDIA the products are
LIZOL
LIZOL is dish washing liquid which was introduced to India in 1998. it
was the first product which was in liquid format. Lizol in 2007 has a
25% market share and it’s a middle class oriented product.
MORTEIN
Mortein was introduced in India in 1999. it was a anti mosquito
Liquid vaporizer, which gave a big competition to the other products
like jet and all-out. It started getting the market share and achieved
45% out of total market share in India.
DETTOL
Dettol is a very famous product in India. Total market share of dettol is
86%. This product has a monopoly in the market , instead of having
competetors
AIRWICK
It is a latest product of the company. which was launched in India in
2006. it’s a freshener used cars and room. It’s a world famous product
and having 70 % of market share in America and 66 % in uk.
CLEARSIL
Clearasil is a world famous product of the company and having 56%
market share in India. It is one of its kind and very famous in uk.
DIP IT
It’s a stain washer, and highly use full product steal and other antiques.
DISPRIN
It’s a medical product and very famous in people for headache. It’s a
pain reliever and having 40 % market share in India according to latest
reports.
HARPIC
Harpic is a disinfectant and a toilet cleaner. Having 67%
market share in India, it’s a very famous product which
is consistently grabbing the trust of the market.
STREPSILS
Strepsils sore throat lozenges.
VANISH
Vanish is a product which already famous in the world and introduced
in India at the time when the economy is booming in India. The market
of VANISH is not very much in India but the company is still hoping
that the market will grow in the next 4-5 years.
EASY OFF
EASY OFF BANG is a stain remover. It is meant for middle and higher
level families. It has a 41% of market share in its category.
VEET
Veet is a latest product of the company which was introduced in India
in 2001 and in 2003 this product was re-launched after some correction
in the product’s quality. Right now the product is having 39% of the
total market share.
Cherry
It’s a shoe polish and was introduced in Indian market in 1988. The
market share of the product is 44% in liquid format and 65% in paste
format.
STRATEGY OF THE COMPANY
Our strategy for profitable growth involves:
1.Focusing on our strong brands in the categories with highest growth
potential.
2.Innovative product and brand development.
3.Geographic roll out of our key brands and categories.
4.Above-average investment in brand building.
5.Tight cost control to fund reinvestment in core brands and grow
shareholder returns.
6.Selective add-on acquisitions.
FUTURE PLANS
FUTURE: GURGAON: The Rs 1,200-crore Reckitt Benckiser, maker of
brands such as Dettol, Lizol, Cherry Blossom and Disprin, has kicked
off an aggressive strategy aimed at safeguarding the germ protection
positioning its flagship Dettol soap and liquid antiseptic brand has ruled
over for years.
Though the Rs 400-crore Dettol continues to lead the antiseptic liquid
handwash market with over 50% share, rival Hindustan Unilever’s
(HUL) mass-priced soap brand Lifebuoy has begun taking away share
from Dettol in recent months, even though marginally. HUL has been
pushing Lifebuoy on the same hygiene and germ protection platform
that Dettol is synonymous with.
Reckitt Benckiser has decided to reposition Dettol — its highest selling
brand — from just premium to address the mass segment as well. Dettol
liquid handwash is in the process of being rolled out in 135-ml packs
priced at Rs 38 across all three variants — original, skincare and
sensitive. Dettol soap, too, has been introduced in a smaller SKU of 35
gm priced at Rs 6.
When contacted by ET, Reckitt Benckiser India MD Chander Sethi
said: “It’s the first time we have introduced Dettol in small packs such
as these. The move is part of our overall strategy to address diverse
consumer needs.”
While the Rs 1,200-crore Reckitt has had small SKUs for other brands
in its portfolio such as disinfectants Harpic and Lizol and mosquito
repellent Mortein, it’s the first time that Dettol’s soap variants are being
introduced in small packs.
Prices of other Dettol variants remain unchanged as of now. The 250-ml
handwash continues to be priced at Rs 55, the 1-litre pack is priced at
Rs 150 while the 100-ml refill pouch is priced at Rs 30. Rival Lifebuoy
handwash soap is currently available in three SKUs: Rs 40 for 200-ml,
Rs 70 for 540 ml, and at Rs 150 for 900 ml. Its refill pack is priced at Rs
25 for 180 ml.
Dettol is poised for a spate of brand extensions in the personal care
space including gels, sanitisers and beauty products. While declining to
divulge specific future plans, Mr Sethi indicated:
“We are planning to roll out many variants of Dettol, but each of these
will continue to occupy the brand’s core germ protection positioning.”
Reckitt Benckiser has set a sales target of Rs 1,000 crore for its Dettol
brand by year 2010. The company recently concluded a Rs 125-crore
capacity expansion exercise with two new plants in Jammu and
Sitargunj in Uttaranchal.
Reckitt Benckiser in India
Against all odds
“Challenge in business is continuous and is accompanied by continuous innovation and rejuvenation,” states Chander Mohan Sethi, Managing Director, Reckitt Benckiser India, while expressing the core philosophy that guides his business. Adhering to this belief, Chander, with his complete passion to drive the cause of business excellence with the support of his people, wants to make Reckitt Benckiser one of the most trusted names in Indian households. In an era of intense cut throat competition and turbulent markets, with so many FMCG companies venturing into the Indian landscape, Reckitt Benckiser India surely has the right ideas flowing from the top; considering Chander’s incessant resolve to take every adversity head on, combined with undying passion for the company where he’s been around for over 23 years.
Chander Mohan Sethi holds an MBA from the Motilal Institute of Business Management, Allahabad University. His exceptionally long association with Reckitt Benckiser can be traced back to the year 1984, where he started his career as the Branch Manager- Eastern Region. He then moved on to become National Sales Manager in 1987 and in the next three years, his huge contribution to the company was given its due and he was promoted as the Head of Marketing and Sales. Charting a continuously ascending career path, Chander now holds the position of Managing Director, Reckitt Benckiser (India) and Regional Director, Reckitt Benckiser, South Asia, since January 2002.
According to Chander, the M&A with Benckiser proved to be phenomenal for Reckitt & Colman. Chander states, “It showed clear support of the people and the clear support of the brands”. Reckitt Benckiser is one of the very few FMCG companies, which has been listed on London Stock Exchange. It has been one of the leading consumer goods companies in South Asian markets with a host of successful household brands like Dettol, Harpic, Mortein, Lizol, Cherry Blossom, Vanish, Easy Off Bang, Veet, Colin, Disprin, Strepsils, Clearsil and others, which have shown tremendous growth rate in terms of brand recall and recognition. Dettol, whose mention was made by Chander quite frequently in the interview is easily the star product, a leader in the hand wash segment and antiseptic segments. Reckitt Benckiser, headquartered in Slough just outside London is aiming to grow and enhance its business operations tremendously, as the £1.92 billion Boots acquisition has shown. Already, the company has presence in more than 100 countries and around 22,000 employees around the world.
Reckitt follows its global business strategy of becoming the number one FMCG company in manufacturing personal care, health care and household care products in each of its market countries in the world. Chander proudly reiterates how, in 2 years time, “Reckitt Benckiser is the number one emerging modern brand in metros, and has experienced a rise in growth levels from 10% to 12%.” AC Nielsen has also reported a 40% growth in the company without any major investments. Regarding a foray in the food segment, Chander does not reveal any specific plans, but neither does he deny a possibility in the future.
Reckitt’s global brands have maintained a consistent reputation of understanding and meeting the needs of consumers of their respective markets and on the basis of the insights derived from the understanding of the consumer wants, Reckitt has been able to satisfy those consumer needs, and in turn, has created a strong shareholder value for itself. Chander cites the instance of the Mortein brand, which he says, “is the ultimate name for household pest control.” The product has been customised to consumer’s needs.
Reckitt’s brand ambassador strategy has played an integral role in its communication with Indian customers, who could relate to the faces adorning the company’s various products. For instance, Harpic was an instant hit amongst the house-wives after popular TV stars Aman Verma and Roshan Abbas were brought in as the new faces for the product. On the other hand, the Veet hair removal system did wonders with Katrina Kaif endorsing it. Chander elaborates, “Through these brand ambassadors, people see and believe in what you stand for, then only they would internalize that.”
As a leader, Chander appears to be quite calm and composed as opposed to his highly aggressive stance as an entrepreneur, a man who walks the talk. When we broach upon the topic of leadership, Chander strongly advocates that HR pundits are the best people to talk about leadership traits. In his view, “A leader should be a simple person. He needs to have a vision which is very imperative. The vision has to be clear, challenging and should be communicated so that it is bought by people. The leader should reflect transparency, fairness, objectivity, honesty and commitment. A leader should create and celebrate success!”
With its undeterred focus on its international portfolio along with Chander’s prudent guidance, the company is well poised for breakneck growth. Simultaneously, in line with Chander’s views, Reckitt Benckiser would want to continue building upon its legacy of trust.
“Challenge in business is continuous and is accompanied by continuous innovation and rejuvenation,” states Chander Mohan Sethi, Managing Director, Reckitt Benckiser India, while expressing the core philosophy that guides his business. Adhering to this belief, Chander, with his complete passion to drive the cause of business excellence with the support of his people, wants to make Reckitt Benckiser one of the most trusted names in Indian households. In an era of intense cut throat competition and turbulent markets, with so many FMCG companies venturing into the Indian landscape, Reckitt Benckiser India surely has the right ideas flowing from the top; considering Chander’s incessant resolve to take every adversity head on, combined with undying passion for the company where he’s been around for over 23 years.
Chander Mohan Sethi holds an MBA from the Motilal Institute of Business Management, Allahabad University. His exceptionally long association with Reckitt Benckiser can be traced back to the year 1984, where he started his career as the Branch Manager- Eastern Region. He then moved on to become National Sales Manager in 1987 and in the next three years, his huge contribution to the company was given its due and he was promoted as the Head of Marketing and Sales. Charting a continuously ascending career path, Chander now holds the position of Managing Director, Reckitt Benckiser (India) and Regional Director, Reckitt Benckiser, South Asia, since January 2002.
According to Chander, the M&A with Benckiser proved to be phenomenal for Reckitt & Colman. Chander states, “It showed clear support of the people and the clear support of the brands”. Reckitt Benckiser is one of the very few FMCG companies, which has been listed on London Stock Exchange. It has been one of the leading consumer goods companies in South Asian markets with a host of successful household brands like Dettol, Harpic, Mortein, Lizol, Cherry Blossom, Vanish, Easy Off Bang, Veet, Colin, Disprin, Strepsils, Clearsil and others, which have shown tremendous growth rate in terms of brand recall and recognition. Dettol, whose mention was made by Chander quite frequently in the interview is easily the star product, a leader in the hand wash segment and antiseptic segments. Reckitt Benckiser, headquartered in Slough just outside London is aiming to grow and enhance its business operations tremendously, as the £1.92 billion Boots acquisition has shown. Already, the company has presence in more than 100 countries and around 22,000 employees around the world.
Reckitt follows its global business strategy of becoming the number one FMCG company in manufacturing personal care, health care and household care products in each of its market countries in the world. Chander proudly reiterates how, in 2 years time, “Reckitt Benckiser is the number one emerging modern brand in metros, and has experienced a rise in growth levels from 10% to 12%.” AC Nielsen has also reported a 40% growth in the company without any major investments. Regarding a foray in the food segment, Chander does not reveal any specific plans, but neither does he deny a possibility in the future.
Reckitt’s global brands have maintained a consistent reputation of understanding and meeting the needs of consumers of their respective markets and on the basis of the insights derived from the understanding of the consumer wants, Reckitt has been able to satisfy those consumer needs, and in turn, has created a strong shareholder value for itself. Chander cites the instance of the Mortein brand, which he says, “is the ultimate name for household pest control.” The product has been customised to consumer’s needs.
Reckitt’s brand ambassador strategy has played an integral role in its communication with Indian customers, who could relate to the faces adorning the company’s various products. For instance, Harpic was an instant hit amongst the house-wives after popular TV stars Aman Verma and Roshan Abbas were brought in as the new faces for the product. On the other hand, the Veet hair removal system did wonders with Katrina Kaif endorsing it. Chander elaborates, “Through these brand ambassadors, people see and believe in what you stand for, then only they would internalize that.”
As a leader, Chander appears to be quite calm and composed as opposed to his highly aggressive stance as an entrepreneur, a man who walks the talk. When we broach upon the topic of leadership, Chander strongly advocates that HR pundits are the best people to talk about leadership traits. In his view, “A leader should be a simple person. He needs to have a vision which is very imperative. The vision has to be clear, challenging and should be communicated so that it is bought by people. The leader should reflect transparency, fairness, objectivity, honesty and commitment. A leader should create and celebrate success!”
With its undeterred focus on its international portfolio along with Chander’s prudent guidance, the company is well poised for breakneck growth. Simultaneously, in line with Chander’s views, Reckitt Benckiser would want to continue building upon its legacy of trust.
Wednesday, December 1, 2010
Recap of 1st Dec Session.
Brand Positioning -Definition and Concept
Definition of Positioning:-
" Positioning can be defined as an act of designing the company's offering and image to occupy a distinctive place in mind of target market."
Brand positioning refers to “target consumer’s” reason to buy your brand in preference to others. It ensures that all brand activity has a common aim; is guided, directed and delivered by the brand’s benefits/reasons to buy; and it focuses at all points of contact with the consumer.
Brand positioning must make sure that:
* Is it unique/distinctive vs. competitors ?
* Is it significant and encouraging to the niche market ?
* Is it appropriate to all major geographic markets and businesses ?
* Is the proposition validated with unique, appropriate and original products ?
* Is it sustainable - can it be delivered constantly across all points of contact with the consumer ?
* Is it helpful for organization to achieve its financial goals ?
* Is it able to support and boost up the organization ?
In order to create a distinctive place in the market, a niche market has to be carefully chosen and a differential advantage must be created in their mind. Brand positioning is a medium through which an organization can portray it’s customers what it wants to achieve for them and what it wants to mean to them. Brand positioning forms customer’s views and opinions.
Brand Positioning can be defined as an activity of creating a brand offer in such a manner that it occupies a distinctive place and value in the target customer’s mind. For instance-Kotak Mahindra positions itself in the customer’s mind as one entity- “Kotak ”- which can provide customized and one-stop solution for all their financial services needs. It has an unaided top of mind recall. It intends to stay with the proposition of “Think Investments, Think Kotak”. The positioning you choose for your brand will be influenced by the competitive stance you want to adopt.
Brand Positioning involves identifying and determining points of similarity and difference to ascertain the right brand identity and to create a proper brand image. Brand Positioning is the key of marketing strategy. A strong brand positioning directs marketing strategy by explaining the brand details, the uniqueness of brand and it’s similarity with the competitive brands, as well as the reasons for buying and using that specific brand. Positioning is the base for developing and increasing the required knowledge and perceptions of the customers. It is the single feature that sets your service apart from your competitors. For instance- Kingfisher stands for youth and excitement. It represents brand in full flight.
There are various positioning errors, such as-
1. Under positioning- This is a scenario in which the customer’s have a blurred and unclear idea of the brand.
2. Over positioning- This is a scenario in which the customers have too limited a awareness of the brand.
3. Confused positioning- This is a scenario in which the customers have a confused opinion of the brand.
4. Double Positioning- This is a scenario in which customers do not accept the claims of a brand.
Positioning is a deadly word, it is the battle of brain.If segmentation strategy is right but customers are not conceiving the same image,positioning goes wrong.Moreover it is not very easy to get the image,distinctive place and target market.It is the entire effort of marketers,considering each and every single factor for creating the image of the product or service.Its an effort of entire brand building.It requires holistic approach of entire organisation.
Eg: Lifebuoy- It was positioned as a toilet soap & hence it has been very difficult to change its image in customers mind to be a bath soap. Although it can be differentiated on the basis of health related issues but its positioning is difficult to change.
-Impression of PSU banks.
-Subway in Kharghar: Right place and well accepted/responded by foreigners,other mkt segments but is not doing great business in such locality.
-HSBC The Worlds Local Bank: Introduced the first ATM machine in India, but now the scene has changed.
-DHL: After 40 years of its business, Is it the same message in its vision and mission statement being followed and implemented???
-Education Domain: Institutions, if these service providers consider students as customers their positioning will decline & may go out of the mkt.
-Banks/Consulting firms are large in number today, they are unaware of their target mkts.
-Crafting the brand positioning by respective bride/groom sides.
Value Proposition: Eg: M&M's Scorpio(SUV), Domino's Pizza- The Pizza delivery experts(30 mins delivery) both provide unique offering.
How as a Brand Manager you are crafting the Positioning?
The significance of use of touchpoints is relevant in this context and hence every single touchpoint is important for the marketer.
For instance: Delay in communication with the customer care executives, Meru Cabs, Sim services.
-Maggi,Domino's to retain their brand.
-Sony: Connotation of price and quality(The best feature observed in India, thats unique positioning)
Image: What you create?
Positioning: What customers feel?
If both, the image and positioning are same/right and occupy the same place in customers mind, the positioning of that brand strucks the right chord.If the image,distinctive place and target mkt goes into the right direction you can very well craft the positioning.But the loyalty of customer to a brand should also be considered, as in case of Indian consumers who think differently at different point of time loyalty for a specific brand goes for a toss while other consumers like in US, people are more loyal towards the brand they prefer.Hence the effect of positioning varies according to the consumer behavior.
Brand Positioning Guru's: Jack Trout and Al Ries.(Read Brand Positioning by Jack Trout and Al Ries, and some more literature on Positioning).
Definition of Positioning:-
" Positioning can be defined as an act of designing the company's offering and image to occupy a distinctive place in mind of target market."
Brand positioning refers to “target consumer’s” reason to buy your brand in preference to others. It ensures that all brand activity has a common aim; is guided, directed and delivered by the brand’s benefits/reasons to buy; and it focuses at all points of contact with the consumer.
Brand positioning must make sure that:
* Is it unique/distinctive vs. competitors ?
* Is it significant and encouraging to the niche market ?
* Is it appropriate to all major geographic markets and businesses ?
* Is the proposition validated with unique, appropriate and original products ?
* Is it sustainable - can it be delivered constantly across all points of contact with the consumer ?
* Is it helpful for organization to achieve its financial goals ?
* Is it able to support and boost up the organization ?
In order to create a distinctive place in the market, a niche market has to be carefully chosen and a differential advantage must be created in their mind. Brand positioning is a medium through which an organization can portray it’s customers what it wants to achieve for them and what it wants to mean to them. Brand positioning forms customer’s views and opinions.
Brand Positioning can be defined as an activity of creating a brand offer in such a manner that it occupies a distinctive place and value in the target customer’s mind. For instance-Kotak Mahindra positions itself in the customer’s mind as one entity- “Kotak ”- which can provide customized and one-stop solution for all their financial services needs. It has an unaided top of mind recall. It intends to stay with the proposition of “Think Investments, Think Kotak”. The positioning you choose for your brand will be influenced by the competitive stance you want to adopt.
Brand Positioning involves identifying and determining points of similarity and difference to ascertain the right brand identity and to create a proper brand image. Brand Positioning is the key of marketing strategy. A strong brand positioning directs marketing strategy by explaining the brand details, the uniqueness of brand and it’s similarity with the competitive brands, as well as the reasons for buying and using that specific brand. Positioning is the base for developing and increasing the required knowledge and perceptions of the customers. It is the single feature that sets your service apart from your competitors. For instance- Kingfisher stands for youth and excitement. It represents brand in full flight.
There are various positioning errors, such as-
1. Under positioning- This is a scenario in which the customer’s have a blurred and unclear idea of the brand.
2. Over positioning- This is a scenario in which the customers have too limited a awareness of the brand.
3. Confused positioning- This is a scenario in which the customers have a confused opinion of the brand.
4. Double Positioning- This is a scenario in which customers do not accept the claims of a brand.
Positioning is a deadly word, it is the battle of brain.If segmentation strategy is right but customers are not conceiving the same image,positioning goes wrong.Moreover it is not very easy to get the image,distinctive place and target market.It is the entire effort of marketers,considering each and every single factor for creating the image of the product or service.Its an effort of entire brand building.It requires holistic approach of entire organisation.
Eg: Lifebuoy- It was positioned as a toilet soap & hence it has been very difficult to change its image in customers mind to be a bath soap. Although it can be differentiated on the basis of health related issues but its positioning is difficult to change.
-Impression of PSU banks.
-Subway in Kharghar: Right place and well accepted/responded by foreigners,other mkt segments but is not doing great business in such locality.
-HSBC The Worlds Local Bank: Introduced the first ATM machine in India, but now the scene has changed.
-DHL: After 40 years of its business, Is it the same message in its vision and mission statement being followed and implemented???
-Education Domain: Institutions, if these service providers consider students as customers their positioning will decline & may go out of the mkt.
-Banks/Consulting firms are large in number today, they are unaware of their target mkts.
-Crafting the brand positioning by respective bride/groom sides.
Value Proposition: Eg: M&M's Scorpio(SUV), Domino's Pizza- The Pizza delivery experts(30 mins delivery) both provide unique offering.
How as a Brand Manager you are crafting the Positioning?
The significance of use of touchpoints is relevant in this context and hence every single touchpoint is important for the marketer.
For instance: Delay in communication with the customer care executives, Meru Cabs, Sim services.
-Maggi,Domino's to retain their brand.
-Sony: Connotation of price and quality(The best feature observed in India, thats unique positioning)
Image: What you create?
Positioning: What customers feel?
If both, the image and positioning are same/right and occupy the same place in customers mind, the positioning of that brand strucks the right chord.If the image,distinctive place and target mkt goes into the right direction you can very well craft the positioning.But the loyalty of customer to a brand should also be considered, as in case of Indian consumers who think differently at different point of time loyalty for a specific brand goes for a toss while other consumers like in US, people are more loyal towards the brand they prefer.Hence the effect of positioning varies according to the consumer behavior.
Brand Positioning Guru's: Jack Trout and Al Ries.(Read Brand Positioning by Jack Trout and Al Ries, and some more literature on Positioning).
One down ....... Nine more to go
From the list (Bucket list)of 10 books which we have to read before may 2011, yestrday i completed one of them.
"Stay hungy Stay foolish" by Rashmi Bansal.
Stay Hungry Stay Foolish is the story of 25 graduates of IIM Ahmedabad (IIM-A), who chose to become entrepreneurs, shunning the more conventional and comfortable option of high-paying corporate jobs.
All this 25 person can devided in broadly in two categories.
1)People who knew entrepreneurship was the Chosen Path. They took the plunge straight after their MBA or after working barely a few years. And they persevered until theymade it big!
2)These entrepreneurs did not plan to take this path but when opportunity knocked they seized it. Their stories go to show that you don't have to be 'born with it', you can develop an entrepreneurial bent of mind at any age.
Almost all of these story starts from their IIMA days and go till their success point. Many of them start a business and failed in their first “Trial” and got succeed in their second or third venture.
Stay Hungry Stay Foolish Covers the following entrepreneurs :
1) Sanjeev bikhchandani- Naurkri.com
2) Shantanu Prakash -Educomp
3) Vinayak Chatterjee - Feedback Ventures
4) Ashank Desai-Mastek
5) R Subramanian - Subhiksha
6) Narendra Murkumbi-Shree Renuka Sugars
7) Chender Baljee-Royal Orchid hotels
8) Madan Mohanka - Teja Industries
9) Sunil Handa- Eklaya Education Foundation
10) Vardan Kabra -Fountainhead School
11) Deep Kaira -makemytrip.com
12) Rashesh Shah-Edelweiss Capital
13) Nirmal Jain-India Infoline
14) Vikran Talwar - EXL Service
15) K Raghavendra Rao-Orchid Pharma
16) Jerry Rao- Mphasis
17) Shivraman Dugal- Institute Of Clinical Research In India
18) Shankar Maruwada-Marketics
19) Ruby Ashraf-Precious Formals
20) Deepta Rangarajan-IRIS
21) Cyrus Driver-Calorie Care
22) Venkat Krishnana-GiveIndia
23) Anand Halve-chlorophyll
24) S B Dangayach -Sintex
25) Vijay Mahanjab ,Basix.
You always run a risk, its game of probabilities. You have to be sporting………..
However good you are you may get out for a duck.
(Quote from Nirmal Jain-India nfoline)
"Stay hungy Stay foolish" by Rashmi Bansal.
Stay Hungry Stay Foolish is the story of 25 graduates of IIM Ahmedabad (IIM-A), who chose to become entrepreneurs, shunning the more conventional and comfortable option of high-paying corporate jobs.
All this 25 person can devided in broadly in two categories.
1)People who knew entrepreneurship was the Chosen Path. They took the plunge straight after their MBA or after working barely a few years. And they persevered until theymade it big!
2)These entrepreneurs did not plan to take this path but when opportunity knocked they seized it. Their stories go to show that you don't have to be 'born with it', you can develop an entrepreneurial bent of mind at any age.
Almost all of these story starts from their IIMA days and go till their success point. Many of them start a business and failed in their first “Trial” and got succeed in their second or third venture.
Stay Hungry Stay Foolish Covers the following entrepreneurs :
1) Sanjeev bikhchandani- Naurkri.com
2) Shantanu Prakash -Educomp
3) Vinayak Chatterjee - Feedback Ventures
4) Ashank Desai-Mastek
5) R Subramanian - Subhiksha
6) Narendra Murkumbi-Shree Renuka Sugars
7) Chender Baljee-Royal Orchid hotels
8) Madan Mohanka - Teja Industries
9) Sunil Handa- Eklaya Education Foundation
10) Vardan Kabra -Fountainhead School
11) Deep Kaira -makemytrip.com
12) Rashesh Shah-Edelweiss Capital
13) Nirmal Jain-India Infoline
14) Vikran Talwar - EXL Service
15) K Raghavendra Rao-Orchid Pharma
16) Jerry Rao- Mphasis
17) Shivraman Dugal- Institute Of Clinical Research In India
18) Shankar Maruwada-Marketics
19) Ruby Ashraf-Precious Formals
20) Deepta Rangarajan-IRIS
21) Cyrus Driver-Calorie Care
22) Venkat Krishnana-GiveIndia
23) Anand Halve-chlorophyll
24) S B Dangayach -Sintex
25) Vijay Mahanjab ,Basix.
You always run a risk, its game of probabilities. You have to be sporting………..
However good you are you may get out for a duck.
(Quote from Nirmal Jain-India nfoline)
Tuesday, November 30, 2010
Recap of 29th Nov Session.
Positioning:-
How it shud be done?
Based on- a)Key differentiating factors?
b)How to deal with competitors?
An effort should be made to critically analyse the various factors affecting positioning.
Generic Strategies:-
By Michael Porter (The Guru of Defining/Designing Mktg Strategy)
5 Force Model
Five forces determining segment structural attractiveness:-
Porter's five forces is a framework for the industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven down to zero.
Three of Porter's five forces refer to competition from external sources. The remainder are internal threats.
Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally, requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. A clear example of this is the airline industry. As an industry, profitability is low and yet individual companies, by applying unique business models, have been able to make a return in excess of the industry average.
Porter's five forces include - three forces from 'horizontal' competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.
This five forces analysis, is just one part of the complete Porter strategic models. The other elements are the value chain and the generic strategies.
Porter developed his Five Forces analysis in reaction to the then-popular SWOT analysis, which he found rigorous and ad hoc.
Porters fives forces model is an excellent model to use to analyse a particular environment of an industry. So for example, if we were entering the PC industry, we would use porters model to help us find out about:
1) Competitive Rivalry
2) Power of suppliers
3) Power of buyers
4) Threats of substitutes
5) Threat of new entrants.
The above five main factors are key factors that influence industry performance, hence it is common sense and practical to find out about these factors before you enter the industry. Lets look at them below.
Competitive rivalry
Segment Rivalry- The competitors will try to convince the target audience through mktg mix,brand positioning,dealer networks etc.Dealing with the competitors includes study of questions like: Who are your rivals? Define your competitors??
Competition is the thing that can move the entire base of customers.
A starting point to analysing the industry is to look at competitive rivalry. If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitute products for example from coke to water then again rivalry will be high. Generally competitive rivalry will be high if:
• There is little differentiation between the products sold between customers.
• Competitors are approximately the same size of each other.
• If the competitors all have similar strategies.
• It is costly to leave the industry hence they fight to just stay in ( exit barriers).
Eg:ISB Vs IIM case.
-Micromax Vs Nokia.
-Maggi Vs Top Ramen.
-Starbucks Vs CCD.
-NTT docomo one of the most successful mobile in Japan.
Docomo entering India through a collaboration with TATA(using 1 paisa/sec plan).
If the leaders in their respective business(in India) like IIM,Nokia,Maggi,CCD respond to the new entrants ultimately the Goodwill of the new entrant increases.
Filmy Example:-In Dulhe Raja movie Govinda runs a dhaba just opposite to a 5 star hotel owned by Kadar Khan.
Power of suppliers
Suppliers are also essential for the success of an organisation. Raw materials are needed to complete the finish product of the organisation. Suppliers do have power. This power comes from:
• If they are the only supplier or one of few suppliers who supply that particular raw material.
• If it costly for the organisation to move from one supplier to another (known also as switching cost)
• If there is no other substitute for their product.
Eg:Automobile-Bajaj Scooter of past Vs Bike manufacturers of recent market like Honda,TVS,M&M.
Electronics- Suppliers of electronic goods like Chroma,VSP,Next.
Power of buyers
Buyers or customers can exert influence and control over an industry in certain circumstances. This happens when:
• There is little differentiation over the product and substitutes can be found easily.
• Customers are sensitive to price.
• Switching to another product is not costly.
Eg:Real estate sector before recession and after it.
Changes in the Real Estate scenario of Kharghar to be observed after the news of Navi Mumbai International Airport.
Bias Mkt: Customer is the king in bias mkt although CRM practices are not much developed and lot of improvement is expected.
Indian mkts are not customer driven, there are at times issues regarding legal aspects,consumption etc.
Buyer power can be seen in services provided by McD-Free coke for 1 min delay.
Domino's-Free delivery if delayed than 30 mins.
Threat of substitutes
Are there alternative products that customers can purchase over your product that offer the same benefit for the same or less price? The threat of substitute is high when:
• Price of that substitute product falls.
• It is easy for consumers to switch from one substitute product to another.
• Buyers are willing to substitute.
Eg: GSM Vs CDMA, LCD Vs LED.
Bulky TV's, monitors being replaced by sleek design.
Pager Vs Mobile,VCR Vs CD players, Xerox m/c Vs All in 1 OneStopSoln.
Threat of new entrant
The threat of a new organisation entering the industry is high when it is easy for an organisation to enter the industry i.e. entry barriers are low.
An organisation will look at how loyal customers are to existing products, how quickly they can achieve economy of scales, would they have access to suppliers, would government legislation prevent them or encourage them to enter the industry.
Eg:Walmart,Starbucks to enter in Indian mkt.
Walmart has only cash n carry ie wholesale mkt yet they can be a big player in their core business.
Generic Strategies to counter the 5 forces:
Strategy can be formulated on 3 levels like
1)Corporate level 2) Business unit level 3) Functional or Departmental level
The Business unit level is the primary context of industry rivalry.Michael Porter identified 3 generic strategies(Cost leadership,differentiation and focus)that can be implemented at the business unit level to create competitive advantage.The proper generic strategy will position the firm to leverage its strength and defend against the adverse effects of 5 forces.
Entering into 2011:- This would be the most challenging decade for service providers as mkt will grow n mature and hence Changing with the Change is important.
"Change is the only Constant"
How it shud be done?
Based on- a)Key differentiating factors?
b)How to deal with competitors?
An effort should be made to critically analyse the various factors affecting positioning.
Generic Strategies:-
By Michael Porter (The Guru of Defining/Designing Mktg Strategy)
5 Force Model
Five forces determining segment structural attractiveness:-
Porter's five forces is a framework for the industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven down to zero.
Three of Porter's five forces refer to competition from external sources. The remainder are internal threats.
Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally, requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. A clear example of this is the airline industry. As an industry, profitability is low and yet individual companies, by applying unique business models, have been able to make a return in excess of the industry average.
Porter's five forces include - three forces from 'horizontal' competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.
This five forces analysis, is just one part of the complete Porter strategic models. The other elements are the value chain and the generic strategies.
Porter developed his Five Forces analysis in reaction to the then-popular SWOT analysis, which he found rigorous and ad hoc.
Porters fives forces model is an excellent model to use to analyse a particular environment of an industry. So for example, if we were entering the PC industry, we would use porters model to help us find out about:
1) Competitive Rivalry
2) Power of suppliers
3) Power of buyers
4) Threats of substitutes
5) Threat of new entrants.
The above five main factors are key factors that influence industry performance, hence it is common sense and practical to find out about these factors before you enter the industry. Lets look at them below.
Competitive rivalry
Segment Rivalry- The competitors will try to convince the target audience through mktg mix,brand positioning,dealer networks etc.Dealing with the competitors includes study of questions like: Who are your rivals? Define your competitors??
Competition is the thing that can move the entire base of customers.
A starting point to analysing the industry is to look at competitive rivalry. If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitute products for example from coke to water then again rivalry will be high. Generally competitive rivalry will be high if:
• There is little differentiation between the products sold between customers.
• Competitors are approximately the same size of each other.
• If the competitors all have similar strategies.
• It is costly to leave the industry hence they fight to just stay in ( exit barriers).
Eg:ISB Vs IIM case.
-Micromax Vs Nokia.
-Maggi Vs Top Ramen.
-Starbucks Vs CCD.
-NTT docomo one of the most successful mobile in Japan.
Docomo entering India through a collaboration with TATA(using 1 paisa/sec plan).
If the leaders in their respective business(in India) like IIM,Nokia,Maggi,CCD respond to the new entrants ultimately the Goodwill of the new entrant increases.
Filmy Example:-In Dulhe Raja movie Govinda runs a dhaba just opposite to a 5 star hotel owned by Kadar Khan.
Power of suppliers
Suppliers are also essential for the success of an organisation. Raw materials are needed to complete the finish product of the organisation. Suppliers do have power. This power comes from:
• If they are the only supplier or one of few suppliers who supply that particular raw material.
• If it costly for the organisation to move from one supplier to another (known also as switching cost)
• If there is no other substitute for their product.
Eg:Automobile-Bajaj Scooter of past Vs Bike manufacturers of recent market like Honda,TVS,M&M.
Electronics- Suppliers of electronic goods like Chroma,VSP,Next.
Power of buyers
Buyers or customers can exert influence and control over an industry in certain circumstances. This happens when:
• There is little differentiation over the product and substitutes can be found easily.
• Customers are sensitive to price.
• Switching to another product is not costly.
Eg:Real estate sector before recession and after it.
Changes in the Real Estate scenario of Kharghar to be observed after the news of Navi Mumbai International Airport.
Bias Mkt: Customer is the king in bias mkt although CRM practices are not much developed and lot of improvement is expected.
Indian mkts are not customer driven, there are at times issues regarding legal aspects,consumption etc.
Buyer power can be seen in services provided by McD-Free coke for 1 min delay.
Domino's-Free delivery if delayed than 30 mins.
Threat of substitutes
Are there alternative products that customers can purchase over your product that offer the same benefit for the same or less price? The threat of substitute is high when:
• Price of that substitute product falls.
• It is easy for consumers to switch from one substitute product to another.
• Buyers are willing to substitute.
Eg: GSM Vs CDMA, LCD Vs LED.
Bulky TV's, monitors being replaced by sleek design.
Pager Vs Mobile,VCR Vs CD players, Xerox m/c Vs All in 1 OneStopSoln.
Threat of new entrant
The threat of a new organisation entering the industry is high when it is easy for an organisation to enter the industry i.e. entry barriers are low.
An organisation will look at how loyal customers are to existing products, how quickly they can achieve economy of scales, would they have access to suppliers, would government legislation prevent them or encourage them to enter the industry.
Eg:Walmart,Starbucks to enter in Indian mkt.
Walmart has only cash n carry ie wholesale mkt yet they can be a big player in their core business.
Generic Strategies to counter the 5 forces:
Strategy can be formulated on 3 levels like
1)Corporate level 2) Business unit level 3) Functional or Departmental level
The Business unit level is the primary context of industry rivalry.Michael Porter identified 3 generic strategies(Cost leadership,differentiation and focus)that can be implemented at the business unit level to create competitive advantage.The proper generic strategy will position the firm to leverage its strength and defend against the adverse effects of 5 forces.
Entering into 2011:- This would be the most challenging decade for service providers as mkt will grow n mature and hence Changing with the Change is important.
"Change is the only Constant"
Sunday, November 28, 2010
Case Study: How market research supports the new product development process
Introduction
Market research is the process by which businesses find out about customers' needs, wants and desires. It makes possible the successful development of new products.
This study shows how an international company, Beiersdorf, combines market research with new product development on its NIVEA Deodorant brand to provide exciting new products that better meet consumer requirements.
Beiersdorf has a clear goal - to be as close as possible to consumers, regardless of which country they live in. Developing superior consumer insights is fundamental to the continued future success of Beiersdorf and its international brands like NIVEA, Eucerin and Atrixo. These are the result of more than 120 years of experience in research and development.
Beiersdorf has launched many new brands and products into a variety of countries and categories. Being an innovation leader has allowed Beiersdorf actively to shape its markets and set new trends. These product launches have led to long-term global growth.
The key stages of market research and new product development
Market research involves the systematic gathering, recording and analyzing of data about customers, competitors and the market. This links marketers to consumers by supplying essential information to solve marketing challenges and help with marketing decisions.
Market research helps a company create and develop an up-to-date and relevant portfolio of products.
Creating new products
Beiersdorf's international Market Research team is based at company headquarters in Hamburg, Germany. The team's objective is to be the voice of the consumers within the organisation. High-quality market research has helped secure the long-term future of the business. Analysing and understanding the data gathered on consumers' behaviours, needs, attitudes and opinions minimises the risks involved in making marketing decisions.
Market research in a global organisation needs the help and support of the company's overseas affiliate companies. Most affiliate companies (in the UK for example) have dedicated Market Research Managers. They help the central research team in gathering and interpreting consumer views. These views provide information or insights that ultimately result in the development of new products suitable for a global market.
This case study follows the development of a new NIVEA Deodorant called Pearl and Beauty aimed at young women. This case study will give you a clear picture of how market research has helped New Product Development (NPD).
Identifying consumer views and product needs – where to start?
Market research should start with the consumer and serves two purposes:
1) To inform companies about consumer needs and desires. What are the trends in the market? What do consumers want?
2) To give consumers the opportunity to talk to the providers of products and services so that their views are taken into account.
Businesses exist in a fast-moving world with increased consumer choice. It is essential that a company knows its market and its consumers before developing any new product. Lots of questions need answering.
Consumer insights drive New Product Development. This information takes into account their behaviours, attitudes and beliefs. It is an expression of their wishes and desires. Businesses use consumer insights to create opportunities for their brands. It is the starting point that enables brands to fit meaningfully into consumers' lives.
Across countries, consumers are different in terms of culture and lifestyle. NIVEA's challenge was to find similar insights from consumers across different countries. This was used to optimize product development.
Secondary research
In the deodorant category, NIVEA used many secondary research sources to discover consumers' views and their need for deodorants. These related to different markets and were supplied by local country market researchers. These included:
i. A consumer Usage and Attitude study. This had been conducted a few years earlier across various markets (UK, France and USA).
ii. An external study by Fragrance Houses. This covered the importance of scent and fragrance to people's well-being and mood.
Primary research
The research team felt therefore there was not enough recent knowledge about the consumer in the secondary research. They commissioned some primary qualitative research in key markets (Germany, France, UK and USA). This was aided by the local Market Research Manager. The aim was to understand the motivations for using deodorant amongst the female consumer.
Primary research is used when there is no existing data available to answer your questions.
The research involved small discussion groups of females. This helped researchers understand the beliefs and motivations of this group. There were several main findings:
• There is steady growth in females shaving. They wanted to look after their underarms throughout all seasons (not just in summer).
• Women cared increasingly about the condition of their underarms.
• Women desired attractive, neat underarms. This symbolised sensuality and femininity.
• The deodorant segment remained focused on functional rather than beautifying products.
Results of the research
The market research revealed an unexplored market potential for NIVEA Deodorant. The brand did not have a specific product that addressed 'underarm beauty' for the female consumer. No direct competitor was offering a product to meet these needs. So there was a clear opportunity to develop a new product. This would fit across different markets and with the current NIVEA Deodorant range.
Turning consumer insights into product concepts
Consumers showed a need for a 'beautifying, caring deodorant'. The team generated ideas on how to address the consumer need.
From these ideas the marketing team created 'product concepts'. These describe the product benefits and how they will meet the consumer needs. Several concepts were written in different ways. These explained and expressed unique product attributes.
The company needed to know which concept was preferred by prospective consumers. It carried out market research to test whether the concepts would work. The research was conducted amongst the desired target market. For Pearl and Beauty, the desired target market was 18-35 year-old women who were beauty-orientated, followed fashion and looked for products with extra benefits.
Quantitative research on the concept was carried out in two test markets (France and Germany). An international company like Beiersdorf must test products in more than one market to assess properly the global appeal.
The concepts were tested monadically. Monadic testing means that the respondent of the test is only shown one concept. This stops the respondent being biased by seeing many variations of the same product concept.
A number of criteria were used to test the concepts:
1) Deodorant category performance measures. These included wetness, dryness, and fragrance. The new concept must deliver generic core benefits.
2) Product attributes specific to the new product and NIVEA core values. The new Pearl and Beauty product has additional benefits to a 'regular' deodorant. For example, it leaves your skin feeling silky and gives you beautiful underarms. Consumers needed to understand and see these benefits.
3) The product needed to be relevant and motivate a consumer to purchase it.
The team chose the 'winning' concept. This best conveyed beauty while remaining relevant to the deodorant category and NIVEA brand.
Next the research team tested various name ideas for the product and developed different designs for the packaging. Packaging design plays a very important role in helping to communicate the image of the product. Pearl and Beauty needed to communicate femininity and sophistication. Pink was a natural colour choice for the packaging. They also used a soft pearlescent container to emphasise the 'pearl extracts' in the product.
Various design ideas were tested using quantitative market research. In addition, this helped to predict the volume of the new products that would be sold, the optimal selling price and the level of switching from existing NIVEA Deodorant and competitor products.
Testing the product, brand positioning and advertising
Testing
The stages described so far produced a product concept that consumers felt was relevant and which they were willing to buy. The next stage was to test the product on actual customers. Many product launches fail, despite great advertising. A big reason is because the product fails to live up to the promises made.
The Market Research Team conducted a product usage test. A de-branded sample of the proposed new product was given to the target consumer of females in several countries. De-branded means the deodorant was in a blank container so that the consumers did not know who made the product or what type it was. Very often consumers form opinions about products and services from advertising and packaging. This can sometimes be very strong and creates a bias in what they think of a product before trying it.
The consumers were asked to use the new deodorant for a week. They kept a diary of when they used it and scored the performance of the deodorant against a list of criteria. These included:
• Did it keep you dry all day?
• Did you have to reapply it?
• Did you like the fragrance?
• Did it last all day?
• Was the deodorant reliable?
Consumers applied the 'de-branded' deodorant under their right armpit and continued to use their current deodorant under their left armpit. This helped the users gauge if it was as good as or better than the brand they normally used. This gave a measure of how likely the consumer would be to swap brands.
The results of the test were very positive. Most consumers loved the fragrance and the feel of the product on their skin. They felt it performed as well as their current deodorant. Most said they would swap their brands after trying the product.
Brand positioning
Now the marketing team had a new product idea that consumers liked. It had a name and packaging design that were well received. They now needed to check how this fitted with the rest of the NIVEA Deodorant brand positioning and range.
The brand position is the specific niche in the market that the brand defines itself as occupying.
The NIVEA Deodorant Pearl and Beauty adds a touch of feminine sophistication and elegance to the NIVEA Deodorant brand's personality. This built on the core deodorant positioning. It made NIVEA Deodorant more appealing, modern and unique to trendy, young female consumers.
Using qualitative research to inform advertising
The next stage was to brief an advertising agency to develop communication to support the launch of the new product. Through market research the team could check whether the advertisements positively supported and communicated the new product.
The company conducted qualitative research on some advertising ideas amongst various groups of the target consumers. It presented ideas in the form of 'storyboards' of what a TV advert could look like. The objective was to evaluate which were the best ideas in terms of:
• Did they stand out as exciting or different?
• Were they relevant to the consumer?
• Did they communicate the right things about the new product?
• Did they persuade the consumer to want to purchase the product?
Evaluating success
Once the product is launched and the consumer can actually purchase it, the research process does not stop.
Continuous consumer tracking can be carried out to find out consumers' views of the new product. This involves interviewing people every day to find out whether they are using the product, what they think of it and why they would purchase it.
Beiersdorf uses other, secondary data sources such as consumer panel data and EPOS (electronic point of sale) data. These monitor the sales effectiveness of the product throughout the launch phase and through the product life cycle.
Conclusion
New product development should start with an insight based on consumer needs.
Throughout the NPD process, market research is a valuable tool for Beiersdorf to check viability and minimise the risk of the product launches.
Being an international company, it is essential that Beiersdorf develops new products using the insights of consumers across markets and cultures. This ensures the products are relevant to a large number of global consumers and will deliver the maximum return when launched.
This maximises return on investment for the company and results in happy, satisfied and loyal consumers.
Introduction
Market research is the process by which businesses find out about customers' needs, wants and desires. It makes possible the successful development of new products.
This study shows how an international company, Beiersdorf, combines market research with new product development on its NIVEA Deodorant brand to provide exciting new products that better meet consumer requirements.
Beiersdorf has a clear goal - to be as close as possible to consumers, regardless of which country they live in. Developing superior consumer insights is fundamental to the continued future success of Beiersdorf and its international brands like NIVEA, Eucerin and Atrixo. These are the result of more than 120 years of experience in research and development.
Beiersdorf has launched many new brands and products into a variety of countries and categories. Being an innovation leader has allowed Beiersdorf actively to shape its markets and set new trends. These product launches have led to long-term global growth.
The key stages of market research and new product development
Market research involves the systematic gathering, recording and analyzing of data about customers, competitors and the market. This links marketers to consumers by supplying essential information to solve marketing challenges and help with marketing decisions.
Market research helps a company create and develop an up-to-date and relevant portfolio of products.
Creating new products
Beiersdorf's international Market Research team is based at company headquarters in Hamburg, Germany. The team's objective is to be the voice of the consumers within the organisation. High-quality market research has helped secure the long-term future of the business. Analysing and understanding the data gathered on consumers' behaviours, needs, attitudes and opinions minimises the risks involved in making marketing decisions.
Market research in a global organisation needs the help and support of the company's overseas affiliate companies. Most affiliate companies (in the UK for example) have dedicated Market Research Managers. They help the central research team in gathering and interpreting consumer views. These views provide information or insights that ultimately result in the development of new products suitable for a global market.
This case study follows the development of a new NIVEA Deodorant called Pearl and Beauty aimed at young women. This case study will give you a clear picture of how market research has helped New Product Development (NPD).
Identifying consumer views and product needs – where to start?
Market research should start with the consumer and serves two purposes:
1) To inform companies about consumer needs and desires. What are the trends in the market? What do consumers want?
2) To give consumers the opportunity to talk to the providers of products and services so that their views are taken into account.
Businesses exist in a fast-moving world with increased consumer choice. It is essential that a company knows its market and its consumers before developing any new product. Lots of questions need answering.
Consumer insights drive New Product Development. This information takes into account their behaviours, attitudes and beliefs. It is an expression of their wishes and desires. Businesses use consumer insights to create opportunities for their brands. It is the starting point that enables brands to fit meaningfully into consumers' lives.
Across countries, consumers are different in terms of culture and lifestyle. NIVEA's challenge was to find similar insights from consumers across different countries. This was used to optimize product development.
Secondary research
In the deodorant category, NIVEA used many secondary research sources to discover consumers' views and their need for deodorants. These related to different markets and were supplied by local country market researchers. These included:
i. A consumer Usage and Attitude study. This had been conducted a few years earlier across various markets (UK, France and USA).
ii. An external study by Fragrance Houses. This covered the importance of scent and fragrance to people's well-being and mood.
Primary research
The research team felt therefore there was not enough recent knowledge about the consumer in the secondary research. They commissioned some primary qualitative research in key markets (Germany, France, UK and USA). This was aided by the local Market Research Manager. The aim was to understand the motivations for using deodorant amongst the female consumer.
Primary research is used when there is no existing data available to answer your questions.
The research involved small discussion groups of females. This helped researchers understand the beliefs and motivations of this group. There were several main findings:
• There is steady growth in females shaving. They wanted to look after their underarms throughout all seasons (not just in summer).
• Women cared increasingly about the condition of their underarms.
• Women desired attractive, neat underarms. This symbolised sensuality and femininity.
• The deodorant segment remained focused on functional rather than beautifying products.
Results of the research
The market research revealed an unexplored market potential for NIVEA Deodorant. The brand did not have a specific product that addressed 'underarm beauty' for the female consumer. No direct competitor was offering a product to meet these needs. So there was a clear opportunity to develop a new product. This would fit across different markets and with the current NIVEA Deodorant range.
Turning consumer insights into product concepts
Consumers showed a need for a 'beautifying, caring deodorant'. The team generated ideas on how to address the consumer need.
From these ideas the marketing team created 'product concepts'. These describe the product benefits and how they will meet the consumer needs. Several concepts were written in different ways. These explained and expressed unique product attributes.
The company needed to know which concept was preferred by prospective consumers. It carried out market research to test whether the concepts would work. The research was conducted amongst the desired target market. For Pearl and Beauty, the desired target market was 18-35 year-old women who were beauty-orientated, followed fashion and looked for products with extra benefits.
Quantitative research on the concept was carried out in two test markets (France and Germany). An international company like Beiersdorf must test products in more than one market to assess properly the global appeal.
The concepts were tested monadically. Monadic testing means that the respondent of the test is only shown one concept. This stops the respondent being biased by seeing many variations of the same product concept.
A number of criteria were used to test the concepts:
1) Deodorant category performance measures. These included wetness, dryness, and fragrance. The new concept must deliver generic core benefits.
2) Product attributes specific to the new product and NIVEA core values. The new Pearl and Beauty product has additional benefits to a 'regular' deodorant. For example, it leaves your skin feeling silky and gives you beautiful underarms. Consumers needed to understand and see these benefits.
3) The product needed to be relevant and motivate a consumer to purchase it.
The team chose the 'winning' concept. This best conveyed beauty while remaining relevant to the deodorant category and NIVEA brand.
Next the research team tested various name ideas for the product and developed different designs for the packaging. Packaging design plays a very important role in helping to communicate the image of the product. Pearl and Beauty needed to communicate femininity and sophistication. Pink was a natural colour choice for the packaging. They also used a soft pearlescent container to emphasise the 'pearl extracts' in the product.
Various design ideas were tested using quantitative market research. In addition, this helped to predict the volume of the new products that would be sold, the optimal selling price and the level of switching from existing NIVEA Deodorant and competitor products.
Testing the product, brand positioning and advertising
Testing
The stages described so far produced a product concept that consumers felt was relevant and which they were willing to buy. The next stage was to test the product on actual customers. Many product launches fail, despite great advertising. A big reason is because the product fails to live up to the promises made.
The Market Research Team conducted a product usage test. A de-branded sample of the proposed new product was given to the target consumer of females in several countries. De-branded means the deodorant was in a blank container so that the consumers did not know who made the product or what type it was. Very often consumers form opinions about products and services from advertising and packaging. This can sometimes be very strong and creates a bias in what they think of a product before trying it.
The consumers were asked to use the new deodorant for a week. They kept a diary of when they used it and scored the performance of the deodorant against a list of criteria. These included:
• Did it keep you dry all day?
• Did you have to reapply it?
• Did you like the fragrance?
• Did it last all day?
• Was the deodorant reliable?
Consumers applied the 'de-branded' deodorant under their right armpit and continued to use their current deodorant under their left armpit. This helped the users gauge if it was as good as or better than the brand they normally used. This gave a measure of how likely the consumer would be to swap brands.
The results of the test were very positive. Most consumers loved the fragrance and the feel of the product on their skin. They felt it performed as well as their current deodorant. Most said they would swap their brands after trying the product.
Brand positioning
Now the marketing team had a new product idea that consumers liked. It had a name and packaging design that were well received. They now needed to check how this fitted with the rest of the NIVEA Deodorant brand positioning and range.
The brand position is the specific niche in the market that the brand defines itself as occupying.
The NIVEA Deodorant Pearl and Beauty adds a touch of feminine sophistication and elegance to the NIVEA Deodorant brand's personality. This built on the core deodorant positioning. It made NIVEA Deodorant more appealing, modern and unique to trendy, young female consumers.
Using qualitative research to inform advertising
The next stage was to brief an advertising agency to develop communication to support the launch of the new product. Through market research the team could check whether the advertisements positively supported and communicated the new product.
The company conducted qualitative research on some advertising ideas amongst various groups of the target consumers. It presented ideas in the form of 'storyboards' of what a TV advert could look like. The objective was to evaluate which were the best ideas in terms of:
• Did they stand out as exciting or different?
• Were they relevant to the consumer?
• Did they communicate the right things about the new product?
• Did they persuade the consumer to want to purchase the product?
Evaluating success
Once the product is launched and the consumer can actually purchase it, the research process does not stop.
Continuous consumer tracking can be carried out to find out consumers' views of the new product. This involves interviewing people every day to find out whether they are using the product, what they think of it and why they would purchase it.
Beiersdorf uses other, secondary data sources such as consumer panel data and EPOS (electronic point of sale) data. These monitor the sales effectiveness of the product throughout the launch phase and through the product life cycle.
Conclusion
New product development should start with an insight based on consumer needs.
Throughout the NPD process, market research is a valuable tool for Beiersdorf to check viability and minimise the risk of the product launches.
Being an international company, it is essential that Beiersdorf develops new products using the insights of consumers across markets and cultures. This ensures the products are relevant to a large number of global consumers and will deliver the maximum return when launched.
This maximises return on investment for the company and results in happy, satisfied and loyal consumers.
Wednesday, November 24, 2010
Recap of 24th Nov Session.
Differentiation
Points discussed are as following:-
Strategies for Reaching Target Markets
Marketers have outlined four basic strategies to satisfy target markets: undifferentiated marketing or mass marketing, differentiated marketing, concentrated marketing, and micromarketing.
We will see Mass marketing and Target marketing with examples here:-
1)Mass Marketing:-Its nothing but MPDP ie mass production,mass distribution and mass promotion.The seller engages in mass production,distribution and promotion of one product for all buyers. Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is type of marketing (or attempting to sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience. By reaching the largest audience possible exposure to the product is maximized. In theory this would directly correlate with a larger number of sales or buy in to the product. As the name says its mass so your trying to get your as many as you can.
The opposite to Niche marketing as it focuses on high sales and low prices. It aims to provide products and services that will appeal to the whole market.
Background
Mass marketing or undifferentiated marketing has its origins in the 1920s with the inception of mass radio use. This gave corporations an opportunity to appeal to a wide variety of potential customers. Due to this, variety marketing had to be changed in order to persuade a wide audience with different needs into buying the same thing. It has developed over the years into a worldwide multi-billion dollar industry. Although sagging in the Great Depression it regained popularity and continued to expand through the 40s and 50s. It slowed during the anti-capitalist movements of the 60's and 70's before coming back stronger than before in the 80's, 90's and today. These trends are due to corresponding upswings in mass media, the parent of mass marketing. For most of the twentieth century, major consumer-products companies held fast to mass marketing- mass producing, mass distributing and mass promoting about the same product in about the same way to all consumers. Mass marketing creates the largest potential market, which leads to lowered costs.
Examples:-
For example, products advertised during national television programs reach consumers in entire countries. As long as these products are available countrywide, advertising to such a huge demographic is considered successful marketing strategy. Consumers seeing products advertised on television commercials are more likely to choose them over similar store products that weren't promoted. Showing television viewers the actual product and communicating benefits such as getting sparkling white teeth by using Brand X toothpaste has been shown to increase sales of advertised products. As the commercials are repeated, the repetition through broadcasting helps to create brand recognition.In mass marketing, products that many people want or need such as soda, toothpaste, bread and household cleaners are advertised to a large audience.
-Henry Ford offered the Model-T Ford in one color ie Black.
-Coca Cola sold only one kind of coke in a 6.5-ounce bottle.
What’s the difference between mass marketing and target marketing?
Mass marketing aims to reach as many people as possible: quantity. Tend to be products
that everyone buys. Example: Coca-Cola. Burger King. K-mart. Broadcast networks(ABC, CBS).
Target marketing aims to reach a specific, “high quality” audience.Eg:World Wrestling Entertainment’s (WWE) target market is young males. Monday Night RAW® is the number one entertainment program on primetime cable among male viewers (2 million+) including the male demographics of 18-34, 18-49 and 25-54. It is shown at 9:00 PM ET to reach its target market.
The Big Question: Is Mass Marketing Dead or Alive???
Inspite of the fact that it creates largest potential market,which leads to lowest costs incurred in mass mktg which can ultimately lead to lower prices or higher margins,its still under argument.However,many critics point to the increasing splintering of the mkt,and proliferation of advertising media and distribn channels,which are making it difficult and increasingly expensive to reach a mass audience.Some claim that mass mktg is dying and most companies are turning to micromarketing at one of the 4 levels ie segments,niches,local areas and individuals.
Also creating mass marketing platforms in today's fragmenting media world is perhaps more important for certain business categories that need to influence millions of customers daily (e.g., beer, fast food, soft drinks, politicians) than trying to assemble slivers of audience in the even more fragmented web world. After all, there are not many Super Bowl, Academy Award or Olympic level broadly based media vehicles left. And there still is no more powerful marketing communications medium than television.
2)Cluttered markets(Future of Branding approach):-What was Marketing all about and why it failed along the way and gave away to now present day branding where CMO’s and Brand Managers integrated personality into the brand which essentially gives a chance to talk about Future of Branding in a cluttered market where brands can be given a human-face which consumers can associate to and in the process of association be a brand evangelist.
Marketing campaigns/promotions over the years have changed leaps & bounds. Marketing, slowly but steadily is embodying a new shape, a new trend perhaps. It’s becoming more human IMHO(in my humble opinion). By human, it means that marketing is getting intertwined more & more into human life.
The shape of marketing programs are distinctly changing from what it used to be, what is it now and where it’s going in the future. Previously, it used to be only about features, quality, attributes, usability and everything related to brand as a standalone entity. Now things have changed or more so, it is changing rapidly.
Now CMO’s and Brand managers across the world are talking about new age branding. They are putting personality back into the brand. Though some may even argue that branding is dead; but is it so? Putting India into perspective where we have got millions of customers for thousands of brands just to satisfy unique category of products; so here “Branding is Dead” would just be a misnomer(an interpretation that is known to be untrue). More so because of the readiness of the competitors to imitate even the core attributes of any brand which makes it all the more important to pursue the branding activities just to buy that customers mindshare.
What I assume is that the future of brands is to more human i.e. brands reflecting emotions. Emotions because that is what human beings are made of.
Quote-Unquote: Saying goes that human beings are mere manifestation of rationality & logic whereas the truth is that we all are emotional, sensitive and perceptive beings; E.g. we still love kids even though they infuriate us with their klutzy acts.
So, personalities change with time, what doesnt change is emotions, sensations & passion. That’s what we all are made of. So brands along with time need to reflect that. Its not that all brands need to change right away but certainly they have to because once there are too many brands in the marketplace & less time for customers to choose, they may ignore. And ignoring means all the millions & millions spend on brand building goes to waste. So personality incorporated brand can be the stepping stone to make brands more human which walks, talks and listens to your customer. The best example is Apple & Google.
Product differentiation is often necessary in competitive markets where customers have a hard time differentiating between products. For example, product differentiation might be necessary when a new laundry detergent is advertised: Since so many brands of detergent already exist, an aggressive advertising campaign would be required. Without this aggressive advertising, customers would not be aware of the product's availability and how it differs from other products on the market. The advertising budget is higher in order to pay for the additional advertising.Differentiation is quite difficult in a cluttered mkt.Its not only the brand equity that matters, other crucial factors prevail and must be emphasized too.
Eg:Examples abound of companies that spend millions of dollars on advertising in order to be key players in their respective industries (e.g., Coca Cola and General Motors).
-Sony( make.believe,Intel,Apple:They still have a brand, and they can do wonders with it.
3)Mktg Mix by E.Gerome McCarthy:-4 p's(product,price,promotion and place) are very imp in differentiating a product(Mfg sector) alongwith the 3 p's(people,process,physical evidence)applied in Service sector.
-Pricing and product aspect eg:-Sony in TV,Nokia in Cellphones.
4)Efficacy of mktg mix in differentiating a product:
When mkt share dips down suddenly,it has a drastic effect.Nokia brand-whether ppl are having a dent or head on.Promotional offers by Bigbazaar,pricing done by Sony.
5)Conditioning learning:-As a marketer,the brands condition the potential customers to a stimulus.
eg:Kishore Biyani(Head of FutureGroup) believed that everyone tried to condition people on festivals and occasions but not on national holidays like Independence day & Republic day,he has differentiated on efficacy of mktg mix by introducing unique offers on these days too.
Place aspect-Shopping mall at Ahmedabad,Shoppers Stop-by looking out for profitable location.McDonalds on National Highways.Cafe Coffee day in remote areas.
Next Session: Crafting Brand Positioning(taking into account Attributes,Brand and Space).
Points discussed are as following:-
Strategies for Reaching Target Markets
Marketers have outlined four basic strategies to satisfy target markets: undifferentiated marketing or mass marketing, differentiated marketing, concentrated marketing, and micromarketing.
We will see Mass marketing and Target marketing with examples here:-
1)Mass Marketing:-Its nothing but MPDP ie mass production,mass distribution and mass promotion.The seller engages in mass production,distribution and promotion of one product for all buyers. Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is type of marketing (or attempting to sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience. By reaching the largest audience possible exposure to the product is maximized. In theory this would directly correlate with a larger number of sales or buy in to the product. As the name says its mass so your trying to get your as many as you can.
The opposite to Niche marketing as it focuses on high sales and low prices. It aims to provide products and services that will appeal to the whole market.
Background
Mass marketing or undifferentiated marketing has its origins in the 1920s with the inception of mass radio use. This gave corporations an opportunity to appeal to a wide variety of potential customers. Due to this, variety marketing had to be changed in order to persuade a wide audience with different needs into buying the same thing. It has developed over the years into a worldwide multi-billion dollar industry. Although sagging in the Great Depression it regained popularity and continued to expand through the 40s and 50s. It slowed during the anti-capitalist movements of the 60's and 70's before coming back stronger than before in the 80's, 90's and today. These trends are due to corresponding upswings in mass media, the parent of mass marketing. For most of the twentieth century, major consumer-products companies held fast to mass marketing- mass producing, mass distributing and mass promoting about the same product in about the same way to all consumers. Mass marketing creates the largest potential market, which leads to lowered costs.
Examples:-
For example, products advertised during national television programs reach consumers in entire countries. As long as these products are available countrywide, advertising to such a huge demographic is considered successful marketing strategy. Consumers seeing products advertised on television commercials are more likely to choose them over similar store products that weren't promoted. Showing television viewers the actual product and communicating benefits such as getting sparkling white teeth by using Brand X toothpaste has been shown to increase sales of advertised products. As the commercials are repeated, the repetition through broadcasting helps to create brand recognition.In mass marketing, products that many people want or need such as soda, toothpaste, bread and household cleaners are advertised to a large audience.
-Henry Ford offered the Model-T Ford in one color ie Black.
-Coca Cola sold only one kind of coke in a 6.5-ounce bottle.
What’s the difference between mass marketing and target marketing?
Mass marketing aims to reach as many people as possible: quantity. Tend to be products
that everyone buys. Example: Coca-Cola. Burger King. K-mart. Broadcast networks(ABC, CBS).
Target marketing aims to reach a specific, “high quality” audience.Eg:World Wrestling Entertainment’s (WWE) target market is young males. Monday Night RAW® is the number one entertainment program on primetime cable among male viewers (2 million+) including the male demographics of 18-34, 18-49 and 25-54. It is shown at 9:00 PM ET to reach its target market.
The Big Question: Is Mass Marketing Dead or Alive???
Inspite of the fact that it creates largest potential market,which leads to lowest costs incurred in mass mktg which can ultimately lead to lower prices or higher margins,its still under argument.However,many critics point to the increasing splintering of the mkt,and proliferation of advertising media and distribn channels,which are making it difficult and increasingly expensive to reach a mass audience.Some claim that mass mktg is dying and most companies are turning to micromarketing at one of the 4 levels ie segments,niches,local areas and individuals.
Also creating mass marketing platforms in today's fragmenting media world is perhaps more important for certain business categories that need to influence millions of customers daily (e.g., beer, fast food, soft drinks, politicians) than trying to assemble slivers of audience in the even more fragmented web world. After all, there are not many Super Bowl, Academy Award or Olympic level broadly based media vehicles left. And there still is no more powerful marketing communications medium than television.
2)Cluttered markets(Future of Branding approach):-What was Marketing all about and why it failed along the way and gave away to now present day branding where CMO’s and Brand Managers integrated personality into the brand which essentially gives a chance to talk about Future of Branding in a cluttered market where brands can be given a human-face which consumers can associate to and in the process of association be a brand evangelist.
Marketing campaigns/promotions over the years have changed leaps & bounds. Marketing, slowly but steadily is embodying a new shape, a new trend perhaps. It’s becoming more human IMHO(in my humble opinion). By human, it means that marketing is getting intertwined more & more into human life.
The shape of marketing programs are distinctly changing from what it used to be, what is it now and where it’s going in the future. Previously, it used to be only about features, quality, attributes, usability and everything related to brand as a standalone entity. Now things have changed or more so, it is changing rapidly.
Now CMO’s and Brand managers across the world are talking about new age branding. They are putting personality back into the brand. Though some may even argue that branding is dead; but is it so? Putting India into perspective where we have got millions of customers for thousands of brands just to satisfy unique category of products; so here “Branding is Dead” would just be a misnomer(an interpretation that is known to be untrue). More so because of the readiness of the competitors to imitate even the core attributes of any brand which makes it all the more important to pursue the branding activities just to buy that customers mindshare.
What I assume is that the future of brands is to more human i.e. brands reflecting emotions. Emotions because that is what human beings are made of.
Quote-Unquote: Saying goes that human beings are mere manifestation of rationality & logic whereas the truth is that we all are emotional, sensitive and perceptive beings; E.g. we still love kids even though they infuriate us with their klutzy acts.
So, personalities change with time, what doesnt change is emotions, sensations & passion. That’s what we all are made of. So brands along with time need to reflect that. Its not that all brands need to change right away but certainly they have to because once there are too many brands in the marketplace & less time for customers to choose, they may ignore. And ignoring means all the millions & millions spend on brand building goes to waste. So personality incorporated brand can be the stepping stone to make brands more human which walks, talks and listens to your customer. The best example is Apple & Google.
Product differentiation is often necessary in competitive markets where customers have a hard time differentiating between products. For example, product differentiation might be necessary when a new laundry detergent is advertised: Since so many brands of detergent already exist, an aggressive advertising campaign would be required. Without this aggressive advertising, customers would not be aware of the product's availability and how it differs from other products on the market. The advertising budget is higher in order to pay for the additional advertising.Differentiation is quite difficult in a cluttered mkt.Its not only the brand equity that matters, other crucial factors prevail and must be emphasized too.
Eg:Examples abound of companies that spend millions of dollars on advertising in order to be key players in their respective industries (e.g., Coca Cola and General Motors).
-Sony( make.believe,Intel,Apple:They still have a brand, and they can do wonders with it.
3)Mktg Mix by E.Gerome McCarthy:-4 p's(product,price,promotion and place) are very imp in differentiating a product(Mfg sector) alongwith the 3 p's(people,process,physical evidence)applied in Service sector.
-Pricing and product aspect eg:-Sony in TV,Nokia in Cellphones.
4)Efficacy of mktg mix in differentiating a product:
When mkt share dips down suddenly,it has a drastic effect.Nokia brand-whether ppl are having a dent or head on.Promotional offers by Bigbazaar,pricing done by Sony.
5)Conditioning learning:-As a marketer,the brands condition the potential customers to a stimulus.
eg:Kishore Biyani(Head of FutureGroup) believed that everyone tried to condition people on festivals and occasions but not on national holidays like Independence day & Republic day,he has differentiated on efficacy of mktg mix by introducing unique offers on these days too.
Place aspect-Shopping mall at Ahmedabad,Shoppers Stop-by looking out for profitable location.McDonalds on National Highways.Cafe Coffee day in remote areas.
Next Session: Crafting Brand Positioning(taking into account Attributes,Brand and Space).
Tuesday, November 23, 2010
Recap of 19th nov,2010
Ansoff's matrix provides four different growth strategies:
Market Penetration - the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share.
for example: Micromax is gaining its market share in an existing market created by majorbrands like nokia, sony ericsson, samsung etc. in an existing product ie. mobile phones.
Market Development - the firm seeks growth by targeting its existing products to new market segments.
for example: e-services,providing e-services to the banking system like transactions, account check etc.kelloge's has developed a breakfast habbit in india which wasnot there in the indian market.
Product Development - the firms develops new products targeted to its existing market segments.
For example, Mc.Donald's is always within the fast-food industry, but frequently markets new burgers.
Diversification - the firm grows by diversifying into new businesses by developing new products for new markets.
for example: pepsi was previously only in the soft drink manufacturing business but it diversified it's business into health drinks and snacks,
Bajaj was a scooter manufacturer then it diversified into bikes.
Then the concept of ' touch point ' was been discussed, it means interaction with the customers through various means.
like
through e-banking site,
through tollfree numbers to call, where consumers can interact and give their feedbacks or queries.
through message like ' chaat ke thaat ' where the tagline is ' hum sab chatore hai ' where consumers can relate themselves to the message.
through service like free demonstration of any product.
through media,
through retail like the product's placing in the retail stores.
first mover advantage and the first mover disadvantage:
first mover advantage is the advantage gained by the initial occupant of a market segment. This advantage is there from the fact that the first entrant can gain control of resources that followers may not be able to match.
for example: Maggi noodles which is the first mover in indian market in its category and created a huge market share in it.
first mover disadvantage:
first, it must educate its customers about the new product or service. This situation poses a significant risk since would-be customer response to products cannot always be predicted.
Second, the issue of having to educate market participants also holds true for partners and suppliers.
Third, first movers often make costly mistakes that enable later entrants to penetrate the market. for example: The internet search market. Yahoo! and many of the other search players treated search technology as a loss leader. As a result, they invested little in developing their search technology. This strategy provided Google with the opportunity to differentiate itself.
A video of Interview with Allwyn Agnel(PagalGuy.com Editor)
http://www.youtube.com/watch?v=3cBjCvRNkWI&feature=player_embedded
Recap of 22nd Nov session
Segment Attractiveness-it is about the manner in which a company comes out in its own way to communicate to people.
in the present world,people have become more conscious about legal aspects regarding a company. so there has been an modification of PEST analysis to address the legal aspect and further termed as PESTL analysis.In India ,with the enforcement of the RTI act people have gained a tool to question any wrongdoing.Indian people have become very finicky like the US people and do not want to engage with companies facing legal issues.
Telecom being an attractive segment,many companies ventured in this sector but Uninor is facing legal issues regarding licenses acquired through unfair means.
At times when indian stock market seemed scaling heights,there was the scam of demat accounts where people traded through multiple accounts.
Reality shows on Indian channels have become an attractive segment .Certain shows have crossed a limit and are broadcasting content inappropriate for cetain audience .This has forced the government to become cautious and take steps such as to change timings which can affect show TRPs.
In short,it has become essential for companies to be aware of existing laws so that they do not cross the line where their business get affected in negative direction.
Another concept existing in today's world is that of Parasitical Marketing,where certain stores (or mini-stores) act as parasites in the shopping malls
e.g.Virgin mobile stores-sell new mobile connections to people who mainly visit malls for window shopping.
jawed habib salons in malls also attract customers in a similar manner.
Segment Profitability
Certain segments which are attractive but not profitable
e.g. education sector was profitable during 1990s but in the present time it is not because of cut throat competition and certain legal issues.
unorganised durable stores with upcoming of Organised stores like Next(in electronics) are not profitable (their main drawback is that they cannot come up with their own brands as in case of FMCG goods).
In case of retail sector ,we can say it was not profitable although attractive.So subhiksha ,spencer faced problems in their businesses.subhiksha unlike hypercity opened many chains without consolidating on single outlet which proved non-beneficial .
In retail sector,if questions like"is ticket size (e.g. male grooming) increasing?" get positive response ,then it can be considered as profitable segment.(Note: ticket size can be explained like a customer's expenditure in a salon increasing as he goes for facial and all).
but pantaloons made an intiative to make the segment profitable by placing its brand of john miller along with other brands (without letting the customer know about it)
In telecom sector,if the ARPU is increasing ,then it can be said to be a profitable segment in a particular market.
we can learn that segment attractiveness should not be the basis if the segment is not profitable.In short, consolidation should be the first step/priority.
we can pose a question whether attractiveness of IPL (in seasons 1,2,3) be made profitable (in season 4).
in the present world,people have become more conscious about legal aspects regarding a company. so there has been an modification of PEST analysis to address the legal aspect and further termed as PESTL analysis.In India ,with the enforcement of the RTI act people have gained a tool to question any wrongdoing.Indian people have become very finicky like the US people and do not want to engage with companies facing legal issues.
Telecom being an attractive segment,many companies ventured in this sector but Uninor is facing legal issues regarding licenses acquired through unfair means.
At times when indian stock market seemed scaling heights,there was the scam of demat accounts where people traded through multiple accounts.
Reality shows on Indian channels have become an attractive segment .Certain shows have crossed a limit and are broadcasting content inappropriate for cetain audience .This has forced the government to become cautious and take steps such as to change timings which can affect show TRPs.
In short,it has become essential for companies to be aware of existing laws so that they do not cross the line where their business get affected in negative direction.
Another concept existing in today's world is that of Parasitical Marketing,where certain stores (or mini-stores) act as parasites in the shopping malls
e.g.Virgin mobile stores-sell new mobile connections to people who mainly visit malls for window shopping.
jawed habib salons in malls also attract customers in a similar manner.
Segment Profitability
Certain segments which are attractive but not profitable
e.g. education sector was profitable during 1990s but in the present time it is not because of cut throat competition and certain legal issues.
unorganised durable stores with upcoming of Organised stores like Next(in electronics) are not profitable (their main drawback is that they cannot come up with their own brands as in case of FMCG goods).
In case of retail sector ,we can say it was not profitable although attractive.So subhiksha ,spencer faced problems in their businesses.subhiksha unlike hypercity opened many chains without consolidating on single outlet which proved non-beneficial .
In retail sector,if questions like"is ticket size (e.g. male grooming) increasing?" get positive response ,then it can be considered as profitable segment.(Note: ticket size can be explained like a customer's expenditure in a salon increasing as he goes for facial and all).
but pantaloons made an intiative to make the segment profitable by placing its brand of john miller along with other brands (without letting the customer know about it)
In telecom sector,if the ARPU is increasing ,then it can be said to be a profitable segment in a particular market.
we can learn that segment attractiveness should not be the basis if the segment is not profitable.In short, consolidation should be the first step/priority.
we can pose a question whether attractiveness of IPL (in seasons 1,2,3) be made profitable (in season 4).
Recap of 18th Nov Session.
Transition from Segmentation to Targeting
Advanced segmentation and target marketing so you can sell more and spend less.
What's the new approach?
Knowing your customers precisely, and the most effective ways to reach them are the keys to unlocking profitability. By turning in-depth data into a unified, actionable understanding, these Segmentation and Targeting solutions connect you with your most valuable customers.
Segmentation and Targeting solutions:
-Prioritize your key customers and prospects, enabling you to limit waste and increase efficiency.
-Clarify your optimal marketing mix across all elements, providing a clear view of who and where your best customers and prospects are.
-Identify and reach your targets online, and in mobile audiences.
-Integrate your own customer data with world-class market and media data to move confidently from insights to marketing action.
Effective targeting:-
1)Identify & profile distinct groups of buyers who differ in their needs and preferences.
2)Select one or more market segments to enter.
3)Establish & communicate distinctive benefits of market offering.
Benefits of Segmentation and Targeting:-
Segmentation is essentially a process whereby a provider of goods or services
chooses to group prospective customers together on the basis of a set of common
characteristics that have significant implications for its marketing activity. Common
characteristics that might be used to segment a market include variables such as age,
income, personality and lifestyle. On the basis of those common characteristics, segments are expected to respond differently to marketing activities – they may want
different features, be more or less price-sensitive, respond to particular types of
marketing communications, or use different channels. Targeting is then concerned
with the identification of an appropriate set of segments which the organization
will seek to serve. Implicit in any decision to undertake segmentation and targeting
is the realization that no single organization is capable of being all things to all
men. It is inevitable that certain products will have particular appeal to certain
kinds of individuals. At one extreme, each individual customer could be presented
as a segment of one because each individual has different needs. In such a case, the marketing mix is bespoke to match the characteristics and needs of a single person or organization. This practice is perhaps more common than might at first be imagined. In retail markets, financial advisers provide a service encounter that is unique to the individual client – as do private bankers. In corporate markets, a customized approach is essential when dealing with large corporate clients. At the other extreme, the whole population could be treated as if it were a single homogenous segment. Traditionally, banks have treated the personal banking market as homogenous and provided a single standard current account to all customers. Increasingly, however, there is recognition that customers do have differing banking needs and that there is the potential to develop specific products for specific segments.
Thus, for example, Barclays now offers over ten different current
accounts in the UK market, targeted to a variety of segments – including children,
students, people with very high incomes and people with very low incomes.
Segmentation and targeting is a means by which a number of important benefits
are secured for both providers and consumers of products and services. In summary,
the benefits of segmentation and targeting are as follows:
1. It facilitates efficient resource utilization. Indiscriminate use of the marketing mix is
a wasteful use of precious resources. By identifying and targeting discrete segments
of consumers (retail or corporate), a company is able to limit the scope of
individual components of the mix and thus reduce costs. To take a simple example,
an advertising programme involving the use of the press media will be less
expensive if it involves the use of magazines that are read by a discrete target segment
of consumers rather than the entire population. Similarly, products
designed to meet the particular needs of a given segment will not need features they do not require. Thus, segmentation results in greater resource efficiency,
which benefits consumers through better value, shareholders through reduced
waste and lower costs, and the environment through resource efficiency.
2. It allows effective targeting of new customers. The logical next step from segmenting
a market is the selection of segments to target for marketing activities. Nowadays,
it is unusual for a company to have a completely indiscriminate approach to targeting
new customers. As the costs of customer acquisition have increased and companies become increasingly focused upon customer profitability, they have to
be selective in respect of which kinds of people or organization they want to be
their customers. It must be appreciated that different customers display different
characteristics and behaviours that impact upon customer value. For example, in
the UK, SAGA targets people aged over 50 for its range of leisure and financial
services. SAGA is able to price its motor insurance premiums very keenly, as the
over-50s represent a low-risk group in terms of propensity to incur motor claims.
Thus, SAGA can be very price-competitive and deliver superior value to this
group of consumers in a way that would not be possible if the company was
trying to serve a mass market.
3. It facilitates competitive advantage. The more specific an organization’s approach to
segmenting the market, the easier it is to establish and maintain competitive
advantage. This arises by virtue of the fact that competitive advantage is a relative
concept that involves differentiating an organization from its rivals in the
eyes of its customers. Self-evidently, the more indiscriminate the approach to targeting, the wider the array of competitors against whom an organization will
have to seek to differentiate itself. In the case of SAGA, it is required to maintain
a competitive advantage over those other organizations that also seek to target
the over-50s – such as RIAS. This presents SAGA with a smaller set of key rivals
than if it were to target the entire adult population. In turn, this makes it easier to
achieve and maintain differentiation.
4. It directs the marketing mix. Best practice dictates that each target segment chosen by an organization should be subject to a specific and relevant marketing campaign.
In this way, marketing is managed to achieve the best fit with each target segment.
Consider the case of the NFU Mutual Insurance Company. Originally aimed at
providing for the insurance needs of Britain’s farmers, it has repositioned itself
to address the insurance and investment needs of the following segments:
● farmers
● people who live in rural communities
● people who live in non-metropolitan towns and have an affinity for the
countryside.
The mix for the farming segment includes insurance products that are specific to
farmers, such as crop and livestock insurance. In terms of promotion, it advertises
extensively in the farming press. As far as rural dwellers are concerned, it uses radio
and television selectively to target those who live in predominantly rural parts of
the country. Its product range is geared towards rural dwellers with a special
interest in country pursuits such as horse-riding.
Some financial service providers are affinity-based, and this allows for particularly
close targeting of the marketing mix.
Advanced segmentation and target marketing so you can sell more and spend less.
What's the new approach?
Knowing your customers precisely, and the most effective ways to reach them are the keys to unlocking profitability. By turning in-depth data into a unified, actionable understanding, these Segmentation and Targeting solutions connect you with your most valuable customers.
Segmentation and Targeting solutions:
-Prioritize your key customers and prospects, enabling you to limit waste and increase efficiency.
-Clarify your optimal marketing mix across all elements, providing a clear view of who and where your best customers and prospects are.
-Identify and reach your targets online, and in mobile audiences.
-Integrate your own customer data with world-class market and media data to move confidently from insights to marketing action.
Effective targeting:-
1)Identify & profile distinct groups of buyers who differ in their needs and preferences.
2)Select one or more market segments to enter.
3)Establish & communicate distinctive benefits of market offering.
Benefits of Segmentation and Targeting:-
Segmentation is essentially a process whereby a provider of goods or services
chooses to group prospective customers together on the basis of a set of common
characteristics that have significant implications for its marketing activity. Common
characteristics that might be used to segment a market include variables such as age,
income, personality and lifestyle. On the basis of those common characteristics, segments are expected to respond differently to marketing activities – they may want
different features, be more or less price-sensitive, respond to particular types of
marketing communications, or use different channels. Targeting is then concerned
with the identification of an appropriate set of segments which the organization
will seek to serve. Implicit in any decision to undertake segmentation and targeting
is the realization that no single organization is capable of being all things to all
men. It is inevitable that certain products will have particular appeal to certain
kinds of individuals. At one extreme, each individual customer could be presented
as a segment of one because each individual has different needs. In such a case, the marketing mix is bespoke to match the characteristics and needs of a single person or organization. This practice is perhaps more common than might at first be imagined. In retail markets, financial advisers provide a service encounter that is unique to the individual client – as do private bankers. In corporate markets, a customized approach is essential when dealing with large corporate clients. At the other extreme, the whole population could be treated as if it were a single homogenous segment. Traditionally, banks have treated the personal banking market as homogenous and provided a single standard current account to all customers. Increasingly, however, there is recognition that customers do have differing banking needs and that there is the potential to develop specific products for specific segments.
Thus, for example, Barclays now offers over ten different current
accounts in the UK market, targeted to a variety of segments – including children,
students, people with very high incomes and people with very low incomes.
Segmentation and targeting is a means by which a number of important benefits
are secured for both providers and consumers of products and services. In summary,
the benefits of segmentation and targeting are as follows:
1. It facilitates efficient resource utilization. Indiscriminate use of the marketing mix is
a wasteful use of precious resources. By identifying and targeting discrete segments
of consumers (retail or corporate), a company is able to limit the scope of
individual components of the mix and thus reduce costs. To take a simple example,
an advertising programme involving the use of the press media will be less
expensive if it involves the use of magazines that are read by a discrete target segment
of consumers rather than the entire population. Similarly, products
designed to meet the particular needs of a given segment will not need features they do not require. Thus, segmentation results in greater resource efficiency,
which benefits consumers through better value, shareholders through reduced
waste and lower costs, and the environment through resource efficiency.
2. It allows effective targeting of new customers. The logical next step from segmenting
a market is the selection of segments to target for marketing activities. Nowadays,
it is unusual for a company to have a completely indiscriminate approach to targeting
new customers. As the costs of customer acquisition have increased and companies become increasingly focused upon customer profitability, they have to
be selective in respect of which kinds of people or organization they want to be
their customers. It must be appreciated that different customers display different
characteristics and behaviours that impact upon customer value. For example, in
the UK, SAGA targets people aged over 50 for its range of leisure and financial
services. SAGA is able to price its motor insurance premiums very keenly, as the
over-50s represent a low-risk group in terms of propensity to incur motor claims.
Thus, SAGA can be very price-competitive and deliver superior value to this
group of consumers in a way that would not be possible if the company was
trying to serve a mass market.
3. It facilitates competitive advantage. The more specific an organization’s approach to
segmenting the market, the easier it is to establish and maintain competitive
advantage. This arises by virtue of the fact that competitive advantage is a relative
concept that involves differentiating an organization from its rivals in the
eyes of its customers. Self-evidently, the more indiscriminate the approach to targeting, the wider the array of competitors against whom an organization will
have to seek to differentiate itself. In the case of SAGA, it is required to maintain
a competitive advantage over those other organizations that also seek to target
the over-50s – such as RIAS. This presents SAGA with a smaller set of key rivals
than if it were to target the entire adult population. In turn, this makes it easier to
achieve and maintain differentiation.
4. It directs the marketing mix. Best practice dictates that each target segment chosen by an organization should be subject to a specific and relevant marketing campaign.
In this way, marketing is managed to achieve the best fit with each target segment.
Consider the case of the NFU Mutual Insurance Company. Originally aimed at
providing for the insurance needs of Britain’s farmers, it has repositioned itself
to address the insurance and investment needs of the following segments:
● farmers
● people who live in rural communities
● people who live in non-metropolitan towns and have an affinity for the
countryside.
The mix for the farming segment includes insurance products that are specific to
farmers, such as crop and livestock insurance. In terms of promotion, it advertises
extensively in the farming press. As far as rural dwellers are concerned, it uses radio
and television selectively to target those who live in predominantly rural parts of
the country. Its product range is geared towards rural dwellers with a special
interest in country pursuits such as horse-riding.
Some financial service providers are affinity-based, and this allows for particularly
close targeting of the marketing mix.
Friday, November 19, 2010
Five ways to a better case solution
1. A good solution will have an appropriate balance of:
- Due diligence: This is the process of gathering information, data and content about the case study
- Summing of insights: An insight is a clear or deep perception of the situation or the case. A pithy list of the gathered insights is important. A sub-set of these may support the solution
- A strategic solution: A single minded vision of the suggested strategy is critical. Avoid overplaying or disguising promotions as significant answers
- Indicative execution: A demonstration or explanation of suggested execution in coherence with the strategic solution is desired
2. Focus on what is important to the solution of the case; rather than enumerating all the data available
3. A mere play or re-write of shared data, without a deeper understanding, is unlikely to make a good case
4. Sharp distillation of the issue, and sharper delineation of the solution, constitutes a better answer!
5. The closer your solution is to realistic implementation, the higher the score!
Ref: http://www.draftfcbulkacomstrat.com/five%20ways.html
@11/20/2010 3:25 AM
Case-Study!
Here is something different...
This is one of prestigious Case-study competitions having several cases in their bank.
This is their latest Nokia C3 Case !
http://www.draftfcbulkacomstrat.com/about_comstrat2010.html
This is one of prestigious Case-study competitions having several cases in their bank.
This is their latest Nokia C3 Case !
http://www.draftfcbulkacomstrat.com/about_comstrat2010.html
Wednesday, November 17, 2010
Additions to the Summary of 17th Nov Session
1)Target mkts:- Multiplexes comprise of abt 900 out of total 12000 cinema theatres in
India. ie abt 7% are Multiplexes but generate 75% of the revenue.Categorization of movies shown in multiplexes according to viewers.(Multiplexes Vs Stand Alone theatres).
2)Facebook introducing their new email service:Targetting employed by Facebook community.Market Penetration: How they will encourage existing facebook users accustomed to usage of other email service providers like gmail,hotmail,yahoomail to use their new email service?
Target Markets future prediction:-
Cities Population
Tier-I >50 lacs.(The Metros:Delhi,Mumbai,Chennai,Kolkata,Blore,Hyderabad)
Tier-II 10 to 50 lacs.(Pune,Ahmedabad,Surat,Coimbatore,Nagpur etc)
Tier-III 5 to 10 lacs.(Indore,Bhopal,Nashik,Raipur etc)
Looking at the above figures its being believed that Tier-II & Tier-III cities are the target mkts which are going to drive products in next decade for which mkt share & revenue has to increase.
*Relation between SEC grid and Targetting:-
SEC has an imp role to play in targetting of consumers.
Urban areas:- includes study of variables like Education and Occupation
Rural areas:-includes study of Education & type of houses of consumers-Kaccha or Pakka house.
Overall analysis of SEC tells us that Education & Occupation are the most vital dimensions on which target mkt is decided.(Here CWE ie Chief Wage Earner is to be considered).
Companies found it after research that there are many variations & final grid has education & occupation as imp factors.
About 6 lacs villages and 5200 cities are there in India,SEC grid accounts for each detail under study.
Eg:Parle & its fake/counterfeit brands like Perle etc.
BCG Matrix:-
Question Marks: Low mkt share & high growth potential.Eg-Karbonn,Micromax,Lava.
The telecom market inspite of the 2G fiasco expects lot of potential growth.A lot of strategical framework is to be used here.
Cash Cow:Nokia(Low growth rate but high mkt share).
Flank Attack-Ambush Mktg eg-HUL(Dove) Vs P&G(Pantene).
Theatres Migrating towards 2 screen: Cineplexes in tier-II cities.
Defensive Strategy:-
Nokia cant adopt it in a cluttered mkt like India,same goes for Maggi.
Defensive Strategy is the biggest Mktg Myopia in a cluttered mkt like India.(Myopia-Shortsightedness)
*Shoppers Stop:Started as a retail venture in 1991 it suffered tremendous loss in 2007-08.They have redefined their strategy with opting for the most appropriate location depending upon the catchement area and cathcment profiling.
*Subhiksha: They expanded their business by entering into new regions without analysing their customers, started new stores total of 2000 from the previous 1000 figure.Result-Failure of the business.
*Hypermarket:They took 3 years to start another store in other place by studing the variables like Location,no. of outlets,overheads,rental charges included under redifing the retail strategy.
*Education Sector:- Maharashtra is the only developed state with no IIM.PEST analysis reveal the effects like brain drain.
*FMCG: Coke Vs Pepsico(Political issues during 1980).
*Pharma Sector: Paras Pharma, Patel coming up with new product Veni,because of family issues.
Cash Cow eg:- Motorola,Pagers(Why I am Here?) low mkt growth and high mkt share.
Bajaj Scooter as cash cow but doing very well in bikes after switching their strategy from umbrella branding to 1 to 1 branding. Earlier Bajaj was associated with the name of the moped like Bajaj Chetak,Bajaj Super etc but now they have changed the branding differently like Pulsar.
*Dogs:-Low mkt share and low growth rate.
If growth rate increses there can be diagonal shift from dogs to stars.
eg: Dying fish(Political issue involved)
Fabric mkt-texture knowledge not sufficient for quality assurance of the fabric.
other eg: Casettes,Radio,Walkmans,Watches,Electric Bulbs.
India. ie abt 7% are Multiplexes but generate 75% of the revenue.Categorization of movies shown in multiplexes according to viewers.(Multiplexes Vs Stand Alone theatres).
2)Facebook introducing their new email service:Targetting employed by Facebook community.Market Penetration: How they will encourage existing facebook users accustomed to usage of other email service providers like gmail,hotmail,yahoomail to use their new email service?
Target Markets future prediction:-
Cities Population
Tier-I >50 lacs.(The Metros:Delhi,Mumbai,Chennai,Kolkata,Blore,Hyderabad)
Tier-II 10 to 50 lacs.(Pune,Ahmedabad,Surat,Coimbatore,Nagpur etc)
Tier-III 5 to 10 lacs.(Indore,Bhopal,Nashik,Raipur etc)
Looking at the above figures its being believed that Tier-II & Tier-III cities are the target mkts which are going to drive products in next decade for which mkt share & revenue has to increase.
*Relation between SEC grid and Targetting:-
SEC has an imp role to play in targetting of consumers.
Urban areas:- includes study of variables like Education and Occupation
Rural areas:-includes study of Education & type of houses of consumers-Kaccha or Pakka house.
Overall analysis of SEC tells us that Education & Occupation are the most vital dimensions on which target mkt is decided.(Here CWE ie Chief Wage Earner is to be considered).
Companies found it after research that there are many variations & final grid has education & occupation as imp factors.
About 6 lacs villages and 5200 cities are there in India,SEC grid accounts for each detail under study.
Eg:Parle & its fake/counterfeit brands like Perle etc.
BCG Matrix:-
Question Marks: Low mkt share & high growth potential.Eg-Karbonn,Micromax,Lava.
The telecom market inspite of the 2G fiasco expects lot of potential growth.A lot of strategical framework is to be used here.
Cash Cow:Nokia(Low growth rate but high mkt share).
Flank Attack-Ambush Mktg eg-HUL(Dove) Vs P&G(Pantene).
Theatres Migrating towards 2 screen: Cineplexes in tier-II cities.
Defensive Strategy:-
Nokia cant adopt it in a cluttered mkt like India,same goes for Maggi.
Defensive Strategy is the biggest Mktg Myopia in a cluttered mkt like India.(Myopia-Shortsightedness)
*Shoppers Stop:Started as a retail venture in 1991 it suffered tremendous loss in 2007-08.They have redefined their strategy with opting for the most appropriate location depending upon the catchement area and cathcment profiling.
*Subhiksha: They expanded their business by entering into new regions without analysing their customers, started new stores total of 2000 from the previous 1000 figure.Result-Failure of the business.
*Hypermarket:They took 3 years to start another store in other place by studing the variables like Location,no. of outlets,overheads,rental charges included under redifing the retail strategy.
*Education Sector:- Maharashtra is the only developed state with no IIM.PEST analysis reveal the effects like brain drain.
*FMCG: Coke Vs Pepsico(Political issues during 1980).
*Pharma Sector: Paras Pharma, Patel coming up with new product Veni,because of family issues.
Cash Cow eg:- Motorola,Pagers(Why I am Here?) low mkt growth and high mkt share.
Bajaj Scooter as cash cow but doing very well in bikes after switching their strategy from umbrella branding to 1 to 1 branding. Earlier Bajaj was associated with the name of the moped like Bajaj Chetak,Bajaj Super etc but now they have changed the branding differently like Pulsar.
*Dogs:-Low mkt share and low growth rate.
If growth rate increses there can be diagonal shift from dogs to stars.
eg: Dying fish(Political issue involved)
Fabric mkt-texture knowledge not sufficient for quality assurance of the fabric.
other eg: Casettes,Radio,Walkmans,Watches,Electric Bulbs.
Recap of 15th Nov Session
IPL Case to be discussed keeping in mind the following points:
-What will happen to IPL?
-What has happened actually to IPL?
-How Franchise's work?
*3 Cases to be written by Feb-March 2011
1)Big-Boss's Marketing Strategy.
2)Mktg of High Tech Products.
3)IPL Case-4.
Revision of Segmentation types:-
1)Geographic:- Refers to division of mkt into diff geographical units like nations,states,regions,countries etc.One of the major geographical segmentation variables relevant to South Asia is division of mkts into rural and urban areas.These areas differ on number of imp parameters such as literacy levels,income,spending power,and availability of infrastructure,social and cultural orientations of people that affect the mkt potential,buying pattern and habits.Eg: Consumers in southern states like Tamil Nadu tend prefer freshly brewed coffee,while in other states tea is preffered,Some prefer strong tea from Assam while others prefer Nilgiri tea.
2)Demographic:-Division of mkt on the basis of variables like age,family size,family life cycle,gender,income,occupation,education,religion,race,generation,nationality,social class etc.These variables are popular bcoz they are often asociated with consumer needs and wants.Eg:
a)Acc to age & Life-cycle:- TV channels in India indicate segmentation based on age and life cycle, Aastha or Sanskar for older generation.Cartoon Network,Disney,Pogo for children; MTV and channel V for youngsters.
b)Acc to life-stage: Al Habib bank of Pakistan targets senior citizens with special savings schemes that yield a higher interest rate.
c)Gender based: Men and Women have diff attitudes and behave differently,based partly on genetic makeup and partly on socialization.Raymonds masculine brand Park Avenue and feminine brand as Be.
d)Income based:- Its a basic segmentation variable which determines the ability of consumers to participate in mkt exchange.However,income does not always predict the best consumers for a given product.Nirma washing powder was launched as the lowest priced detergent in India targeted at middle income segment of the mkt.As a brand,Nirma has maintained its middle class focus and "value for money" proposition.
e)Generation:Each generation is profoundly influenced by the times in which it grows up-the music,movies,politics and defining events of that period.Demographers call these generational groups as cohorts.The younger generations play significant roles,not only as consumers,but also as initiators and infuencors of buying decisions.A study by Walt Disney Company and Group M company reveals that about 63% of children are invloved in purchase decisions of wide range of products ranging from computers,bicylces,TV sets,automobiles.
f)Social Class:-It has a strong influence on preference in cars,clothing,leisure activities etc and also the retailers and many companies design products and services for specific social classes. The concept of social class in India is influenced by caste system-a very unique system peculiar to India.This complexity of Indian mkt has prompted the development of "SEC" as a viable method to segment mkts.
3)Psychographic:-Its the science of using psychology and demographics to better understand the consumers.Here the buyers are divided into diff groups on the basis of psychological.personality traits,lifestyle or values.Eg: Mcdonalds changed their menu in India to adapt to consumr preferences. Beef is avoided in the menu and instead,veg burger was introduced based on preference for vegetarian food.
4) Behavioral:Here,marketers divide buyers into groups on basis of their knowledge of attitude towards use of, or response to a product or service.
a)Decision roles:People play 5 roles in a buying decision:Initiator,Influencer,Decider,Buyer, and user.
Women play significant influencing and deciding role for kitchen appliances.
b)Behavioral variables:
-Occasions:Greeting cards from Archis and Hallmark,Amul chocalates as "a gift for someone you love".Monaco biscuits come with suggestions for toppings so that biscuits can be served as snacks at parties etc.
-Benefits:Shampoos offer basic cleaning of hair,conditioning effects.Brands such as Clinic,Chik,Pantene offer diff variants addressed to diverse benefit segments.
-User Status:Every product has its non-users,ex-users,potential users,first time users and regular users.eg:Blood bank cannot rely on regular donors to supply blood hence they should recruit new first time donors and contact ex-donors each with a different mktg strategy.
-Usage rate-Mkts can be segmented into light,medium and heavy product users.Eg: Cellphone service providers in South Asia offer low tariffs targeted at entry-level users of cell phone service to attract them to product or service.
-Loyalty status: 4 groups based on brand loyalty status-
a)Hard core loyals b)Split loyals c)Shifting loyals d)Switchers.
Loyalty programs tend to reduce customers propensity to switch brands.
Eg: In industries like retailing,hospitality,airlines companies offer loyalty programs like awards etc.
5)Usage Based:-eg:Sachetization of products.
Transition from Segmentation to Targetting:
Is the mkt sustainable?
Is the mkt measurable?
Nirma in its early days was a single product and employed mass mktg strategy.
But now mass mktg approach seems to be declined eg:Welding rods instance told by sir.
Bajaj Scooters believed that "Mkt for two wheelers is not sustainable" but later Hero Honda proved them wrong by introducing Hero Honda Splendor.
Newcomers in 2 wheeler production: TVS,Kawasaki,Mahindra.
On the same lines: Is the B school sustainable in India?
Is the 2 year program of MBA sustainable?
For more reading on Sustainability read: Marketing model by Lillian & Kotler.
-What will happen to IPL?
-What has happened actually to IPL?
-How Franchise's work?
*3 Cases to be written by Feb-March 2011
1)Big-Boss's Marketing Strategy.
2)Mktg of High Tech Products.
3)IPL Case-4.
Revision of Segmentation types:-
1)Geographic:- Refers to division of mkt into diff geographical units like nations,states,regions,countries etc.One of the major geographical segmentation variables relevant to South Asia is division of mkts into rural and urban areas.These areas differ on number of imp parameters such as literacy levels,income,spending power,and availability of infrastructure,social and cultural orientations of people that affect the mkt potential,buying pattern and habits.Eg: Consumers in southern states like Tamil Nadu tend prefer freshly brewed coffee,while in other states tea is preffered,Some prefer strong tea from Assam while others prefer Nilgiri tea.
2)Demographic:-Division of mkt on the basis of variables like age,family size,family life cycle,gender,income,occupation,education,religion,race,generation,nationality,social class etc.These variables are popular bcoz they are often asociated with consumer needs and wants.Eg:
a)Acc to age & Life-cycle:- TV channels in India indicate segmentation based on age and life cycle, Aastha or Sanskar for older generation.Cartoon Network,Disney,Pogo for children; MTV and channel V for youngsters.
b)Acc to life-stage: Al Habib bank of Pakistan targets senior citizens with special savings schemes that yield a higher interest rate.
c)Gender based: Men and Women have diff attitudes and behave differently,based partly on genetic makeup and partly on socialization.Raymonds masculine brand Park Avenue and feminine brand as Be.
d)Income based:- Its a basic segmentation variable which determines the ability of consumers to participate in mkt exchange.However,income does not always predict the best consumers for a given product.Nirma washing powder was launched as the lowest priced detergent in India targeted at middle income segment of the mkt.As a brand,Nirma has maintained its middle class focus and "value for money" proposition.
e)Generation:Each generation is profoundly influenced by the times in which it grows up-the music,movies,politics and defining events of that period.Demographers call these generational groups as cohorts.The younger generations play significant roles,not only as consumers,but also as initiators and infuencors of buying decisions.A study by Walt Disney Company and Group M company reveals that about 63% of children are invloved in purchase decisions of wide range of products ranging from computers,bicylces,TV sets,automobiles.
f)Social Class:-It has a strong influence on preference in cars,clothing,leisure activities etc and also the retailers and many companies design products and services for specific social classes. The concept of social class in India is influenced by caste system-a very unique system peculiar to India.This complexity of Indian mkt has prompted the development of "SEC" as a viable method to segment mkts.
3)Psychographic:-Its the science of using psychology and demographics to better understand the consumers.Here the buyers are divided into diff groups on the basis of psychological.personality traits,lifestyle or values.Eg: Mcdonalds changed their menu in India to adapt to consumr preferences. Beef is avoided in the menu and instead,veg burger was introduced based on preference for vegetarian food.
4) Behavioral:Here,marketers divide buyers into groups on basis of their knowledge of attitude towards use of, or response to a product or service.
a)Decision roles:People play 5 roles in a buying decision:Initiator,Influencer,Decider,Buyer, and user.
Women play significant influencing and deciding role for kitchen appliances.
b)Behavioral variables:
-Occasions:Greeting cards from Archis and Hallmark,Amul chocalates as "a gift for someone you love".Monaco biscuits come with suggestions for toppings so that biscuits can be served as snacks at parties etc.
-Benefits:Shampoos offer basic cleaning of hair,conditioning effects.Brands such as Clinic,Chik,Pantene offer diff variants addressed to diverse benefit segments.
-User Status:Every product has its non-users,ex-users,potential users,first time users and regular users.eg:Blood bank cannot rely on regular donors to supply blood hence they should recruit new first time donors and contact ex-donors each with a different mktg strategy.
-Usage rate-Mkts can be segmented into light,medium and heavy product users.Eg: Cellphone service providers in South Asia offer low tariffs targeted at entry-level users of cell phone service to attract them to product or service.
-Loyalty status: 4 groups based on brand loyalty status-
a)Hard core loyals b)Split loyals c)Shifting loyals d)Switchers.
Loyalty programs tend to reduce customers propensity to switch brands.
Eg: In industries like retailing,hospitality,airlines companies offer loyalty programs like awards etc.
5)Usage Based:-eg:Sachetization of products.
Transition from Segmentation to Targetting:
Is the mkt sustainable?
Is the mkt measurable?
Nirma in its early days was a single product and employed mass mktg strategy.
But now mass mktg approach seems to be declined eg:Welding rods instance told by sir.
Bajaj Scooters believed that "Mkt for two wheelers is not sustainable" but later Hero Honda proved them wrong by introducing Hero Honda Splendor.
Newcomers in 2 wheeler production: TVS,Kawasaki,Mahindra.
On the same lines: Is the B school sustainable in India?
Is the 2 year program of MBA sustainable?
For more reading on Sustainability read: Marketing model by Lillian & Kotler.
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