Friday, March 16, 2007

Marketing Funda : Limited Edition

Marketing Funda #4: Limited Edition

The post is inspired by one of my students Mr.Prateesh who raised this intriguing question: Why do companies come out with Limited Edition products?
Obviously this question can be seen in the light of high promotion advertisements of Marketing giants like Pepsi launching Pepsi Gold and Mirinda Limited Edition.
According to Wikipedia, the term "Special Edition" when used in Marketing, is intended to give the product something new and previously unseen in the regular edition.Limited Edition carries a sense of urgency and the products will be released for a shorter time or in limited numbers.
Limited Edition term is derived from publishing industry where limited number of editions can be printed with top quality impressions. But later this term was taken and used across industries.

Although Limited Editions are sold at a premium, there are many FMCG companies take up this concept minus the premium factor.The industry that has used this concept widely is the automotive sector . In India too there were lot of products that come with Limited Editions. The recent one is the Pepsi World cup Gold. Pepsi has earlier came out with Pepsi Blue in the last world cup.

The reason for launching a Limited Editions can be many :
1. Induce brand rejuvenation
2.Consumer Connect
3.Celebrate an event
4.On occasions/Festivals
5.Sales Promotion
6.Test Marketing
7.Creating a Hype in the market
8.Celebrity Endorsement
9.Encourage multiple purchases.
10. Create Brand Associations
11. Enhance Share of Mind

According to MG Parameswaran of Ullka, marketers use Limited Editions to increase consumer connect, to excite the market or for celebrations ( source:Financial Express). For example Lux came out with two limited edition flavor Chocolate Seduction to celebrate its 75 th anniversary.Pepsi Blue is to celebrate World Cup. Amara Raja Batteries had a Limited Edition to celebrate Narain Karthikeyan's entry into F1.

Sometimes Brands come out with Limited Editions to Excite the market. If the brand sales is plateauing, Limited Editions can bring back excitement into the product.The incremental improvements may encourage many new consumers into the product thus rejuvenating the brand.
Limited Editions also help to encourage customers to make multiple purchases as a Collectors item. Sometimes marketers use these Editions as a test marketing of a feature of attribute. For example Wagon R used a series of Limited Editions to test market some of the features which later became the part of the standard equipment.
Limited Editions are also used by marketers to boost the Share of Mind i.e to ensure Top of Mind Recall. Brands like Pepsi which has limited scope of differentiation in terms of product attributes uses Limited Edition like Pepsi Aha, Caffe Chino to boost the image and also the high profile promotion ensure top of mind recall.

Limited Editions are used for special seasons and occasions. Many marketers launch event/theme based variants of their products that runs for a short period but with a view to enhance the brand image.Some times Limited Editions are used to create a hype in the market.

Another advantage marketers see in Limited Editions are to use it to maximize the use of a celebrity.Palio effectively used Sachin and Special edition cars to boost the image of the brand.Limited Editions also help the brand to create positive brand associations. Coke used limited edition Rang De Basanti bottles to create positive association of truth and optimism.

All though there are many advantages to using Limited Editions as a strategic marketing tool, often these editions are expensive.Most often the return from these limited ranges cannot be measured. Sometimes the Limited Editions become failures which in turn affect the brand equity of the parent brand. Now a days marketers use Limited Editions as a tactical weapon ( sales promotion ) rather than a strategic tool.

Source: Financial Express