Tuesday, September 07, 2010
Candyman : Kuch Bhi Karega for Candyman
Thursday, September 02, 2010
Marketing Strategy : Customer Orientation Vs Competitor Orientation
Although many marketing literature propounds the dictum “Customer is the King”, it is seldom practiced in its fullest sense. Marketers would love to put customers at the center of their business strategy but the intense competitive environment forces them to think beyond the customer and move towards the competitors.
There is a dilemma in the marketers mind with the choice of whether the firm’s principal orientation should be towards customer or competitors. Conventional wisdom say that firms should be oriented more towards customers than competitor. Peter Drucker famously said “The purpose of business is to create customers “. When a firm is customer oriented, the entire business is centered on customer needs and satisfaction.
According to academic literature, there are three components of market orientation (1) Customer Orientation (2) Competitor Orientation (3) Inter-functional coordination. Customer Orientation is where the firm spends its resources on gathering information about customer needs and behavior. Competitor orientation is where the firm directs its resources to gathering information about competitor behavior and activities. The firm’s strategies will then be based on the information gathered through any of these orientations. (Source: Narver, John C. and Stanley F. Slater. 1990. "The Effect of a Market Orientation on Business Profitability." Journal of Marketing 54 (October):20-35.)
Customer orientation helps firms with a clear in-depth understanding of consumer which results in a focused marketing effort. Research has confirmed that customer orientation helps firms to increase performance and enhance customer satisfaction.
Too much customer orientation also can be dangerous. There is a chance of marketers becoming blinded by their current focus thus oblivious of the changes brought about by the competitors. There are critics who argue that customers may stifle innovation in companies because customers may not be able to explicitly state their expectations or anticipate future needs. Customers are often resistant to change and this forces the highly customer focused firms to maintain the status quo thus refraining from game changing innovations.
The firms who are skewed towards competitor orientation are blamed for launching me-too products in an effort to fight competition. Too much focus on competitor often forces firms to invest in understanding customers or anticipate their needs better. Too many resources will be spent on competitive activities which may restrict investment on breakthrough innovations. Competitor oriented firms are more open to the changing trend in the market. Since their actions are more directed by the actions of the competitor, there is less chance of lethargy in marketing activities.
Firms must understand that there is a trade-off between these two orientations. Firms will have to lose something if they chose either of the two orientations. The ideal option is to balance both the orientation. It is easy to advocate that firms should have both customer and competitor orientation but with a limited resources in-terms of men and money, firms will find tough to have best of both worlds.
Companies must realize that the choice of customer / competitor orientation is dependent on the environment in which firms operate. There are external and internal factors that will decide the orientation of the company. For example, there are organizations like Zappos.com which is totally customer oriented. The customer orientation run deep within the organization’s DNA and the entire firm is structured around the customer.
Competitor orientation is more preferable in markets which are growing very fast. In fast growing markets, firms should invest in gathering more data about competitors which will enable them to develop innovations at lower costs.
Customer orientation is preferable in more uncertain markets. When the markets are changing very fast, firms can focus on customers which will enable them to change their marketing strategies quickly in accordance with changing customer needs. Also firms that deal with complex markets need to focus on investing in customers rather than competitors.
The choice of customer vs. competitor orientation is ultimately depended on the top management’s world view. The choice is important because there are only limited resources available with the managers to spend on either of these orientations.
Firms can strike a balance between these orientations if they can focus on the following guidelines.
- Invest in a robust market intelligence mechanism in the marketing department. The mechanism can be internal or outsourced, but the emphasis will be on information gathering and dissemination. When a mechanism exists, depending on the market environment, organization can decide on the type of information that should be gathered.
- Encourage free flow of information within the organization. Market orientation tends to be ineffective if the organization is bureaucratic. Hence firms should ensure that important market information is passed to various levels quickly.
Tuesday, August 31, 2010
Brand Update : Can Ambassador be saved ?
Related Brand
Thursday, August 26, 2010
Is Social Media a mere extension of traditional media ?
Wednesday, August 25, 2010
Brand Update : Dettol & Lifebuoy Creating Hand Sanitizer Category
Monday, August 23, 2010
Brand Update : Hajmola Repositions as Audio Candy
Watch the ad here : Hajmola Audio Candy
Wednesday, August 18, 2010
Addiction Body Spray : Lasts Long Really Long
Monday, August 16, 2010
Brand Update : Mentos Becomes a Chewing Gum
Friday, August 13, 2010
Marketing Strategy : How to Profile Your Customers
How to Profile Your Customers
Originally published here in Adclubbombay.com
Knowing one’s customer is a prerequisite for successful marketing practice. Customer profiling is the collection valuable information about customers which will help in better targeting and marketing strategies. Although every marketer knows about the importance of customer profiling, it is surprising to see how little effort has been taken in this regard.
The main reason cited by marketers, especially those dealing with FMCG and consumer durable products, for this lack of customer profiling is the sheer size of the customer base. For a mass marketer, profiling the large segment of consumers is not viable economic proposition. The problem starts when marketers see their customers as a large segment and not seeing them as a collection of individuals. It is true that a mass marketer cannot profile individuals but treating the entire segment as one without understanding individual profiles can make decision making less effective.
Profiling helps the marketer in better targeting, better communication and also provides a thorough understanding about his/her buying behaviour. The more information a marketer has about the customer, more efficient will be his marketing activities. Customer profiling can be done at an individual level or at segment level. In practice, most of the mass marketers and B2C marketers tend to profile customers at the segment level and the B2B marketers focus on individual profiling. B2C marketers find it difficult to profile individual customers because of the large number of customers.
Customer profiling starts with the identification of target customers. Before profiling, marketers should have clarity about their prospective customer. This is a critical step for start-ups and those businesses that are entering new markets. The critical question that a marketer should address at this stage is “Who is our customer? “. Many businesses tend to view this question narrowly. It is important for marketers to understand the different customer- roles in a buying situation. For example, in the case of a Television purchase, every member of the family will have a role to play in the whole purchase process.
According to Professor Philip Kotler, there are five customer roles in a purchase process
Initiator – The person who first suggest the idea of buying a product.
Influencer- One who influences the purchase decision through his suggestion or advice.
Decider- Who decides on the purchase and also any purchase decisions like where, what and how to buy.
Buyer – Who makes the actual purchase?
User- The person who consumers or uses the product.
While profiling the customer, it is important to profile those members of the purchasing unit who takes up these roles.
The next step in the profiling process is to decide on the information that is to be collected. Marketers can collect general date like demographic data which are often available in the public domain. These data help in proper segmentation and also in determining the market potential. Along with these data, it is important for marketers to collect personal data about their target customers. These data are difficult to capture and requires investment of people and financial resources. These data involves the media habits, hobbies, psychographics, purchase patterns, attitudes etc. In the book “Customer Equity “ , Robert C Blattberg, Gary Getz & Jacquelyn S Thomas , identifies six major categories of customer profile data. They are
Customer Sales Potential: Refer to the potential sales volume from the customers.
Customer Characteristics: Refers to the data related to customers like demography, income etc
Summary Customer Equity Measures: The value that the customer brings into the company
Organisational charts and Key persons: Applicable to business customers.
Influencers and specifies: The key roles customers play in the buying process.
Customer Attitudes: The qualitative data about the customers.
Once the information requirements are finalized, marketers should decide on the collection of the data. It is very difficult to collect the personal data of the consumers. Hence marketers should adopt data collection techniques which are more qualitative in nature. It is important for marketers to take a long term view about collecting such data because of the cost involved. The data pertaining to the attitudes and purchase patterns should be collected on a continuous basis in order to make it relevant.
Data once collected should be effectively utilized in the decision making process. Technology has enabled companies to collect all sorts of data. Many managers feel overwhelmed by the quantum of information collected. It is important for firms doing customer profiling to have a mechanism to make relevant data available to the decision makers.
In this era of high competition, customer profiling can prove to be the winning edge for marketers. One factor that determines whether a company is customer oriented or not is how the firm effectively uses customer profiling in their decision making process.
Tuesday, August 10, 2010
Brand Update : SRK Joins Pepsodent in Dishoom Dishoom
Thursday, August 05, 2010
Marketing Strategy : How to Craft Your Brand's Vision
How to Craft Your Brand's Vision
Originally Published here in Adclubbombay.com
Creating a vision for the brand is the most important primary step in the brand management process. Brand Vision can be defined as the long term strategic position that the brand will take in the market as well as in the consumer mind-space. Brand vision offers a strategic intent which will act as a long term goal for the brand.
Creating brand vision is a strategic process which requires the involvement of top management. The vision dictates the future course of action for the brand with regard to its growth and future course of action.
Most of the time marketers are faced with critical decisions regarding the future growth path for the brand. There is a dilemma whether the brand should be extended to cater to new opportunities in the market or to be focused on the current category. Some times marketers tend to extend the brand too much that the entire brand equity gets diluted. Without the guidance of a clear vision, brands tend to lose focus and extend into unchartered unrelated categories. Lack of vision also creates the problem of discontinuity for the brand’s strategies. There are chances that the brand compromises its equity for the sake of short-term growth unless guided by a long-term vision.
Having a brand vision will help marketers make decisions regarding the growth of the brand. The vision also helps marketers to tap into opportunities which are in line with the vision and reject others that contradict the vision. Vision helps the brand to create a brand charter which will act as a rule book for the managers. It will also help the managers to shape the brand strategies during the time of crisis.
Brand vision also helps to develop consistency with regard to brand communication. The messages derived from the brand vision will be consistent across all media. Even when the advertising & creative agencies change, the brand message will remain constant. In the absence of brand vision, the communication messages will not be connected by a common thread.
Brand vision also motivates the employees to perform better. Employees feel motivated and inspired when they are aware of the brand vision. More importantly, employees should feel that they are contributing to the realization of that vision.
Typically brand vision statements should be simple and easy to remember. The golden rule is that every employee should be able to remember the brand vision especially in the case of a corporate brand or service brand.
While drafting the brand vision, the marketers has to keep the following facts into mind
Think Big
While drafting a brand vision, marketers need to have big plans for the brand. The vision should not restrict to the category or even the industry. Instead the brand vision should aim at addressing some critical issues faced by the consumer. The vision should inspire both the consumers and employees alike.
Encourage growth
Brand vision should encourage the growth of the brand beyond product categories. The marketers should be looking at a 10 year time horizon while drafting the brand vision. The marketers should be asking the following questions while drafting the vision.
- In 10 years, what will be the position of the brand in the industry/category?
- What is the core need that this brand is going to satisfy?
- Is that need sustainable over a period of time?
- What needs do this brand satisfy in future?
- Will the vision of the brand appeal to the consumers?
- Does the brand vision excite the employees?
- Does the vision encourage growth and pursuit of opportunities?
- Is the vision easy to understand and communicate?
It is important for the brand to maintain synergy with the corporate strategy. That is why the top management should play a key role to in drafting the vision. When the brand’s vision is aligned with corporate vision, a sustained investment and support can be ensured for the brand’s growth.
Brand visions should be created with customer as the focal point. Many a time brands focus too much on the product rather than the customer need. Having a strong focus on customer will help brands to create visions which are practical. Customers will also be able to relate to the brand vision since the vision is created with the customer in mind.
Periodic Revision
Although brand vision is crafted for a long term, it is important for the marketers to revise the vision from time to time. Brands operate in a dynamic environment. There are chances that the brand’s vision may become irrelevant for the consumers in the changed environment. Hence visions need to be revised in line with the changing consumer environment.
Monday, August 02, 2010
Marketing Q&A : Frame of Reference and Points of Parity
Friday, July 30, 2010
Xylys : It Possesses You
Monday, July 26, 2010
Brand Update : Tic Tac moves from Hello to Refreshment
Saturday, July 24, 2010
Brand Update : Ranbir Kapoor is the New Cool Face of John Players
Thursday, July 22, 2010
Mahindra Voyager : RIP ( 1997-2000)
Sunday, July 18, 2010
Brand Update : Cadbury Dairy Milk For Shubh Aarambh
Thursday, July 15, 2010
Allen Solly : My World , My Way
Sunday, July 11, 2010
Brand Update : Flipkart - From Bookstore to Store
- Book margins may be underpressure and does not make business sense to concentrate on books alone because of price/margin/competitive pressure.
- Wanted to emulate the business model of Amazon which successfully moved from books to other categories
- Investor pressure to deliver more returns.
- Other categories offered lucrative opportunities.
- Want to cash in the brand equity.
- Founders want to build scale and exit ?