GLOBALISATION –REDEFINE YOUR MARKETING WORLD

It happened recently when I went to my uncle’s house in Chennai that his one year old daughter stopped crying when she listened to Jennifer Lopez and started dancing itself within the small arena built for it, the cradle. If I have to approve the definition for globalization in wikepedia I would say this is the perfect one. Yes, friends the impact of globalization is felt in each and every corner of this world but as a management student and more precisely a marketing student I was giving a thought is there this globalization has something to change with our traditional marketing views and concepts. I felt yes and it forced me to fill my pen once again.
If I have to see globalization I would see it as “Dealing with Differences”.oh! That’s a great task for every marketer you know. Anything in this world is termed difficult when it has uncontrollable in it. These uncontrollable play a very important role and this makes a marketer to see globalization as a threat. The uncontrollable comes in various forms lifestlyle, culture, demography, geography etc.
Uncontrollable Are Always Uncontrollables.Say Its Bhagvat Gita or Mintzberg Emergent Strategy or Al Ries “You Can’t Go There From Here” In Positioning. But a marketer can understand this uncontrollable better. Now the question comes can understanding this uncontrollable will help a marketer to convert threat into an opportunity. The answer could be yes with at least high probability because there are many companies like McDonalds, Foremost Dairy (Thailand) which has understood this uncontrollable and converted this threat into opportunity.
At this time I also felt there is necessity to rethink our conventional definitions of marketing. Marketing according to KOTLER is meeting customer needs profitably and satisfactorily. When it comes to globalization it’s a task for marketer to define who is my customer? What is value and satisfaction for my customer here is not going to be satisfaction for customer outside the world.
The conventional definition for demand says its willingness to buy and ability to pay. But when it comes to globalization a prospect may have willingness to buy ,ability to pay but his social cultural factors may restrict him to buy that product. So the conventional definition brings in one more variable called “limitation on consumer because of socio-cultural effects”.
Lets have a touch on branding .Say a brand positions itself differently in two countries today. Say a motor bike claiming “speed’ as its competency in one country and “style” in the other. As days go due to globalization and democratization of knowledge consumer in one country will come to know my brand claims two things and what does my brand stands for? It may lead to dilution of brand equity in due course.

Let’s think about Michael porter’s conventional strategies, cost leadership, differentiation focus. When world becomes boundary less it leads to non-price competition. Will cost-leadership strategy hold good is a big question mark. Think about focus strategy .if you are concentrating in niche market fine .but when all your competitors move towards other countries and expand their product portfolio if you are idle you will be making satisfactory profits but you will be pushed far behind in market share and you will not grow.
So its time to rethink and redefine not only your major marketing principles but fundamentals of marketing principles.

Compilation of speech made by

Prabhu.S at KIAMS International Marketing class.

COKE- A SAGA NOT A BRAND

SOME OF THE KEY SUCCESS FACTORS FOR COCA –COLA

 Brand image
There are two schools of thoughts one says a brand can be built and other says a brand is evolved.whats right is not our issue now however a brand signifies one word called “trust” the consumer have on that brand. A trust can’t be built over night. It’s a saga. Coke has its history of about more than a century and this prolonged sustenance has definitely added to the brand image in the minds of the consumers and to its wallet.
 Brand associations.
Throughout its history it was really excellent in associating the brand with right celebrities, right personality, right colour etc.the campaigns like “tanda mat lab coca cola” best describes the intangibles associated with that in India.
 Brand extensions:
It capitalized on its brand equity by extending into mineral waters and other flavors of coca-cola at right time. It acquired a company called minute maid corp. and introduced Fanta (1960), sprite (1961) and tab in 1963.it broke through the concept of “marketing myopia” by describing itself not as just cool-drink but as a beverage. It introduced “kinley” in India in mineral water segment when Pepsi launced “aquafina” and “bisleri” (parle later acquired by Pepsi)
 Perceived quality
As said in the book “brands in the balance” the second most spoken word in the world after o.k. Is coke. This is clearly visible in the case of introduction of “new coke” by then Roberto goizuetta in 1983s, which was an utter failure for them though the product was superior in taste. The consumers saw the coke not only in its functional and product attributes but also in their minds. They wanted their old cola back. The company reintroduced old cola with the name cola classic. This strongly shows the impact the cola has in the minds of its consumers. In response to this situation frenette, once chief of coke Europe “what we learned is that we don’t own this brand, the consumer does”

 Brand awareness
Starting from its inception we can see the intense promotional strategies adapted by coke brand recognition by clocks, calendars, free coupons etc.knowing the congestion in TV commercials its now shifting its focus more in event sponsorship, lounges offering music videos and video games exclusive site for song downloads etc.
 Quality –corporate culture and values:
It started standardization of its bottlers, strict quality adherence in supply and deliverance. It was ready to listen to consumers when controversy rose in Belgium when the customers wanted to take back the coke from shelves after several kids vomited and fainted in 1999.


WHERE IS COCA-COLA VULNERABLE?

 The dilemma between global brand strategy and local:
As per Theodore levitte 1983 “the impact of globalization is that to come out with inescapable standardization of products, manufacturing and the institutions of trade and commerce”. This narrows down to a global brand strategy, which suits for all regions. But still it is a double-edged sword. Imagine a company like coke where it is in beverage industry where it caters to different culture, demography and psychography how far it is feasible to adopt a global strategy. It has to think global and act local. Coke did this mistake with Belgium issue already discussed in 1999 and recent controversies if pesticides issue in India. It still has to work on this dilemma. After the Belgium incident Douglas daft, CEO coca cola said, “I am not sure we understood the world as much as we thought we did”.
 The brand image itself
Being so famous is as bad as good. Considering the same Belgium example the brand has done more problems for the issue than giving solutions. It took pains for the company to relaunch once again.

 Flight ads
Flight ads are that ad, which temporarily attracts the customers but doesn’t say much about core values of the company or the product. An ad should describe a brands personality and value driver, which drives the personality. Most of the recent ads just endorsed by celebrities don’t much explain about cokes value, in long run this may make people to forget what coke stand for.(recent world cup performance of India)
Recommendations:

 Penetration of coke so that it appeals the bottom of the pyramid consumers. (India)
 Think global but act local.
 CELEBRITY endorsement is not the only strategy to promote. It’s very sensitive to market of the celebrity.
 Don’t repeat mistakes like new coke. Consumer owns your brand.
 Come out innovative promotions that best fits the region may be event sponsorship in small scale for villages. (For bottom of the pyramid consumers, BOP)
 Position it differently for example like refresher for a farmer/ who is doing hard work in farmland to penetrate deep into BOP.

MARGINAL UTILITY AND CONSUMER BEHAVIOR

INTRODUCTION:

Demand theory is the basic of managerial economics and the concept of marginal utility plays a very important role in understanding the demand theory. Before entering into marginal utility its better to understand what is “UTILITY”.

WHAT IS UTILITY?

It is whole boutique of benefits or satisfaction that an individual gets in buying and using a service or product. In simple words it is aggregation of benefits and satisfaction. Let us discuss by relating to practical situations. Lets take an example of star bucks the very famous coffee outlet in us. What a customer gets in going for star bucks. It’s not only the coffee (the product as benefit) but also the experience, which are ambience, convinience and prestige in taking a coffee over there. He gets satisfaction in terms of emotions and product. That is why he is willing pay also a premium for the same product coffee at star bucks.

WHAT IS MARGINAL UTILITY?

It is nothing but the extra benefits and satisfaction that an individual gets when he/she is buying one more same product or service. Mathematically putting it can be change in satisfaction or benefits for every one more product he/she buys and experiences.

Marginal Utility = Change In Satisfaction And Benefits / Change In Number Of Product Or Service Experienced.

PATTERN OF MARGINAL UTILITY:

Now the question arises will the satisfaction increase or decrease for every one more product purchased and used. It can be simply demonstrated by an example.

MARGINAL UTILITY AND PRACTICAL APPLICATION:

Let us take an individual who is going for watching a movie. First time when he watches he gets fun, thrill, entertainment etc. If the movie is very good he/she may watch for second time and the thrill, fun, entertainment may increase. But if he watches for tenth time say everything gets saturated and the thrill and fun whatever he/she got Initially goes way. But there can be an occasion in between his/her first watch and tenth watch it is from where he /she loses that interest. That is called Threshold Limit Of Saturation. After that he/she loses interest.


MARGINAL UTILITY = CHANGE IN Y / CHANGE IN X
HOW IT IS RELATED TO DEMAND THEORY:

The demand theory states that at constant supply if price goes up the demand comes down. Let us relate to marginal utility.

When number of observations of that movie is more it means that supply is high and the satisfaction levels come down and so the customer is not ready to pay extra price for the extra observation. So automatically demand comes down. What can a theatre owner do to make a customer come back.hecan reduce the price of the ticket. It may motivate the customer to come back to next two times after the saturation point. But that also will not last long. He/she may go for seven times maximum.

WHY DO CONSUMERS BEHAVE LIKE THIS?

It can be psychologically explained .It may be because of boredom .It may because of loss in anxiety. But a smart consumer can increase that marginal utility by observing another movie for that same rate. This is role of competitors in the market to increase the marginal utility of an average consumer and make them shift towards their product.

CONCLUSION:

Hence the concept of marginal utility helps in explaining demand theory and also plays a very important role in marketing in understanding the consumer behavior. A through understanding of this is very essential for managers and corporates to gain competitive advantage.


PRABHU.S
KIAMS

Positioning -A concept of Marketing or concept of life

Positioning at bus stop

I was waiting in a bus stop as usual to go out for shopping. There were few more college students standing along with me and I could see some curiosity and eagerness in their silent whispers. I understood they are waiting for some local aiswraya rai (of course I have crossed those times of whispers in my life too).I was watching them. I love analyzing people and emotions and i got a food for thought that time. suddenly every guy in that group started behaving differently, one took his mobile and started his US accent English with some caller on the other side (hope genuine or he was talking to recorded voice in customer care, sorry I am not a mind reader), the other adjusting his coolers and the last had nothing except a cigarette and he lighted that in his own style.

What are they trying to do?

To impress that girl. To position themselves in the mind of that girl. To put in marketing terms to capture the mind space of the prospect. Let’s now correlate this situation to actual marketing in depth. What did these guys do? Try to adapt different strategies with their availabilities and accessories. Will that prospect get impressed is a million dollar question? But this question can be answered if the guys have understood the preferences of that girl. Let’s think logically. Let’s ask a question to ourselves who will be the best person to occupy her mind.

Features:
Good Looking Guy -EXTERNAL LOOKS -PACKAGING
An Action Done By One Of Those Guys Resembles Someone Close To Her May Be Brother, Sister Etc-PERSONAL EXPERIENCE-SLICE OF LIFE
Someone Who Wears Very Costly Shirt And Has Costly Accessories -EXTERNAL LOOKS -PACKAGING
Someone Who Does An Action Or Perform Something Which Is Extremely New And Miraculous For Her Which She Has Never Seen In Anyone Else.-DISTINCTIVE
The Portfolio of All These May Make One of Those Prospects as DESIRABLE.

Is this end of the story, what is more important is consistency in whatever showed by that prospect which is called as DELIVERABLE.

If by any of these above parameters if one of those prospect has occupied the mind space of that girl thats how he has positioned himself.This is how a product ,a brand positions itself.

So whats wrong if i say

every experience in life is marketing!
every gestures is advertising!
every moment is learning!

prabhu.s
KIAMS.

Airtel TV commecial- A blend of Emotions and Benefits

The recent Airtel Commercial where a grandson meets his grandfather is a perfect blend of emotions and benefits. If we read the book “Ogilvy On Advertising” written by David Ogilvy he says about the commercials which has above average performance in making customers shift brands. In that he lists commercials, which gives fun, testimonials, product usage, emotions etc have the capability to shift Brand preference.

Generally emotions are used in cases where you can’t explain the benefit of a product like cigarettes, beer etc. Here in this new Airtel commercial the emotional distance between the grandson and grandfather is broken by the network coverage capability of the airtel network.

If we closely watch, the grandfather’s residence will have a village set up which shows the network extension of Airtel to even villages. It also suits the Indian culture and current trends of Indian families where the modernization and lifestyle has lengthened the road of emotions but a parents mind always forgives child for his/her mistakes.

It’s a perfect portfolio of psychology, emotions, and product benefit. Hats off to makers!

PRABHU.S
KIAMS

You Sell a Product But Market a Brand

As marketing students the words we never forget whenever we make presentations are "brand","positioning","mind space". Etc.we have different opinions and definitions for "brand","branding","and positioning". Sometimes when i read books i really don't know what exactly they mean to us. How is it going to help us as marketing managers? The whole article is my personal interpretation about brand and positioning.

How does a product differ from a brand?

I personally feel that a product is one, which only concentrates on its functional attribute. What i really mean is that if i am a pen manufacturer i concentrate only on writing? So as a product seller i am keen in selling my product as a writing instrument. What difference i have to give or try to give if i want to market my brand instead of a product.

Here comes the role of STP (Segmenting, Targeting, Positioning) concepts, the idea of perceptual mapping, etc.to put it more clear the function doesn't change to different customer segments. Writing Is Writing. But the experience they want to get out of writing varies among different consumer groups.

For example children wants to have fun while writing so the pen have pictures of cartoons on it. A corporate executive may need highly formal look so it has to be professional in aesthetics. This is just from look or external appearance of the product. If you consider various aspects life, performance then each and every aspect varies according to target segment.

So a brand is a collection of attributes, which you think suitable for your target segment and try to add to your product and market it.

How many of us say come lets have breakfast or snacks rather than saying come let’s have maggi? I would say a brand has achieved an unperturbed space in target customers mind at least for short period if its name has replaced the function the brand offers. “Xerox” is epitome on this aspect.

Okay you have identified your target segment and the attributes you want to offer to them. How is that you are going to communicate to them strongly?

Positioning will answer to this question and I will discuss on this in next article.

Prabhu.s
KIAMS.

Branding and Positioning

This blog will give ideas about what is Branding and how some global companies have suceeded by branding.It will also share views on branding techniques and how to position the product in the mind space of a customer etc.

Also helps in sharing views of various marketing gurus opinions about different branding and positioning concepts.