Category: General Marketing

Much water has flown through the Ganga since McCarthy proposed the famous Four Ps thirty years ago — Product, Price, Place and Promotion. It was alright for an advertiser to develop a product, price it to make a profit, place it on the retail shelf and promote it to an eager consumer. The formula does not work well these days. There is product explosion. Retailers are independent. Consumers are not pliable. It is time to think of a new model.

Lauterborn suggests a Four Cs model.

Consumer wants and needs

We have to make what someone specifically wants to buy. We can no longer sell what we make.

Consumer cost to satisfy

Price is irrelevant. We have to consider the cost of time, the cost of conscience and the cost of guilt — so many other aspects apart from price.

Convenience to buy

It is an era of e-commerce and direct marketing. It is not necessary to go physically to a place to buy. We have to consider how each segment in the market prefers to buy.

Communication

Promotion is out, communication is in . It is co-operative. Promotion was manipulative.

Windows 10 being launched in July 2015 is the re-invention of Microsoft. It is going to be offered as a free update to users of windows 7 and 8. Henceforth, no new versions of windows will be sold. Instead there will be frequent updates on subscription basis. It is the recognition of the fact that the rules of the software industry have changed. Apple passed on free software, which is subsidised by the profits it makes on hardware sale. Google passes on free software which is subsidised by its advertising revenue. Windows still retains its position as the largest selling PC OS. Here also there are two factors — the overall sales of PCs are showing decline. Google’s Chrome OS and Apple’s Mac are competing with Microsoft. PCs are being replaced by small devices such as cell phones and tablets. Microsoft dipped its toes in water here by offering free apps of MS Office. Cortana, a Siri-like digital assistant has been added. Edge is the new Microsoft browser, which replaces Internet Explorer. Microsoft is shedding the snake skin to emerge as a new vibrant organisation.

Industrial marketing till recently was considered just a selling function. However, it has now emerged as a critical function, much more than mere selling. Products were sold on the basis of quality and price. Today there is increased competition. Prices are not just cost-plus, but are dictated by competition. This is one of the reasons for the shift of emphasis from selling to marketing. Technological advantage does not always give the competitive edge. It calls for a marketing approach. Many companies are keeping in touch with the market and the consumer. They are setting up Market Development  Groups. These monitor are market and spot the opportunities for new and better products.   Gabriel discovered through such a group that its shock absorbers have a new market, i.e. of washing machine and exercise equipment. Product up-gradation is also necessary. The manufacturing process should be geared to provide better values to the consumer. In purchasing, product features and specifications are the  key factors. The industrial market is also being segmented, e.g. high, medium and low voltage switch gears. There are image building corporate campaigns. Prior to selling, a presentation of the corporate profile is made. Mainstream advertising is used to project a corporate image.

The product information is critical and selling is based upon it, rather than emotional appeals. There is generic promotion. As the buyers are well-informed, there is no place for hard sell.The concept of consultative selling is growing. Though personal selling is still a major element of promotion, we come across seminars, exhibitions, business-to-business interactions and direct marketing. Companies like to cater to OEM market (original equipment manufacturer ). There is also a replacement and spares market. In selling to OEMs, the key factors are the quality and cost. The nature of the buying organisation also matters — whether it is the government , the private sector or the public sector. Public sector selling involves tendering. In defence selling the quality and reputation of the manufacture matter more. In government buying, two committees are involved in decision making  — technical committee and price committee. The buying decision is based on purchase negotiations, the price, credit period, spares availability and after-sales-service. Service is emerging as a vital component of the marketing mix. Service has been made a revenue centre by many organisations. Channel decisions are also important in industrial marketing. Some companies operate through dealers or stockists. Some operate through distributors. When distributors are appointed, we have to deal with a small number of people and receiving payment is quite easier. But a dealer network ensures that the company is in touch with the marketing realities. A dealer provides valuable feedback.

Industrial marketers should not be limited to a small product range. They are vulnerable in a turbulent environment. They should resort to market segmentation. Industrial markets tend to be seasonal, affecting demand. Besides technological advances change the consumer requirements. The reliability is a key factor in building reputation.

A single order in industrial markets could be worth several crores.

Several industrial marketers have ventured into consumer marketing with varying degrees of success, e.g. the Tatas, Wipro, HMT, Andrew Yule, Crompton Greaves, TVS.

These days the companies have realised that success in today’s competitive market place is by providing customer service of quality and their grievance redressal mechanism. A contact centre is one such mechanism which handles customer calls and complaints. It is a third-party customer contact desk. It goes beyond call handling, and tries to establish comprehensive customer relationship management system. These services are outsourced. Many companies from abroad are outsourcing significant amount of customer contact services from India. If companies just rely on their internal resources, it may result in customer dissatisfaction. A plethora of communication devices may not be helpful. There should be a single response number customer. Contact centres are common in service industries like credit card companies, banks and cellular phone companies. Third party customer contact centres are increasingly being used by FMCG companies, consumer durable companies and insurance companies. These centres also provide telemarketing solutions. Some companies get forms filled up online, courier them to be signed, collect them with supporting documents and submit them. A call centre enters into an agreement with the company. In centralised model all calls across various cities are handled by customer service representatives ( CCSR ) in a single location. If the central location is at place called X, and calls originate from Y and Z centres, they are received at the respective local switches to be re-routed to X. In distributed option, the local centres take care of the calls. The hybrid model is a mixture of the two. Companies improve brand perception by employing the services of call centres. A company will have to advertise a customer service number.

Page 3 phenomenon has swept India. Page 3 people has affected marketing, advertising and life style of people. Page 3 has touched all classes of people. Middle class cheers these people. These people are now brought to comment on cricket also. Page 3 generation is party crazy. Some of them have pin up value. Many Page 3 people one might not see in flesh and blood. But most people have heard of them. Many celebrity endorsements and launches are brought to us by courtesy of these people. Page 3  patronage has the potential of making a product successful. A favourable mention on Page 3 can put people and things in circulation. Restaurants send invitations to press in the hope that they will make it to Page 3. Liquor companies try to ensure that their brand is mentioned in the copy about the celebrity and his drink habits. Fashion designers focus on people who wear their collections.

Page 3  as such is media creation. Its genesis lies in local city supplements to attract retail ads. But it has brought about a tremendous cultural change. Mere wealth is not enough. People crave for spotlight. It is creditable to be in association with the movers and shakers of society. Readers get vicarious pleasure to know about the rich and famous. They aspire to be like them. The Page 3 events and therefore Page 3 itself is a reflection of being successful and a sign of having arrived in life. The middle classes who enjoy Page 3  subconsciously aspire for this. Some of these people are role models. They may be achievers  or may not be. At times they are frivolous. Some are social climbers who organise great parties. Page 3 is about positive coverage. Here we shall talk about Armani suits, rather than dwindling profits. These people give an opportunity to the voyeur in us. They encourage gossip bringing the primitive in us to the surface. Page 3 celebrates those who are famous for being famous. It features, as Mohammed Khan put it, a new aristocracy. These are a small number of people who are horrified at the prospect of appearing on Page 3 as it portrays people as party beings lacking talent and intelligence.

Apart from cricket, we now  have viewers for Indian games like kabaddi. Star India will broadcast the second season of PKL across eight channels of its network. PKL I had 435 million viewers nationwide. It was one of the most-watched Star properties in the country. The finale alone recorded a reach of 86.4 million. Star is the title sponsor. Leading brands have signed up as associate sponsors. Star wants to develop multi-sport culture. Among all non-cricket leagues, it is kabaddi that perhaps resonates at the grassroots and holds great potential.

Wilbur Wright and Orville Wright — popularly known as the Wright brothers —  were mechanically gifted. This quality they had inherited from their mother. They were good at school, but illness prevented them from attending college. Smithsonian Institution in 1899 responded to Wilbur’s query on the list of books on aeronautics. They pursued all the works. They studied the weather data of Kitty Hawk, which they selected as the ground for their experiments. They did work for three years on rudders, wings and their ratios and angles. After this preliminaries, they installed an engine on the plane. They built a wind tunnel to study wing designs. They also constructed a launch catapult. All experiments were documented. They designed their pioneering aircraft — each and every part was machined by them. Dec 17, 1903 at 10.35 AM Kitty Hawk, North Carolina, USA. After four years of work,history was created. The plane was air-borne for 12 seconds. Orville was at the controls. A photograph was snapped.

Later they improved the design at Ohio. They could succeed in longer flights. First the French and then the Americans joined the bandwagon. They patented many things, and became wealthy. A decade after Kitty Hawk, airplanes used in the World War I showed how they can be used as war-birds. Wilbur expired in 1912. Orville was alive till 1948.

The new Companies Bill mandates that companies with a net worth of Rs. 500 crore or more, or a turnover of Rs.1000 crore or more, or a net profit of Rs. 5 crore or more, shall spend  ‘at least 2 per cent of the average net  profits of the company made during the three immediately preceding financial years, in pursuance of its corporate social responsibility ( CSR ) policy.’ With this bill, India will be the first country in the world to force essentially CSR spending by companies.

Giving money for ‘ causes ‘ is not new. The term charity covered feeding, housing and taking care of the poor, the needy and the sick. Corporate SR is guided by established and stated values that the company stands for. The community’s need are assessed. The environment is scanned for the needs. These could be met through CSR.

Does India need forced CSR? Is not the giving not in our DNA?  There is so much giving to faith based institutions. These in turn run schools, colleges, hospitals and orphanages. In spite of so much giving, the issues of poverty, social justice and corruption do persist in India. Mere giving is not enough perhaps. The problems are complex. There should be collaborative working. Let us do fewer things (focus ) in a bigger way ( scala ) for longer periods of time (commitment ). The impact has to be measured. Some measurements such as ‘ meals served ‘ or ‘ patients treated ‘ are easier, but measurements pertaining to climate change and social justice are difficult.

In matrix structure, there is solid reporting line to one boss and dotted line relationship with one or more other bosses. The matrix structure is strangely ambiguous to those accustomed to simple linear reporting lines. In MNCs, the local business heads report directly to global business heads and have a dotted relationship with the country head whose role is limited to governance. In decenralised matrix, business heads report to the country head and have dotted relationships abroad. There could be a mix of the two. There could be an implicit matrix, and one has to handle the ambiguity. In global companies, dual reporting is the norm. One has to strike the right balance between the global and local. The matrix is a dynamic, living thing. A certain level of maturity is expected in a person to get into a multiple reporting format. It is all about collaboration, transparency and communication.

A CEO in a matrix structure is less empowered. In appointments too, he has to consult his global business heads. To implement global strategies, MNCs prefer a matrix structure. It provides talented employees greater chances of advancement. The matrix structure is common to hotel industry. The property is an individual entity has its own functional structure. The General Manager is their boss. However, they maintain a dotted line relationship with their counterparts in the regional headquarters.

Once considered written in stone, market realities are forcing the leading companies to opt for relevant and dynamic vision statements. They are revisited and they have a shelf life. They have become less esoteric and more relevant. Companies expect their people to own the vision statement. The statements contain achievable goals that people can identify with. These are not handed down to employees as commandments. The whole process has to be inclusive.