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| Tuesday, 3 February 2004 |
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21st Century Marketing challenges by Prasanna Perera, Marketing and Management Consultant, Chartered Marketer, CIM, U.K. Media networks are exploding, brands are multiplying, product varieties are growing rapidly ... all of these present challenges to marketers of the 21st century. Marketers today face great challenges and the ability to deal with them effectively is a must and not an option. Let us briefly examine the changing scenario of markets and marketing and the factors behind the scenes. Number of brands increase to dizzy heights Take a walk in any supermarket and you will be amazed at the sheer number of brands exhibited. In milk powder for example, over 15 brands, whilst in washing powder over 10 brands and toothpaste another 10 brands. The list goes on and on. The customer is driven crazy with these brand options and the challenge to marketers is to get their brand loyalty levels intensified. Therefore, a greater emphasis on brand building than ever before, is a prerequisite. Me-too brands will not stand a chance and the only way ahead is to nurture brands that are distinctive and special. Product varieties multiply greatly Take yoghurt as an example: Set yoghurt, fruit yoghurt, low fat yoghurt, non fat yoghurt, flavoured yoghurt... the list goes on and on. The consumer as a result may get confused and find it difficult to make clear choice. What are the reasons for so many product varieties to be made available? It is in order to satisfy the needs of varied customer segments and niches. Hence by pursuing customer satisfaction initiatives, the same customer is now being confused! Against this backdrop, marketers would do well to access their product portfolios in terms of sales and profits. In certain instances, offering a limited line of product varieties may be desirable, in order to reduce the level of confusion, amongst customers. Another aspect to note is to launch product varieties, which are unique and having a definitive customer preference. In ice cream, the standard varieties are vanilla, chocolate and strawberry. There are several brands already offering these varieties. What should a new brand offer in the ice cream category? May be unique flavours which the main stream players do not offer. (Jaggery ice cream, Mixed fruit ice cream, Banana ice cream.) Product life cycle's shorten The life span of products has declined dramatically over the years, mainly as a result of technological developments. In addition, market factors such as changing consumer needs and competitor product introductions have also contributed. The shift from brand management to category management has also resulted in a range of new products being developed to dominate categories, by catering to diverse market segments and niches. Hence, new products are introduced rapidly and the life cycles of existing products are willingly aborted or naturally terminated. Marketers have to develop new products at a much faster pace and capitalise on existing product opportunities within a shorter time frame. More difficult to obtain space in the consumer's mind The concept of "brand positioning" is all about positioning your brand in a distinctive way, in your target consumers mind. Unfortunately, the consumer's mind has only limited capacity and this capacity is already taken up by brands that are world class. The result is that consumers have become tremendously selective regarding products, brands and advertising. They are most willing to ignore most advertising without any fear of losing anything. In other words, consumers have learned to look without seeing, to hear without listening. The challenge to marketers is not to shelve the concept of positioning, but rather to fight against the "closed" consumer mind which is at full capacity! The way to do this, is to offer the consumer products/brands that are unique, supported by imaginative and really creative advertising. Me-too products/brands should not be launched, unless there is good reason to do so. The consumer will simply ignore such brands and advertising for same. Markets becoming hyper-fragmented Marketers in their pursuit of differentiation, have segmented, sub-segmented and further niched markets and there are no further segments available in most markets. The result is that it is becoming increasingly difficult to achieve incremental sales by launching new products/brands. Even if further niches are available, they will probably be of marginal value in terms of sales and profits. The message to marketers is clear. In a hyper-fragmented market, segmenting markets in the traditional way will not suffice. The need is for creative segmentation, which in turn will be a competitive advantage. Further opportunities for mass customisation should not be ignored. Digital technology is increasingly facilitating customised product and service offerings. Advertising saturation is simply phenomenal and media fragmentation is growing Consumer media habits are so diverse, that several mediums need to be targeted to achieve the levels of brand awareness and recall desired. This naturally leads to higher communication budgets and also to waste in advertising spend. In Sri Lanka today consumers have several TV stations, Radio stations and newspapers to select from. The number of advertisements exposed to the Sri Lankan consumer is quite astonishing. What do consumer do as a result? They simply learn to switch off and ignore advertisements that are run-of-the-mill an irrelevant. In other words, the consumer has learnt to watch TV, without being exposed to commercials! (In their mind). What does all this mean to marketers? Traditional advertising methods will not drive markets and more radical/creative approaches will be required to capture consumer imagination and interest. This may mean embracing new mediums such as interactive TV, internet and mobile communication. Ways of cutting through the clutter will be required. Direct marketing could be solution but once again creativity and targeting will be key. Creativity in advertising, will be a must and marketers must be more open to radical creative executions proposed by advertising and PR Agencies. Digital technology has revolutionised many markets Whether marketers like it or not, the internet and other related mediums have changed the destiny of most markets for ever. Newer and more technologically advanced products are appearing much faster, often at speeds that are difficult to comprehend by the average consumer. Marketers must learn to harness digital technology for their own benefit, by becoming techno-savvy. Not only should technology be used to develop new products, it should be utilised for all aspects of marketing. In this brief article, I have attempted to highlight some key challenges that marketers would have to face and offered some advice on how to deal with them. Traditional marketing thinking and methods will need to be carefully evaluated and bold decisions taken to change, if results are to be achieved in a challenging era. The traditional marketing concepts and principles are still valid but need to be revisited with modern thinking and business acumen. Above all, willingness to challenge the existing "status quo" is important. "We are all potentially free to know, go, do and be whoever we want to be" - (Ridderstrale and Nordstrom) |
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