Marketing and selling in tough economic conditions:

Out-of-the-box marketing strategies

Prasanna Perera

Prasanna Perera, Marketing and Management Consultant, Chartered Marketeer, CIM U.K.

In slow moving markets, traditional marketing strategies do not always work. There is a need to think and act differently, to energize dormant markets to achieve growth for organizations. In this brief article, I will endeavour to share some insights.

1. Segmentation of markets

There are many niche marketing opportunities in both products and services.

Take for example, the hospitality industry. Niche tourism segments such as eco-tourism, agri-tourism, adventure tourism, discovery tourism to name a few. In the beauty care industry, there are many new market segments and related products and services have been developed. Take the beverage sector, where health beverages, organic beverages and energy boosting beverages have taken centre stage.

Hence, the ability to creatively segment markets becomes a critical skill in marketing. Not only do you need to identify mass segments but more importantly, niche segments. There is a saying - "Riches in Niches", which is indeed true.

2. New products and services

When new market segments are identified, new products and services need to be developed. In healthcare, "doctors on wheels", "mobile laboratories" and specialized types of care are interesting examples. In fast foods, you observe many specialized food outlets and chains, catering to niche market segments.

For example sandwich bars, donuts, coffee houses, hotdog houses, sushi bars to name a few. In food you also observe players catering successfully to the masses.

Numerous catering establishments have developed winning business models, be it catering for weddings, office parties, get-togethers or even day-to-day meals. Budget airlines are a new service concept that has achieved much success by catering to a totally new market segment i.e. passengers who have never flown due to economic reasons. The names of Air Asia, Southwest Airlines and Easy Jet come easily to mind.

3. Should Marketeers be market driven or market driving or both

In textbook marketing, an organization needs to be market driven i.e. to identify market opportunities and develop products and services to cater to them. There is nothing wrong with this approach, except that all players are doing so. World class organizations not only are market driven, they are also market driving i.e. creating new markets/needs that consumers have not even identified.

Take for example the many innovations of the Sony Corporation - Walkman, Discman, Video Walkman, Handycam. None of these products were outcomes of existing consumer needs. They all created needs in consumers, that consumers had never identified! In Sri Lanka, we have observed many market driving initiatives in the Insurance Industry. For example, on-the-spot, call-and-go etc. Even in the telecommunications industry many market driving initiatives have been observed.

4. Innovative promotions and methods of distribution

The amount of noise and clutter in the Sri Lankan marketplace and communication sphere is high. Hence, traditional methods of promotions do not deliver the desired results.

How many TV and Radio Stations are available to viewers and listeners in Sri Lanka, not to mention newspapers and magazines. My advise is to explore interactive and two-way promotional methods, in order to engage audiences. Web based communication and mobile communication needs to be utilized more regularly and effectively.

Customers also need to be rewarded for their loyalty. Hence, loyalty marketing programs are popular but they need to deliver "real" values to customers. Merely giving points for purchases, will not suffice.

In the area of distribution, the organized trade (or organizing trade) is growing and even lower middle class Sri Lankans are patronizing hypermarkets, supermarkets and mini-marts.

However, the traditional trade (kade's) are still the most prevalent methods of distribution for many product categories. Within these kade's the clutter is simply unbelievable - lots of products, point of sale material etc., Marketeers will need to find a way to overcome this clutter at outlet levels, in order to highlight their offerings to consumers. This is where "out-of-the-box" distribution strategies are required. Many marketeers are now making their products available in non-traditional outlets. For example FMCG products in hardware and electrical outlets. Innovative POSM will also be required at outlet levels. How long are we going to rely on posters, danglers, streamers etc.?

5. The benefits of " out-of-the-box" marketing thinking

The biggest advantage is the opportunity for differentiation - in product, service, marketing mix. This leads to higher sales growth, profitability growth and ultimately greater shareholder value. Creative marketing strategies also help to position organizations as "innovative"; hence, providing opportunities for charging higher prices.

Creative marketing also provides an organization with a "window of opportunity" to capture a sizeable percentage of the market, before the competition catches up.