Download Topic 9 Innovation and Markets

Topic 9
Innovation and Markets
Ref; Corporate Strategies Google Images search
9.1 Corporate Strategies
Essential ideas: Companies and businesses can utilize a range of different
strategies to develop products, services and systems.
Nature of Design
The success of a company relies heavily on the strategies it adopts. The
evaluation of products, services and systems can inform the selection of the most
appropriate strategies to follow that will enable a company to achieve its
objectives.
Concepts and Principles
Pioneering strategies
Imitative strategies
Market development
Product development
Market penetration
Product diversification
Hybrid approaches
The relative success of pioneering and innovative strategies
Corporate and social responsibility
Guidance
Comparison of success between pioneering and imitative strategies
Examples of companies that have used above strategies
Examples of a company that are a result of a hybrid approach
How corporate social responsibility may be a particular goal of a company
whereby the aim is to manage the economic, social and environmental impacts
of their operation to maximize the benefits and minimize the disadvantages
Examples of evidence of effective corporate social responsibility for a major
multinational company
Pioneering strategy
‘….. involves creating a new or innovative direction and product. Many
individuals, designers or companies believe there is a real competitive
advantage and profit in being the first to market with a new and sought after
product. It is this idea that typifies the pioneering approach. Market pioneers
need to identify their market sector and segment quickly or even create one to
justify their often expensive, R&D costs.
Ref. p 21 Design & Technology Metcalfe & Metcalfe
2011
Examples include the early operating systems of personal computers, Apple
brought out the first user friendly GUI operating system and quickly started to
eat into the Microsoft share of the PC market. Microsoft countered with
‘Windows’ which can be seen as an imitative strategy. Court cases followed for
years as one company took the other to court to try to win the legislative battle.
Copyright infringement was heavily involved.
Imitative strategies
These strategies are more focused on allowing the pioneers to establish a market
or to clearly see what the market is and what is a successful product for that
market. This allows imitators/colonisers to save on high set up costs of R&D.
Once the market matures imitators can then more easily enter and
improvement and product development occurs.
Ref. p21-23 Design & Technology Metcalfe
& Metcalfe 2011
Leverage is available to non-pioneering firms for gaining long-term competitive
advantage by virtue of their late entry into a market: as it was with IBM over
Apple, and is with Dell over IBM. The follower can benefit from the (1)
clarification of the demand-uncertainty and market-uncertainty,
(2) knowledge of the effects of changing customer needs and new technologies,
(3) opportunity to free-ride the pioneer's investments in consumer-education,
(4) distribution channel and infrastructure development, (5)
pioneer's mistakes in product positioning and pricing, and in its promotional
efforts.
Read more: http://www.businessdictionary.com/definition/follower-advantage.html#ixzz39QHLVOYC
Market development
is the process of developing sales, new products or services and often new market
sectors or segments. It often improves businesses through; introducing new
products to existing customers, introducing new products to new customers,
establishing a greater market by attracting new customers, educating consumers,
creating new application for an existing product.
Ref. p21-23 Design & Technology
Metcalfe & Metcalfe 2011
Many parts of a Swiss Army knife were originally an existing, stand alone,
piece of technology (Scissors, Saw, Knife, Tweezers, Pliers) Now there are Swiss
Army products such as Swiss Cards, USB’s which still retain many of the
original elements of the technology.
Product development
is the evolution of a product through the inclusion of new features, accessories,
materials or components. It usually is aimed at existing market sectors and
segments but can also include new markets or first time purchasers. Adding
variations to a product to develop its range and building on an established
brand.
http://www.victorinox.com/ch/product/Swiss-ArmyKnives/Category/SwissCards/SwissCards/SwissCard/0.7100.T
Market penetration
Market Penetration means increasing sales to existing customers or finding new
customers for existing products. Can be calculated as Product sales / Total
market potential. Many different product promotion strategies can also be used
to increase market penetration such as discounts, celebrity endorsements, bonus
offers etc.
Ref. p22 Design & Technology Metcalfe & Metcalfe 2011
Product diversification
involves the modification of an existing product so that its market potential can
be increased. Aims to attract new customers to increase sales. Can use previous
reputation or improvements in product ranges or platforms. Aim is to increase
sales. Examples of these strategies includes. Mars moving from Chocolate
products to Ice Creams.
Ref. p23 Design & Technology Metcalfe & Metcalfe 2011
Nike moving from Sports shoes to Sports clothing, fashion and equipment,
sporting equipment and even watches.
http://www.nike.com/us/en_us/c/nikeplus-fuelband
Hybrid approaches
Involves using both Pioneering and Imitative strategies in the development of a
product or products to build sales and profitability. Adopting innovative
techniques, adaptations and features but imitating market imitators by
reducing the research and development costs through using a market familiar
product
Ref. p22 Design & Technology Metcalfe & Metcalfe 2011
The relative success of pioneering and innovative strategies
Historically, pioneering companies have rarely reached market dominance. Eg
Xerox corporation was unable to reap the benefits of the PC market. Sony’s
Betamax Video player. For successes, Apple was a pioneer in the I-Pod/I-Pad
notebook computer product line.
Corporate and social responsibility
CSR, also called corporate conscience, corporate citizenship or sustainable responsible
business/ Responsible Business)[1] is a form of corporate self-regulation integrated into
a business model. CSR policy functions as a self-regulatory mechanism whereby a
business monitors and ensures its active compliance with the spirit of the law, ethical
standards and international norms. In some models, a firm's implementation of CSR
goes beyond compliance and engages in "actions that appear to further some social
good, beyond the interests of the firm and that which is required by law."[2][3] CSR
aims to embrace responsibility for corporate actions and to encourage a positive impact
on the environment and stakeholders including consumers, employees, investors,
communities, and others.
The term "corporate social responsibility" became popular in the 1960s and has
remained a term used indiscriminately by many to cover legal and moral
responsibility more narrowly construed.[4]
Proponents argue that corporations increase long term profits by operating with a CSR
perspective, while critics argue that CSR distracts from business' economic role. A 2000
study compared existing econometric studies of the relationship between social and
financial performance, concluding that the contradictory results of previous studies
reporting positive, negative, and neutral financial impact, were due to
flawed empirical analysis and claimed when the study is properly specified, CSR has
a neutral impact on financial outcomes.[5]
Critics[6][7] questioned the "lofty" and sometimes "unrealistic expectations" in CSR.[8] or
that CSR is merely window-dressing, or an attempt to pre-empt the role of governments
as a watchdog over powerful multinational corporations.
CSR is titled to aid an organization's mission as well as a guide to what the company
stands for to its consumers. Business ethics is the part of applied ethicsthat examines
ethical principles and moral or ethical problems that can arise in a business
environment. ISO 26000 is the recognized international standard for CSR. Public
sector organizations (the United Nations for example) adhere to the triple bottom
line (TBL). It is widely accepted that CSR adheres to similar principles, but with no
formal act of legislation.
Ref: http://en.wikipedia.org/wiki/Corporate_social_responsibility
http://www.highbrowmagazine.com/4185-general-motors-and-breakdown-corporatesocial-responsibility
Triple bottom line[edit]
People planet profit, also known as the triple bottom line, are words that should be
used and practiced in every move an organization makes. People relates to fair and
beneficial business practices toward labour, the community and region where
corporation conducts its business. Planet refers to sustainable environmental practices.
A triple bottom line company does not produce harmful or destructive products such as
weapons, toxic chemicals or batteries containing dangerous heavy metals for
example. Profit is the economic value created by the organization after deducting the
cost of all inputs, including the cost of the capital tied up. It therefore differs from
traditional accounting definitions of profit.[38][39]
Despite the fact that adopting this triple measure has helped some companies be more
conscious of their social[40] and moral responsibilities,[41] the triple bottom line has its
critics. The first criticism is that the reporting of environmental and social/moral
responsibilities is selective and ignores some real moral demands, thus substituting the
adopted list for a company or its members paying attention to its myriad moral
obligations. The second criticism is that there is no guaranteed-upon way to carry out
the environmental and social/moral audits comparable to the way that companies
carry out their financial audits-much of which is governed by government
requirements. An inherent difficulty with any social reporting is that it is not
quantifiable in the way that a financial report is. There is no quantitative method
that captures what is significantly at issue and no agreed-upon way to represent
qualitative measures.[42]
Ref: http://en.wikipedia.org/wiki/Corporate_social_responsibility
Brand differentiation
In crowded marketplaces, companies strive for a unique selling proposition that can
separate them from the competition in the minds of consumers. CSR can play a role in
building customer loyalty based on distinctive ethical values.[47] Several major brands,
such as The Co-operative Group, The Body Shop and American Apparel[48] are built
on ethical values. Business service organizations can benefit too from building a
reputation for integrity and best practice.
Crises and their consequences
Often it takes a crisis to precipitate attention to CSR. One of the most active stands
against environmental mismanagement is the CERES Principles that resulted after
the Exxon Valdez incident in Alaska in 1989 (Grace and Cohen 2006). Other
examples include the lead poisoning paint used by toy giant Mattel, which required a
recall of millions of toys globally and caused the company to initiate new risk
management and quality control processes. In another example, Magellan Metals in the
West Australian town of Esperance was responsible for lead contamination killing
thousands of birds in the area. The company had to cease business immediately and
work with independent regulatory bodies to execute a cleanup. Odwalla also
experienced a crisis with sales dropping 90%, and the company's stock price dropping
34% due to several cases of E. coli spread through Odwalla apple juice. The company
ordered a recall of all apple or carrot juice products and introduced a new process
called "flash pasteurization" as well as maintaining lines of communication constantly
open with customers.
See also The "Shattered Image" article had originally been scheduled to be published as a 10,000 word
feature in Vanity Fair earlier in 1994 but was dropped after legal threats by The Body Shop. The original
article was eventually published in 2004 by The Nation Books in Killed: Great Journalism Too Hot to
Print,[27] edited by David Wallis. Business Ethics, which had featured Roddick on its cover just the year
before, subsequently agreed to print a much shorter version of the exposé. In April 2013 it was revealed
that Bodyshop was charging Irish consumers up to 50% more than their British counterparts. [28]
Ref: http://en.wikipedia.org/wiki/The_Body_Shop
9.2 Market Sectors and Segments
1. www.d4Nations.com
2. http://blog.revenueshares.com/investment-opportunities-in-2014-
revenueshares/
3. http://allthingsmarketingoz.blogspot.com/2012/10/which-industry-is-really-driving-economy.html 4.
http://www.wifag-polytype.com/plastic-laminates-tubes/markets/
Essential ideas: Designers must research and consider the target market
sectors and segments in the design of their products
Nature of Design
Designers must consider the market when targeting their product, service or
system. The smaller the sector the more the target audience will have in
common. Companies may decide to compete in the whole market or only in
segments that are attractive and/or familiar. A designer’s understanding of the
identified market is essential.
Concepts and Principles
Categories of market sectors
Influence of market sectors
Classifications of consumer market segments: income, profession, age, family,
values, behavior
Development of a product family
Guidance
Broad categories of market sectors include geographical sectors focusing on
values, culture and characteristics of purchasers in a particular region and
purchasing power, client based sectors focusing on consumers, industrial,
public sector and commercial
How companies take into account market sectors in the design and manufacture
of products
Examples of products designed for only one sector and products designed to be
sold to more than one sector
How the needs of the markets segments listed impact on the design of products
and scale of production
Examples of product families
Refs
http://furnishingsresearchstore.com/ft.html
http://www.worldfurnitureonline.com/showPage.php?template=homepage&id=101
http://www.slideshare.net/Ken_Research/india-furniture-market
http://www.slideshare.net/SophiaJns/india-furniture-market-forecast-and-opportunities2019
http://www.slideshare.net/manigarg211/ikea-invades-india
http://www.slideshare.net/csilmilano9/world-furniture-international-markets-review-bycsil-nr-60-december-2013-by-csil
http://www.slideshare.net/ukaszSzymula/2013-luxury-goods-worldwide-market
Categories of Market Sectors
Market sectors are particular subsets of markets that share specific
characteristics. Sectors are often large and can include diverse fields such as
pharmaceutical, household and automotive groupings.”
p23 Design Technology Metcalfe,
Metcalfe 2011
Geographical sectors focusing on values, culture and characteristics of
purchasers in a particular region and purchasing power, client based sectors
focusing on consumers, industrial, public sector and commercial
Market segmentation is a marketing strategy that involves dividing a broad target
market into subsets of consumers who have common needs and priorities, and then
designing and implementing strategies to target them. Market segmentation strategies may be
used to identify the target customers, and provide supporting data for positioning to achieve
a marketing plan objective. Businesses may develop product differentiation strategies, or
an undifferentiated approach, involving specific products or product lines depending on
the specific demand and attributes of the target segment.
http://en.wikipedia.org/wiki/Market_segment
Shoes
Market
Sector
Market sector can be
segmented into
groups of consumers
with similar
characteristics
Each segment can be further broken down into
Age
Job
Interests
Lifestyle
Location
Income
narrower sectors.
Eg Age subdivided into Baby, toddler,
pre-school, junior, teenager, adult etc.
Values
Philosophy
Classifications of consumer market segments: income, profession, age, family,
values, behavior
Income is a key criteria for determining certain market segments. Income largely
determines the type of products or consumables that certain people will be
interested in or potentially purchase. Especially luxury or high priced
products, which are marketed toward certain income segments of the total
population. Profession also is a key determinant of segmenting markets. Many
professions have particular equipment, tools, clothing or required The medical
profession requires certain types of materials, consumables or even technology so
this clearly dictates the market for these types of products. Age related markets
can be seen through the design, production and selling of age pertinent items
such as clothing, shoes or other products for babies, children, teenagers, senior
citizens etc. Family markets include many products such as family type
vehicles, household goods and even holidays. Values related markets can
include a wide variety of interests including but not limited to philosophy,
religion, education. Behaviour segment marketing can include areas such as
sports, hobbies, physical interests.
http://www.businesssttudiesonline.co.uk/AsA2BusinessStudies/TheoryNotes/2874/PDF%20Non%20Print/02%20Market%
20Planning.pdf
Some products are purposely created for only one segment. High end luxury
watches are aimed at the high income market. Particular vehicles 4WD/SUV’s
are marketed/aimed at certain types of drivers. This means that the marketing
of these items can be very focused on where, how and when these products are
advertised. More general or less income focused products are often marketed at
several sectors or even segments. Family and value oriented, or even some age
related products such as general clothing or shoes are often marketed and
aimed at broader segments.
Many large corporations having a product family often attract customers/sales
through the use of advertising an image. Eg Coca Cola products advertise young
people involved in many appealing and attractive activities as a way of
increasing its appeal. So what started as a one drink soda company now has
many different products including Coca Cola, Coke light, Coke Zero being sold
in many different sized/material containers including, glass, plastic, steel and
aluminum and also dispensed into cups, glasses and containers from machines.
As is widely known Coca Cola is a multinational company now and as such
commands a huge scale of production of all its family of products. With
production being done at such huge numbers, economies of scale allows many
opportunities for diversification or design development.
Robust Design or Product Family
Robust design is a flexible approach that can be adapted to changing technical
and market driven requirements. The product functionality remains quite
constant despite many factors changing.
Product Family uses a concept of standardised specifications of components or
assemblies this allows companies to create competitive advantage. Often based
around a common product platform..
p23 Design Technology Metcalfe, Metcalfe 2011
Product platform indicates commonalities in design including but not limited
to product lines, shapes, materials, production or manufacturing processes or
other features such as marketing, branding.
Honda is an example of a Robust design developing into a product family. The
ability of Honda to provide high power to weight ratios in their engines which
was initially used in its racing motorbikes helped create the environment
(Technology and expertise) to transfer this product advantage into a whole
range of motorbike models.
Ref
http://www.youtube.com/watch?v=rYabfifhEPE
Try to decide which examples match the different markets below and justify
your answers.
Examples
-
1.
Marketing campaign to a different target market group
-
2.
Developing a new colour range of the same product
-
3.
A low fat version of the same food product
-
4.
Using nylon for clothing rather than parachutes or its original use.
-
5.
Income; Age; Lifestyle; Values
-
6.
Products containing common parts and assemblies
-
7.
Flexible designs which can be changed due to technical improvement
Different Markets
Example (1-7)
Robust Design
Market Development
Diversification
Product Family
Market Sector/Segmentation
Product Development
Market Penetration
Complete the following Quiz on Marketing Segments and review your responses
http://www.tutor2u.net/business/quizzes/as/marketing_segmentation/quizmaker.htm
Jeep
http://www.bing.com/images/search?q=jeep+product+family&qpvt=Jeep+product+family
&FORM=IGRE
9.3 Marketing Mix
Essential idea: The marketing mix is often crucial when determining a
product or brands offering.
Nature of Design
Empathy for and understanding of the target audience is developed through
analysis of the market chosen. This informs several factors: the standards that
end users demand; how and where to distribute and sell the product; how
much they are willing to pay for a certain product and its quality; and how to
communicate the launch of the product. Correct analysis of these factors could
determine the success or failure of the product despite its quality
Concepts and Principles
Marketing Mix the 4P’s Product, Price, Promotion and Place
Product; standardization of products
Price; strategies for setting price; cost-plus, demand pricing, competitor-based
pricing, product line pricing, psychological pricing.
Promotion: Advertising, publicity, personal selling
Place: Implications of internet selling for a company in relation to its supply
chain and distribution network
Guidance
Consider governments standards for a particular market segment, component
standardization and industry wide standards.
Examples of trigger products and incremental products
Analysis of product prices that matches each of the price setting strategies
Examples of promotion campaigns for different products.
http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-placepromotion-product.html#axzz3CcJKJlNC
“The marketing mix is the set of controllable, tactical marketing tools that a
company uses to produce a desired response from its target market. It consists of
everything that a company can do to influence demand for its product. It is also
a tool to help marketing planning and execution.
The four Ps of marketing: product, price, place and promotion
The marketing mix can be divided into four groups of variables commonly
known as the four Ps:
1. Product: The goods and/or services offered by a company to its
customers.
2. Price: The amount of money paid by customers to purchase the
product.
3. Place (or distribution): The activities that make the product available
to consumers.
4. Promotion: The activities that communicate the product’s features and
benefits and persuade customers to purchase the product.
Marketing tools
Each of the four Ps has its own tools to contribute to the marketing mix:

Product: variety, quality, design, features, brand name, packaging,
services

Price: list price, discounts, allowance, payment period, credit terms

Place: channels, coverage, assortments, locations, inventory,
transportation, logistics

Promotion: advertising, personal selling, sales promotion, public
relations”
Ref: http://www.marsdd.com/mars-library/the-marketing-mix-in-marketing-strategy-productprice-place-and promotion/
More specific detail on each of the 4P’s is offered here
1.
2.
http://www.nhlabreakaway.net/_content/courses/NHLAMKT101_Module_4.pdf
http://en.wikipedia.org/wiki/Marketing_mix
http://www.dezeen.com/
Activity 1.
Look at the first website above and state all of the 4 P’s for an Apple product. Be specific and
give as much detail as possible.
Name of Brand/Product…………………………………
P
P
P
P
Choose a Lighting product (Desklamp) and again outline all aspects of the marketing mix to
clearly show how this is involved in the commercial success of the product.
Name of Brand/Product…………………………………
P
P
P
P
Test your Marketing Mix knowledge using the following quiz……..
http://www.tutor2u.net/business/quizzes/as/marketing_mix_introduction/quizmaker.htm
9.4 Market Research
Essential idea: Market research is an organized effort to gather information
about markets or customers.
Nature of Design
Market research often identifies how to improve the product, service or system
and increase its chance of success within a particular sector or segment. The
price a user is prepared to pay is usually determined through market research.
This in turn sets an upper limit of cost to the design and production of a
potential product, service or system. Market research has a crucial role in
determining the constraints a designer has to work within.
Concepts and Principles
Purpose of Market Research
Consumers reaction to technology and green design and subsequent impact on
design development and market segmentation
Market research strategies
Guidance
The purpose of Market research includes idea generation and development;
evaluating market potential and economic trends; collecting data relating to
demographics, family roles, consumers; identifying suitable promotion
strategies; considering technological trends and scientific advances.
Market research strategies include literature search, expert appraisal, user trial,
user research, perceptual mapping and environmental scanning.
Advantages and disadvantages of each market research strategy considering the
nature, reliability and cost of the research and importance to the design
development process.
Purpose of Market Research
The purpose of market research is to help a business gain more detailed
understanding of consumer needs, reduce the risk of business failure, gather
data on customers and potential customers and aid in business decision
making. Market research should be done often to realise and continue meeting
needs of a changing market.
Complete the exercise below using the following words
deadlines
tative
distribution
Quantitative
economic
recording
failure
research plan
Market
sources
Marketing research is defined as the
needs
objectives
systematic
plan
tastes
gathering,
portfolios
Quali
trends
and analysing of data
about problems relating to the marketing of goods and services.
Marketing research can serve a number of purposes, including giving a business a better
understanding of customer
future
, reducing the risk of product
and helping to predict
. It can be used to find out information about the product itself and the market in
which it operates, as well as about the promotion and
of that product.
Marketing research needs to be carried out regularly, if not continuously, because the
environment in which business organisations operate is subject to change. The reasons for this
dynamic environment may include changes in consumer
changes in the product
, changes in technology,
of rival firms and changes in
conditions
Market research is the process of identifying primary and secondary information about the
demand for a product, whereas
research is a much broader process involving product
testing, and consumer reactions to changes in prices and promotion.
Before marketing research can be carried out, the problem must be defined and
the
established. The next step is to develop a
data
which determines what
will be used and how the data will be collected. If primary research is required it
may be necessary to take a sample of the population as a whole - this will involve drawing up
a sampling
. It will also be necessary to establish a budget and
to ensure that the
research is completed on time and within agreed costs.
research involves gathering statistical or numerical information, such as the size of
the market. It is usually obtained by conducting large scale surveys.
research, on the
other hand, is concerned with people’s opinions, views and motivations and is usually
obtained via focus groups or in-depth interviewing.
Check your answers at the following URL;
http://www.tutor2u.net/quiz/marketing/jcl_marketing_research_purpose.htm
Consumers reaction to technology and green design and market segmentation
Ref: http://www.greenbookblog.org/2013/05/06/four-new-approaches-to-consumersegmentation-in-a-digital-and-social-age/
http://www.ssireview.org/articles/entry/cultivating_the_green_consumer/
http://www.wpp.com/wpp/marketing/hottopics/china/ten-implications-formarketing-strategy-in-these-times/
http://www.greenmarketing.com/files/NRoGM_ch1REVIEW-COPY-FOR-FREEDOWNLOAD.pdf
Market research strategies
Literature Search - the methodical investigation of all published sources for
information bearing on a usually scientific or technological subject <it is in
chemistry that the literature search has attained full stature — New Technical
Books>
Expert Appraisal - The reliance on the knowledge and skills of an expert in
the operation of the product.
http://www.larapedia.com/glossary_of_technology_terms/expert_appraisal_meaning_in_technology.
html
User Trial – Is the observation of people using a product and the collection of
comments from people who have used the product.
User Research - Is obtaining user responses usually through questionnaires or
interviews
Perceptual Mapping - is a diagrammatic technique used by
asset marketers that attempts to visually display the perceptions of customers or
potential customers. Typically the position of a product, product line, brand, or
company is displayed relative to their competition.
http://www.perceptualmaps.com/example-maps/
Create your own Perceptual Map using this template ………………………….
http://www.perceptualmaps.com/free-templates/
Environmental Scanning - Environmental scanning can be defined as ‘the
study and interpretation of the political, economic, social and technological
events and trends which influence a business, an industry or even a total
market’.[2] The factors which need to be considered for environmental scanning
are events, trends, issues and expectations of the different interest groups.
http://en.wikipedia.org/wiki/Environmental_scanning#cite_note-2
Or careful monitoring of an organization's internal and external
environments for detecting early signs of opportunities and threats that
may influence its current and future plans. In comparison, surveillance is
confined to a specific objective or a narrow sector.
Read more: http://www.businessdictionary.com/definition/environmentalscanning.html#ixzz3D3cf8rf2
Advantages and disadvantages of these methods include
Literature Search – Advantage is that many different sources of information are
available but a disadvantage is that there may be an abundance of
information or data which can be very time consuming. IT helps in accessing
data and collecting data immensely but again perhaps too much so synthesis is
necessary
Expert Appraisal – Expert knowledge is gained quickly and can help a
designer decide design direction, as opposed to user trial info which takes
longer to acquire. Expert appraisal may however be biased and an expert may
be difficult to locate.
User Trial – Advantage is that the User is a non specialist so which makes the
trials easier and cost effective to conduct. Disadvantage is that they may carry
out tasks in different ways……… and be inexperienced.
User Research - Advantage is that it is easy and cheap to conduct,
disadvantage is that it is largely qualitative data collected.
Perceptual Mapping - Advantage is that it allows an observer to very quickly
see how a brand or product compares to other competitors in the market
through a graphical representation. Disadvantage is that as it is a graphical
representation the accuracy can be misleading or even biased depending on the
size and scale of the mapping used. Can give limited information depending on
the data used, What source, when it was sourced, reliability of the data etc.
Environmental Scanning - Advantage is that it gives a very broad
interpretation of strengths, weaknesses, opportunities and threats. Disadvantages
include lack of detailed information or specifics of what constitutes these
opportunities or threats it may need much more research or specific data to
identify usable information.
Complete this quiz on Marketing research to check how much you understand………..
http://www.tutor2u.net/business/quizzes/as/marketing_research/quizmaker.htm
9.5
Branding
Essential idea: Branding creates an identity for a product or company, which
makes it distinct from another and can provide added value.
Nature of Design
In order to diffuse products into the market place, the identity of a company is
typically embodied in a brand. The brand is communicated to the consumer
through a value proposition. Designers help to communicate this by: building
stronger user experience around the brand identity; determining content design;
establishing the tone of message through advertisements; promotion
Concepts and Principles
Brand loyalty
How brands appeal to different market segments
The difference between a trademark and registered design
The implications for a company of positive and negative publicity on brand
image
Contribution of packaging to brand identity
Effects of product branding
Evaluating the global impact of branding
Guidance
Examples of positive and negative effects of product branding on different
market segments.
Examples of products affected by branding on a global scale.
What is Branding? http://www.youtube.com/watch?v=JKIAOZZritk
Brand Loyalty
is where a person buys products from the same manufacturer repeatedly rather
than from other suppliers.[1] In a survey of nearly 200 senior marketing
managers, 68 percent responded that they found the "loyalty" metric very
useful. Brand loyalty, in marketing, consists of a consumer's commitment to
repurchase or otherwise continue using the brand and can be demonstrated by
repeated buying of a product or service, or other positive behaviors such as
word of mouth advocacy
Ref: http://en.wikipedia.org/wiki/Brand_loyalty
http://en.wikipedia.org/wiki/My_Coke_Rewards
or another example
Marriott Rewards is the guest loyalty program that offers travelers their choice
of points toward free vacations and merchandise or frequent flyer miles, as well
as other membership benefits, when staying at Marriott brand hotels
worldwide. Frequent travelers also can earn “elite level” benefits with Marriott
Rewards, including room upgrades, bonuses, and gifts. There are three “elite”
levels—Silver, Gold and Platinum – each based on the number of nights stayed
at Marriott hotels each year.[30]
When consumers become committed to your brand and make repeat purchases
over time. Brand loyalty is a result of consumer behavior and is affected by a
person's preferences. Loyal customers will consistently purchase products from
their preferred brands, regardless of convenience or price. Companies will often
use different marketing strategies to cultivate loyal customers, be it is through
loyalty programs (i.e. rewards programs) or trials and incentives (ex. samples
and free gifts).
Ref: http://www.investopedia.com/terms/b/brand-loyalty.asp
Classwork activity
Name and describe 4 company loyalty programs and what the benefits are to the
consumer and company
How Brands appeal to different market segments
Market segmentation pertains to the division of a market of consumers into
persons with similar needs and wants. For instance, Kellogg's cereals,Frosties,
and Coco Pops are marketed to children. Kellogs Crunchy Nut Cornflakes are
marketed to adults. Both goods denote two products which are marketed to two
distinct groups of persons, both with similar needs, traits, and
wants. http://en.wikipedia.org/wiki/Marketing#Market_segmentation ,
People do things with brands to say things about themselves. This means brand
and target market segment personalities need to be aligned (to some extent). If
they’re not they’ll be like ships passing in the night as the brand will hold
little self expressive value for the target market. It’s also crucial the brand’s
personality acts as an emotional common denominator that appeals to all the
target segments. However, facets of the brand personality need to be emphasised
in certain contexts and at certain moments in time. This helps ‘fine tune’ the
brand’s appeal to certain segments. So how does this work in reality? For
example, if you decide to buy a new car, VW would hope that you would
consider it first, among the dozens of great car makes that dealerships have to
offer. Volkswagen's "da-da-da" campaign achieved exactly that among young
buyers. The brand was perceived as being cool, inclusive and reliable, which
was relevant for the audience that Volkswagen wanted to appeal to.
Consequently, the results jumped off the chart. As such, branding is more than
just a promise of what the product or service will provide. It is a dialog between
two trading groups who need to communicate effectively in a highly noisy
environment
Ref: http://wavelengthmarketing.wordpress.com/2013/05/17/how-can-one-brand-appeal-todifferent-segments/
Classwork activity
Watch this video:
http://understandingteenagers.com.au/blog/2010/07/how-branding-is-shapingteenagers/
List / explain 4 examples of 2 x positive and 2 x negative effects of product branding
on different market segments
Trademark and Registered Design
A Trademark is a distinctive design, graphics, logo, symbols, words, or
any combination thereof that uniquely identifies a firm and/or
its goods or services, guarantees the item's genuineness, and gives
it owner the legal rights to prevent the trademark's unauthorized use. A
trademark must be (1) distinctive instead of descriptive, (2) affixed to the item
sold, and (3) registered with the
appropriate authority to obtain legal ownership and protection rights.
A Registered Design refers to the features of a shape, configuration, pattern or
ornament applied to an article by any industrial process. If you register a
design, you will be protecting the external appearance of the article. Registered
Designs are used primarily to protect designs for industrial use. By registering a
design, you obtain a right to ownership and the right to prevent others from
using the design without your permission. You can exploit your design in many
ways. You may use it to better protect your market share by barring copying by
others, license it to third parties for commercial returns or sell the design for a
sum of money.
Read more: http://www.businessdictionary.com/definition/trademark.html#ixzz3DMlpETDA
and
http://www.ipos.gov.sg/AboutIP/TypesofIPWhatisIntellectualProperty/Whatisaregistereddesign.asp
x
The implications for a company of positive and negative publicity on brand
image
Earning and maintaining a good reputation is challenging for new and
established businesses. When bad publicity emerges, businesses could be
portrayed as irresponsible, dishonest or appear to be only looking out for their
best interests. Although it is possible to make a good name for your business on
a local or national scale, doing so can be an uphill battle, especially in the
face of bad publicity.
Loss of Trust
Bad publicity can come in the wake of an exposed lie or inaccuracy. Sometimes
advertising is used to pump up businesses' capabilities and consumers'
expectations. Expectations can be carelessly overblown, revealed as false in the
form of bad publicity and lead to disappointment and a loss of trust. When an
organization fails to follow through with promises, customers, employees and
partners are more likely to question the truthfulness of all the organization's
current and future messages. Regaining trust can be difficult and timeconsuming. Mistrust expressed by word of mouth and through social media can
take years to repair and often can only be remedied by the number of vocal
supporters eventually outnumbering the critics.
Effects on Sales
In general, bad publicity negatively affects sales. Companies that are virtually
unknown can at times experience a boom in business after bad publicity, but
they are the exception. In general, bad publicity damages the long-term success
of larger established businesses. Product accessibility can also decrease with
bad publicity, and potential consumers might have fewer opportunities to
purchase products. When buyers and store owners have negative opinions, their
choices ultimately affect their customers' options
Damaged Brand Equity
Brand equity can suffer long-term damage as a result of bad publicity. This is
especially evident for companies that must recall their products because of
safety or health hazards. In such cases, even if only a portion of a product's
supply is recalled, buyers are likely to avoid the brand altogether for a period.
Rumors, even those with no merit, can affect sales just as strongly
Damaged Brand Association
Brand association refers to the deep-seeded attitudes and feelings a customer
has toward a product or company. When brand association is negative, negative
attitudes are more likely to come into a consumer's mind before positive ones.
Bad publicity can contribute to negative brand association, which can in turn
reduce sales over time. Changing attitudes and brand associations can take a
great deal of time and can also be costly, as a company might be forced to invest
in additional advertising and campaigns to correct negative attitudes. Damaged
brand association also leaves room for competition to move in on a customer
base, which can also reduce sales.
Ref: http://yourbusiness.azcentral.com/disadvantages-bad-publicity-3495.html
Contribution of packaging to brand identity
The McAfrika was a burger sold by McDonald's in Norway and
traded as a Limited Edition Olympic Games Burger. It attracted
significant public attention as a result of its name and the
timing of its launch. The McAfrika sandwich contained beef,
cheese, and tomatoes wrapped in pita bread. McDonald's claimed it was based
upon an authentic African recipe. The McAfrika was released in 2002, just as
a major famine was occurring in southern Africa. The name of the burger was
immediately criticized for being grossly insensitive, especially since it was
released in Norway, one of the richest nations in the world. Norwegian Church
Aid and the Norwegian Red Cross, which were both conducting humanitarian
operations in southern Africa at the time, said that McDonald's decision was
insensitive, crass and ill-considered. CARE Norway demanded that McDonald's
withdraw the burger. In particular, Norwegian Church Aid protested the
McAfrika burgers by giving out "catastrophe crackers" to customers entering
Norwegian McDonald's outlets. Support for McDonald's came from the
organization African Youth in Norway who appreciated Africa name being
used in a positive manner instead of as a continent of war and poverty.
Generating positive publicity for your business is an area of marketing that is
often forgotten or not even considered. Yet using the media to tell people about
your business can be a very effective way of spreading the word, enhancing
your credibility and generating sales. What’s more, other than the time you
spend arranging your publicity… it’s free! Being published in the press or
featuring in an industry magazine can add weight to all your other marketing
and shouldn’t be seen as something only the big companies go after. New
Zealand is a nation of small business owners like you, and people are
interested in your story. Generating free publicity for your business is easier
than you think especially if you know how to look for opportunities and make
the most of them when they arise.
Class work
Look for one brand that has benefitted from positive publicity. Discuss
implications on the brand image.
Brand identity and package design are an increasingly important component of
corporate branding strategies as they contribute significantly to marketing or
branding successes. While marketing and advertising efforts seek to create “need”
or demand for a product, only the package can tangibly deliver
that product and brand to the consumer. The package must meet
the consumer where he or she is, and it must deliver just the
right brand message to promote a purchasing decision. All of the
corporate marketing, advertising and promotional efforts in the
world go for naught if the consumer standing before the retail
shelf, passes over the product. When this happens, the
huge cost of research and development, marketing and
positioning the product in the marketplace has been a
waste.
Since a brand’s packaging is its most enduring and
accessible brand communication vehicle, it’s important
that it conveys the brand experience. Through an
innovative structure and package design system. The brand’s packaging must be
a synergistic part of the overall brand expression continuum. Sometimes the
objective is to develop a logo and a package design system for line extensions by
leveraging existing brand equities while creating distinctive imagery for a new
category segment. A great example of this is Procter & Gamble’s Pringles Snack
Stacks products. Snack Stacks offer consumers the same Pringles in an eight-
pack configuration of small plastic tubs that are yoked together in a
paperboard sleeve. Ideal for lunchboxes and for those who wish to control
portions, this structural package extends the Pringles line, and its recognizable
brand attributes. The iconic Mr. Pringles character has been contemporized for
new generations of potato chip fans and is now a global player in the crowded
snack market in 140 countries.
Effects of product branding
Brand name products are those products that are identifiable not just by their
function but also by their manufacturer. In some cases, brand names are so
recognizable, they come to stand for the products themselves, as with Kleenex,
Tylenol and Post-It. Brand names are so pervasive, it is no wonder that they
have been argued to have potentially deleterious effects on children.
Read more : http://www.ehow.com/info_8075672_effects-brand-names-kids.html
Brand names are words, images, slogans or symbols used to distinguish a
product from its competitors in the market. The legally protected brands (those
that can't be copied without the explicit permission of the owner) are called
trademarks and are one of the most important elements of modern marketing.
This is because, according to the "The Socio-Cultural Meaning of Brands"
research published by the Oxford University Press, "the power of a brand to
influence perceptions can transform the experience of using the product."
Read more : http://www.ehow.com/info_8488017_influence-brand-names-consumerdecisions.html
Evaluating the global impact of branding
Global branding and advertising can help you market your product or service
in many different countries around the world. Although global branding and
advertising have historically required large budgets, emerging communication
techniques such as social media can make global campaigns affordable for
companies of all sizes. Though branding came about during the industrial
revolution to create distinction and individuality, branding in today’s global
society takes on a different role for consumers, often having a negative impact
on workers many consumers aren’t aware of. Most people feel better when they
choose brand names because they equate recognition and established reputation
with a quality product. In her book Naomi Klein uncovers the underbelly of
branding and explains that companies manufacturing outside the U.S. often do
so in Export Contracting Zones. These zones often utilize “Work Camps” which
regularly subject workers to inhumane conditions. The Institute for Global
Labor and Human Rights released a report alleging that workers producing
clothing for Classic Brands like Walmart, Target, Macy's, and Hanes at a factory
in Jordan have been routinely beaten, underpaid and forced to work excessive
hours. The report added that workers have been forced to live in bed buginfested dormitories that lack heat and hot water. The companies named in the
report have yet to take any action. Charles Kernaghan, author of the report says
these companies have become global networks that design, make, buy, and sell
things wherever around the world it’s most profitable for shareholders and
believes nothing will change until we get a law that keeps goods produced
under these conditions out of U.S. consumers' shopping carts. As long as
consumers stay in the dark about these practices, retailers will continue to
pressure manufactures & suppliers to keep producing as cheaply as they can.
Would you be willing to pay more to ensure humane work conditions for all?
Examples of products affected by branding on a global scale
Nescafe
http://wn.com/global_branding
Global brands
http://www.youtube.com/watch?v=IddQGjBKxYs
Class work:
Choose one product and discuss how it was affected by branding.