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RESEARCH MONOGRAPH
Paradigm Shift in Marketing
Seminar– Saturday, 15th February 2014
Workshop -Saturday, 12th October, 2013
“Business enterprise has two and only two basic
functions: Marketing and Innovation”.
- Peter Drucker
Vidya Prasarak Mandal's
D 9
Daringly Brilliant
Dr. V. N. Bedekar Institute of Management Studies, Thane
DR VN BRIMS
DID YOU KNOW?
The first TV commercial was by the
Bulova Watch company on July 1,
1941. The watch company paid
$9.00 for an announcement that
was 10 seconds long.
DID YOU KNOW?
In 1927, AT & T presented the
first demonstration of TV in the
US. Secretary of commerce
Herbert Hoover’s live image
was transmitted over cable
to New York.
DID YOU KNOW?
The first “spam” email was sent
by a Digital Equipment
Corporation marketing
representative to every ARPANET
address on the west coast of the
United States on May 3, 1978.
DID YOU KNOW?
Colgate toothpaste was
launched as an aromatic
dental cream in jars in 1873.
Colgate Company ushered in
the first collapsible packaged
dental cream in 1896.
DID YOU KNOW?
In 1941 Leela Chitnis was
signed on by Lux as the first
Indian film actress to endorse the
beauty soap. This advertisement
was created by first ad-agency of
India 'Dattaram and Co.'.
DID YOU KNOW?
The first hybrid car was
manufactured way back in
the year 1902 and was named
‘Mixte’ by its manufacturer
Ferdinand Porsche.
DID YOU KNOW?
Warner Chappell Music owns
the copyright to the song
‘Happy Birthday’. They make
over $1 milion in royalties
every year from the
Commercial use of the song
DID YOU KNOW?
1912- ITC (then Imperial
Tobacco Co. Ltd.)
launched ‘Gold Flake’ brand
Shopping Festivals Give Online Sales a Big Boost - Economic Times
Globally 70 % of the new products launched fail - Brand Equity
Gen Y loves to shop...at a sale! - The Times of India
Shoppers Parade to Malls on Republic-Day Sale - Economic Times.
Liquor top sales at Indian Airports - The Times of India
Paradigm Shift in Marketing
Integral components of marketing, customer and factors like sociocultural, economic, demographic factors of marketing macro and microenvironment are inextricably interlinked and do interact, leading to
continuous change in the needs and preferences of consumers,which
in turn spurs marketers to innovate their products and services in
response to ever changing market dynamics, thus making ‘change’ as
the only continuous and permanent feature of marketing, like any other
discipline. Thus ‘Paradigm shift in Marketing’ is ubiquitous feature of
business.
“ The future is not ahead of us. It has already happened. Unfortunately
it is unequally distributed among companies, industries, and nations.”
- Philip Kotler on Marketing
Introduction
For the past several decades, the business world is going through a period of rapid changes;
technology shifting from mechanical world to digital world - the internet, computers, cell-phones
and the social media - having profound impact on the behaviour of producers and consumers. On
the other hand increasing population above sustainability level has forced businesses to device
ways towards judicious utilisation of scarce resources. Climatic changes like global warming and
rising pollution are challenging countries to limit carbon dioxide into the atmosphere, but at the cost
of imposing a higher burden on business. These and the other changes require a major rethinking
of marketing as a discipline and practise, because “It’s not the strongest of the species that
survives, nor the most intelligent, it’s the one most responsive to change.”1
-Charles Darwin1
Long ago, it is said that the Earth was populated with very huge powerful creatures. The Dinosaurs were one of them.
Large size and robust structure helped them to survive the inclement environment including climate of those times. They
survived in the planet for thousands of years. However, when the environment changes were conspicuous, these huge
creatures found it difficult to adapt to the changing situation. They could not adjust to change. Their genes were tailor-made
to survive and sustain only inclement environmental conditions. They were not accustomed to adjust to rapid changes in
the environment. Within a short time, these huge species ceased to exist. The message of the above episode, - ‘evolutionary
anecdote’, is that unless animate entities learn to adapt and adjust to change and ensure that their rate of learning is greater
than the rate of change, their survival is impossible.
1
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
1
Introduction to ‘Paradigm Shift’2
Before we understand Paradigm shift in Marketing, it is necessary to know the meaning of
Paradigm shift in general.
A “paradigm shift” reflects change from one way of thinking to another. It does not just
happen, but rather it is usually driven by agents of change. The term paradigm is used to
indicate a constellation of concepts, ideas, approaches, and principles shared and used by
a scientific community to define research problems and solutions. During a paradigm shift,
the new paradigm first emerges in outline and then establishes itself as and when a synthesis
is produced that is sufficiently attractive to a large number of people in the community. A
paradigm is only a partial view of the World hence there are merits and demerits. One
paradigm that has heavily influenced our thinking about change processes is the Darwin’s
model of evolution. As a slow stream of small mutations, gradually shaped by environmental
selection into novel forms, this concept of incremental, cumulative change has become all
pervasive. Similar explanations are offered for geological erosion, skill acquisition, et al.
A paradigm shift takes place when a significant change happens -usually from one fundamental
view to a different view. Commonly paradigm shift or transformation, the way we humans
perceive events, people, environment and life altogether, can have positive and negative
effects. The end results include varying degrees of negative and positive transformations that
allow people to open their hearts and minds to multicultural diversities, promotes liberty and
freedom. Paradigm shift happens when there are anomalies, disparate, odd scientific results
that cannot be explained away by inadequate method. When a paradigm shift occurs in
science, it has the violence of revolution. The leaders of the dominating paradigm seem to
kill those who are proposing the emerging paradigm.
We must live with unpredictability because the new ways may work for some time and then
thrown back, due to such factors as one not living by our principles, imperfect implementation,
and reaction from those holding on to the old dominant paradigm. The only certain thing
about life is change. No discipline will ever progress if old dominant paradigms continue to
monopolise thinking.
The purpose of this research monograph is to trace the paradigm shift in marketing and to identify
marketing practices, along with shifts in the same of various enterprises. It is also a purpose to
indentify research evidence for paradigm shift which has taken place in the course of history and
the impact and outcomes of such shift. At the outset, an overview of paradigm shift discovered and
the related research evidence discovered are listed in the forthcoming table. Ten paradigm shifts
listed in marketing highlight shift from Simple trade to Relationship era. Table presents the paradigm
shift discovered, source of research, research approach and the hypotheses explored along with
outcomes.
2
Source: Dr. V.N. Bedekar Memorial Research Volume- II: 2007
Research Monograph: Paradigm Shift in Marketing
2
A Summary of Published Research Reviewed to Explore Paradigm Shift in Marketing
N
o.
Paradigm
Shift
Discovered
Research Paper
(Title, year, Author)
Hypothesis/ Research
Questions
Research
Approach
Outcomes
1.
Paradigm
Shift from
Simple trade
era to
Relationship
marketing
era
The future of
Marketing’s past Rise and Fall of
Marketing in
Mesopotamia: A
conundrum in the
cradle of civilization
(2005) by Z.S.
Demirdjian (USA)
To identify the nation among
the ancient civilizations within
which the genesis of marketing
took place
Exploratory
research approach;
Descriptive
approach based on
secondary data
about primarily
archaelogical
findings
Considering proofs from archaeological
findings, author accepted Philip
Kotler’s (1971) view that marketing
may have been first practiced in the
cradle of civilization, beginning in
Urartu and then spreading to other
societies down in the south.
2.
Paradigm
Shift from
Transactional
Approach
to Relational
Approach of
Marketing
Evolution of
Relationship
marketing (1995)
Jagdish Sheth U.S,
Towards a
Paradigm-shift in
marketing? An
examination of
current marketing
practices (1997) N.Z
Does marketing practice
support the notion of a
Paradigm shift where the
transactional approach is being
replaced by Relational
Approaches?
Pluralistic
Approach;
Secondary research
of case database;
Interviews
Transactional and Relational
approaches do coexist.
However, The study shows evidence of
a ‘shift’ in managerial thinking as well
as in practice towards relation making.
Within each sector, there appears a
movement towards customer
orientation and developing synergistic
relationships and partnerships.
3.
Paradigm
Shift from
Marketingmix to
Relationship
marketing
From Marketing-mix
to Relationship
marketing- towards
a paradigm shift in
Marketing (2005)
Christian Gronroos,
U.K
How did marketing-mix
emerged?
Is there a paradigm shift in
marketing ?
Literature survey ;
Secondary case
database of various
industrial sectors
Product centric approach is still
prevailing but in practice, focus of
marketers is moving more towards
relationship marketing as supported by
many such recent initiatives
4.
No Shift in
Paradigm
from
Marketingmix to
Relationship
marketing
Measuring
Theoretical
Paradigm shift from
marketing-mix to
Relational marketing
(U.S) (2000)
H1: There is a perceived
difference among the current
marketing paradigm, as defined
by reliance on product and
application expertise roles, as
opposed to the new approach
on relational marketing by
practicing sales professionals.
H2: There is a perceived
difference among industries,
educational levels, and years of
experience with the traditional
and emerging relational
marketing paradigm.
Correlation
Analysis,
Spearman Rank
Correlation and
Pearson
Correlation
Coefficients
n-way ANOVA
Within limits of this study, there is little
or no empirical evidence exists to
support theoretical paradigm shift
towards relational marketing.
Relational marketing is really a subcomponent of large scale movements of
the value-added process so its
extremely difficult to isolate its effect
from statistical point of view.
5.
Paradigm
shift in role
Exploring a
paradigm shift in
marketing
communications:
consumers changing
from passive to
active role (2012)
U.S
Is there a shift from consumer’s Descriptive,
passive role towards active role Qualitative data
due to extension of traditional
Analysis
model of marketing
communications in Web 2.0
environment?
Firms are using more of pull strategy to
engage consumers through Web 2.0
tech. like blogs, Twitter, YouTube which
resulted in shifting consumers to more
active role.
(passive to
active)
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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6.
Paradigmshift from
focus on
production
networks to
consumption
networks
Fronties of
Marketing Paradigm
in the third
millenium (2011)
Ravi S. Achrol,
Philip Kotler, U.S
Researcher traced history of
change from focus on mass
production to mass
consumption approach.
Exploratory study;
Qualitative
Analysis
7.
Paradigm
shift from
Marketing
1.0 to
Marketing
3.0
Fronties of
Marketing Paradigm
in the third
millennium (2011)
Ravi S. Achrol,
Philip Kotler, U.S,
Green Marketing:
Some Eco-Issues
(2012) India
What are the reasons for emergence of sustainable
marketing and what are paradigms for third
millennium?
Marketing has undergone a paradigm
shift from Product-centric orientation
(1.0) to customer-centric (2.0) to valuedriven (3.0) approach.
8.
Paradigm
shift from
mass
consumption
to
sustainable
marketing
Fronties of
Marketing Paradigm
in the third
millenium (2011)
Ravi S. Achrol,
Philip Kotler, U.S
What are the reasons for emergence of sustainable
marketing and what are paradigms for third
millennium?
Emergence of sustainable marketing
practices and increased awareness about
need for sustainability among
customers.
9.
Paradigm
shift from
advertising
on
traditional
media to
Social media
or Web 2.0
A New marketing
paradigm- Social
media web 2.0: An
Empirical Analysis
to study awareness
and usage of Social
media by SMEs in
Delhi (2012) India
H1: Sales of SMEs are not equally influenced by
traditional marketing tools and social media
marketing tools.
H1: Purchase decision of customer is not equally
influenced by traditional and social media tools.
Increase in awareness and usage of
Social media marketing tools by
marketers and customers.
1
0.
Paradigm
shift from
Relationship
marketing to
Social-media
marketing
3.0
Social Network
marketing 3.0
whitepaper, Richard
Parker; U.S,
Relationship
marketing 3.0Thriving in
marketing’ s new
Ecosystem (2009)
U.S
Very high speed of innovation related to social media marketing tools and with the same rate
they are being adopted by various firms and consumer groups.
Existing relationship marketing moving towards Social-media marketing 3.0 (more customised
and controlled web environment as per individual preferences).
Research Monograph: Paradigm Shift in Marketing
Firms promoted mass consumption
since industrial revolution era.
4
Paradigm Shift in Marketing
To explore the paradigm shift which has taken place in the discipline of marketing, we have conducted
a secondary research of literature survey. In a Review of research conducted by various scholars
in the past (from 1995-2012) on discovering the Paradigm Shift which has taken place in the
discipline of Marketing, several findings emerged. These findings from research papers published
between 1995 and 2001 critically support the view that marketing is undergoing a basic shift from
transactional3 approach to a relational4 approach which is today known as CRM (Customer
Relationship management). The research papers published thereafter, predominantly from 2005
to 2012 argue the further shift towards value-driven marketing 3.05. The major types of paradigm
shift thus revealed is summed up under various titles in the rest of the monograph.
The main new trends in Marketing as responded by Philip Kotler in his book ‘FAQs on
Marketing’:
z
z
z
z
z
z
z
z
z
z
z
z
z
z
z
z
From make-and-sell marketing to sense-and-respond marketing
From owning assets to owning brands
From vertical integration to virtual integration (outsourcing)
From mass marketing to customised marketing
From operating only in marketplace to operating in cyberspace
From pursuing market-share to pursuing customer share
From focussing on customer attraction to customer retention
From transaction marketing to relationship marketing
From customer acquisition to customer retention and customer satisfaction
From mediated marketing to direct marketing
From marketer monologue to customer dialogue
From separated planning of communications to Integrated marketing communications
From single channel marketing to multi-channel marketing
From product-centric marketing to customer-centric marketing
From marketing department doing marketing to everyone in the company doing
marketing
From exploiting suppliers and distributors to partnering with them
Transactional marketing: It emphasizes sales transaction or exchange function of marketing.
Relational/ Relationship marketing: The form of marketing which focuses primarily on relationship between a
business and its customer base.
5
Marketing 3.0: It is the latest era of marketing as proposed by Philip Kotler which is value-driven, it includes the
practices like societal marketing, green marketing, corporate social responsibilities and social media marketing.
3
4
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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HISTORY OF MARKETING THOUGHT
Excellent Marketing is not an accident but a seamless effort of planning and execution of state - of
- the - art strategies. It’s a challenge for today’s marketers to stay ahead and fulfil consumers
constantly changing demands as the below quote rightly reveals:
“You can’t just ask customers what they want and then try
to give that to them. By the time you get that built, they ‘ll
want something else” –
- Late Mr. Steve Jobs
American Marketing Association (AMA), which was formed by the merging of the American
Marketing Society and the National Association of Marketing Teachers on January 1, 1937,
defined marketing as “The activities and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and society at large”.
Kotler and Armstrong have also defined marketing as the “process by which companies create value for
customers and build strong customer relationships in order to capture value from customers in return”.
Marketing has developed over the last several years i.e. From Barter System to Marketing 3.0
has empowered consumers and enhanced their role in decisions that were earlier limited to board
room meetings.
According to Kotler, Marketing plays a key role in addressing today’s challenges. Finance, Operations,
HR and other business functions won’t really matter without sufficient demand for products.
“Because the purpose of business is to create and keep a
customer, the business enterprise has two and only two basic
functions: Marketing and Innovation. Marketing and innovation
produce results; all the rest are costs. Marketing is the
distinguishing, unique function of the business.”
-Peter Drucker on Customer Relationship Marketing (CRM)
History of Trade and Commerce6:
The history of commerce is the history of civilization itself. In his barbarous state men’s ‘wants’
were few and simple, limited to his physical existence, such as food, clothing and shelter, but as
profound changes occurred in population, income levels as well as infrastructure, the needs of
civilized man also experienced equally, if not more, profound changes.
Commerce: Exchange of goods or services for money or in kind, usually on a scale large enough to require transportation
from place to place or across city, state, or national boundaries.
Trade: The action of buying and selling goods and services.
6
Research Monograph: Paradigm Shift in Marketing
6
No civilized community produces all the things which it consumes. A portion of its needs must be
supplied by an interchange of products with other communities or nations and this was the beginning
of commerce, either domestic or foreign. Commerce resulted in trade that further created a need
for differentiating among products and called for efforts that could persuade consumers to buy
products of a certain manufacturer. All these activities gave rise to Marketing.
In next few pages, an attempt is made to study the origin of marketing as a function and the
evolution of Market as a place of exchange through the different phases in civilization.7
“Consumption is the sole end and purpose of all production and
the interest of the producer ought to be attended to , only so far
as it may be necessary for promoting to the consumer.”
-Mr. Adam Smith
Figure.1 depicts the eras of civilization classified for the purpose of the study:
Harappan Civilization
(3300-2600 BC)
Ancient
Era
Evolution of
Marketing
Mesopotamian Civilization (3000 BC)
Mohenjodaro (2600 BC)
Mughal Empire (1526-1757)
Modern
Era
Industrial Revolution
(1750-1850)
Pre-Liberalization Phase
(1850-1990)
Post- Liberalization Phase (Post 1991)
Adam Smith in his book “ An Inquiry into the Nature & Causes of the Wealth of Nations”
has identified four stages in the evolution of mankind viz.
z
The Age of Hunters
z
The Age of Shepherds
z
The Age of Agriculture
z
The Age of Commerce
Throughout the age of hunters, mankind survived on their scavenging and hunting skills and the
hunts were used to feed their family. A wide range of weapons were created and used at this stage.
7
Civilization: A society in a stage of social development at a particular time and place.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
7
Fig.2. shows the framework of major stages in Mankind Civilization8.
The term market is derived from the Latin word “Mercatus”, meaning “to trade”. It also means
merchandise, wares, traffic, or a place of business.9 Markets in general, are described as a place
where buyers and sellers meet and goods and services are exchanged.
Trade during the Harappan Civilization (3300 – 2600BC)
The two largest cities in the Indus valley were Mohenjo-Daro (now situated in the province of
Sindh, Pakistan) and Harappa (now situated in the Punjab, north-east Pakistan), each with around
40000 people.10 This was the earliest known civilization which was discovered in the 1920’s11
located near the Indus valley and hence known as the Indus Valley Civilization and centred in
several important cities including Mohenjo-Daro on the Indus river and Harappa on the neighbouring
Ravi river. Very little evidence exists to trace the legitimate presence of markets during this civilization.
Archaeologists12 have found large areas they believe would have been market-places for food,
grains and luxury goods such as carnelian13 may have been traded.
Etched Carnelian was highly priced during the mature Harappan
Civilization (2700-1900 BC). It gave rise to a market for cheap imitation
product.
Fig.3. Carnelian
Source: The rise and fall of Marketing in Mesopotamia: A Conundrum in the cradle of civilization - Z.S. Demirdjian, p.3
Source: Encyclopedia of Social Science, Vol. 10, 1972 ,p. 575
10
Source: The Kingfisher history Encyclopedia - editors of Kingfisher.
11
Source: http://en.wikipedia.org/wiki/Indus_Valley_Civilization
12
Archaeologists associated with the Indus Valley Civilizations include R.D. Banerji, John Marshall, N. Dikshit, Daya Ram
Sahni, Madho Sarup Vats, Mortimer Wheeler. More recent work has been conducted by B.B. Lal, S.R. Rao, M.K.
Dhavalikar, G.L. Possehl, J. F. Jarrige, Jonathon Mark Kenoyer, and Deo Prakash Sharma, among many others at the
National Museum in New Delhi.
13
Carnelian (also spelled cornelian) is a brownish-red mineral which is commonly used as a semi-precious gemstone.
8
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Research Monograph: Paradigm Shift in Marketing
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The whole period of the Harappan Civilization is divided into three phases: (i) Early Harappan
phase (3500 BC–2600 BC) – it was marked by some town-planning in the form of mud structures,
elementary trade, arts and crafts, etc., (ii) Mature Harappan phase (2600 BC–1900 BC) – it was
the period in which well developed towns with burnt brick structures, inland and foreign trade,
crafts of various types, etc. were noticed and (iii) Late Harappan phase (1900 BC–1400 BC) – it
was the phase of decline during which many cities were abandoned and the trade disappeared
leading to the gradual decay of the significant urban traits. At Lothal, (Located in Bhal region of the
modern state of Gujarat) a brick structure has been identified as a dockyard meant for berthing
ships and handling cargo. This suggests that Lothal was an important Port and trading centre of the
Harappan people.
Figure.4. - The Dockyard of Lothal
The granaries discovered at sites like Harappa, Mohenjo-Daro and Lothal served as the store
house for grains. Pottery-making was considered as an important industry in the Harappan period.
The Harappans were engaged in external trade with Mesopotamia. It was largely through Oman
and Bahrain in the Persian Gulf. It is confirmed by the presence of Harappan artefacts such as
beads, seals, dice etc. in these regions. Mesopotamia traded with Meluhha and imported precious
metals like copper, carnelian, ivory, shell, lapis-lazuli, pearls which have been identified with
Harappan Civilization.
Exchange during Mesopotamian Civilization (3000 BC)
The expression ‘Mesopotamia’ is derived from the Greek, meaning ‘land between two rivers’.
The first people to settle in Mesopotamia around 7000 years ago were the Sumerians. The absence
of natural resources resulted in trade between Mesopotamia and the neighboring nations.
Mesopotamia and Urartu (in below fig.) are considered to be cradle of civilization.
According to Philip Kotler the thought of Marketing literally took birth somewhere in Mesopotamia
and its surrounding areas specially the kingdom of Urartu lying to the north east (now present in
Turkey and Iran). Words suggest in both Akkadin and Sumerian which seems to refer to relatively
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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open spaces, such as rebitum “a square” Akkadin, equated to Sumerian sila dagala, literally “wide
street”.14 Silver and grains were used in lieu of fixed money during this civilization.
Fig.5. the Kingdom of Urartu
Mohenjo-Daro Civilization (Built around 2600 BC)
It becomes important to cover Mesopotamia, which traded with Mohenjo-Daro in the origin of
trade. Standardized weights, measures, and scales found in Mohenjo-Daro are evidence that the
citizens had an organized system of trade. It is reasonable to assume that services offered along
with goods – construction, artisan, etc. were traded. The trade between Mohenjo-Daro and
Mesopotamia occurred via the Sea route.
Kautilya’s Arthashastra (350–283 BC)
Kautilya in Arthashastra, has mentioned that Trade, Commerce and Finance formed the basis of
the state. It can be noticed that today’s concept “Vertical Marketing System”15 in distribution
where the producer, wholesaler, and retailer—work together as a unified group in order to meet
consumer can be traced back in the Arthashastra where Kautilya mentioned that dealings among
private merchants could pool their goods for ease in trade. Also selling on agency basis can be
termed as today’s retail format of “Franchising”.
Kautilya’s Arthashastra has a detailed description of the marketing system that should prevail in
the management of a State. The marketing system comprised, inter-alia, a trade control system
and well defined channels of distribution. Profit margins were regulated at 5% for the locally
produced goods and 10% for imported goods. There were also price support systems to ensure
that excess supplies did not affect the producers. Further, detailed rules were prescribed for exports
and imports and special laws were enunciated for regulating the management of sales.
(Early Mesopotamia: Society and Economy at the Dawn of History, By J. N. Postgat,pg 79)
Vertical Marketing System (VMS): Is a distribution strategy where the Manufacturer, Whole seller and retailer share and
pool resources at a common place.
14
15
Research Monograph: Paradigm Shift in Marketing
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Kautilya recognised that imports were a very important component of the wealth of a nation and
can provide the State with products which are either not locally available or can be procured at
competitive prices from foreign sources as compared to domestic sources. Thus, Kautilya explored
the principles of comparative advantage and believed that international trade “is mutually
beneficial to the various kingdoms when the products being imported are cheaper than
those that can be obtained domestically and will fetch higher prices to the exporter than
what can be earned in domestic markets”16. Thus, marketing of the produce of a nation was
not restricted to the national level. It transcended the borders of the State to explore imports and
exports based on the principle of comparative advantage and contribution to the wealth of the
state. In addition to goods, Kautilya also recognised the need for services marketing and
procurement and recommended the attraction of foreigners with special technical know-how and
other unique expertise not available locally.
Existence of markets during the Mughal Empire (1526 to 1757)
“Mughal” is the Persian word for “Mongol”. During the time of the Mughal the expanding economy
needed to be urbanized. It was during this period where Delhi merchants were persuaded to have
special market days for Women. Even in this era, agriculture was actually the biggest source of
income. Ajmer (located in Rajasthan) was well known for the production of best quality sugarcane.
Prior to the Mughal Empire the concept of weekly markets was popular but during this tenure
fixed markets came into existence17.
Industrial Revolution (1750 - 1850)
“Business is marketing” or “Marketing is Business” are synonymous. The Industrial Revolution
transformed human life by changing methods of manufacturing, the way people made a living and
the products available to them. Rapid transition from the agrarian economy to the industrial economy
resulted in the origin of the seller’s market. The Industrial Revolution took place in England during
the eighteenth and nineteenth centuries. It resulted into four sets of changes: first, the introduction
of new technology; second, the use of new mineral sources of energy; third, a concentration of
workers in factories; and fourth, new methods of transportation. Thus the Industrial Revolution
heralded the social and economic changes that marked the transition from a stable agrarian and
commercial society to a modern industrial society relying on complex machinery rather than tools.
Much of Britain’s favoured position came from the triumph of a wealthy middle class with both the
money and willingness to invest in new ventures. The first was the new steam engine and textile
technology. Second, there was the new agriculture and population growth creating both the labour
force for the new industrial factories and the markets to buy their produce. The third factor was
Britain’s colonial empire, which provided raw materials for the factories as well as more markets
for their goods. Fourth was the development of a superior transportation system for getting raw
Waldauer, Charles, William J. Zahka and Surendra Pal. “Kautilya’s Arthashastra: A Neglected Precursor to Classical
Economics” <http://online.sfsu.edu/mbar/ECON605/Arthashastra.pdf>
17
Source: http://www.indianetzone.com/50/economy_mughal_empire.htm
16
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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materials to the factories and finished products to markets. The fifth and final factor was a large
surplus of capital along with the willingness to spend it on new machines and technology.
This was a period of rapid social change driven by technological and scientific innovation. The
production era in Marketing can be credited to the technological and transportation advancement
during this era. Gradually the 21st century brought about the paradigm shift from production to
Marketing. Before the industrial revolution, subsistence economy existed where people almost
used all the products that were produced and the excess was offered as a marketable surplus for
exchange or Barter in the vicinity markets.18 The industrial revolution brought about a paradigm
shift in technology and hence mass production was the order of the day. This saw the need for
manufacturers to profitably dispose off the large scale produce. Thus began the need for marketing
and also the emergence of serious marketing thought. It was during this era where Marketing was
considered as an important function by many firms. In fact it was Robert Keith, an executive at an
American company Pillsbury, who pioneered certain initial thoughts in the field of marketing by
indentifying marketing into four stages viz. the Production, Sales, Marketing and the Consumer
stage. He also saw that the consumers were interested in buying products that were available and
affordable which compelled enterprise into mass production giving rise to “Economies of Scale”
and a consequent reduction in unit cost which enabled enterprise into affordable pricing.
“The act of exchange is the consummation and confirmation of the marketing process,
and brings the marketing concept to life.”
- Anderson, Challagalla, and McFarland
Marketing in India ( Upto 1991: Pre liberalization phase)
The stages of India’s Business Evolution
Year
Stage
Focus
1947 - 57
Building an Industrial base
Power, transport and communication
1958 -70
Import substitution
Import of capital goods , self sufficiency in
foodgrains, consumer durables, number of
capital goods
1971-84
Years of tight control
Import permission and exports permission
1985-1991
Relaxation of controls and the
emergence of competition
Export as integral part of industrialization and
development policy
1991 onwards
(Post
Liberalization)
Promise of market based
economy in many sectors
Power, communication , automobiles, banking
,telecom, roads, finance , insurance and defense
etc.
(Source: Bennet, Roger C.,J.D Singh, The failure of theory to reconcile with practice, Monograph
no: 6,International Management Institute, P. 13)
18
Reference: (Pg 11 Marketing By Irma McKinlay, Maria O’Conno )
Research Monograph: Paradigm Shift in Marketing
12
“Marketing might by itself go far toward changing the entire economic tone of existing
system without any change in the method of production, distribution of population
or of income.”
- Peter Drucker
“Production may be the door to economic growth of the underdeveloped countries,
but Marketing is the key that turns the lock.”
- W.J . Emlem
Marketing in India ( Post liberalization phase)
During this phase the economy witnessed a paradigm shift from a protected market to a market
driven by competition and market forces allowing only the fittest to survive. The theory of continuous
entry and exodus of firms – inefficient firms withdrawing and efficient firms entering and surviving,
became a way of life.
Thus, revenue management was suddenly a function of costs, competitiveness, effective product
differentiation, appropriate choice use of technology and timely moves - preferably pre-emptive
move. From managing laws and licensing limits governing business, enterprise had to shift abruptly,
and rather sharply, to business management in the real sense.
Shaving Blades market was divided between Topaz, 7 O’clock, Gillette, Wilkinson, Erasmic
and others. After liberalization improved products like the twin-Blades of Gillette and Electric
shaver of Phillips replaced ordinary shaving blades market.
In 1993, the refrigerator market belonged to three brands - Godrej, Kelvinator and Voltaswhich among them held more than 90 percent of the market share. By the end of 1994 and
early 1995 their combined market share had eroded to less than 70 percent with the advent of
the newcomers - Videocon, Whirlpool and BPL.
(Source: ‘Competing through Knowledge’, Madhukar Shukla, Response Books, 1997)
Government came out in favour of outward oriented trade and industrial policies where marketing
was given prime importance and companies like Reliance, Ranbaxy, Arvind Mills , Sundaram
explored the international markets. With the de-licensing of the automobile industry in the year
1993, many international car manufactures entered India. Suzuki was the first MNC to enter India
in 1981 through a joint venture with the Government of India and set up “Maruti Udyog Limited”.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
13
Mahatma Gandhi’s 10 Customer Commandments of Business Success:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Customers are the most important people in our business
Customers are not dependent on us – we are dependent on them
Customers are not to argue or match wits with
Customers brings us their needs – it is our job to fill those needs
Customers are not an interruption of work – they are the purpose of it
Customers do us a favor when they call – we do not do them a favor by serving them
Customers are part of our business – they are not outsiders
Customers deserve the most courteous and attentive treatment we can give them
Customers are the individuals who make it possible to pay our wages
Customers are the lifeblood of this and every other business
The traditional objective of marketing has been to make the goods available at places where they
were needed. The idea was later on changed by shifting the emphasis from “exchange” to
“satisfaction of human wants”. These developments are recognized along with the growth of
civilization.
EVOLUTION OF THE MARKETING CONCEPT
Marketing has evolved over the period of time depending on the different stages of economy.
Before industrialization, marketing as a distinct discipline was not prominent except for the limited
purpose of Exchange or Barter as the case may be. The Industrial Revolution promoted the concept
of mass production, supply exceeded demand and mass consumption was the only way to dispose
of the marketable surplus profitably from producer to consumer.
Production Concept
Pride and Ferrell [2008] traced the production philosophy during the 1850s and 1900s. This was
the Industrial Revolution. Managers of those times believed, as already mentioned, consumers
preferred products that were easily affordable and available. As Kotler rightly states that this
concept made sense in the developing countries like China where the largest PC manufacturer
Legend (principal owner of the Lenovo Group) and domestic appliance Haier were taking advantage
of the country’s large pool of inexpensive labour to dominate the market 19. There was no research
conducted to understand customers likes and dislikes. During this phase some of the issues that
confronted the manufactures were to understand what to produce and how much quantity should
be manufactured to meet demand? Henry Ford’s widely quoted remark about the needs of
automobile buyers “They can have any colour they want as long as it is black” reflects the
thinking during this phase.
19
Source: (Philip Kotler, Marketing Management, 14e, 2013 ).
Research Monograph: Paradigm Shift in Marketing
14
The Product Concept
Fig.6. The buggy whip industry
The term product can be defined as anything that is tangible. This philosophy was dominant during
the 1900 till 1930s when companies concentrated on the products they manufactured. It was
assumed that customers preferred products that were of good quality. However, it was during this
phase that some managers assumed that if the company produces a technically better product than
its competitors it will capture majority of the market share and will be the preferred brand among
the consumers resulting into “Marketing Myopia”. This marketing thought is also known as BetterMouse trap syndrome20 . The classic example that illustrates this concept is the Buggy Whip
Industry21 which failed to survive the changing market conditions and unsuccessfully defined itself
as a Buggy Whip Industry instead of perceiving and articulating its position as part of the
transportation business.
The Selling concept
This concept underlines the importance of a sales department in a company and assumes that a
customer will not buy the products of the company until he/she is advised and is sold a certain
product. It assumes that sales is a separate dedicated function addressing issues regarding sales of
the business. This facilitated other functions, then known as production, purchase and personnel,
to take care of their respective functions. Such was the thinking of the past. According to Kotler
and Armstrong [2008], the orientation of the selling concept was that the company can sell any
product it produces with the use of marketing techniques, such as advertising and personal selling.
This concept evolved, literally by default, because mass production facilitated by the Industrial
Revolution motivated enterprise to produce large quantities resulting into surpluses and consequent
20
A short-sighted and inward looking approach to marketing that focuses on the needs of the company instead of defining
the company and its products in terms of the customers’ needs and wants. It results in the failure to see and adjust to the
rapid changes in their markets. The concept of marketing myopia was discussed in an article (titled “Marketing Myopia,”
in July-August 1960 issue of the Harvard Business Review)
21
Buggy Whip Industry - A whip is a tool traditionally used by humans to exert control over animals or other people,
through pain compliance or fear of pain, although in some activities whips can be used without use of pain, such as an
additional pressure aid in dressage.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
15
competition. Recently, Kotler and Armstrong [2010] noted: “The selling concept takes an ‘insideout’ perspective” which commences with the manufacturing operations and pays exclusive attention
to heavy selling and promotion to procure profitable customer. The focus is on “customer conquest”–
Myopic short-term sales with little concern as to who buys or why they buy.
Marketing Concept
“We cannot direct the wind,
but we can adjust the sails”
— Contemporary Western Proverb
The marketing philosophy dominated business orientation during the 1950s [Pride G. Foundations
of Marketing, Houghton Mifflin, Harrow. 2008] as a customer-centric philosophy and continues
till the 21st century. This concept assumed that the start of any business is ‘Consumer’ and
organizations should manufacture products which are needed and desired by the consumer rather
than selling products which are in excess supply due to mass production, undertaken by enterprise,
unsupported by appropriate demand forecast.
Example:
Vodafone allows customers to make their own plan
based on their preferences either on STD calling, SMS
packs or Local packs.
Sony Laptops (VAIO) facilitates customers to
personalising their equipment to match their own
individual style right from choosing aesthetic and
technical features.
It is believed that the concept of ‘Consumer Buying Behaviour’ originated during this phase. The
key assumption underlying the marketing philosophy is that “a marketer should make what it can
sell, instead of trying to sell what it has made”22. The focus of enterprise changed from problems of
production to understanding what the consumers desired and how the companies could meet the
consumer demand at a profit. Thus demand forecasting gained momentum and the task was to find
a right product for the consumer rather than somehow fit or match the consumer into the product.
22
Source: Schiffmann LG, Kanuk LL. Consumer Behaviour, Pearson International Edition, New Jersey. 2009
Research Monograph: Paradigm Shift in Marketing
16
Custom Laptops by Sony
Custom Laptops from VAIO are about personalising your equipment to match your own individual
style. Available for a range of series, the customisable options allow you to build your own laptop,
choosing aesthetic and technical features to create a bespoke VAIO personal computer that
complements your personality.
Fig.7. Customisation option for Sony Vaio Laptops
The Societal Marketing Concept
Fig.8. Fizzy-drink giant Coca-Cola has launched an advert addressing obesity for the
first time on television.
The societal marketing concept emerged in the 1970s and has since overlapped with the marketing
philosophy. This concept assumes that a company exist within a society and in fulfilling customers’
demand should ensure societal benefits too in the long run. This calls marketers to build a social
and ethical consideration into their marketing practices. The management here must juggle between
company profits, customer satisfaction and public interest.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
17
Examples of Societal marketing
1.
The Body Shop: The Body Shop International is the original, natural and ethical
beauty brand. The company uses only plant based materials for its products. It is
against animal testing, supports community trade, activates self esteem, defends human
rights, and overall protection of the planet. They have also their own charity, ‘The
Body Shop Foundation’, to assist those working to achieve progress in the areas of
human and civil rights, environmental and animal protection. Thus Body shop is really
following the concept of Societal Marketing.
(Source: Bloom N. Paul, Gundlach T. Gregory. Handbook of marketing and society,
Sage publications)
2.
British American Tobacco Company: BAT is a British based Tobacco company. It
was founded in the year 1902. BAT is involved in working for the society in every part of
the world. It conducted tree plantation drives as part of its societal marketing strategy.
3.
Adidas: Adidas has embarked on a number of projects based on societal marketing
strategy , all community based like better pay for local workers in the under-developed
countries, avoiding under-age employees, support for local community sports, offer
of free sports gears for talents and sports event sponsorships.
Holistic Marketing Concept
“No problem can be solved from the same consciousness that created it.
We must learn to see the world anew”
-Albert Einstein
The concept is based on the “development, design, and implementation of marketing programmes,
processes and activities that recognize their breadth and interdependencies”23. Here business is
looked from the broader perspective in the economy.
Fig.9 Holistic Marketing Components
23
Source: Kotler P, Keller KL. Marketing Management, Pearson Education International, London. 2009
Research Monograph: Paradigm Shift in Marketing
18
Holistic Marketing approach does take into account all these parameters. The first is the Internal
Marketing which refers to the clarity of Mission and Vision with the company and among its
employees. This is also highlighted in the “Service Recovery Paradox”. It states the importance
of knowledge update from the lowest echelons to the C.E.O of a business.
The second is Integrated Marketing which focuses on the communication that different mediums
provide to the consumer and articulates the Core Brand message seamlessly.
The third is Performance Marketing which is also known as “Socially Responsible Marketing,”
states that all activities of a business should be carried out in the interests of the society at large i.e.
probono public (public good).
The last is the Relationship Marketing that reinforces the importances of Customer Satisfaction
and the role of the customer in the overall growth of the business rather than mere expansion in
market share/ volume or value.
Dattaram & Company - India’s first ever Advertising Agency - Estabished in 1905
•
India’s first ever press ad. 1907 - Client West End watches.
•
India’s first banner on trams, 1920.
•
India’s first vernacular ad, 1935 - Product : Gripe water.
•
India’s first colour ad, 1945 - Client : Ramtirth Brahmi Oil.
•
India’s first ad soliciting ads. 1958 - Message to clients : ‘Be Wise. Advertise’.
•
India’s first agency to spearhead a movement to route public sector ads only through
wholly owned Indian agencies, 1959.
•
India’s first agency to handle an election promotion, 1963.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
19
Paradigm Shift from Transactional marketing to Relationship/
Interactive Marketing
The development of marketing as a field of study and practice is undergoing a re-conceptualization
from transactional marketing to relationship marketing (Kotler, 1990; Webster, 1992). The paradigm
shift from transactions to relationships is associated with the return of direct marketing in businessto-business and business-to-consumer markets. Thus direct marketing assumed greater force and
the focus on business-to-business and business-to-consumer markets. Scholars who at one time
were leading proponents of exchange paradigm, such as Bagozzi (1974 - 1994), Kotler (1972 1994), and Hunt (1983- 1994) are now intrigued by the Relational aspects of Marketing.
Development of Relationship marketing points to a significant shift in the axioms of Marketing from
competition and conflict to consensus, collaboration and cooperation among competitors inter
say. This also established the need for mutual dependence rather than operating in silos. Change in
focus from value exchanges to value creation relationships have led companies to develop a more
integrative approach to marketing , one in which other firms are not always competitors and rivals
but are considered partners in providing value to customer. This has resulted in growth of many
partnering relationships such as business alliances and cooperative marketing ventures as well as
supplier collaborations examples of which are discussed in box below:
EXAMPLES
1.
Philips India and Videocon are competitors in the market. However, the
semiconductor unit of Philips India supplied components to Videocon for its Bazooka
model.
2.
Godrej Foods sale tomato puree; so does the Hindustan Unilever Ltd., under the
Kissan brand. Both brands of puree, however, are produced at the Godrej factory in
Bhopal- using the tomato paste supplied by HUL. HUL incidentally supplies paste
also to its competitor, Nestle, for making tomato Ketchup, which competes with its
own Kissan ketchup.
3.
BPL and Videocon both were competitors in consumer electronic market. However,
when the colour tubes facility of Uptron was put up for sale, both the companies
joined hands (alongwith Toshiba) to take it over and run it.
(Source: ‘Competing through Knowledge’, Madhukar Shukla, Response Books, 1997)
Another dimension of shift towards relationship approach is in terms of creating customer
relationships thereby focussing on customer retention rather than only on customer acquisition
through focus on Customers Relationship Management (CRM.)
Research Monograph: Paradigm Shift in Marketing
20
CRM Examples
1.
ICICI Bank was formed in 1994 and since then has distinguished itself as a pioneer
in the Indian banking community, rapidly adopting innovative business practices and
technologies. A key to its success has been its ability to harness business information
to support customer relationship management (CRM) initiatives that have fueled growth
and helped to attract more than 25 million customers. The foundation for ICICI Bank’s
wide-ranging CRM programs is a Sybase IQ-based data warehouse. The first iteration
of the warehouse in 2000 generated a wealth of insights that enabled the bank to build
customer intimacy.
2.
In one of its Customer Relationship Management (CRM) initiatives Samsung India
Electronics Ltd. aimed at upgrading its customer base and induce new buying. Under
this initiative, Samsung decided to insert a Product Registration Card (PRC) with
products across select categories in its IT/ telecom, consumer electronics and home
appliances divisions. The company then derived relevant data from the PRCs in terms
of its existing customer profile and communicated with its target audience in a specific
manner to induce them to upgrade to other Samsung products. Samsung, as of now,
has a customer base of about 40 lakhs in India. According to a Samsung spokesperson,
“Through the data derived from the PRC, we will be able to determine the customer’s
intention to purchase other products and carry out more targeted product and marketing
communication with the relevant target groups to reach out to our customers more
proactively.”
From Product Demonstrations to Product Experiences- Experiential
marketing
There is a significant shift in approach of marketers when it comes to convince customers that their
product will deliver best of the experiences through “Experiential Marketing”, which refers to
actual customer experiences with the brand/product/service that drive sales and increase brand
image and awareness. It’s the difference between telling people about features of a product or
service and letting them actually experience the benefits for themselves. When done right, it’s the
most powerful tool out there to win brand loyalty.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
21
Examples of Experiential marketing:
1.
Starbucks markets a “coffee experience” as customers sit in its attractive shops and
escape from the hustle and bustle of the busy world.
2.
Barnes and Noble chain of bookstores delivers an experience that includes chairs
and tables for sitting and reading, evening lectures and performances and a great
coffee shop, even tying up with Starbucks for serving coffee.
3.
Bass PRO, a retailer of fishing equipments, includes a pool of water with fish so that
customers can try out the fishing pole.
4.
REI, a retailer selling climbing equipments, includes a climbing wall and a simulated
rainfall in its stores so that customers can test and experience the performance of its
products.
5.
‘Club Mahindra’ known for launching unique marketing initiatives, is now leveraging
the mall culture and has set up ‘Holiday World’ in leading retail venues as a part of its
experiential marketing concept , through which a customer can experience the actual
ambience, facilities and recreational activities provided at various Club Mahindra
Resorts.
6.
BMW has a fantastic experiential marketing program called the BMW Performance
Driving School. It gives anyone, who is interested, the opportunity to drive a BMW
in racing conditions, which for any true car enthusiast is like an addictive drug.
Fig.10. Examples of Experiential Marketing
Paradigm Shift from product-centric to customer centric marketing
There is a paradigm shift in marketing which indicates marketers approach changing from their
focus on product attributes towards customer needs and demands based on their changing
preferences.
Good customers are an asset which when well managed and served, will return a
handsome lifetime income stream for the company.
-Philip Kotler
Research Monograph: Paradigm Shift in Marketing
22
Example: Dettol- Sustaining a cult brand through customer-centric marketing
Dettol came to India 78 years back. The brand started its journey in 1933 as an antiseptic
liquid for cuts and wounds used in hospitals. From there it has taken various forms such as
bar soap, liquid hand-wash, shaving cream to hand sanitizer to cater the changing expectations
of consumers. However, the core promise of the brand has remained the same that it fights
germs and is best in doing so. According to Mr. C.M. Sethi (Chairman and MD Rekitt &
Benkiser India), “Challenge in keeping cult brands relevant is the changing consumer and
what the consumer wants today and tomorrow”. For any brand to attain the status of a cult
brand it is important to forge a human connection with the consumer by fulfilling their human
needs (safety, social, esteem, self-actualization) and leveraging the higher-level needs. In
Sethi’s words, “You have to modernise your brand but at the same time you have to be able
to link back with the core essence of the brand.”
Fig. 11. Brand Evolution and Brand Resonance of Dettol
(Source:http://pitchonnet.com/blog/2012/01/03/pitch-cmo-summit-2011-dettol-sustaining-a-cult/)
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
23
Paradigm Shift from Marketer Monologue to Consumer Dialogue
Traditionally marketers “talked to” potential customers via a communication medium such as
television24 with consumers taking a passive role in marketing communication process. However,
more recently consumers are taking more active role in marketing communications. The current
Web 2.025 communications environment and other numerous technological innovations like Social
media, mobiles etc. allow consumers to increase their control of exposure to commercials. With
this shift in paradigm, brands are “talking with” customers motivating them to share their product
experiences and give their inputs in brand creation.
Examples:
1.
Nokia’s ‘Amazing Everyday’ campaign involving consumers actively: The
campaign titled ‘The Amazing Everyday’ placed Lumia as a phone that allowed one to
easily share everyday moments and syncronise their physical and digital worlds
effortlessly. In malls across the country, ‘experience zones’ were set up with giant live
devices and monster headsets. To amplify the ‘Amazing Everyday’ campaign in the
social media space, people were invited to visit the Nokia Facebook page and submit
short stories, videos and photos on how they have been able to turn their everyday
routine life into an Amazing Day. In the words of Mr. Viral Oza, (Director-Marketing,
Nokia India),”The Lumia ‘Amazing Everyday’ campaign has been one of our most
successful campaigns; finding strong resonance with the youth audience who are looking
to enhance every day experiences, by sharing them with their friends and family”.
2.
‘Kissanpur’ campaign by HUL : This campaign, through a print advertisement,
supplied tomato seeds and insisted customers to grow tomatoes, click pictures,
uploading it on Kissan website to be a part of display on the labels of Kissan bottle.
Fig.12. Print Advertisement of Kissan with seeds supplied to customers
Source : Steenburgh and Avery, 2008a, p.2.
Web 2.0 : This term was coined in 1999 to describe web sites that use technology beyond the static pages of earlier web
sites - (Wikipedia).
24
25
Research Monograph: Paradigm Shift in Marketing
24
Paradigm Shift from operating only in physical market-place to operating
in Cyberspace/Virtual market-place
There are over 120 million internet users in India, which is approximately 10 percent of the total
population. As per latest studies, the e-commerce market in India is set to grow the fastest within
the Asia-Pacific Region, at a CAGR26 of over 57 percent from 2012-2016.While the initial impetus
to the development of e-commerce in India has been provided by the travel portals, railways, and
airlines; online services like banking, bill payment, hotel room booking, matrimonial sites, and job
sites, among many others are now becoming popular. Whether it is deal sites like Snapdeal.com,
tradeindia.com Online Retailers like Yebhi, Jabong, Myntra or book retailers like Flipkart.com,
quickr.com, OLX.com, JustDial.com, practically every conceivable product/service segment has
set up shop in the virtual world aiming to attract the ‘value for money’ customers.
In October 2012, India reached
60.2 million active monthly
users for Facebook which
makes India #3 in the ranking
of all countries.
(Source: http://pitchonnet.
com/blog/2012/12/26/socialmedia-trends-forecast-for2013/)
Flipkart.com launched ‘Flyte’- e-books store
after its digital music store’s success in India
Bangaluru -based online retailer Flipkart.com
announced its foray into the eBooks category
through its digital store Flyte. The company
founded in 2007 had launched its digital music
store in February 2012. Flyte has a selection of
over 100,000 books at highly attractive prices
and said the e-book offering will change the
reading habits of Indian book lovers.
(Source: Business Standard- 28th Nov. 2012)
E-Commerce Statistics of India
·
·
·
·
·
·
12 crore internet users
4 crore 3G subscribers
4 crore shoppers online
55% of business comes from Tier-II & III
cities
60% of the transactions are Cash on
Delivery
Margins are as high as 30%
Myntra.com is one of the well known e-commerce
retailers and claims to have a registered user base
of 30 lakh and five lakh customer traffic every
day.”Myntra sees an age group of 18 to 28, mostly
comprising college students and first jobbers
coming online and shopping,” says Ganesh
Subramanian, Chief Merchandising Officer,
Myntra.com. In terms of product categories, sports
and casual lifestyle products – footwear, apparel
and accessories are popular.
26
Compounded Annual Growth rate (CAGR) is a business and investing specific term for the smoothed annualized gain of
an investment over a given time period - Wikipedia
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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Paradigm Shift from Mass Production to Mass Customization
With the advent of industrial revolution and interchangeable parts, manufacturing moved from craft
era to mass production era. Today there is a new era emerging and it is called Mass Customization.
Goal of mass customization is to provide enough variety so that the want of every consumer is met
to his/her delight. As a result, large homogenous markets are replaced by heterogeneous niches
with fragmented demand. Information technology and automation play a key role in mass
customisation as they create the linkage between a customer’s preferences and the ability of a
manufacturing team to construct products based on those wide varieties of preferences. Today,
offerings of various industries, no matter its nature, can be customised, along many dimensions of
consumer preferences.
EXAMPLES:
1.
For apparel industry, term mass customization means manufacturing clothes that have
been pre-altered to fit an individual’s body. Now it is common to have huge variety in
colour and sizes available from XS (extra small) to XL (extra large) for many leading
apparel brands like Gucci, Levi’s, Armani, Prada, Zara, Calvin Klein, Guess and
many more.
2.
For food industry, key players like HUL, ITC, Britannia and GSK have increased
their product portfolios and product-line depth to cater to the customised needs of
various niche customer segments. Like Horlicks has variants ranging from one for
growing children to that for working woman or nursing mother.
3.
Britannia offering wide range of biscuit variants from fibre content to low fat and
cholesterol for heart patients to salty and sugar-free variants suitable for diabetic patients.
4.
In service industry also wide range of offerings are made available, tailored as per
customer’s need like LIC offering a huge portfolio of insurance plans like Jeevan
Anand, Jeevan Mitra, Jeevan Amrit as endowment plans, Jeevan Akshay as
retirement plan, Jeevan Anurag, Komal Jeevan and Jeevan Ankur as children plans
for their future education and marriage, Jeevan Saathi as Joint life plan, Jeevan Bharti
as special money-back plan for women, Jeevan Aadhar and Jeevan Vishwas as
plans for handicapped dependants and Jeevan Shree and Jeevan Pramukh plans
for high net-worth individuals.
5.
In telecom industry, leading players like Airtel offering enormous number of plans like
zero monthly rentals, friends plan, night calling plans, 3G plans, high speed broadband,
unlimited broadband etc.
Research Monograph: Paradigm Shift in Marketing
26
Mass production and Mass consumption to Mass customization: Benetton -Paragon
Par excellence
Consumers’ preferences keep on changing with changes in style and fashion. It’s a great
challenge for business to constantly adapt to the changing demands and expectations of
consumers. Benetton with its latest in-house technique, make the dying process possible
overnight to practice the principle of Mass customization. This technology enables the dying
process of sweaters instead of yarn for instance if the seasonal preferences change from blue
to pink colour sweaters, this technique enables Benetton to respond quickly, saving on obsolete
inventory and also simultaneously making available the sweaters in the new colour .
In mid – 1980’s, Benetton designs were made on video screens, which were linked to
computers. The stylists were presented with a choice of 250 colours to choose from, the
designs were converted into data and then fed into the computerized knitting and cutting
machines. This enabled production of 15,000 garments every eight hours and saving huge
percentage on waste material and also being abreast or ahead of the state- of – art needs of
the market.
It is said that staff with only seven people could process 36,000 boxes everyday and robots
with a capability of reading barcodes to enable Benetton to hold the fort and rule the waves of
the market. The competitive advantage in marketing of Benetton stems not from production or
marketing strategies per se but in harnessing technology, including robots to acquire process
and utilize knowledge about markets and customers.
(Source: ‘Competing through Knowledge’, 1997, pg 97 -98, Madhukar Shukla, Response Books)
Fig.13. An Extended family of brand Horlicks, which portrays example of mass customisation
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
27
Paradigm Shift in Advertising from Conventional Media to NonConventional Media
Advertising as an important marketing function, is undergoing a paradigm shift from conventional
ways of simple product communications to unconventional ways like graffiti advertising, tattoo
advertising, ambient advertising, stall advertising, stealth marketing, mirror advertising, viral
marketing, below-the-line marketing and innovative message giving advertisements.
Fig.14. New trends of some popular advertisements
Graffiti Advertising: Graffiti is writing or drawings scribbled, scratched, or sprayed illicitly on a
wall or other surface in a public place. Graffiti has been used as a means of advertising both legally
and illegally. In New York City (NYC,) Bronx-based TATS CRU has made a name for themselves
doing legal advertising campaigns for companies like Coca Cola, McDonald’s, Toyota, and MTV.
(TATS CRU, Inc. is a group of Bronx-based graffiti artists turned professional muralists.) Over the
last two decades, TATS CRU has produced various advertisements for clients ranging from
neighborhood businesses and institutions to large corporations like Coca Cola and Sony.
Fig.15. Graffiti Advertisements of Coca Cola
Tatoo27 Advertising: In 1999, Vibe magazine predicted that companies in the next millennium
would pay people to get tattoos advertising their brands. In March 2001, American professional
Tatoo: A tattoo is a form of body modification, made by inserting indelible ink into the dermis layer of the skin to change
the pigment. The word “tattoo” was brought to Europe by the explorer James Cook, when he returned in 1771 from his
first voyage to Tahiti and New Zealand.
27
Research Monograph: Paradigm Shift in Marketing
28
basketball player Rasheed Wallace rejected an offer from advertising firm Fifty Rubies Marketing
to wear a tattoo advertising a candy company’s product. In September 2001, a prominent online
casino paid boxer Bernard Hopkins US$100,000 to wear a temporary tattoo on his back during
his championship fight with Félix Trinidad, making him the first athlete to wear a tattoo advertisement
during a professional sports event.
Ambient Advertising: Ambient advertising is about placing ads on unusual items or in unusual
places you wouldn’t normally see an ad. It can be catchy, shocking, surprising or funny!
Fig.16. Examples of Ambient Advertising
Stealth or Covert Marketing: It also known as Undercover Marketing, an aspect of marketing
in which an audience is not aware that they are being marketed to. It is marketing incognito. To use
a parallel, if the marketing industry is for example, the military, the stealth marketers would be the
covert ops, secret agents or spies. The objective would be to make someone feel that they need or
want something, without actually going out and saying buy this, our product is great, or check this
out. Apple is a great example of modern companies that use stealth marketing. In many movies
and TV shows we see these days with people using Apple products.
Convergence of Media
A paradigm shift in use of media by corporate for their marketing communications is taking place
and as a result, prints and digital media are converging. Today a consumer can scan Quick Response
Code (QR code) or image in newspaper with ‘Alive’ mobile application and watch related audiovisual clip about product or news while reading the newspaper! So who says that print media is
becoming obsolete?
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
29
QR Code (abbreviated from Quick
Response Code) is the trademark for a type
of matrix barcode (or two-dimensional
code) first designed for the automotive
industry. More recently, the system has
become popular outside the industry due
to its fast readability and large storage
capacity compared to standard Universal
Product Code (UPC) barcodes. The code
consists of black modules (square dots)
arranged in a square pattern on a white
background. The information encoded can
be made up of four standardized kinds
(“modes”) of data (numeric, alphanumeric,
byte/binary, Kanji), or through supported
extensions, virtually any kind of data.
The QR Code was invented in Japan by
the Toyota subsidiary Denso Wave in 1994
to track vehicles during the manufacturing
process, and was originally designed to
allow components to be scanned at high
speed. It has since become one of the most
popular types of two-dimensional
barcodes. Unlike the older one-dimensional
barcode that was designed to be
mechanically scanned by a narrow beam...
(Source:http://mashable.com/2012/09/11/qr-codesmobile-payments/)
‘Times of India’ has launched a new mobile
application (app) called ‘Alive’ that would
let you view videos, photos, and polls
related to a ‘news’ just by pointing the app
at a newspaper item with Alive logo. This
app is available for Android, iPhone,
BlackBerry and Nokia Symbian Smartphones
and would offer a captivating experience for
the users than just reading a newspaper. The
app has crossed 250,000 downloads on the
launch day, leading to 300,000 augmentation
views on a single day.
Features of Alive app
·
·
·
·
·
·
Transforms text, image, symbols,
patterns or objects into a virtual
experience
View videos and picture gallery of the
actual news items in the newspaper
Voice your opinion immediately and
make the newspaper more interactive
Share the newspaper news item on the go
View history of the news items you
have viewed
Save the multimedia content for future
viewing
DID YOU KNOW?
The first product to have a bar code was Wrigley’s gum. The company
originally started selling products like soap and baking powder in 1891.
Research Monograph: Paradigm Shift in Marketing
30
Paradigm Shift from Globalisation to localisation: “glocalisation” - Global
brands winning Local hearts
True localization extends beyond simple translation to include “language, culture, custom, technical and
other characteristics of the target locale.” While globalization represents growth through access to
international markets, localization emphasizes specificity and relevance to a particular market. The end
goal is to make a product or service appear as if it had been developed specifically in and for the local
market and allow a company to communicate effectively with international consumers and users.
There is a paradigm shift indicating strategies of many global brands crafting their offerings to cater
to the needs of local customers.
EXAMPLES:
1.
2.
3.
McDonald’s “Think global, act local” aptly defines that how company combines
elements of Globalisation and localisation according to various fast food markets and
how they adapt to local communities. McDonald’s in India serves vegetable Mc
Nuggets, Mc Aloo Tikki and a mutton-based Maharaja Mac (Big Mac). Such
innovations are necessary in a country where Hindus do not eat beef, Muslims do not
eat pork, Jains do not eat meat of any kind.
HSBC’s “Different Values” campaign clearly illustrates that “people value things in
very different ways.” One of the advertisements from the campaign includes two different
images of tattoos: two pairs of hands and feet tattooed with henna, captioned “traditional”
and a man’s tattooed shoulder, captioned “trendy.” For a brand that defines its consumer
demographic as having forward thinking and progressive values, these same values may
be perceived in another country as established, traditional, and steadfast.
Apparel brand “Global Desi” draws inspiration from the rich variety of traditional
and cultural art found in various parts of India. The Global Desi label builds on folklore
and folk art and stylizes it into a rich ensemble that makes it a must-have for the
modern Indian woman. The collections you can find under the Global Desi label are a
rich blend of ethnicity and the contemporary style of garment design.
Paradigm Shift from increasing consumerism to Sustainable Marketing
concept and Green Marketing Initiatives
Sustainable marketing is based on the key premise that society and marketing are poised at a
fundamental transition from an anthropocentric (human centred) paradigm to a bio-centric (nature
centred) one (Fuller 1999, p. 12). The imperative for sustainable marketing can be characterized
by two types of carrying capacity—market capacity and resource capacity. The former is concerned
with the present consumption level in a society. The issue addressed is whether the consumption
level of the current generation will permit posterity to achieve the same level of consumption. It’s a
well known fact that many economies in the world are operating near their market capacity limits;
Europe, the U.S., Japan are all bouncing at or near the limits. Operating at near market capacity is
a red signal indicating marketing excesses. The resulting crises are due to the marketing shadow—
overconsumption—whether it is oversold currencies, financial instruments, real estate, business
opportunities or dreams.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
31
Sustainable marketing starts at the very beginning of the product development cycle and ends only
with the disposal of the side effects and detritus of consumption. In his influential book, “The
Ecology of Commerce,” Hawken (1993) phrases it succinctly, “Business has three issues to face:
what it takes, what it makes, and what it wastes.” These three principles can be laid across venerable
planning framework of marketing, the product life cycle, to create its shadow life cycle as shown
in the figure below.
Fig.17. Ecology of sustainable product life cycles28
Sustainable marketing almost inevitably implies a slow-down in sales growth and product
obsolescence cycles, and in some cases, even shrinkage of the market. Concept of Demarketing
is also a sustainable marketing strategy, which is used to dissuade people from using certain products
and services. Demarketing describes the use of marketing tools to cool demand, as opposed to
heating it up.
Green Marketing29
Green Marketing aims at ecological sustainability. Infact sustainable marketing does embrace green
marketing strategies of manufacturing eco-friendly products, bio-degradable packaging material
for products, use of production techniques which ensures less emission et al. Green Marketing is
the marketing of products that are presumed to be environmentally safe and incorporate a broad
range of marketing activities, including product modification, changes to the production process,
packaging changes, as well as modifying advertising. Today more and more organisations are
moving towards green marketing initiatives to promote eco-friendly consumerism and harness
renewable sources of energy.
Source: Journal of the Academy of Marketing Science, ‘Frontiers of the marketing paradigm in the third millennium’ Ravi
S. Achrol and Philip Kotler, 2011
29
According to the American Marketing Association, Green Marketing is the marketing of products that are presumed to
be environmentally safe. Thus green marketing may incorporate a broad range of marketing activities, including product
modification, changes to the production process, packaging changes, as well as modifying advertising.
28
Research Monograph: Paradigm Shift in Marketing
32
EXAMPLES:
1.
Women’s micro-enterprise initiative for sustainable rural lighting in India:
The Centre for Appropriate Technology and Livelihood Skills (CATALIS) has undertaken a
micro-enterprise initiative for providing sustainable lighting solutions for rural communities,
through solar lighting devices as solar lanterns.
2.
IDEA Cellular : IDEA Cellular is on a mission to paint the city green with a range of
outdoor media innovations, to spread awareness about the green initiative “Use Mobile,
Save Paper!” IDEA has transformed Mumbai bus shelters into Green covers, with potted
plants, and tendril climbers to convey the green message. The Green bus shelters at Worli,
Mahim and on the Western Express Highway have already started catching the attention of
passersby.
3.
Toyota Prius- Hybrid Car: Hybrid car by Toyota- Prius is positioned on eco-friendly
grounds. Because of the “environment friendly” aspects of the car, the U.S government
gives a $1500 tax deduction, and some states allow single-occupant hybrids in HOV (High
Occupancy Vehicle) lanes. Other bills are also pending to extend the tax break based on
greater fuel efficiency and lower emissions from vehicles.
4.
National Fertilizer Limited: Making Green Image in rural India: Continual efforts
are on taking up projects that shall enable the company to earn Carbon Credits under
Clean Development Mechanism. Initiatives like Social Forestry - ‘Van-Mahotsava’ and
Solar Lighting were focused to empower rural India. All the Units of NFL are ISO 90012000 certified for Quality Management System, ISO-14001 certified for Environment
Management System and have received OHSAS-18001 certification for Occupational
Health and Safety Management System.
5.
IndusInd Bank: Green Banking has been catching up as among the top Indian green
initiatives ever since IndusInd opened the country’s first solar-powered ATM and pioneered
an eco-savvy change in the Indian banking sector.
6.
Best Green IT Project: State Bank of India- Green IT@SBI: By using eco and power
friendly equipment in its 10,000 new ATMs, the banking giant has not only saved power
costs and earned carbon credits, but also set the right example for others to follow. SBI has
also entered into green service known as “Green Channel Counter” by providing many
services like; paper less banking, no deposit slip, no withdrawal form, no checks, no
money transaction forms. All these transaction are done through SBI shopping & ATM
cards. State Bank of India turns to wind energy to reduce emissions by becoming the first
Indian bank to harness wind energy through a 15-megawatt wind farm developed by Suzlon
Energy located in Coimbatore using 10 Suzlon wind turbines, each with a capacity of 1.5
MW. This wind project is the first step in the State Bank of India’s green banking program
dedicated to the reduction of its carbon footprint and promotion of energy efficient processes,
especially among the bank’s clients.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
33
Paradigm Shift from Product Selling to Consultative selling
Consultative Selling first appeared during the 1970’s in the book Consultative Selling by Mack
Hanan. It’s a syndrome in the past and also with today’s Gen Y30 who have dozens of options for
a majority of products or services they choose to buy. Gone are the days that a good sales person
would be described as a persistent product pusher but the definition of a sales person in the 21st
Century is of a “Sales Advisor”. If a question is raised “How would you want to sell a product to
someone,?” majority of sales-staff would feel that the buying responses of consumers would be
similar to their own responses when they pose it themselves (Sales-staff) as customers. The biblical
message that “Thou shalt love thy neighbour as thyself” does not hold good in today’s competitive
world of sales where bounteous companies literally battle for market share. Today the sales person
has to sell Products/ Services the way customers want to buy since every individual has different
motives and these motives will only be understood if role is changed from a Sales-person to a
Sales Advisor.
Examples:
¾
Reliance Digital as a part of their competitive strategy follows an Innovative pre- sales
service and sends trained staff to homes to advice on buys according to space &
ambience of the place to suggest the model that will best suit the customer requirements.
¾
The Mobile store , retailing arm of Essar Group rolled out the MobileStore Lounge in
Pune stretching over 850 square foot, the store gives customers an opportunity to
interact with trained sales staff or tech buddies, who are armed with tablets and
consult customers on trouble shooting actions, features and specifications of various
Smartphone’s.
Consultative selling also aids in
experiential marketing by creating a
great in- store experience for
customers.
“Businesses do not sell to business
Businesses do not sell to Consumers
People sell to People”
:Unleashing the Power of Consultative
Selling
Gen Y : In India Gen X,Y,Z are used interchangeable but in the west Gen X (term coined in the 1950’s) pertain to people
born in the 1960’s – 70’s . In India these terms are indianised and are relevant to people in their 30’s -40’s. Also at times
referred to as the “Choose Generation”
30
Research Monograph: Paradigm Shift in Marketing
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Customers can’t always tell you what they want, but they can always tell you what’s
wrong.
- Carly Fiona on the Entrepreneurial Thought Leaders podcast
Origin of Branding-Paradign Shift from owning Assets to owning Brands
A Corporate Brand is an Intangible asset for a corporate house:
“Buildings age and become dilapidated. Machines wear out. People die. But what
live on, are the brands.” Sir Hector Laing, Chief Executive Officer, United Biscuits plc.
The word Brand comes from an old Norse “Brandr”, meaning “to burn”. It was during the early
days when man stamped ownership on livestock and with the development of trade the word is
now used to distinguish goods between sellers inter se. Marketing literature supports that Branding
as practice existed during the ancient civilization in Greece, China and Rome where a potter used
to put mark his pots by putting his thumbprint in to the wet clay on the bottom of the pot and create
a mark say a fish or a star or some other icon or signage. This reinforces that symbols were the
early form of brands rather than names31 . The Industrial revolution, exposure and development in
technology resulted in mass production and further mass selling which compelled mass consumption
as an inevitable outcome. This further resulted in the need for Brand protection. The “Bass Red
triangle” trademark was the first registered trade mark in UK (1876).
Back in the 19th century the Bass & Co Brewery used a Red
Triangle logo for their ‘pale ale’ (beer brand) and in 1876
this logo went on to become Britain’s first trademark and
as far as we could find, the world’s first trademark. Wikipedia
Fig. 18. Logo of ‘Bass’
AMA defines Brand as “ the name, term, design, symbol, or any other feature that identifies one
seller’s good or service as distinct from those of other seller’s.” The oldest generic Brand, which is
in continuous use in India since the Vedic period (ca. 1100 B.C.E to 500 B.C.E), is known as
‘Chyawanprash’, a herbal paste consumed for its purported health benefits and attributed to a
revered Rishi (seer) named Chyawan32. Branding is popular not only with Corporate but also with
NGO’s, Political parties and a wide variety of socio- economic aspects of life. Between 1600s
and 1800s in the UK in England criminals were branded for purposes of punishment and
identification. The English letter “S” was imprinted on every criminal’s cheek.
31
32
Source: Brand and branding by Rita Cliffon pg 14
Source : Sanskrit Epic Mahabharat , Van Parva, Page 3000,Shloak 15-22.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
35
In France, criminals were identified by stamping them on their
shoulder with a symbol presented along aside and known as
“fleur de lis” (In French, fleur means flower, and lis means lily)
Fig.19. “fleur de lis”
Shombit Sengupta, international management consultant and founder of the business strategy agency
Shining Emotional Surplus, in an interview with Brand channel on 29th May 2006[2] stated that
many Indian manufacturers have the notion that advertising promotions with film stars or sports
personalities as brand ambassadors will make the brand successful.
Paradigm Shift in Branding from logo being a mere icon to logos telling
brand’s story
The choose generation of today has lot of options of all kind of products resulting in branding
coming a long way over the years. Each company battles for the TOP OF THE MIND position
construct Customer Engagement strategies; involve customer in Brand building exercises with the
mere objective to have a high brand recall value.
The importance of Branding can be felt from the increasing number of Ad agencies and colleges
offering courses on branding .
Brand through its logo can be seen and spoken as the face of the Company.
A logo is the face of a brand. It builds recognition,
familiarity, trust and loyalty. A logo is an
endorsement of quality. Without a logo, a product is
a commodity. With a logo, a product becomes a brand.
SHAFALIKA SAXENA CMO, Microsoft India
Research Monograph: Paradigm Shift in Marketing
36
Fig. 20.Evolution of Starbucks logo over the decades
Companies often engage in the logo change. Recent example is Asian paints:
Asian Paints design, highlighting the easy
flow, smoothness, dynamism in its
offerings.
Amit Syngle, Vice-President (Sales and
Marketing) Asian Paints Limited
Boost becomes the first Indian brand to partner with Vodafone McLaren Mercedes
- Best Media info Sept 20, 2012.
Paradigm shift from Board Room Decisions to Crowd-sourcing
“Tell me and I forget,
teach me and I may remember,
involve me and I learn.”
— Benjamin Franklin
Last decade has witnessed a tremendous increase in customer engagement in crowd-sourcing33.
The term crowd-sourcing originates from the online article, ‘The rise of crowd-sourcing’, written
by Jeff Howe which was published in 2006 in the online magazine “Wired”. Even though the term
Crowdsourcing: It is a process in marketing where customers are asked suggestions on aspects with references to the
product, advertisement etc. in return of prizes. It can occur online or offline and is often restricted to the employees and their
family.
33
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
37
crowd-sourcing has existed since 2006 it has been argued that the concept itself is not new and was
invented as early as 1714, when the British Government offered anyone a £20,000 prize for finding
a solution to the ‘Longitude Problem’34, 35.Technology and the invent of the internet has made the
otherwise passive customer relatively more active. This has led to a transfer of power in different
industries from the owners to the consumers governing the entire chain of economic activity.
Till the advent of Barcode, retailers had little power to bargain with large manufacturers
about shelf space utilisation. The sales people from large companies dominated the
negotiations regarding shelf space. However, Barcode transferred the customer knowledge
in the hands of the retailers which enabled the retailers to keep track of thousands of items
sold from their stores and also generate additional information which permitted retailers to
make decisions on the combination of products for optimum shelf space utilization,
promotions, packaging etc.
The barcode system revolutionised the relationship between large companies and retailers
to the advantage of the later. The sales staff from large enterprises controlled the negotiations
regarding the shelf space.
(Reference: ‘Competing through Knowledge’, 1997, pg 15-16, Madhukar Shukla, Response Books)
Companies are taking advantage of this context and enabling consumers to play the Brand Game.
On the optimistic side the crowd is viewed as intelligent to give suggestions and great rewards are
offered in return.
For some companies it’s not the tight marketing budget that triggers this exercise but it’s the
customer engagement and Brand relevance that is established.
“If you have questions, go to the store.
Your customers have the answers”
-
SAM WALTON, founder, Walmart
The measurement of longitude was a problem that came into sharp focus as people began making transoceanic voyages.
Determining latitude was relatively easy in that it could be found from the altitude of the sun at noon with the aid of a table
giving the sun’s declination for the day.The Longitude Prize was a reward offered by the British government for a simple and
practical method for the precise determination of a ship’s longitude. The prize, established through an Act of Parliament (the
Longitude Act) in 1714, was administered by the Board of Longitude. - Wikipedia.
35
Source: Consumer Participation in FMCG Crowdsourcing Contests, Lund University – School of Economics and
Management Program: International Marketing & Brand Management 2011/2012
34
Research Monograph: Paradigm Shift in Marketing
38
For Kurkure, Pepsico India had invited people to design its Diwali gift box for the year
2012, aiming to boost consumer engagement and brand relevance.
“Tight marketing budgets due to the
slowdown have nudged brands to look
toward smarter, cost-effective solutions
to crowd-source content,” says Arun
Mehra, CEO of Talenthouse, a social
crowd-sourcing agency.
Fig.21. Gift pack of Kurkure designed by customers
The LAY’S® Do Us A Flavor™ Contest began on July 20, 2012. The contest was open to legal
residents of any of the 50 United States or District of Columbia, who were 18 years of age or
older at the time of entry. The winners were chosen after voting on Facebook and the winner
received a prize of $ 1 million.
Fig.22. LAY’S® Do Us A Flavor™ Contest
Kansai Nerolac recently invited people to create their own version of its iconic jingle-—
‘jab ghar ki raunak badhani ho’
“The primary objective of the above campaign— called ‘kuch change karein, chalo
tune badlein’—was to engage and involve consumers, thereby further strengthening
their affinity with the brand”
- Sukhpreet Singh, Vice President (Marketing & Sales) Kansai Nerolac Paints
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
39
Fig.23. Crowd sourcing
(Source: 6th Nov 2012 - The Economic Times, Mumbai)
Research Monograph: Paradigm Shift in Marketing
40
Paradigm Shift from 30 Sec TV Slot to 30 Sec ‘YouTube’ video
(Traditional advertising to online advertising):
“Doing Business without Advertising is like winking at a girl in the dark, You
know what you are doing but nobody else does”
Stewart H..Britt
Indian Advertising marked its beginning when hawkers called out their wares right from the days
when cities and markets first began. Advertisements started appearing for the first time in print in
Hickey’s Bengal Gazette which was India’s first newspaper. Television was introduced in India on
Sept.15,1959, as a pilot project in Delhi. Daily transmission started in Aug. 1965 and by 1972,
Television spread to other parts of the country. Sunday feature films caught the eyes of the customers
during early 70’s. Commercial TV was introduced in 1976, but took off only in 1984 with the
advent of the popular show “Hum Log”.
Fig.24. A still from TV serial ‘Hum log’
In 1967, the first commercial was aired on Vividh Bharati and later in 1978; the first
television commercial was seen. In the 21st century from a Single channel the consumers now
have a wide choice and so the marketers are facing challenges to catch the eye of the customer
tossing between the different communication media that a consumer is exposed to. Technology
has empowered customers through “Zipping36 & Zapping37” to muddle with different channels.
Companies today have no option but to be present where their target audience exists.
Gone are the days when a marketer would be assured that a good product and good advertising
are enough to sell. Today is all about being friends with the customer and customizing your message
to suit his/her need.
Zipping: With the advent of technology, like TataSky, DTH Service which allows an individual to record a show and
watch later at convenience also enables an individual to fast forwarding through commercials while watching a previously
taped show is termed as Zipping.
37
Zapping: The act of using a remote control to change television channels when an advertisement begins.
36
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
41
“Connecting today is a dialogue.”
-
Mark Parker, CEO, NIKE
Fig.25. E-commerce statistics of India and world-wide
ICMR along with “4P’s of Business & Marketing” conducted a survey with a sample of 80
Marketers and 827 users from 5 different metros - Delhi, Mumbai, Bangalore, Kolkata and
Chennai to establish that 43% of the net users in India are between age group 18 -25 years, As
depicted in the figure below:
Fig.26. Age group-wise break-up of Internet users in India
Research Monograph: Paradigm Shift in Marketing
42
Many companies have a myth and enquire with advertisement agencies to create a Viral Marketing
campaign for their brand. But it has to be kept in mind that a Viral Marketing campaign is not
created but built with constant efforts since the term Viral means “Word-of-mouth” and is only
created by constant Customer Engagement.
kolaveri di
song became
synonymous with the concept of
Viral marketing
Café Coffee Day – New ad was uploaded on You
Tube “SIT DOWN” illustrating different moods and
reasons Café Coffee Day wants the consumers to
visit the café.
Paradigm Shift from Shelf Placement to In-film Placement of products /
Services
Bollywood, (term originated from a blend of Bombay and Hollywood) received recognition as
one of the 500 entries in the list of meaning to be added in the Oxford Dictionary - Jul 2, 2003
According to Subhash Ghai, a director, it wasn’t even the people from the Hindi film industry who
acknowledged it as Bollywood. He noted that the term “Bollywood” was used, for the first time,
in a BBC’s coverage of the film, Ram Lakhan (1989). BBC said that the Bombay film industry
was copying the style of Hollywood in terms of costumes and fashion, and hence the Bombay film
industry may be labelled Bollywood.
This strategy established an emotional connect of the Indian audience with the stars of the Indian
celluloid screen like Dilip Kumar, Late Rajesh Khanna, Sadhana, Asha Parekh, Rajnikant and
Late M.G. Ramachandran (MGR). These actors are looked upon as demigods and therefore they
are powerful trend-setters for various accessories and products. The usage of a particular product
by a leading star in a particular film inspires an audience to be a part of star trend. Product
placements are therefore commercial insertions within a particular media intended to heighten the
visibility of a brand, type of product or service. These insertions are meant to strengthen the recall
value of the brand. The availability of captive audience as well as the targeted reach are motivational
factors for In-film placements38. Thus large companies looking for in-film placements for their
product/ service or brand look for an effective relationship with producers of films.
Marketers have realized that exposing the brand in a natural environment and avoidance of Zipping
Source: (Avery Rosemary J and Rosellina Ferraro, Verisimilitude or Advertising? Brand Appearances on Prime Time
Television, Journal of Consumer Affairs, 34(2),217-2444, 2000)
38
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
43
is an essential benefit of product placement. This phenomenon can be traced back to the 1958
classic Chalti Kaa naam Gadi. The movie Dilwale Dulhanyiyan Le Jayenge of the 1990s was
a successful story of launching of Stroh beer in Indian market.
Coca-Cola was ahead of the game even in Bollywood movies. In a scene from the film Shree 420
(Mr. 420) (1955) when Raj Kapoor, the protagonist, enters Mumbai for the first time, a large
Coca-Cola banner was visible right above his head. In Hindi film “Chalti Ka Naam Gaadi”(1958),
the story revolved around three brothers who own an auto repair shop. Several scenes in the film
featured a poster depicting Mobil brake fluid along with at least one mention of it by one of the
primary characters39.
Fig.27. A still from the movie “Chalti Ka Naam Gaadi”(1958), depicting Mobil brake
fluid advertisement display
Film producers also welcome and constantly look out for brands that fit in to the integral part of the
script since it also is a revenue model for the film fraternity resulting in a Win – Win situation for the
marketers as well as the film producers.Marketers in the recent years have also explored television
serials with high Television Rating Points40 (TRP’s) to reach and connect to the audience.
Fig.28.Movie - Late Spring in 1949 as the
heroine Noriko cycles with a male friend,
we see a Coke ad in the foreground.
Fig.29.Coca Cola have been a prominent
feature on the judges’ desk in American
Idol.
Source : Comparative study of the practice of product placement in bollywood and hollywood movies, Shruti Vinayak
Gokhale ,2010
40
Television Rating Points3 (TRP’s) - Television Rating Point (TRP) is a tool provided to judge which programmes are
viewed the most. This gives us an index of the choice of the people and also the popularity of a particular channel. For
calculation purpose, a device called People’s Meter is attached to the TV set in a few thousand viewers’ houses for judging
purpose. These numbers are treated as sample from the overall TV owners in different geographical and demographic sectors.
39
Research Monograph: Paradigm Shift in Marketing
44
Fig.31. Rajdoot motorcycle became famous
when lover boy Rishi Kapoor rode it in 1973 in
superhit film ‘Bobby’.
Fig.30. Tata Starbus integrated its brand
in the movie by offering a ride as a part
of their tour bus
3 Idiots Product Placement:
¾
The Airtel Internet data-card and its signature tune
were ‘placed’ during an important sequence while
Sharman Joshi is in hospital and Aamir tries to
connect to Web cam chat through this data-card.
¾
The Volvo SUV XC90R was another placement
in the film.
¾
Two-wheeler Mahindra Flyte made its debut in
Bollywood with ‘3 Idiots’ with a few scenes
involving Aamir Khan riding the bike with two
pillion riders—Sharman and Madhavan.
Fig.32. ‘Mahindra Flyte’ used in
movie ‘3 Idiots’
From “Kolaveri di” to “coolaveri di”
After making the entire nation hum to the tune of “Why this Kolaveri Di,” now it is Dhanush’s
turn to go “Coola-veri-Di.” Emami Ltd, has tied up for in-film promotion of its brand Himani
Navratna, an ayurvedic cool oil, with the movie named ‘3’.
(Source : The Hindu businessline, 10th February 2012)
It should be noted that product placement unsupported by shelf placement, preferably immediately,
following the advertisement, renders sales promotion and the associated time money and effort
rather defunct. Many massive amounts invested in very expensive media are rendered unproductive
for want of co-terminal operation of publicity programs and logistical arrangement at the point of
consumption.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
45
Fig.33. Mountain Dew powers ‘Zindagi Na
Milegi Dobara’
Three friends discovers ‘Darr Ke Aage Jeet Hai’ in
this most anticipated blockbuster, Zindagi Na Milegi
Dobara, powered by Mountain Dew. They decide to
turn their fantasy vacation into reality and head to
explore, unwind and experience some ultimate
adventure sports, confirming at every step that Darr
Ke Aage Jeet Hai! Released on July 15th, the film,
directed by Zoya Akhtar, featured an exciting
ensemble cast including Hrithik Roshan, Katrina Kaif,
Farhan Akhtar, Abhay Deol and Kalki Koechlin.
Source : http://pepsicoindia.co.in/media/Press-Releases/
release_07_07_11.aspx
Paradigm Shift from User Marketing to Shopper41 Marketing
Shoppers today are influenced by dozens of players and their state of the art marketing strategies
intending to shape their behaviour.
The theory of Consumer Behaviour states that marketing efforts are fruitful only if the consumer
decides to purchase the particular product. However, matter does not end there. The consumer
needs to be under the continuous influence of the intention to buy till such time as he acts and
actually purchases the product. The purchase decision gets influenced by two factors first - the
availability of that product with the retailer and battling with the retailers efforts to effectively
market a competitive product and second the in-store promotions of competitive brands which
may be inducing purchases by the same customer or set of customers.
This is where “Shopper Marketing” emerges as a useful concept. According to Peter Krieg,
America’s leading marketing consultant, shopper marketing, at its most basic level, represents
“activities along the path to purchase, designed to inspire a visit to a retailer and the purchase of a
manufacturer’s brand”42. Again according to Peter Krieg “shopper marketing beats out digital for
fastest growing area of marketing spending” in many consumer companies and it is believed that
the annual spend on shopper marketing in 2011 was 50–60 billion USD.
41
42
Shoppers are defined as people who go to the store/online to make a purchase of a product in a product category.
Shopper Insights: The State of the Science- By Peter Krieg and Jeff Maloy(p.2)
Research Monograph: Paradigm Shift in Marketing
46
Fig.34. Consumers versus Shopper (Source: Shopper Insights: The State of the Science- By Peter Krieg and
Jeff Maloy p.4)
In the past the objective of the marketers,
was to deliver products and address
promotional strategies to the end consumer.
However in today’s competitive market the
role of a “Consumer” is changing to the
role of a “Shopper.” Marketers have realized
that the one who shops will not necessarily
be the consumer of the product. This resulted
in marketer’s making efforts to constantly talk
with Shoppers, listening to their insights and
derive a solution.
Fig.35.
Showing new Shopper Marketing Paradigm
(Source: The Hub January/
February 2010)
Implementing such Shopper Marketing
strategies and in- store promotions that
enhance the customer’s shopping experience,
turns out to be a Win – Win situation for all
the three parties involved viz. the Shopper,
Brand (company) and retailer . This results
into a positive word - of -mouth (WOM) and
increase in footfalls at the retail outlet boosting
Brand Loyalty for a particular Brand.
Fig.36. showing parties benefitted from shopper marketing.
(Source: Shopper Insights: The State of the Science- By Peter Krieg and Jeff Maloy p.12)
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
47
Shopper Marketing Example
Shopper Marketing Example:
‘Fixtures living’ provide a completely new
way for people to shop for kitchen and bath
fixtures. Visitors are welcomed with
handcrafted coffee and encouraged to think
about how they want to live, versus, what
they want to buy. Next, they explore 30
operational kitchen and bath vignettes.
Guests can even cook with a chef or walk
under a cascade of water in the spa. “Dream
rooms” offer wi-fi and trackable walls where
people can meet with their own designers
or do additional research.
Before Asian Paints sold paint, it needed to
make consumers comfortable with the idea
of experimenting with colour in their
homes.Asian Paints flagship store in Delhi
allows the customers to interact with
dashboards that allow them to select ideas.
With Fitch as its design firm, Asian Paints
was the winner of the Ultimate Hub Prize,
and recipient of the coveted Hub Cup 2012
-The Hub Magazine’s 2012 Shopper
Marketing survey.
(Source - The hub Magazine, 2012)
(Source: The Hub Magazine, 2012)
Paradigm Shift from National Brands to Private Brands
Increase in population, working class and income levels have radically changed the retail industry.
Private labels43 started with retailers wanting to offer cheaper substitutes. There were two advantages.
First, the retailers could negotiate better in favour of private brands vis-à-vis national brand. Second,
the private brand enjoyed patronage of the owner and hence benefited from USP (Unique Selling
Proposition) of proprietorship of the private brand.
Tesco stands to be a good example of combining Value and premium strategy for private
labels. Tesco in Europe has a range called Tesco Finest line. It does have a Tesco Value line,
which is cheaper; however the Finest only sells premium products at a premium price. Tesco’s
finest chocolate, sells at a premium compared to national brands like Cadbury’s . Similarly, its
yogurt sells at more than 50 % percent over Danone and other yogurts.
(Source: International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011)
National Brand: The brand name of a product that is distributed nationally under a brand name owned by the producer
or distributor. Private Brands : Products distributed only in some areas of the country
43
Research Monograph: Paradigm Shift in Marketing
48
The origin of Private labels can be traced when the great Atlantic & Pacific Tea Company (A&P)
partially built upon it’s freshly ground (in-store) 8 o’clock Coffee in the early 1900’s44
Indian shoppers reflect a lower affinity for private labels. However, for a large mass of ‘new’
consumers who are experiencing the modern format of buying and selling for the first time, a
private label represents an opportunity to ‘upgrade’ at a price that represents value while still being
affordable.
“Private labels are still at a nascent stage in India, retailers are constantly experimenting
with such offerings” - Jan 26th 2011, Economic times
Examples:
¾
Shoppers’ Stop list of premium private brands includes brands like Life , Karrot and
STOP.
India’s largest e-commerce venture
Flipkart.com has forayed into private label for
digital accessories, such as laptop bags and
camera pouches, under the brand Digiflip.
¾
Bharati Retail, Walmart’s joint venture partner in India, have bought eight private labels
in total including Great value line of food (flour, dry fruits, spices, cereal, and tea) .
Other Wal-Mart private labels introduced in India include George apparel. Home
Trends (Home furnishing), Mainstays ( plastic , kitchen accessories) are a few of the
private brands bought to India by Wal-Mart.
(Source: International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011)
Paradigm Shift from Executive Endorsements towards Celebrity Endorsements
India is a country where superstars are considered god whether it’s Rajnikanth in the south, Amitabh
Bachchan or Shah Rukh Khan in Mumbai. People in India wait hours outside the house for a look
of their favourite Stars and aspire to be like them. Here is where marketers saw an opportunity
and roped in celebrities and believe that this way the products connect with the customers. A
consumer today due to technology is exposed to various products and dozens of brands each
attempting to steal the eye of the shopper. When someone picks a product or service it’s not just
that particular product that is chosen. What is purchased is what motivates the purchases the
image the brand has created, in fact implanted, in the mind of the customer.
Marketers use celebrities largely from the film fraternity and sports world to create powerful brand
image. On the contrary there is a belief that exist in the minds of some consumers that endorsements
are merely business for the endorser. Many brands with the success of the celebrity constantly
change endorsers to connect with the Target audience.
44
Source : http://www.retailcustomerexperience.com/article/21480/The-evolution-of-private-labels-at-retail
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
49
Celebrity endorsements are not limited to products and services. Even states have revealed a
trend of hiring a celebrity and employing them for Tourism advertisement.
Fig.37. Amitabh Bachchan is the Brand Ambassador of Gujarat.
Aristotle said, “Beauty is a greater recommendation than any letter of introduction.”
“Brands are spending more on marketing now, perhaps between 20-40% more than they
were at the beginning of the year… there’s a lot more assertiveness and confidence in terms of
getting known faces to promote brands,”
- Anirban Das Blah, CEO & MD of talent management firm CAA Kwan, which represents
actors Ranbir Kapoor and Freida Pinto ( Economic Times, Dec 4, 2012)
As an effort to take Maaza’s brand equity to the next level actors
of Indian cinema Imran Khan and Parineeti Chopra have been
signed as latest endorsers epitomize the young India — go getters,
energetic, wanting to make a difference and sure of themselves.
It’s a saying in the Bollywood that “Every friday a star is born and every friday the destiny of
Bollywood stars changes”
The Law of Demand can also be applicable to the film fraternity, in view of the fact that as their
movies are declared hit in the box office brands start signing them as their endorser.
However assessing the popularity and the influencing capability of the star is not an easy task, here
Times Celebex powered by zoom makes a difference. The rating index is based on several
measurable parameters, including the stars’ box office performance, their ability to stay in the news
across print, TV and online; their brand endorsement, and their popularity among fans on the
Internet and social media and all these are taken together to assign a “T-SCORE”.
Research Monograph: Paradigm Shift in Marketing
50
Fig.38. Determinants of T-score (Source: Economic Times, Oct 29th 2012).
Fig. 39. Celebex Ranking (Source: www.timescelebex.com)
• Vijay Kumar Signs Deal with Percept
Mumbai London Olympic Games silver medal winning pistol shooter Vijay Kumar has been
signed up by sports marketing firm, ‘Percept’, which would manage the Army marksman’s
brand image and endorsements.
“We decided on Aamir because we wanted
someone who is a bit iconic, who is styleconscious himself, and somebody who cuts
across both sex and age group, between
urban and rural India, a celebrity who is
mouldable and who is not over-exposed”.
Fig.40. Aamir Khan endorsing ‘Titan’
Bijou Kurien, COO, Titan
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
51
Fig.41.‘Audi Q7’ was used in the major box office hit movie “Bodyguard (2011)”.
¾
In the movie ‘Namastey London’ (2007) the website Bharatmatrimony.com is
mentioned as having the highest reliability in finding new partner.
¾
The box office ‘Om Shanti Om (2007) included many different brands like Exide, Tag
Heuer, Maybeline and MTV.
Fig. 42. Examples of Celebrity Endorsement
Celebrity endorsement is not restricted to Bollywood, but highly used for anybody who makes
India stand out; cricket players, sport medallists and other important personalities.
Brands localise not only their offerings while entering a
new market but also their endorser to connect with the
local audience. “LUX” which is endorsed by Katrina Kaif
and Shahrukh Khan in Mumbai recently shot a small music
video for Lux Liquid Bodywash “Seda Kathandare”
staring Sri Lankan beauty Bollywood actress and Lux
brand ambassador Jacqueline to connect with the
audience.
Research Monograph: Paradigm Shift in Marketing
52
Paradigm Shift in brand extension of Female-oriented brands towrds
Male-oriented brands
A couple of years ago products were largely known as a male / female products and showed that
gender in the advertisements as well as had estblished itself closely to the gender eg. Fair and Lovely for
females etc. Previously, make-up products or cosmetics for males, was a laughable idea and perceived
as a challenge but with Unilever undergoing a brand extenssion of their “AXE” Deodrant launched a
limited edition to test out the reaction to a brand largely known as a Men’s Brand and initiated “Anarchy”
for females. Companies are now experimenting with a blender of gender for products resulting in either
a One- night – stand affair for some or a Happy – ever after marriage story.
Fig.43.Shahrukh Khan was among the few male
stars to endorse a female soap - Lux (“Lux Sunder
Purush”)
in
the
year
in
2005.
Fig.44. Axe offering common deodorants
for men and women.
(Source : http://indiatoday.in , 8th November, 2012)
Bacardi launched ‘Bacardi +’ to increase male beer drinkers since it contains 8% alcohol. To
explain this launch of drinks for males, Mahesh Madhavan, (CEO South Asia, Bacardi) shares
“If you peg anything for men in this market, women will drink it, but the reverse doesn’t
happen . Men do not consume a drink positioned for women, that’s unfortunate but is the
fact.”
Unilever brand Dove, which is present in categories like body wash, hair care has launched a
Men + care range for men. According to Jennifer Bremner, Global brand director “ Our
research found out that males use women skin care products”
Fig.45. Garnier, the skin and hair expert, has
launched “Garnier Men’s” a new range of skin care
products designed specifically for men and signed
John Abraham as an Endorser.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
53
Fig.46. Emami’s ‘Fair and Handsome’, the
fairness cream for men, is the first in its
category to sign on a Bollywood star as its
brand ambassador in India.This endorsement
follows the brand’s track record of being the
first fairness cream for men in the world.
( S o u r c e : h t t p : / / w w w. f a i r a n d h a n d s o m e . n e t /
srk_press_release.pdf)
Paradigm Shift from off – season Discount sale to promotion through
Mid-night sale trend among retailers
A late night out with friends would be generally assumed either going to a club or a dinner, but with
the younger generation open to idea of late night shoppping and visits to the well known markets
for consumer durables, has created a new trend. Retailers are encashing on this new consumer
behaviour profile contributing to overnight buying habit. This is proved as an innovative concept to
boost the otherwise low sales figure for a particular month.
But the Brick and Mortar stores have also started duplicating it with many successful examples as
mentioned below :
Ford after witnessing low sales in April 2012 carried
out a one –day drive across 123 cities nationwide on
Sunday, May 13, 2012.
“The Midnight Sale is all about enhancing the Ford experience on a one-day scenario and
also enhancing the attractiveness of buying a vehicle on this day,”
Nigel E Wark, Executive Director, Marketing, Sales and Service, Ford India
Paradigm Shift from Brand Visibility to Brand Engagement - ‘Adver-gaming’
The word advertisement45 is derived from the latin word ‘advert ere’, which means turning attention
towards something. Especially after liberalization and with the increase in the number of television
channels, there has been a massive rise in the number of television advertisements. Also due to
extensive competition, all players are struggling to get their share of consumers’ attention. As we
know, from early ages, people played games to relax, build social bonds, increase their social
status, and develop skills and so on. With the advent of the computers, computer games emerged
as a powerful source of entertainment.
45
“Advertisement is a non personal presentation and promotion of ideas, goods or services by an identified sponsor with
an objective to induce purchase.
Research Monograph: Paradigm Shift in Marketing
54
Internet games are consumed by various demographic groups- young and old, men and women,
thus making it a prolific market.
Games help marketers to talk to their target audience head on through a non intrusive, entertaining
medium that they already fancy- a challenge still faced by traditional advertising.
Traditional forms of advertising promise only a few seconds of engagement. A game will keep
consumers interested for several minutes at a time. The time spent on a game beats any other
traditional form of media. Online casual games cost a fraction of the cost it takes to prepare and
launch traditional advertisements thus, improving the return on investment apart from customer
engagement, exposure and recall.
Chen and Ringel (2001) defines Advergaming as “the use of interactive gaming technology to
deliver embedded advertising messages to consumer.”
Zapak, India’s largest gaming portal has launched its first
Adver-game on Reliance Digital TV and Dish TV with an
aim to provide fun and engaging games on DTH platform.
Close-up, one of the leading toothpaste brand in the country,
partnered with Zapak to enter the digital space this year to
promote their new variant Close-up - Fire Freeze.
“Youth of today spends a lot of time in their office, and
they often try to impress their colleagues. Close-up as a
brand stands for confidence that comes with fresh breath.”
-Manish Agarwal, (Chief Operating Officer – Digital
Business, Reliance Entertainment Ltd.)
(Source: Best Media-Info Bureau ,May 11, 2011)
Paradigm Shift From In –Store Retailing to Retail - on - Wheels
Shoppers are becoming more and more demanding compelling retailers to include another retail
format viz. “Mobile Retailing”. Further this is not limited to smart phones. At times, customer’s
experiences delay in purchases because of the difficulty in comfortably exploring the product. With
a view to offset the inconvenience caused to the consumers, retailers have positioned vehicles
containing their products for customers so that customers can pick and choose for trial at home
before actually buying a particular product.
This format has been explored for categories in Pet care, Entertainment.
Fig.47. Gypsy Couture is “a unique travelling boutique
specialized in fashion-forward clothing and accessories.”
The San Antonio emporium, housed in a vintage trailer,
can be booked for a girls’ night out or special event.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
55
Paradigm Shift from 4P’s in Marketing to 8P’s in Marketing
Manufacturing companies usually address four strategic elements Product, Price, Place and
Promotion. In service industry, it is said that customers hire a service because they like the service
and also connect with the service provider. The major challenge that today service providers are
facing is positioning the right image in the customers’ mind. In the service industry the production,
distribution and consumption happen at the same point of time resulting in active customer
participation.
4 Ps were coined in 1958 by Neil Borden in his American Marketing Association presidential
address. However, this was actually a reformulation of an earlier idea by his associate, James
Culliton, in 1948 described the role of the marketing manager as ‘a “mixer of ingredients”, who
sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes
along, sometimes adapts a recipe from immediately available ingredients, and at other times invents
new ingredients no one else has tried.’ Booms and Bitner’s (1981) 7Ps mix for services are
extended to other areas of marketing.
Fig.48. depicting 8 Ps in Marketing
(Source: http://www.cravelabs.com/blog/-/blogs/future-of-local-and-social-discovery)
Service Marketing Academics and Experts have added the 8th P in Marketing of services i.e
Productivity in the book on Service Management by Lovelock and Wirtz, 2007, pp. 22-23.
Service industry unlike to the product Industry is dominated by human capital and resulting in
production of heterogeneous services. It therefore becomes important to manage the demand and
capacity. Promotional efforts like “Happy Hours”, discounts etc. are measures to ensure productive
use of capital.
Many companies are also trying out their own version of the P’s depending on the product and the
market in which the product sells. It’s a practice with some websites and bloggers to add an
adjective starting with the letter “P” to the P’s in marketing but 8 P’s in marketing are supported by
authentic publishers.
Research Monograph: Paradigm Shift in Marketing
56
Paradigm Shift from mere Graphics to Musical cues in Advertising
Considering how difficult it can be to get a jingle out of your head when you have heard it several
times. Whether you like it or not, and even if the jingle is irrelevant, you just can’t seem to stop
humming it. Music plays an imperative part in the marketing tool scale. With the intensifying usage
of TV and Radio and Out- of – home Advertising (OOH)46 consumers are exposed to hundreds
of advertisements daily. The question now arises which of the ad will have a high Recall Value.
Music can be altered in the meaning of the ad. They were first used in advertising in 1928, when a
radio advertisement asking “Have Your Tried Wheaties?” hit the air. According to author Steven
Karman in his book “Who Killed the Jingle?” Ad’s that include music often tend to be used in
our daily communication because of their high recall. After hearing a jingle several times as part of
a marketing campaign, consumers often create their own repetition and start humming the tune or
singing the words in their head. Sometimes the mere sight of the product can trigger the words of
the corresponding jingle.
Examples:
Titan still rules the heart by its silent ad “la la la la, la la la ...” and is amongst the Best ad Jingles
ever made.
Kansai Nerolac’s brand Jingle “Jab ghar ki rounak badhani ho………” has been winning
hearts of Indian audiences for decades. Recently as a parts Customer Engagement strategies,
the company gave it’s consumers a chance to come up with their own Jingle in a contest named
“Kuch Change Karein, Chalo Tune Badlein – Personalise the Nerolac Jingle” campaign on
Facebook and Twitter.
A very recent example is the overwhelming response
and recall that the brand Thumps Up enjoyed when
it launched the recent campaign in sync to its rough
and tough personality connected with its target
audience throughout its “Aj Kuch Tofani Karte
Hain” Campaign.
Marketers are trying hard to connect to the audience either by its jingle or punch line. Some punch
lines are so effective that they are used in our daily communication. Some jingles are marketed so
effectively over the years that mere listening of that jingle recalls the brand. Most of the jingles
mention the brand at the end, ample number of times for effective recall.
Out- of - Home Advertising (OOH): All the advertising that is not on television, the radio, in magazines and newspapers
or on the Internet. It can be on roads, trains and buses etc.
46
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
57
“Kuchh khas hai hum sabhi mein
kuchh baat hai zindagi mein
Baat hai khas hai
kuchh swad hai
Kya swad hai
Zindagi mein
Asli swad zindagi ka”
- Cadbury Dairy Milk
“Doodh doodh doodh doodh doodh hai wonderful
Pi sakte ho roz a glassful
Doodh doodh doodh doodh doodh, wonderful doodh,
Piyo glassful
Garmi me dalo doodh me ice
Doodh ban gaya very nice
Piyo daily once or twice
Mil jayega tasty surprise
Doodh doodh doodh doodh doodh, wonderful doodh,
Piyo glassful
Doodh hai must in every season
Piyo doodh for healthy reason
Rahoge phir fit and fine
Jiyoge past ninety-nine
Doodh doodh doodh doodh doodh, wonderful doodh
Piyo glassful
Charon aur, mach gaya shor
Give me more, give me more!
Gimme gimme gimme gimme gimme gimme wonderful doodh
Piyo glassful doodh”
-Amul
Research Monograph: Paradigm Shift in Marketing
58
“Tanduroosti ki raksha karta hai Lifebuoy
Lifebuoy hai jahaaan, tanduroorsti hai wahan. ..
Lifebuoy!”
- Lifebuoy
“Ye jami ye asma hannn
Ye jami ye asma
Hamara kal hamara aaj, hamara kal hamara aaj
Hamara kal hamara aaj, hamara kal hamara aaj
Buland bhart ki buland tasveer
Hamara bajaj,hamara bajaj ,hamara bajaj”
- Bajaj Scooters
“Washing powder Nirma
Doodh si safedi
Nirma se aaye
Rangeen kapde bhi khil khil jaaye
Sabki pasand Nirma...
Washing powder Nirma
NIRMA!!!”
- Nirma
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
59
Paradigm Shift from Mega event product Launch to Virtual Product launch
The first thought of a product launch flashes a scene where there are lights, press, camera’s and
the curtain is pulled off for the product launch. However the advent of social media changed the
pattern of communications among different stakeholders of society. Internet has emerged as a
global, anonymous, online 24*7 market connecting people almost instantaneously. Thus the world
is now rightly described as a global electronic village. This advantage of continuous connectivity
has resulted in marketers shifting from traditional product launches that were surrounded by Who’s
who from the Industry to Virtual Launches of product through internet which has emerged as a
very powerful and prolific social media. Product launches have always been an occasion
characterised by entertainment and action. Internet has provided a variety of social media viz.
Facebook, Twitter, LinkedIn to name a few. As a result contact with consumers is relatively easy,
be they users of FMCG products, day-to-day services or professionals demanding unique or
specific product or service. Social media improve their visibility among customers who can be
kept abreast of happenings in the marketplace or developments in products or services.
Example:
Fig.49.Mahindra’s XUV500 launch on Social Media
Mahindra before the launch of its successful XUV500 planned a great strategy and that today is
used as a learning case in management schools47.
Paradigm Shift from Telegram to E-mail Marketing
With People spending more and more time online either on social networks or checking emails,
marketers are leaving no stone unturned to catch the eyes of the customers and educate them on
products through constant updates on recent happenings, latest offers, product launches. Email
marketing has thus come of age. Marketers have realised that a lot of good things can happen
when they build long term relationship with their customers. People are hooked to a product
longer, the power of Word –of – mouth is at work and people start talking and are engaged with
any product, service or brand.
47
Source: http://hungamadigitalservices.com/case-studies/xuv-500-launch
Research Monograph: Paradigm Shift in Marketing
60
It is often argued that email marketing results in unsolicited marketing. The line of difference between
Spamming and Email Marketing is “Permission Marketing” .Marketers therefore make sure
to educate customers on a certain information only after soliciting the permission of the customers.
Email Marketing is regarded as one of the cheapest marketing tool that reach a target audience
instantaneously, simultaneously and uniformly wherever necessary. Mass customisation is possible
and many companies send emails with different content to different customers on the same product
depending on brand loyalty and product patronage.
Gone are the days when customers were looked as entities meant only for promoting sales (volume
and value). Marketers are now interested in building a long term, lifetime value with their customers.
Marketers have changed their outlook towards “Campaigns” and are constantly trying to build
“Relationships”. A marketer often sends emails to customers on their Birthdays/Valentine day
with additional offers to make the customer feel special.
Be it FlipKart.com, Snapdeal.com, OfficeYes.com and other retailers, Email has proved to be an
Effective, Measurable and Action Oriented “EMA” tool to engage customer.
Companies in India have yet to capture the huge potential that this tool can offer. Efforts are made
by many companies to get the best results through this media.
Octane.in, India’s leading email marketing company
in its third annual industry research report, “Spark
the Surge”, as part of the Octane Research series in
which 412 marketers participated making it the
largest marketing community research project stated
that Email marketing is the second highest emarketing investment channel for Indian marketers
in 2013. A staggering 99% of the respondents
revealed that Email marketing programs were
effective in meeting their desired goals for 2012.
Source
http://www.telegraphindia.com/external/
display.jsp?mode=details&id=34183
Paradigm Shift from only Television advertising to Mobile Marketing48:
“If your plan don’t include mobile, your plans are not finished.”
Wendy Clark Senior Vice President, Integrated Marketing Communications and
Capabilities The Coca-Cola Company
48
Mobile marketing is marketing on or with a mobile device, such as a cell phone – Wikipedia.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
61
The advent of Mobiles has replaced many products among customer like watches, calculators and
many more. In today’s busy lifestyle mobile has become an indispensable product among individuals.
Marketers are in constant search for strategies that are cost effective and assure reach to the target
audience in a personalised and interactive approach. With the assumption that people avoid Banner
Ads49, Marketers have a three letter strategy SMS50(Short Message Service) through which they
connect to the target audience. Marketers often make their tele-calling staff to call and send SMS
to potential customers and update them on products and offers to avoid such irrelevant calls at
absurd times the Government has also launched a Do Not Call Register51 where a customer
can enter his number and reduce the number of telemarketing calls.
Fig.50. A recent study showed that Half of India’s homes have cellphones, but not toilets
-March 14th 2012 - The Hindu
Mobile Advertising spending in India to grow by 40 % in a year Mobile Marketing
Association (MMA) in partnership with ‘exchange4media’, estimated the size of the mobile
advertising in India to be 180 crore, which is expected to increase by 40% in the next 12 months.
The report also affirms the share of mobile advertising to be 10% of the overall digital advertising
spends in India. “Mobile is an exciting, fast growing category, but it’s still a very small piece of the
overall pie. Mobile advertising is growing at a fast pace and will soon challenge other channels”
was the outlook of Rohit Dadwal, Managing director, MMA, Asia Pacific.
Source: timesofindia.indiatimes.com, Sep 21st 2012.
Banner ad is a form of advertising on the World Wide Web that appears while browsing any particular website.
Short Message Service (SMS) is an exchange of a text message that people possessing a mobile or fixed line send using
a standardized communication protocol.
51
Do not call register: It is a service that un-subscribes a number from promotional calls from a marketer.
49
50
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Fig.51. Mobile Ad Spending in BRIC countries
Paradigm Shift in marketing from only Word-of-Mouth to Blogging
How many times opinions get shared with others? Be
it regarding a movie, product or even an interaction
with a representative from a company. How many
times do people buy a product based on some one’s
opinions? These questions may not have exact
answers because the counting gets difficult.
Indians by nature are people who like giving opinions.
It’s not surprising that Blackberry Status (BB),
Twitter, Face book profile get updated continuously
almost on 24*7 basis. Such a continuous dialogue
through social media facilitated by state of the art
technology like Tab, I-phone et al. “Blog” is one of
the outcomes. It’s nothing but communicating and
sharing opinion at will that is to say at discretion and
pleasure of the users.
Many famous personalities have their blogs that connects them to the audience where they are free
to discuss what they want and put their opinion across.
Blogs are an effective tool of influencing a purchase decision since in most of the cases they are
written by genuine customers. Thus companies are constantly monitoring what is discussed on the
web via blogs or social media updates.
When Abhishek and Aishwarya’s were gifted with their first child, it was on Twitter that Amitabh
Bachchan twitted the child’s real name putting all the curiosity to an end. “My granddaughter is
called Aaradhya”, Amitabh Bachchan had posted on Twitter52.
“Ever realized playing with the ‘little one’ for just a few minutes could be equivalent to an entire
two hour workout in the gym! Child is the father of man”, Amitabh Bachchan wrote in his blog.
52
Indiatoday.in (20th May 2012)
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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Nowadays companies also hire bloggers to write reviews about their products online and Blogging
today is a profession.
People at times use blogs also to share their bad experiences with a certain service provider.
Paradigm Shift in Sales from over-the-counter sale to sales through
Vending Machines
It is often said in Marketing that “Be where your Customers are” however this is not feasible due
to the increase in real estate prices. Here is where Vending Machines plays an important and cost
– effective source of making product available to the customer. A couple of years back as a
measure to promote safe sex Condom Vending Machines were installed (CVM) in some areas in
Mumbai. However the results were rather disappointing. Assuming that people in India are
apprehensive of being noticed buying Condoms from these vending machines. The National AIDS
Control Organisation (NACO) and the Hindustan Latex Family Planning Promotion Trust
(HLFPPT) also installed Vending Machines containing other things too.
In the West, Sales are common via. Vending Machines be it products like footwear, bags or even
jewellery. In India vending machines are commonly seen in airports and a few other locations. It
has still not picked up forcefully. An exception to this is the Gitanjali Group which launched Jewellery
Research Monograph: Paradigm Shift in Marketing
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Vending Machine, a la ATM- jewellery ATM in this case at Shree Siddhivinayak temple in Mumbai
on the auspicious day of Akshay Tritiya (24th April 2012).
This gold and diamond ATM is a collaboration between Gitanjali Group and Siddhivinayak Trust,
which is ideally suited for last-minute purchases on auspicious occasions and for gifting, providing
instant, celestial gratification to the buying devotees.
Post selection, customers may decide to pay by cash, card or net-banking options. Once full
payment is made, the machine automatically dispenses the chosen product along with certificate of
authenticity and receipt for the same.
On the occasion of Akshay Trithya, Gitanjali
Group has joined hands with the
Siddhivinayak Trust to launch the Gitanjali
Jewellery Vending Machine (GJVM) at the
Siddhivinayak Temple.
Source : Indian Express, 24th April 2012
Fig.52. Gitanjali Jewellery Vending Machine (GJVM) at Siddhivinayak (Mumbai)
Paradigm Shift from targeting only urban markets to targeting rural
markets also- Bottom of the pyramid marketing
Around the turn of the century nobel laureate in economics Amartya Sen, had proposed the concept
of “empowerment,” arguing that economic development is fundamentally “the expansion of individual
freedom of choice” (Sen 1999). He inspired a shift toward empowering the poor as the key to a
lasting end to poverty.
After decades of programs designed around development theories proposed by economists,
sociologists and anthropologists, there is a new movement in the field—development approaches
proposed by scholars in business schools. Two events acted as catalysts. One is the late C. K.
Prahalad’s influential book ‘Fortune at the Bottom of the Pyramid (Prahalad 2005)’. The second
one is the award of the 2006 Nobel Peace Prize to Muhammad Yunus. Business Week named
Yunus (founder of the Grameen Bank and modern microfinance), among the greatest entrepreneurs
of all time, joining Bill Gates, Steve Jobs, Henry Ford, Thomas Edison, John Rockefeller and the
like. These high visibility influences have drawn the attention of large multinational corporations
(MNCs) and venture capitalists to the problems and potential of the BOP53
53
Bottom of the Pyramid: In economics, the bottom of the pyramid is the largest, but poorest socio-economic group. In
global terms, this is the 4 billion people who live on less than US$2.50 per day. The phrase “bottom of the pyramid” is used
in particular by people developing new models of doing business that deliberately target that demographic segment, often
using new technology.
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
65
C.K. Prahalad’s model is based on aggregating the demand of the bottom of the pyramid (BOP)
and equipping poor people with the microfinance to start and run businesses. According to Prahalad,
the purchasing power of the BOP collectively amounts to $8 billion per day, making them a multitrillion dollar annual market for the world’s products.
Prahalad recounts many business success stories such as Hindustan Unilever and ITC in India
which focuses on rural markets. The rural marketing strategies as discussed below:
Fig.53. BOP statistics
EXAMPLES OF RURAL MARKETING:
HUL’s Project shakti: HUL’s Project Shakti is unleashing the potential of rural India and thus
changing lives of rural population. Hindustan Unilever’s Shakti Entrepreneurial Programme helps
women in rural India set up small businesses as direct-to-consumer retailers. The model makes
use of existing Self Help Groups working in villages and appoints them as sales persons called
‘Shakti Amma’ to sell HUL products in villages.The scheme equips women with business skills
and a way out of poverty as well as creating a crucial new distribution channel for Unilever products
in the large and fast-growing global market of low-spending consumers. By 2010 the Shakti
network has reached 600 million54 consumers.
ITC’s E-Choupal: ITC’s foray into an enhanced distribution network to rural markets came from
the recognition that the existing agri-produce distribution channels were inefficient. The company
exports various agricultural products — soybean, rice and wheat, to name a few. In the year
2000, ITC embarked on an initiative to deploy technology to reengineer the procurement of soybeans
from rural India. Kiosks called e-Choupals — consisting of a personal computer with Internet
access were set up at the villages. Soybean farmers could access this kiosk for information on
prices, but had the choice to sell their produce either at the local market or directly to ITC at their
hub locations. By purchasing directly from the farmer, ITC significantly improved the efficiency of
54
Source:http://www.hul.co.in
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66
the channel and created value for both the farmer and itself. The e-Choupal infrastructure consists
of a kiosk with Internet access in the house of a trained farmer, called a ‘Sanchalak’. This kiosk
is within walking distance of target farmers. A warehousing hub managed by the former middleman,
called a ‘Samyojak’. This is within a tractor-driveable distance of target farmers. A hub location
services a cluster of e-Choupals.
Fig.54. ITC E-Choupal and HUL’s Project Shakti
Paradigm Shift from Marketing 1.0 to Marketing 2.0 to Marketing 3.0, a comparison
(Fig.55):
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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Fig.56. Marketing 3.0 components
(Source for fig.55 and 56: ‘From Product to Customers to Human Spirit- Marketing 3.0’ by Philip Kotler, Hermawan Kartajaya)
Paradigm shift from Marketing 1.0 to Marketing 3.0, where we see companies expanding their
focus from products to consumers to humankind issues where profitability is balanced with corporate
social responsibility (as mentioned by Philip Kotler in his book ‘Marketing 3.0’). This so called
human spirit-driven paradigm is truly evident from the recent launch of ‘Being Human’ clothing line
with tagline- ‘A clothing line with a heart, now in stores.’ Royalties from the sales will support
education and healthcare initiatives of ‘Being Human- The Salman Khan Foundation’.
Salman Khan launches flagship “Being Human” store in India
Bollywood actor Salman Khan on Thursday launched the flagship Being Human store in
Mumbai.From a T-shirt, Being Human has now grown into a full clothing line with its own stores.
The store has been launched in partnership with ‘Mandhana Industries’, with whom Salman
Khan has signed an exclusive worldwide licensing arrangement for Being Human-The Salman
Khan Foundation, to design, manufacture, retail and distribute Being Human fashion apparel.
The royalties received on the sale of this fashion line will go to support the education and
healthcare initiatives of the foundation.
The foundation would launch a chain of restaurants where its profits would be used for charity. On the
clothing line and restaurants, Khan said the idea was to get people spend for what they normally do.
(Source: Business Standard January, 18th 2013)
Research Monograph: Paradigm Shift in Marketing
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Paradigm Shift in Marketing Budgets- From major spend on
conventional media to increased spend on Digital media
Budgets have always been a delicate issue with companies especially when it comes to the Marketing
Budgets since justification becomes difficult. With the advent of new techniques like Social Media,
Mobile Marketing etc. for marketing products, companies often are in a tricky situation, analyzing
the best technique that takes the company closer to its objectives namely Profit Maximization,
Market share, High Brand Recall etc.
In today’s world a Marketing budget sounds incomplete without allocated budget to the social
Media. In India 1 in 4 Online Minutes are spent on Social Networking websites55.
Online Marketing Should Form 60% + of Marketing Budgets in 2013
A survey commissioned by ‘Edit Optimisation’ revealed that many businesses and organisations
should spend the majority of their marketing budgets on web based streams in 2013.
In a survey of marketing companies, consultants, analysts and digital agencies, the results
show respondents believing that on average 76% of any marketing budget should be spent on
web based and digital marketing.
Only 17% of the budget should be allocated to traditional advertising methods such as the
print, television and radio with the remaining money being held in reserve, to allow the marketing
department the flexibility to take advantage of any new opportunities that might arise during the
year.
On average respondents chose to spend 67% of their budget, on web-based activity, and only
33%, on traditional media advertising, with a significant number of respondents, ignoring
traditional media altogether.
(Source: http://marketing.siliconindia.com/news/Online-Marketing-Should-Form-60—of-Marketing-Budgets-in-2013)
55
ComScore article dated August 19, 2012 - http://www.comscore.com/Insights/Press_Releases/2012/8/
In_India_1_in_4_Online_Minutes_are_Spent_on_Social_Networking_Sites
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Fig.57.
Companies follow different ways to allocate Marketing Budgets. According to Neilson in their
Global AdView Pulse report fast-moving consumer goods56 (FMCG) companies accounted for
approximately a quarter (25.1%) of all ad dollars spent between January and September 201257
making it the largest sector by ad spend market share, with FMCG brands increasing their ad
spend by 6% in 2012.
Fig.58. Industry wise break up of Marketing budgets and FMCG Marketing Budgets
Source: http://www.thehindubusinessline.com/industry-and economy/marketing/article3487101.ece?ref=wl_industry-andeconomy.
Fast-moving consumer goods (FMCG): Goods that are sold quickly and are relatively of low cost examples : grocery
items, toiletries.
57
http://www.mandmglobal.com/news/01-02-13/fmcg-brands-account-for-25-of-global-ad-spend.aspx
56
Research Monograph: Paradigm Shift in Marketing
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In the March 2012 quarter, the ad budget for nine leading listed FMCG companies stood at 12.1
per cent as a proportion to sales. These companies spent 11.9 per cent in the same period last
year58. The rationale behind this increase was new product launches and reduction in raw material
prices59.
Britannia’s increase in advertisement spending for March-12 was due to variants of premium
biscuits. Similarly, Dabur India introduced new variants in its hair oils namely Anti Dandruff Hair
Oil and Cooling Hair Oil60 and shampoos in the second half of fiscal 2012, with the March ‘12
adspend-to-sales figure higher by two percentage points.
In the Electronic Industry Samsung outstood many companies in advertising and marketing as per
Horace Dediu at Asymco Consultancy in the article dated Nov. 30th 2012 in Business Insider.
This budget can be credited to the growth of Samsung in the Smartphone Industry.
Fig.59. Samsung’s Marketing budget break-up
Volvo to spend Rs 20 crore on marketing, will unveil Rs. 25 lakh car in 2013
Volvo Auto India (VAI) will bring its Rs 25 lakh car, V40 Cross Country, unveiled recently in
Paris, to India in March or April 2013 and increase its overall marketing budget in the country
from Rs 16 crore to Rs. 20 crore for the year 2013.
(Souce: The Hindu: Business Line- Dec 27, 2012)
http://www.thehindubusinessline.com/industry-and-economy/marketing/article3487101.ece?ref=wl_industry-andeconomy
59
Advertising on the upswing for FMCG companies in March quarter - The Hindu Business Line, June 3rd 2012.
60
http://smartinvestor.business-standard.com/company/direcrpt-3392-Dabur_India_Ltd.htm
58
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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Maruti Suzuki Will Enhance its Marketing Budget
The one of the largest advertisers of the car manufacturing industry is the auto giant Maruti
Suzuki, which increased its advertising budget by 12-15 per cent for the fiscal year 2012-13.
Maruti was the most active digital advertiser in 2011 with the Cricket World Cup and fourth
season of the IPL. ‘Maruti Cricket Maharathi’ had been the most popular campaign registering
45,000 app downloads last year, which was created by a mobile marketing company named
Affle. The digital advertising crossed over 10 percent in 2012. The automobile sectors have
crossed the advertisers of FMCG products and telecom industry in the year 2009 in digital
and mobile media advertising space.
The digital advertising by automobile sector is growing at a rate of over 100 per cent in India.
(Source: http://www.cardekho.com/india-car-news/maruti-suzuki-will-enhance-its-marketing-budget-7852.htm)
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History of Marketing: Timeline of innovation
1450: Gutenberg’s metal movable type, leading eventually to mass-production of flyers
and brochures
1730s: Emergence of magazines (a future vector of niche marketing)
1836: First paid advertising in a newspaper (in France)
1839: Posters on private property banned in London
1864: Earliest recorded use of the telegraph for mass unsolicited spam
1867: Earliest recorded billboard rentals
1880s: Early examples of trademarks as branding
1905: The University of Pennsylvania offered a course in “The Marketing of Products”
1908: Harvard Business School opens
1922: Radio advertising commences
1940s: Electronic computers developed
1941: First recorded use of television advertising
1950s: Systematization of telemarketing
1970s: E-commerce invented
1980s: Development of database marketing as precursor to CRM
1980s: Emergence of relationship marketing
1980s: Emergence of computer-oriented SPAM
1984: Introduction of guerrilla marketing
1985: Desktop publishing democratizes the production of print-advertising
1991: IMC gains academic status
1990s CRM and IMC (in various guises and names) gain dominance in promotions and
marketing planning,
1995-2001: The dot-com bubble temporarily re-defines the future of marketing
1996: Identification of viral marketing
2000s: Integrated marketing gains acceptance and in 2002 its first dedicated academic research
centre
(Source: Wikipedia- History of Marketing)
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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Here is the 25 P’s of Social Media we can think of:
·
Provide: Something of value...
·
Petition: Demand innovation, make folks, platforms, messages better!
·
Productize: Yes, new word! Make your offer easy to understand!
·
Promote: Your product, service, business, events, news (don’t over-do).
·
Personalize: Let them see the “real” you.
·
Participate: Interact and engage (your audience)
·
Play: Take it easy, it’s not all strategy... :)
·
Pace: Take it easy, don’t over do it. Just don’t!
·
Protect: Protect your brand, industry, service, peers
·
Plan: Yes, plan —don’t just do it!
·
Propel: Initiate discussions, bring the best out in people.
·
Pamper: Recognize players, collaborate, give credit where credit is due.
·
Partake: Answer questions, participate in discussions/chats.
·
Peer: Do not underestimate players based on their followers, community
·
Penetrate: Cover all aspects
·
Patrol: Entire landspace —correct & clarify statements and behaviors
·
Perform: Do it! Just do it!
·
Persist: Don’t give up!
·
Predict: Think what’s next...
·
Pioneer: Don’t hold back, try different things (white hat rule though!)
·
Practice: Don’t be afraid, practice makes man perfect; learnings await you!
·
Propose: Propose ideas, solicit business (humbly), ask for collaboration.
·
Punctuate: Don’t be afraid of repeating your point, though not bot-like.
·
Pursue: Follow up; be persistent to engage: to get answers, be heard.
·
Pay Attention: To influencers, trends, competition, customers.
Box: 25 Ps (Source: http://socialmediatoday.com/officedivvy/154631/25-pssocial-and-new-media-marketing
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Industry Speak
Paradigm Shift in Marketing
- By Mr. Deepak Agnihotri, Assistant Professor, DR VN BRIMS, has over 32 years of
multi-dimensional experience in the varied industries like Hospitality, Financial Services, Consumer
goods, Health-care, Engineering and software, working at key positions in Technology, Business
and Operations.
Marketing as defined is the process of communicating the value of a product or service to customers.
History tells us that Paradigm shift in Marketing have happened across various periods.
Paradigm Shift:
Era
Production Orientation
Concept
Supply created its own Demand
To
Quality of Product was considered to be
important
Product Orientation
To
Prioritizing movement of goods from plant to
customer achieving high sales turnover
Sales Orientation
To
Marketing
direction
Market Orientation
function
guiding
company's
To
Focus on customer, satisfying his needs and
making a King
Customer Orientation
To
Effort to retain existing customers rather than
acquiring new customers every time
Relationship Orientation
To
Social / Mobile Orientation
Using knowledge and theories of earlier eras
making real-time connections, establishing
social exchanges based on relationships driven
by consumers
A paradigm shift as we all know occurs whenever a new analytic framework changes the
understanding of the way a system operates. Marketing has been adopting these system changes.
For example an interesting element of this mystery is consumer Market in India has diverse languages,
regions, religions, economic and social status, and has always been a tricky proposition to
understand.
It is observed that the market is undergoing a paradigm shift due to India’s rapid economic growth
and promising demographics. The Indian consumer market is on a growth path and this growth
will be mainly driven by a favourable population structure and rising disposable incomes. Till now
the consumer market was mostly defined as a pyramid, a very small wealthy class with a taste for
luxury and high-end goods and services at the top, a middles-class at the centre and a huge
economically underprivileged class at the bottom. This pyramid structure of the market is slowly
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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Industry Speak
breaking up and being replaced by a diamond – a reasonably large affluent class at the top, a vast
population in middle class at the centre and a very little economically underprivileged class at the
lower end. Marketing has changed its way and value add is being done to all classes of society
rather than only the small affluent class at the top and middle class as earlier.
Example: Horlicks Asha, a health drink was promoted by adding 4000 sub-distributors with
special advertising campaigns of street play, and through movie screening.
HUL’s personal products unit initiated Project Bharat, the first and largest home-to-home
rural operation, where HUL had vans visiting across villages of the country distributing sample
packs comprising a low-unit-price pack each of shampoo, talcum powder, toothpaste and
skin cream priced at Rs. 15. This was to create awareness of the company’s product categories
and of the affordability of the products.
Amul is another case in point of aggressive rural marketing.
Some of the other companies that are making headway in this area are Coca Cola India,
Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation,
Cavin Kare, Britannia and Hero Honda.
Marketing has made changes to itself to deal with the needs generated by the paradigm shift that
have occurred in the family system – not only from joint family to nuclear family, but considering
various family forms such as homosexual marriages, communes, groups of elderly people coming
together to share expenses, tribal groupings, also contract marriages for short periods and even
live-in partners; from public housing to homeownership, from national health service to private
options, from government regulation to market mechanism, from welfare to workfare, from
collectivism to individualism, in political systems - from government monopoly to competitive
enterprise, from state industries to privatized companies, from government Security Plans to private
insurance and investment; healthcare – administering healthcare programs for communities and not
just individuals, changing treatment methods from allopathic to ayurvedic and homeopathy; man
management – change has occurred from personnel management to human resource management.
In education – the institutes have changed from the old paradigm of Teaching and Testing to new
paradigm of continuous learning and development, from education delivery to education management.
Earlier the teachers were expected to know everything and were viewed as the students’ natural
adversaries (perhaps as enemies), whereas today Teachers are experts in their own field applying
their insights as appropriate to real-life challenges and they are viewed as teammates and partners
in removing obstacles to student’s progress.
Development and advances in Information Technology has resulted in changed ways of working
for example:
Rail reservations, banking, scheduling, inventory, pay-roll, accounting and production, retail business
is virtually getting transformed.
For the petroleum retail sector in India, recent years have seen elementary changes in the way
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Industry Speak
business is being done. In India petrol has been a homogeneous commodity with a same price for
many decades. Consumers in India had never seen brands of petrol and different brands being
sold at different prices. Hence, there was no question of brand loyalty to exist and for them petrol
brands and different pricing are a new thing altogether. In the period of protection and control,
marketing of petrol actually meant distribution of petrol. In the name of marketing, petrol selling
companies strengthened their distribution network by adding more and more number of petrol
pumps to their network. Efforts made for expanding the coverage were considered as marketing.
Today, all of a sudden, they are not protected by the government and are exposed to the competition
from private players. Hence it has become necessary to keep a watch at the marketing strategies
of the competitors.
In sports - Indian Premier League (IPL) provides a paradigm shift approach of cricket marketing
in global cricket industry. IPL not only provides spectators with a fun, fast and is cost-effective but
has established the benchmark in cricket marketing, ensuring high cricketers’ salary, productive
engagement of all related stakeholders and a solid financial platform. IPL is based on the Twenty20
format of international cricket and tailored the marketing practices of English Premier League
(EPL) and American National Basketball Association (NBA). IPL concept has proved its global
acceptance, opportunities and increased revenue pattern as a paradigm shift in global cricket
marketing.
During old days of marketing, prospects would need to accept the product that was pushed and
provided to them. Consumers only had a few channels to get their information from such as local
newspaper, radio or TV station. The deal with those channels was, look/listen/watch my
advertisements, and I’ll show you the entertainment stuff you want.
This marketing paradigm is undergoing a dramatic shift.
Today, consumers have thousands of channels to get their information/entertainment from, namely
the internet. With intelligent search engines and social channels available to them, consumers can
hunt the content they want about a product or service, when they want to consume it and in the
form they want it; video being the most preferred form (after all, YouTube is the 2nd most popular
search engine).
The old Push marketing model is falling back. People want what they want, and don’t want what
they didn’t ask for. If the marketers keep pushing their adverts/ promotional material at prospects,
all they are doing is annoying them and creating a bad impression for their brand – for example the
number of emails that are deleted by an individual from the inbox everyday or close the browser
leaving websites because they didn’t give the information right away that was asked for.
In the new way of marketing, product or service providers create content that can be viewed
online and visually engage a prospect who interacts with that product or service content. The
prospect while browsing pulls the content on his display screen at his convenience drawing value
from the content, indirectly telling the vendor that a more in-depth information is required that
would stimulate his senses allowing him to make informed choice about the product or service.
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Industry Speak
Today’s consumer buys only from a trusted source. If the vendor is able to deliver the knowledge
value through the content he delivers, at consumer’s convenience, he becomes a trusted source
and a chance is created for the consumer to make a purchase. Every time the value is delivered the
trust relationship is strengthened.
Thus the new marketing paradigm is a lot like dating; wait to be asked, make the best impact, be
fun and entertaining, never lie and always do what you say you’re going to do. Believe it or not,
there are thousands of consumers looking right now for what is offered. They want to discover on
their own or by having a friend of theirs refer to them and they want to be impressed when they do
find what they want.
Example: If you want to buy a car you get all the information from carwale.com before you go
to the showroom or if you want to buy a property you visit magicbricks.com or
indiaproperty.com or any such source to get the required information. You do this at your
leisure, in the company of your family and friends where you discuss and satisfy yourself
before you set out to buy.
The future will not fit into the containers of the past. In the old paradigm media buying was, to a
large extent, about managing reach and frequency. With the advent of digital media, the banner ad
became digital analogue to the 30-second TV spot. Content marketing and mobile apps are not
merely new methods of seeking attention, but new possibilities to build assets in the marketplace
and increase consumer engagement. Brands today do not merely satisfy consumer’s need about
the feature or attribute of a product but have become partners by helping the consumers to get the
maximum utility and enjoyment out of their purchase.
Example: L’Oreal Paris, created the Destination Beauty channel on YouTube to give consumers
advice on how to use their products.
Another example is the Michelin Guides, which was conceived to help motorists get more out
of driving to new places;
Similarly American Express Open Forum gives small business owners advice on running their
enterprises.
Johnson & Johnson doesn’t just sell baby products. The Baby Center is an exhaustive resource
of parenting information and other baby tips provided by the brand.
The paradigm in marketing has shifted from intrusion to inclusion. Consider an advertisement that
once was considered as a disturbance, intrusion, is now considered as a part of one’s life as the
same is observed for getting more knowledge about the product for example: advertisement of
Colgate Sensitive toothpaste giving us knowledge on exposed nerves below the teeth and home
remedy for the same.
The paradigm has also shifted from transactions to relations with all the values focussed on the
eventual consumer. The marketing effort has moved from merely pushing the information to the
prospective consumer to creating a viral that appeals to consumer so that he/she gets pulled to
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Industry Speak
make a purchase - Transactional marketing emphasizes on the key marketing mix elements like
product, place, price and promotion within a functional context. The goal of each party is to
maximize the benefit received from each transaction.
Example: Ginger Hotel’s unique self check-in facility, which allows you to help yourself in
without any assistance from the Front Office, saving time and fuss is a recent example in India
of transactional marketing.
Other examples are Retail stores having self check-out facilities and Newspaper vending
machines abroad allowing dropping money and pick-up a newspaper are indicators of a
transactional approach.
The ultimate being an online shopping on Amazon where some browsing is possible but you
often know what you want, self-select and self-checkout.
Relationship Marketing Example - PEPSI launched an innovative digital marketing campaign
in recent days, where they actually used very modern ‘quick response code’ through mobile
phone technology. Customers were brought to a website they could download exciting free
gifts for their mobile phone very easily. This campaign allowed Pepsi to communicate directly
with millions of their customers in an innovative way. This kind of campaign actually allowed
Pepsi to gather more information on who are their actual customers, what they like, how could
they make long-term relations with them and much more.
Paradigm Shift in Marketing
Urban Markets to Rural Markets - Marketing to Rural Women
- By Kailash Chitnis, Visiting Faculty, DR VN BRIMS, has more than 25 years of experience
and has worked with Raymond’s Ltd. – Park Avenue Division, Mafatlal Textiles and banking
industry in the area of Marketing.
More than 60 years after India became a Republic, India has seen phenomenal changes. India has
gained recognition globally as a major player in the World Economy.
A ghastly rape galvanised the Indian Youth – especially the Young Women in India – this was the
Indian Women Power coming to the forefront – it was also a wake up call for all – The Government
– the political parties – bureaucrats and also for the corporate world – a message that a whole new
young generation was waking up to assert itself especially the ‘Young Women Generation’ including
the rural women. The writing is on the wall that 21st Century belongs to the Indian women and that
Indian women are going to be a dominant force in the Indian markets.
There are two shifts that are visible in the markets – (A) Shift from urban markets to rural markets
and (B) Shift from male dominance to female dominance – both shifts are very relevant to Indian
Marketers.
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Indian rural areas are showing considerable economic promise. This is the reason why many
marketers are interested in further penetrating the enormous rural hinterlands of India. The Indian
rural market is expected to touch 1 trillion USD by the year 2020.
More than 50% of LIC business comes from Rural India – so is also the case of BSNL. Rise in
rural incomes has increased the demand for niche products at low price points. Brands like HP,
NOKIA and GM are investing in new ventures to tap this huge rural markets.
There are almost 6.5 lac Villages in India. Marketing to rural consumers is an entirely a different
ball game. It is a misnomer that rural consumers want cheap products – rural consumers want
value for money (VFM) products. Rural consumers are highly value centric.
The biggest change that is being noticed these days in the rural markets is the changing role of
women in the villages. Rural woman has a mind of her own and is not afraid to express her opinion.
Various factors like increased exposure to media, education and exposure to various brands that
are now available to the rural women are definitely influencing her.
Several pioneering efforts carried out by companies like HUL’s ‘Project Shakti’ have encouraged
rural women to be entrepreneurs and have made Rural Women Financially active. There are many
brands which are focusing on rural women – Brands like CLINIC or FAIR & LOVELY and
WHEEL are targeting rural women as they are either decision makers or users of the brand.
Urban markets are getting saturated and therefore the focus is shifting to the rural markets.
Understanding the Consumer remains the key to marketing success even in rural markets.
Women are an important target group for marketers as they represent half of the population. In the
coming years women consumers are going to play a dominant role in the market because of their
emerging role in the buying process. Research has shown that if women are enthusiastic about a
product or a brand, they advertise it more than men.
Proper efforts to communicate to women does wonders to Brands. Thus, brands like KELLOGS,
HORLICKS and NIRMA have understood the importance of women consumers. KELLOGS
and HORLICKS have launched products specially targeting for women. Today brands have
penetrated upto tier II towns but with growing numbers – the rural women is going to be a very
important segment and it won’t be long before brands start wooing the Indian rural women.
Paradigm Shift in Marketing
- By Dr. Vishwas Joshi, Visiting Faculty DR VN BRIMS, has completed his PhD in Organic
Chemistry and has around 18 years of Sales, Marketing, and Techno-commercial experience in
Bulk Drugs, Intermediates, Agrochemicals, Speciality and Biocides in India and abroad in many
reputed companies like Searle India, BASF, Indofil and Rhodia.
1. From Transactional marketing to Relationship , Interactive , Experiential Marketing
Marketing’s original mantra is to”find needs and fill them.”
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Market is a very Living notion , belief or understanding of Customers , Society. Customers
in market derive their hypothesis about a Product , based on perception and Level of education
the Customer segment has. Let us offer to sale a bullock cart to a Mercedes Car owner and vice
versa. And this is a miss fit.
In the evolution of Market , We can categories Market Development phases as, First – Pre
historic Marketing phase , typically to cater the need and conduct the trade or transaction . A
simple farm to Customer type.. Second - Historic Marketing phase , which was a bit developed
compared to earlier phase and had a developed artisan base , in this phase various trade skills
based on artisan work were developed. Fine arts spread all over the world exhibits the evidence
of Turkey , Asian , Persian , Europian etc fine arts and development of commodities required by
Society and Kingdoms.
Then is Third – Industrial Age Marketing phase, invention was the base and Scientific concepts
were multiplying with geometrical proportion yielding a very Large base of consumer products
from Cycles , Automobiles , Pharmaceuticals , Printing machines and Aeroplanes.
Fourth is Information age Marketing phase, Patents, Data Management , Periodicals and a big
pool of Information base , which helped the product to Propagate its market base. This can be
said as Push Marketing.
Then Fifth one is the recent , Digital age Marketing phase, most of the products on screen , just
a click away and Logistically moving through digital signals. The physical movement of goods
follow , till customer satisfaction , payment realization and rejection and compensation.
Fifth and important is elaborated here and that is the objective of this Marketing phase is
Perception of value by Customers. Customer insight , share of Customers , purchase
facilitation. These concepts evolution has yielded to Customer relations , Perception and
Management of these concepts , while offering basket of the products - Customer centric
Marketing phase.
But how the supplier companies achieve this ? The company finds needs by listening to or interviewing
customers and then prepares an appropriate solution to each need , the end result is a Product , a
Service.
No Need Society………….
Today, however, there are few needs that companies don’t know about or how to address it .
Pietro Guido, an Italian marketing consultant, elaborated this concept in book he wrote , titled as
The No-Need Society .
There is an answer to the”no-need society”—that is, to create new needs. Sony’s Akio Morita,
in his Made in Japan, said:” We don’t serve markets. We create markets .” Consumers
never thought of Digital recorders, video cameras, fax machines, Palms, tabs , Laptops , and so
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on, until they were made. A successful experiment is done to cater needs of the customer , customer
perception improved by interaction and education .
Of course, new needs will emerge even if the old ones are satisfied. “Down-Aging.” As people get
older they want to feel and look younger, and this leads to buying sports cars, having plastic
surgery, and using exercise equipment. So we can distinguish between existing needs and latent
needs. Smart marketers will attempt to anticipate the next need and not only confine their attention
to today’s need.
Relationship of supplier , customer can be elaborated .Sometimes a need is obscured because a
company has taken too limited a view of customers. Certain dogmas get set in concrete, such as
the cosmetics industry dogma that women basically use cosmetics in order to look more attractive
to men. Along came Anita Roddick, who started The Body Shop with the assumption that many
women want products that will give good care to their skin. She added another value: that many
women care about social issues and will patronize a company that cares.1
Companies play strong role in teaching buyers , what they want………
Greg Carpenter and Kent Nakamoto have challenged a core assumption of marketers that buyers
initially know what they want.2Instead they learn what they want. And companies play a strong
role in teaching buyers what to want. Different brand competitors add new features to their
computers, cameras, and cellular phones that buyers may not have known of or asked for, and in
the process, buyers form a better idea of what they want. There are seven lakh aps available to
customers to use on mobiles , computers and palms. Such companies are not just market driven
(by customer needs), but are market driving (by innovation ). In this sense, competition is less a
race to meet consumer needs and more a race to define these needs.Being experimented on a
customer segment.
Consumer interaction and early market entrants……
Early market entrants (such as Xerox or Palm) often gain sustained market leadership because the
attributes they initially build into their products define the wants that were otherwise ill-defined.
Consumers see the attributes as defining the category. Late-entry competitors are forced to supply
the same attributes at a minimum gain as well as innovate new ones.Those who experiment on
buyer’s needs, gain more.
Marketing is satisfying NEEDS or creating them……….?
Marketing is offering products and/or services in order to satisfy existing needs.
However, sometimes needs are not so evidently visible, or even perceived by clients, in that
case company’s challenge is to “create” the market. For example, previous market research on
the launch of Sony’s Walkman indicated that clients did not see the Walkman as a necessity.
Analysts thought that the Walkman would be a failure.
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Similarly, before the launch of Apple’s iMac, customers didn’t see the aesthetics of computers as
a necessity. Computers were thought of as gray products. According to Apple’s market study, no
one thought that they would buy a computer based on how it looked. This creates some kind of
apparent contradiction.
Indeed, if company think that various needs do not exist but could be created in the mind of a
consumer, it may not seem necessary to do market research to identify existing needs. Then company
could simply try to convince clients that companies product is necessary. If the product is not
“seen” as necessary, the challenge could be communicating what clients should “see.” Then, any
product can be sold successfully, if presented well, which is not true.
So, how do you do to identify needs and satisfy them?
Needs can be divided in two groups:
z
z
Latent needs: Hidden needs that the consumers have, even though they do not explicitly
perceive or recognize them. These needs exist and can be revealed by an objective
analysis. In this case, there is a problem, deficiency or function that can be resolved or
improved with a product or service.
Perceived needs: Needs that the consumers recognize consciously and demands of
services or products that do not exist in the market.
With the Walkman, Sony was sure that “listening to music in any intimate and comfortable place”
was really an unresolved need, but people thought that it was too costly since they had not seen a
gadget like the Walkman before.
On the other hand, market research showed that computer buyers were not interested in external
designs. However, Apple suspected that aesthetic factors were features that people would value,
if they had the opportunity to do so. These examples show that when a company creates markets,
it doesn’t create needs, but makes latent needs, which already exist, into perceived needs. The
needs already exist!
Obviously, it is much more expensive and risky to commercialize products or services respond to
latent needs, because:
z
z
Company need more resources to persuade the clients or to make them perceive that
they need it.
It is complicated to describe latent needs, and the risk of making a mistake is very high.
However, although this path is costlier and riskier, it is clear that if it succeeds, profits can increase
significantly. Usually, the riskier is the more profitable.
Researchers are very good at generating ideas of products that are totally new. However, it is not
necessary to create new products to attain a competitive and advantageous position in the market.
Sometimes it’s enough to create a product or service that is already common, but with a rare quality.
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This is fundamental and company should understand that innovation or improving a product does
not necessarily have to be radical in order to succeed in the market. It is usually even better if the
change is not too radical, basic and fundamental , because otherwise company would have to
procure resources that company does’nt have in order to educate the clients on their own interests.
Paradigm shift from transactional to experimental
To summarise this Paradigm shift, let us understand Paradigm meaning . This is particular pattern
or model.A set of assumptions, concepts, values, and practices that constitutes a way of viewing
reality for the community that shares them, especially in an intellectual discipline. It can sometimes
be used more loosely to mean “the prevailing view of things.” And the shift within.
Why shift and drift happens…………………….
As explained above, Product or Service is a duplication of need. It replicates and replicates. Till
replication cannot happen. If we refer to above explanation that companies do not know how to
address certain needs. Mutation happens and The Change is generated. This is the basis of
evolution of the need and market and thus new product. This is where we experience Sony’s Akio
Morita’s pronunciation :” We don’t serve markets. We create markets .” A paradigm shift in
need and thus Market supply , product creation happens.
If this paradigm shift is positive , then the product and market has higher chance of survival , then
similar products and baskets of similar concept are generated and evolution begins. Of course this
is a continuous process.
So in simple format , identify the need , cater the need , continue to do so. At certain point
companies do not know how to address the issue and then new market , new product is created
, a paradigm shift happens in need and even in catering the need.
But why this drift of need or product happens. Here the rule of nature is , Change to survive. Survival
of the best and exclusive. Paradigm shift of market is happening from transactional to experimental
and from farm products to ipods to best cater the need and with survival of the best. As Market is
Living notion , change is a character of Living and thus a continuous process of drift and shift.
References
1.
Roddick, A. (1991).Body and Soul: Profits with Principles, the Amazing Success Story
of Anita Roddick and the Body Shop.New York: Crown.
2.
Carpenter, G. S.& Nakamoto, K. (1989). Consumer preference formation and pioneering
advantage.Journal of Marketing Research, (August), pp. 285-298.
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Paradigm Shift in Indian Pharma Marketing & Sales
-By Mala Raj, Visiting faculty, DR VN BRIMS, is a Senior Pharma Marketing Consultant at
Product Management Support Services. She has over 27 years experience in the Indian Pharma
industry in brand management, training, new product launches, business development and is also a
visiting faculty at BRIMS, Thane for Marketing subjects. (E mail: [email protected])
Introduction:
The Indian Pharmaceutical industry has witnessed an unbelievable growth from Rs 6200 crore in
1995 to over Rs 60,000 crores in 2012! Even when the other industries were bemoaning the
recession that gripped the world, the Pharma industry grew with double digit growth rates! With
the enforcement of ‘Patent Regime’, contrary to the expected slump in the industry, the industry
actually went from strength to strength. Is this a reflection of the better access to healthcare and
medicines or is it as a result of the rising affluence among the middle-class Indians who can afford
better medicines now or is it due to the efforts of the Pharma marketing and sales teams or does it
imply greater incidence of sickness and treatment in the country? This article aims at exploring the
trends seen in the Pharma industry, with particular focus on the shifts in the marketing and sales
techniques for prescription medicines.
Background:
Traditionally and even today, Pharma selling has always depended on personal selling and the key
figure in personal selling is the ubiquitous ‘Medical Representative (MR).’ The marketing team,
referred to as the PMT (Product Management Team) framed the brand strategies, prepares the
promotional inputs and trains the field-force (MRs, Front line managers & Senior Managers) on
the implementation of the same. Distribution was always routed through the stockists / distributors
and the retail chemists. Advertisement and promotion has to be only to the medical profession and
direct product promotion to the end-user customer (i.e., patients) is not permissible.
Increased Reach, Improved Availability:
In the 1980’s availability of medicines was quite restricted with few players in the industry and few
brands. However the 1990’s witnessed a sharp increase in the number of new entrants in the
pharma space and ever since, the pace of new entrants, new molecules and new brands continues
unabated.
Almost all leading companies like Nicholas Piramal, Cipla, Sun Pharma, GSK, Lupin, Cadila, etc
moved on from having a single marketing team to almost 10 divisions. The focus was on servicing
a particular specialty well with a full range of products that that specialty requires. This special
focus has been a key factor in driving the sales turnover. The field-force strength, which was
around 400 in most large companies in the 1990’s is now over 1000-1500 in most of the top 10
companies in the country.
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With the increased manpower, the reach and penetration of the market also improved. Availability
of medicines improved not only in cities but also in towns and villages. Companies like Cipla,
Lupin, Ranbaxy, etc engaged special task-force for rural marketing and medicines were made
available across the length and breadth of the country.
A Pill for all ills:
The product range offered has also grown tremendously. Companies moved from a molecule
driven approach to customer driven approach. For eg. 2 decades ago companies would have 1
good antihypertensive, 1 pain killer, 1 good antibiotic and so on, in their portfolio. But now, most
companies believe in having a brand of almost all the drugs that their target audience prefers to use.
So the same company has over a dozen antihypertensives (Lupin), over a dozen antibiotics (Alkem),
over 2 dozens anti-asthmatic preparations (Cipla) and so on. As a result we have nearly 20,000
companies, each having 50 – 100 brands each; with nearly 20 lakh formulations in the country.
The last decade has witnessed the launch of many new molecules in each and every therapeutic
category from the routine cough, cold, fever to the complex segments such as AIDs, Cancer,
Vaccines, etc.
Cut-throat competition and Declining Ethics:
Earlier, when the number of companies, the number of molecules and the number of brands were
far lesser, Doctors knew MRs by their names, names of their brands and the name of the company
they represented. MRs were respected by Doctors as a major source of information on new drugs
and better ways to treat diseases. The emphasis of the marketing efforts then was towards brand
building. Product knowledge was conveyed to Drs, with a few samples left behind for trail purpose.
Prescription support was requested based on the merits of the brand.
Soon, with the manifold increase in number of companies, it became very difficult for the Dr to
meet the growing numbers of medical representatives. From a meager 3-4 MRs seen in a day, a
leading Dr now has over 20-30 MRs waiting to meet him. Is it humanly possible for any Dr to
remember the brand names and their contents and the features of the 3-5 brands promoted by
each of these 20 MRs on a daily basis? Nearly impossible and this led to a total change in the
marketing approach adopted by the pharma companies.
From dissemination of knowledge, the focus shifted to brand name registration using inducements
of all kinds. Prescriptions were demanded based on mutually agreed arrangements. Doctors are
showered lavishly with all inducements to prescribe brands and they in turn have learned to demand
more and more from the industry.
As a result, all the principles laid down by Kotler and his likes have been pushed far behind to be
replaced by ordinary give and take deals. This is going to be the Achilles heel for the industry. It
has eroded the status of the MR and the image of the pharma industry.
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Similarly on the distribution front too, companies begun giving more and more bonus offers and
discount schemes to stockists and chemists in an attempt to make them stock and sell their brands.
This practice of offering excessive bonus schemes to the trade is also proving to be a wasteful
exercise, which ultimately affects the profitability of the brand and of the organisation.
Positive Shifts in Promotional Style & Content:
A few commendable changes noted in the decade include the trend towards dissemination of
information for new drugs by way of symposias and conferences. Indian Doctors were treated to
educational seminars and launch conferences of various drugs with eminent speakers from all over
the world addressing them on latest improvements in the field of medicine.
Extending the reach of pharma marketing to include the end-user customers, by way of detection
camps and awareness campaigns was also a step in the right direction. For eg. Cipla sponsored
Asthma detection camps, Lupin sponsored BP camps, Bone mineral testing camps, and so on.
Diagnostic camps for early detection of various diseases has enabled many begin appropriate
treatment early and curb the disease in the initial phase itself.
From the era of ‘print’ promotion, Pharma moved on to digital promotion in a limited way and a
few also experimented with the use of social media for promotion of their OTC pharma brands.
This is the media of the future and very small steps have commenced in this direction.
In Conclusion:
It is said that the only constant thing in this world is ‘change.’ The environment is changing, the
medical profession is changing, the customers, i.e., patients are getting more enlightened and are
willing to question the Drs, awareness of generic medicines (& their lower rates) has increased,
people are discussing health issues and treatment in various social forums on the net…the list is
endless. A sharp marketer will look for innovative ways to build his brand in the midst of all these
changes by focusing on the needs of his customers, the Drs, and delivering that in a powerful and
persuasive manner.
The industry needs to be guided by principles of fair play and evolve together to set standards
which will help us restore the image of the industry to one of serving the patients of the country
rather than one of exploiting the illnesses of its citizens.
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DR VN BRIMS Annual Seminar and Workshop
Paradigm Shift in Marketing, as delineated and unravelled, in this research monograph, should
help organisations, professionals, students, teachers, researchers and all those interested in the
domain of marketing, its allied areas and new forays to:
1.
Identify the nature, scope and conceptual framework of the marketing function in current
and emerging times vis-a-vis the historic profile;
2.
Identify the paradigm shift in marketing over the years and understand the raison d’être
for the same;
3.
Explore research evidence in favour or against any paradigm shift and the lessons from
the same;
4.
Understand the changing profile of marketing from the perspective of advertising including
the emergence of a powerful tool social media, the reasons for, and messages from, the
same;
5.
Understand the impact of Information and Communication Technology (ICT) on the
marketing function;
6.
Focus on the changing profile of customers, their behaviour, and how marketers
understand, respond and adapt to respond to the ever changing customers’ needs in a
customer driven environment;
7.
Identify the state-of-the-art with respect to the mode of operation of the marketing
function and its significance for various marketing / business decisions vis-à-vis ICT and
digital maturity;
8.
Assess the resource effectiveness of marketing efforts and the challenges for enterprise
on a global basis in the context of increased accountability of marketing performance;
9.
Realize the dynamic, flexible and volatile dimension of the business environment and the
need for businesses to respond and align their marketing strategies, in decreasing response
time, on a pre-emptive basis;
10. Asserting the impact of progressive liberalization, privatization and globalization policies
across the world, on the shifting paradigms and the implications for marketing strategies
in terms of balancing between profit motivation, customer delight, social inclusion, along
with ethical and responsible marketing management in all segments of society for all
products and services;
The Seminar/Workshop will address each of the above issues in turn and should provide value
addition to students, teachers and other stakeholders like management institutes, other individuals/
groups and institutions concerned with marketing and allied areas viz. advertising, logistics, market
research and particularly new forays in marketing viz. retail marketing, online marketing, rural
marketing, mobile marketing et al.
Research Monograph: Paradigm Shift in Marketing
88
The specifics of the seminar ‘Paradigm Shift in Marketing’ will address:
1.
Role of the marketing function in current and emerging times in sustaining the competitive
edge of business.
2.
Paradigm shift in marketing as presented in the monograph in terms of:
¾
Product management
¾
Advertising management
¾
Sales management
¾
Changing dimensions of marketing function and management industry-wise
¾
Implications of ICT for marketing
¾
Strategic marketing management in particular and marketing management in general in
enterprises functioning as learning organization in a global knowledge society
¾
Socially and ethically responsible marketing
¾
Best practices in marketing
¾
Inclusiveness -social, gender, economic strata, demography, marketing-mix et al.
¾
Virtual markets ,customers and suppliers
VPM’s Dr. V.N. Bedekar Institute of Management Studies, Thane
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Bibliography
1.
Philip Kotler, Hermawant Kartajaya, Iwan Setiawan, ‘Marketing 3.0- From Products to
Customers to Human Spirits’, Times Group Books, New Delhi, 2010
2.
Peter F. Drucker, ‘The Practice of Management’, Allied Publishers, New Delhi, 1978
3.
C.K. Prahlad, ‘The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits’,
Wharton School Publishing and Pearson Education, New Delhi,2008
4.
Al Ries, Jack Trout, ‘Marketing Warfare’, Tata McGraw Hill, New Delhi, 2012
5.
Philip Kotler, ‘FAQs on Marketing: Answered by the Guru of Marketing’, Marshall Cavendish
Business, 2005
6.
Walker, Mullins, Boyd, Larreche, ‘Marketing Strategy: A Decision Focussed Approach’, 5th
Edition, New Delhi: Tata McGraw-Hill,2006
7.
Kevin Lane Keller, ‘Strategic Brand Management: Building, Measuring and Managing Brand
Equity’, 3rd Edition, New Delhi: Dorling Kindersey, licensees of Pearson Education in South
Asia,2009
8.
Madhukar Shukla, ‘Competing Through Knowledge: Building a Learning Organisation’,
Response Books,New Delhi, 1997
9.
Schiffmann L.G., Kanuk L.L., ‘Consumer Behaviour’, Pearson International Edition, New
Jersey. 2009
10. Philip Kotler, Kevin Lane Keller, ‘Marketing Management’, Pearson Education International,
London, 2009
11. Rita Cliffon, ‘Brands and branding’, Profile Books, London, 2009
12. Adam Smith, ‘The Wealth of Nations’, Kindle e-Books, 2005
Research Monograph: Paradigm Shift in Marketing
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EVOLUTION OF LOGOS: THE CHANGING FACE OF MARKETING
“A Customer is the most important visitor on our premises. He is not dependent on us.
We are dependent on him. He is not an interruption on work, he is the purpose of it.
He is not an outsider on our business, but he is a part of it. We are not doing him a
favour by serving him, he is doing a favour by giving us an opportunity to do so”
- Mahatma Gandhi
D 9
Daringly Brilliant
Vidya Prasarak Mandal’s
Dr. V. N. Bedekar Institute of Management Studies, Thane
“Jnanadweepa”, Chendani Bunder Road,
Thane (W) - 400601, Maharashtra
Tel: (91-22) 2536 4492 Fax : (91-22) 2544 6554
Email : [email protected]
Website : www.vnbrims.org