Download Model Construction and Operation Mechanism of Non-mainstream

Model Construction and Operation Mechanism of Non-mainstream
DONG Jing, ZHANG Wensong
Economics &Management School, Beijing Jiaotong University, Beijing 100044 China
[email protected]
，
Abstract: The paper is based on the theory of consumer preference, diversification, and
non-mainstream. The paper puts forward and defines a new idea of marketing—non-mainstream
marketing by the concept of non-mainstream and customer personality. The paper studies on marketing
mode and operation mechanism by an analysis of marketing mode and operation mechanism combined
with cases, and then gets a conclusion: corporations should pay attention on the development of
customer personality and consumer preference, implement the new theory of non-mainstream, and break
the sale mode which is formerly singer and standardized.
Key Words: non-mainstream
consumer preference non-mainstream culture
tail marketing
1. Definition of non-mainstream
As is well known, mainstream means that it is a dominant pole and is accepted by the majority
public. By application of this concept, mainstream marketing means that corporations position target
groups and marketing objectives such as Standardization strategy and Pareto’s theory according to the
vast majority of consumers. However, as clothing industries made a successful application of
non-mainstream elements, people began to pursue personality that made non-mainstream popular once
again. Non-mainstream culture belongs to Sub-culture, which has different definitions in Different
industries and different academic fields. In clothing industries, they define non-mainstream culture as
【】
avant-garde clothing with those unconventional style 1 ; in economics, non-mainstream is in contrast to
mainstream, which means theory or doctrine that are non-competitive and non-dominant in a certain
period and region【2】.
Although management scholars have been aware of the non-mainstream idea, research has only
been limited to specific products or specific industries, and has not yet formed a complete system;
therefore, non-mainstream has been not clearly defined until now in management sector. Because of
non-mainstream culture being rooted in the development of consumer preferences and personality, the
paper makes such a definition of non-mainstream culture as a sub-culture formation formed when
consumers release personality and display anti-traditional values with a rebellion of traditional
mainstream cultural.
With the non-mainstream culture rising, producers begin considering demands of consumer
personality as a basic element under technical support, so producers must change original and standard
sale mode for meeting customer demands into the non-mainstream marketing era. Non-mainstream
marketing is called as a marketing idea which stresses on adaptation to demand regression of consumer
personality under the impact of non-mainstream culture. In essence, non-mainstream is not a signal
model or strategy but a new marketing idea. The idea is guided by consumer demand and experience
with an objective of maximizing enterprise value, so that enterprises really consider wishes and needs of
consumers while going on marketing planning, and from consumers’ view, corporations will change
passive acceptance into the initiative in order to marketing results.
Non-mainstream marketing has a system of multiple objectives. Therein, the final objective is to
maximize profits and value of enterprises, which is the purpose of existence and also the survival of
enterprises; secondly, the basic goal is to increase the market share so that business can expand market
popularity and customer loyalty. That is because sale revenue is the majority resource of profits.
Marketing department do not maximize their market share and market power while establishing a good
marketing image until business can expand and consolidate their brands and the basic goal; otherwise,
the “third party” goal is an improvement of added value on customers— when enterprises go on sale,
they not only consider the present profits but also consider the development space; therefore,
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corporations need a new consideration on marketing positioning and direction from consumer view, and
try to enhance consumer demand for personalized experience and effectiveness as well as the
added-service.
2
Marketing model of non-mainstream
Generally speaking, marketing has different objectives, but their basic goal is to enhance market
share and market rate; on the other hand, for enterprises, marketing considers the market positioning and
direction mainly based on consumer demand and acts preferences and then makes the decision of
product-making and services. And marketing model means patterns of behavior and mode of thinking
adapted by enterprises when they keep on marketing activities. Behavior patterns include marketing
strategy, marketing, etc; and thinking mode includes various marketing ideas. In addition, another theory
is market segmentation which is proposed by Wendell R.Smith(American)in the mid-1950s and also
means a classification process to consumer –market that through market research, marketing section
divides the overall market into particular consumer-market according to difference on needs and desires,
buying behavior and purchasing habits of consumers, so each group or even one consumer is a market
segment designed by enterprises.
Based on the four principles-- marketing objectives, mode of thinking, marketing basis, and market
segmentation, non-mainstream can be divided into three models: customized model, characteristic
model and tail model (Table 1). Thereof, customized model focuses on demand personality of
consumers, and characteristic model focuses on mental preferences, while tail model emphasizes on
market segmentation. Of course, if enterprises confirm and lock market segmentation as well as target
groups, they must integrate various resources such as product research, production capacity and market
competition. The paper will integrate these four factors to make a choice of marketing mode.
Table one customized model, characteristic model and tail model
Productresearch,production capacity
Degree of market competition
Degree of market segmentation
Consumers’ demand personality
mental preferences
Tail model
Customized model
Characteristic model
(1) Customized model
Customized marketing model, known as the "one-to-one" model, is that corporations make use of
networks to obtain consumer demand for personalized information, and then play product development
on their own and flexible production capacity so as to supply unique products and service for what each
consumer wants. Customized model is characterized by the use of network information system to record
information of every customer. With the use of information system, enterprises can keep two-way
contract with customers, in order that enterprises can clearly understand the specific request on products
and services of each existing customer and potential customer. Then enterprises go on a new design of
product and production in accordance with these specific demands and requests, and they modify
products with feedback information for customers to provide personalized products and services. For
example, they are practitioners of customized model and also beneficiaries such as Motorola pager
production workshop, "Buick Vehicles" production line in Shanhai, Dell assembly line, Reeves jeans
shops, and the Ritz.
(2) "Characteristic" marketing model
Characteristic model is based on some common characteristic of customers or characteristics of
related matters (such as age, size) to divide consumer groups, tracking and designing sales model of
products suitable for consumer hearts. The advantages of this model are that enterprises can make use of
their own classification they have set to divide consumer groups and to track designing product line. If
so, those enterprises will be more conducive to enhance consumer loyalty and strengthen emotional ties
between target groups and the brands for their purposes which are to serve markets and also create a
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new potential market on the basis of the original market. For example, companies such as cosmetics can
especially design products line for women born in the 1970s. These products line include the products of
all ages in use: young series, middle-aged and older series. Many large companies will guide customers
to choose their products for improving customer loyalty according to the existing customer information,
and make a declaration “especially design for somebody”.
(3) "Tail" marketing model
In the "U"-shaped curve, tail is also called as the edge of the curve, so tail model can be described
as edge model. It means, in the fierce market competition, producers make full use of the secondary
market as the chances to focus on, and study the psychology and behavior in the costumers for meeting
their demand, making a result that a product can be formed without being replaced for avoiding strong
competitors (Figure 1). Tail marketing makes companies understand their own advantages and target
groups more clearly than before who have the same characteristics of the demand. Because of these
traits in tail model, enterprises, especially small and medium enterprises, can make a more clear
marketing objective, and then make an in-depth understanding of target groups to confirm the consumer
personality; and based on these customer demand requests, enterprises formulate a marketing strategy
and product sales, so that they can acquire market share while improving product visibility in the niche
market targeted.
There are different applications in marketing practice to this model; the well-known niche model is
the flexible application of the tail pattern. In the 1980’s, scholars in the United States introduced this
“niche model”. “Niche” has a meaning like this—sticking in a pin wherever there is room, so niche
model is called as “marginal marketing”. This marketing mode regards a small piece of the market
(niche market) which competitors are not concerned about as a specialized service object, and tries to
meet a variety of demands for products so as to form market products which are not replaced by other
companies. Niche model has the traits of timeliness and practicality which makes it popular in SMEs,
and many companies made a success with this model such a good example as Mengniu. Mengniu was a
very small private enterprise, and at the beginning of undertaking, Mengniu did not choose to give Yili
tit for tat but choose to the weakest product of Yili—Li Lezhen, then Mengniu tried to make this market
bigger and stronger, so at last Mengniu kept a footing in milk market of China. Until now, Mengniu
gave Yili tit for tat not the product of “Li Lezhen” but the product of “Bai Libao” and “yoghurt”.
Consumer
quantity
Fierce competition
Tail-weak
Tail-weak
Figure 1 tail-marketing model
3. Operation Mechanism of Non-mainstream
Consumer preferences and demands personality plays a core role in the process of marketing
mechanism. Consumer behavior theory holds if customers go shopping, the root cause of
decision-making is internal stimulus such as psychological preferences. Buyers will probably make a
buying behavior until they have some awareness of demand under external stimulation such as
marketing activities. The whole process is demand -- motivation - cognition - buying behavior. It needs
another important factor for the realization of the process: the target market. During the end of the 20th
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century, the world entered into the wave of liberalism which brought into pluralistic era not only social
or business but also politics or economy. Under the background of environmental change on culture and
industries, companies build pluralistic goals, and because of changing demands, enterprises have to se
up information system of consumer transactions. Based on the guide of customers’ demand to position
target market, enterprises should apply comparative advantage to confirm market positioning for
avoiding opponents and distributing resources.
Before enterprises implement non-mainstream marketing, they need correctly analyze existing
resources, capabilities and external competition in the market, and then provide customized products for
customers after grasping demand preferences. Therefore, companies need focus on understanding of
needs and personality preferences of each customer, and according to these information design product
concept to launch marketing. If the result in the test marketing reach to the expected market rate, that
bears out that design concept is feasible and enterprises can carry out production; on the other hand, if
market rate is not satisfactory, salesmen should provide unsatisfied feedback to enterprises so as to
design new products until the goal of customer satisfaction (Figure 2). When companies receive
feedback, the whole process constitutes a closed-loop system of value chain, so we can understand
consumer dynamics, improve management efficiency and reduce logistics costs.
Customer feedback
Customer information
system
Design product
Choose
concept
distribution
Unfeasible
Customer
feedback
Product
test
Figure 2 the closed-loop system of value chain of non-mainstream marketing operation mechanism
4. The Case analysis based on the operation mechanism
Hong Kong CSL is a pioneer in the field of mobile communications. She launched mobile
communications services back in 1983, and now she offers GSM / WCDMA mobile network. CSL is
regarded by public as the first supplier to adopt the clear strategy of market segmentation. Trough the
two brands—“1010” and “One2Free”, CSL provides different mobile services suitable for customers’
demands. The paper will analyze operation mechanism of non-mainstream marketing with the CSL case
above.
(1) The construction of customer information system
Before CSL designs the brands, it makes a detailed survey over the existing and potential
customers, not only including the mobility, demands of voice and demand factors but including personal
factors such as daily life, the purchase psychology and use mobility. According to this information, CSL
builds up the information system avoiding the information asymmetry between company and customers.
(2) Product positioning
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At first, CSL depends on mobility to divide customers into two types: liquidity and non- liquidity.
Secondly, CSL makes segmentation on non- liquidity market based on such factors as the mobility,
voice and daily life, dividing into two niche markets: “business group” and “high Value social group”.
Business groups focus on success, personality and taste, so CSL designs “1010” directed at this group to
show “I am number one”; aimed at high Value social group focusing on freedom, personality and trend,
CSL specially designs the brand--"One2Free". If so, young customers can recognize their own group
and freedom only from the name of brand.”2” is the gesture of “Victory’ standing for pursuing freedom.
And these brands match CSL’s resources.
(3) Product identification
It needs recognition of consumers if products reach market rate. Achieving the expected goal, CSL
offers different service options with the two niche markets (Figure 3). Through various marketing
activities, CSL achieves the expected market share, showing the success of product design.
Service
Charge choice (Hong Kong dollar)
After-sale service
Advertisement
Community service
Figure 3
1010
Fees from 360 to 1,480
1010 Centre, personal assistant services
Pianist playing music
Customer Club
One2Free
Fees above 228
-----Message story
-------
5. Conclusion
Modern marketing has entered into the stage of the consumer-driven market and organizational
structure after experiencing two phases. With the impact of non-mainstream culture and the research on
consumer behavior, non-mainstream idea is attracting more and more attention of industries. Seen from
the case above, enterprises have begun to follow the personality characteristics and preferences of target
group for designing and selling products, through the overall grasping the "personality" to break
standardized sales model and implement "one-on-one" services, enterprises will create a new
opportunity of market.
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