channel management ..overview

introduction to channel concepts , an overview ..happy reading

http://www.scribd.com/doc/22791098/Introduction-to-Channel-Management

some interesting marketing successes of 2009 in India

Hi sharing with you all..was reading the BW , Nov 2009..thought it would be interesting to share..what is important that each of these successes .. they have a unique differentiation ..something which was clear to them and the consumers ..have fun

2009

• Consumer was seeking value and looking at fundamentals more than emotional connect
• Most companies emphasized on basic 4 P’s which became even more important –with 3 P’s of process/people/physical evidence becoming more important
• Starting April 2011 , valuations of brands will have a significant role in company valuations , & companies will have to report the growth in brand valuations & this would place the onus directly on the management

Samsung

• Launched 225 products in 2009 against 2000 the year before
• It is closing the gap effectively with technology breakthrough / products customized to Indian needs
• They made an exclusive 32” LED TV for Indian customers as Indians have smaller rooms
• They target to lead in product innovation space & be relevant to consumers

Aircel

• Till 2006 it was just in 2 circles with 2.2 million consumers
• Positioning was on non-voice uses –pay bills/book tickets/network with friends
• Monthly susbscriber additions have doubled from 600,000 6 months ago to 1.4 million

Rahul Gandhi

• Congress launched him as their marketing weapon
• He has added a new constituency” the youth “
• Shows freshness , sincerity , positivity – all of which is a rare combination amongst the politicians
• Political scion gifted with a glorious smile

Virgin Mobile

• Decided to target youngistan – focused exclusively on youth
• Focus on communication where the youth “ gets around “ not necessarily rebels ..they find a way
• Introduced many first “ including ..get paid to receive a call” -Cut clutter
• It has achieved a 92 % awareness , and 69 % consideration a year since its launch

LIC

• Their nearest competitor is less than 1/ 10^th of their size
• They increased their MS from 60 to 67% last year
• Their IMC initiative was through its people – they decided to give a select band of its agents the title of chief life insurance advisors ..and task them with appointing and mentoring agents ; hitherto the prerogative of development officers
• They created an army with brought about Rs 700 cr of business last year

Ghajini

• It raked in Rs 90 crores in the ist weekend of its release
• Marketing cost was Rs 7.5 crore and the global box office offtake Rs 260 crore
• They homestly told the consumers what to expect through a major use of IMC – Aamir’s physical appearance , the haircut , the in cinema visibility ; ushers having a similar haircut
• The audience was prepared for what they were going to see

Rakhi Sawant

• From an item girl she became the biggest start for NDTV imagine
• As a brand she is brash , crude , willingly flaunts her unsophistication
• Her appeal connected with the masses

Consumer Behaviour ,Response to Communication Stimuli

Hi

this is collated for a quick review , understanding of the same.

http://www.scribd.com/doc/20363403/Consumer-Behavior-to-Communication

A lot of understanding is drawn from "An Integrated Marketing Communications Perspective" from Belch & Belch

Integrated marketing communication process

With the media getting fragmented , budgets getting squeezed , consumers getting distracted an effective way being focussed nowadays is to target consumer touchpoints .

•

•

Involves coordinating various promotional tools ,marketing activities to form a message , rather than only relying on media advertising

–-Get the consumer at touchpoints

–-Avoid duplication

–-Consistent message for the product /brand

–-Maximise the ROI ,more cost effective

–-Leverage on changing environment /behavior

–-Focus on actual purchase /trials

Tools of IMC

•

-Advertising

•-Direct marketing

•-Interactive/internet marketing

•-Sales promotion

•-PR

•-WOM

•-Personal selling

•-BTL

-POS

•IMC planning process

-Review of marketing plan

–-SWOT :environment/competition/TG/product/distribution/ manpower…

•-Define the product message /TG/objective

•-Understand the best mix of IMC basis the product /message /TG

•-Understand the budget

•-Develop IMC

–-Message /strategy/tools of IMC/adapting the message

•-Integrate the IMC strategy/execution

•- Monitor/evaluate & control the IMC

POS

Participants of IMC

- Advertisers

•-Agencies

•-Media companies

•-Marketing communication specialists

•-Collateral services

Process towards defining the IMC for a product

• understand : opportunity /competition/target market-TG
• identify target markets - segment /define the positioning /product benefits
• product decisions- product/pricing /packaging /placement-distribution channels/promotional activities/people/processess
• elements of IMC which maximise the consumer touch-points and enable objectives
• monitor /evaluate /replan

•Consumer decision making process which IMC influences

•-Problem recognition need/repeat purchase/desire/greed

–-maslow’s heirarchy

–-Psychoanalalytic theory –sigmund freud

–-MR probes needs-in depth interview/FGD/associaiton tests/projecting techniques

•-Information search

•-Alternatives evaluation

•-Purchase decision

•-Post purchase evaluation –cognitive dissonance

•-Recommendation-WOM

examples abound

-Nano launch (Tata) ,Ghajini (Aamir Khan) , Virgin Airlines (Richard Branson) ,Hero Honda ( MTV roadies )

Depending on the stage of PLC of a product , IMC can work to address objectives like -

St

• awareness
• Recall
• Trials
• Informative
• Consumption
• Repeat purchase

St

•

Celebrity endoresements

With more and more companies thinking it as the way to break clutter , it is relevant to reflect on the same.

•Stage of the product - It depends on what stage of the product life cycle is the brand in.

•

•Is it a strategic decision over 4, 5 years- brand value must remain consistent with the value of the celebrity being endorsed in terms of personality, positioning. So even if the celebrity changes the values remain consistent ..

•

•Celebrity–brand match: , strong enough so that the endorsements are able to strongly influence the thought processes of consumers and create a positive perception of the brand ?

•

•Constant monitoring mechanism : Are we able to monitor the behavior, conduct and public image of the celebrity continuously to minimize/maximize any potential.

•

•Brand over endorser: should ensure that this does not happen by formulating advertising collaterals and other communications

•

•Celebrity endorsement is just a channel: it is one part of the communication mix that falls under the broader category of marketing. I have observed that the teams/ sales /CP

•

•Celebrity ROI: should have a system combining quantitative and qualitative measures to measure the overall effect of celebrity endorsements.

Small SKU's are again the darling of the consumers..The Magic Price point -SMALL is buyable

Good day biscuit - Rs 5/- ;Nestea at Rs 2/-; Lux at Rs 10/-; pepsico has started advertsising its Kurkure in packs of Rs 3/- and Rs 5/-

The escalating prices have forced the consumers to lap the low ..CONVENIENTLY priced small vol units . Companies like HUL,ITC,Frito lays ,Britannia are all encouraging the same .Last year claim the companies the small SKU's contributed around 25/30% of their sales.

Cigarette companies/confectionary companies /haircare companies have all been working on convenient price points for a long time . It helps substitute for - change which is not available / it helps dispose of unnecesary Rs 2/, Rs 5/, Rs 1 coins ...it helps define the price points for the companies .Earlier when 10p/20p/50 p was available the pricing of cigarettes/toffees/chewing gum was such .Later on with the shortage of coins it started moving towards the most conveniently available coin.

However nowadays affordability /accessability alongwith

-the inflationary pressures on prices of products

-the choice /options/variants available

-the reduced shelf space to stock

-the reduced space to merchandise

-abundant distribution

all of it makes a small conveniently priced product a good option for generating trails /repeat purchase and the acceptability of a consumer to stock multiple variants.

Changing Rural Markets –have we noticed ?

As of 2005 , urban areas accounted for 52% of India’s NDP ,despite having just over one quarter of the population. Although the primary source of income is agriculture in the rural areas , the economy is more diverse in terms of the economic output .

Traditionally rural / urban markets are considered in isolation by FMCG companies . During drought since the PPP drops , so do the targets , conversely when the industrial activity slows down , the focus is renewed on rural markets .

Is it really the case ?

• Has the transformation been mapped ?
• Or are the companies limited in their reach of products
• Are the company personnel unable to travel the rural markets since it is a “tough” non AC terrain
• Have the marketers really talked to the rural consumers to see what their drivers are ?

The rural markets are becoming prosperous . The “bottom of the pyramid” is expanding

In the past 4 /5 years the economy has improved in these markets on account of better support prices , normal monsoon, escalating real estate prices income emanating from activities in towns are sent back .

The aspirations of the rural today mimic those of the urban consumers. The emergenceof modern retail trade , the growing demand for ready to eat food , the exposure through C&S network , penetration of colour televisions seem to transform the needs. Today girls / women wear less sarees and more salwars/jeans , for it is trendy and apparently more comfortable .

Improvements in infrastructure , rural connectivity on roads ( which from 40% in 2004 is today at 70% ), mobile penetration , improvement the cross migration of the rural –urban consumer into real time situation , all contribute to an aware rural consumer .

As the younger generation grows , the inability of the fsarm to support a family forces , family members to move away from the agricultural income .as the proporation of non-agricultural income grows , and dominates the character of consumption changes .The evidence points to the PPP of a rural consumer coming from dual sector = agriculture+ non agricultural activities.

BW reaserach ,based on data provided by Indicus Analytics , CMIE finds that less than 10% of the FMCG business is actually susceptible to the vagaries of the monsoon .

Knowing consumer behavior is the key , so do the traditional consumer companies approach the rural markets from a sales /distribution perspective rather than a marketing understanding ?