Showing posts with label Marketing Strategy. Show all posts
Showing posts with label Marketing Strategy. Show all posts

Global Convergence of Consumer Tastes – Fact or Fiction?

Saturday, 10 August 2013

There's a secret dream that every international marketer's heart harbours, whether it remains a distant dream for long or not is the question. The underlying thread that weaves through all the hype surrounding catchphrases like ‘glocalisation' is but the convergence of consumer preferences globally. And that's sort of the holy grail of international marketing!

TL;DR version : Global convergence of consumer preferences is a reality we're witnessing each day. This has profound implications for international marketers. Concerted strategic marketing efforts can shape & drive this convergence.

The global village

Holy Grail, eh? Just break it down for me, would you?

Global brands and standardization
The ‘Global Village' is no more a myth thanks to the rise of global capitalism, falling of barriers to international trade, increasing interconnectedness and a cross-fertilisation of ideas, which has been further fuelled by the convergence of media, income and technology. Today, we see a certain degree of homogenisation in the global consumption patterns as national borders and traditional cultural boundaries blur rapidly, leading to the identification of global segments. Yet, the idea itself isn't novel; Theodore Levitt in his landmark 1983 article had argued that this homogenisation of needs and wants was inevitable as the rational consumer would invariably prefer standardised products of high quality and low price. So when we see McDonald's prospering around the globe, western fashions becoming common in many eastern countries and cross border music channels like MTV becoming a rage everywhere, it's of little surprise to the international marketer. The evidence is for everyone to see mainly in the form of various marketing messages of omnipresent brand identities predominantly in the FMCG and technology sector. People around the globe are developing preferences for the same products, wearing the same type of clothing, watching the same TV programs, and playing the same digital games on their computers! And these consumer behaviour trends are being reinforced all the more by the print media, radio, TV and to an increasingly great extent, the Internet.

Then why do we still see so many differences across markets?

Cutomization of Global Brands
All said and done, the convergence isn't perfect and its foundations are regularly questioned in view of the substantial variance in consumer behaviour across nations. But with differences of per capita GNP progressively disappearing, culture has become a powerful variable to explain this trend, and which the Hofstede studies also corroborate. National culture, which is broadly the values, beliefs, norms and behavioural patterns of a national group, is subject to global culture's continual influence, which in turn is instrumental in reshaping an individual's personal culture. Even as these global cultural values get transmitted to the individual, he retains a set of core common values, which helps explain this partial heterogeneity in consumer behaviour. Still, the consumer tastes appear to be driven less and less by long-standing local and regional traditions, and more by perceived desirability of global brands. Simultaneously, there seems to be shift in values as well towards standardisation.

Sounds pretty cool, but is this thing for real?

Commodities of culture-association, like alcoholic beverages, etc. are harbingers of the degree of cultural convergence. Research shows an increasing health consciousness of the consumers as they switch to beverages containing less alcohol, also a switch from the local traditional drinks to beverages that are seen as more fashionable as well as healthful has been observed. Apart from such commodities, digital convergence too is being largely guided by consumer preference. Consumers globally have shown a preference for mobile telecommunication handset size similar to that of the current PDA or mobile while adopting a considerably larger display, thereby directing R&D to increasing the pixels per inch, while still maintaining the portability. But obviously, given some degree of heterogeneity in this trend, partial, rather than perfect, convergence is expected. But the good news is that research also shows that concerted strategic marketing efforts can affect consumer perceptions and actually alter consumer choices. This means that to be effective, the various marketing activities like standardising the product, identical brand names, uniform packaging, synchronised product introductions, similar advertising messages across markets in various countries, have to be integrated and coordinated well. Advertising should seek to portray products in idealised and desirable context, because globally consumers buy the products that they believe express their identities.

Alright, so what's the lesson for the international marketer?

The most global brand - Coca Cola
The global marketer should take heart from this fact that cultural traditions aren't impenetrable, and that consumer choices can be affected by intelligent strategic marketing, which is an interactive and evolutionary process. Tempting, though it may be to read the consumer psyche every day and regularly adjust your marketing model to it in consonance with local traditions, it is not sustainable in the long run from an international marketing perspective. The key is to identify homogenous global segments so that if at all any customisation is required, it is minimal. Standardised marketing strategies and products are actually the future drivers of cultural change and consumer convergence.

© Jayant Rana, 2013
Images courtesy: Foter / sebr / CC BY-NC-SA; heiwa4126 / CC BY; Express Monorail / CC BY-NC-ND; kateboydell / CC BY-NC

Segmentation, Targeting & Positioning in the Real World

Saturday, 10 November 2012

There's a lot that's been said and written about marketing strategy already, so why this post, you may ask. Well, frankly this post isn't really the best source in case you're looking to learn the very basic concepts of marketing strategy, but what it is good for is understanding the kind of hard choices and robust logic that goes behind it in the real-world.
Most of you would remember those early morning (or any other equally sleepy hour) lectures when your marketing professor used to harp on and on about the customer being the be-all and end-all of marketing, and by the end of the course some of you probably were even convinced that it was true. But then work caught on and you got so focussed internally on your processes, protocols, etc. that you forgot that learning and started ignoring that customer. That's exactly where your marketing starts to falter.

Now as much as you'd like to focus only on making a great product (or service), and hope that everybody buys it, unfortunately that's not how it works in the real-world. People, right from the DNA level above, are quite dissimilar from each other, and while most of them may agree that a higher resolution camera is better than a lower resolution one, they may not feel the same way for a higher sized shoe, or a shirt, as that's a preference based on 'fit!' Because of that reason your product would be the 'perfect fit' only for one category of people, while for many others it may not and they'll never buy it. Question is, can you still make money and grow?

That's why segmentation should really start by understanding the potential sources of growth - grouping customers into multiple buckets based on the choices that they make. And to understand those customer choices, is by no means an easy task. It's a thorough process involving referring to multiple data sources, and often involving primary market research, meaning it requires hard cash! And spending a lot of hard cash on something suboptimal isn't going to help much with your popularity. And thus to make solid business sense your segmentation study should actually try to answer not just who (socio-demographic) your customers are or what (behavioural) they do, but go beyond and answer that why (attitudes and needs) they make such choices.

So now that you've understood the various groups which can be your potential sources of growth, you need to choose from them the ones against which you'll direct your marketing resources. One of the temptations marketers tend to give in is to go blindly after the biggest segment (in volume or value). While it can be the segment with the biggest potential in itself, but the question to ask oneself is that can you even begin to serve the specific needs of that segment, and are you, given your present strengths, well placed to succeed in that segment, which will be targeted by multiple other competitors for obvious reasons. So even though some segments may be big and very attractive, but your likelihood of succeeding with them may be very slim. You understood their attitudes in the segmentation study, but you also further need to understand what will their attitude be towards the product you have conceptualised. You also need to be clear that you have a competitive advantage for the target segment and that your choices are driven by robust data, and not merely intuition. Hence, targeting is more about in-depth analysis and making the right (and sometimes very hard) choices and sacrifices. You MUST match your target segment's needs with your own strengths (likelihood to win) by making informed choices about your target audience, and IGNORE the others.

Targeting your Customer Segment
Copyright (c) 123RF Stock Photos

So now that you've put in so much of hard work into heavy-duty data analysis focusing on your potential customer and making some very tough choices, you'd now probably want to take some rest by shutting that customer out and finding peace in your internal protocols and processes. But, tough luck mate! Now is when the real thing begins...

Positioning is something which isn't done to your product, but actually in the mind of your prospect (as most people use their minds, rather than their brains, to make a lot of choices). It is the space you want to own in the mind of the prospect and as the name suggests, the process involves positioning your brand of the product in a unique way within the mind of your target audience. Notice the operating word 'unique' in the last sentence. You cannot have two brands share the same position in the prospect's mind. It's like parking two cars in the same spot...quite impossible, right? The second operating word is 'differentiated'. If your smartphone isn't different from the others, then it's simply a product... just another smartphone. I'm sure you don't feel the same way about a Samsung Galaxy or an Apple iPhone (which are differentiated brands of smartphones). The third operating word is 'ownable'. Is your smartphone's differentiation based on the fact that it's an Android device. Well sorry, in that case you're again one of those hundreds of others based on Android ('cause hello, you don't own it)...it's not your phone that's differentiated, but rather it's actually Android! Probably not something you wanted, right? And it's difficult to own something of that much criticality, unless protected by law, lest you'll have hundreds of other copies in the market in no time. That's done by using IPRs, which we'll discuss in a later post. And finally the last operating word is 'sustainable'. Can you deliver a pizza in under 30 minutes? Well, you might, but can you do it over and over again, hundreds of times (can you sustain it)? If not, then probably not a good idea to position yourself on the basis of a 30-minute delivery. Because even though you may claim that positioning for your product, but the customers would only remember the one who can actually DO that kind of thing repeatedly (remember what I earlier mentioned about positioning being what you do in the mind of the prospect). These four operating words drive the positioning of a brand. And thus, for conceptualizing and executing a successful positioning strategy you need to decide on a positioning that's unique, differentiated, ownable and sustainable over the long-term, while keeping in mind your target audience's profile, the competitive frame in which you operate, and your key point of differentiation.

It's a challenging task to summarise all that goes behind formulating a successful marketing strategy in this short post, but this should help you understand the kind of effort and resources it takes to formulate one. There are whole lot of intermediate processes and activities involved, like insight generation, setting up specific business and strategic objectives, developing a strong value proposition, etc. which need to be executed in just the right manner in order to succeed in the market.

How has your marketing experience been lately, and what real world challenges did you face? Let us know in comments...

© Jayant Rana, 2012-Present

 
Jayant Rana's Blog © 2014