Non Price Competition


In spite of the emphasis placed on price in microeconomic theory, marketers often compete on product attributes other than price. You may have noted that price differences between products such as gasoline, men’s haircuts, candy bars, and even major products such as compact cars and private colleges are often small, if there is any price difference at all. Very rarely will you see price used as a major promotional appeal on television. Instead, marketers tend to stress product images and consumer benefits such as comfort, style, convenience, and durability.

Many organizations promote the services that accompany basic products rather than price. The idea is to make a relatively homogeneous product better by offering more service. Quite often the reason marketers emphasize non-price is because prices are so easy to match. Few competitors can match the image of a friendly, responsive, consumer-oriented company.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Franchises


A franchise is a contract arrangement by which the owner of a trade name, trademark, copyright, or process grants permission to others to use this property in selling goods or services under specified conditions.

The purchaser of a franchise (franchisee) obtains the advantage of offering a well-known or unusual product that may already have wide appeal. The franchisee  also receives the benefit of mass buying and advertising. Typically, the buyer of a franchise may pay a flat fee for the franchise as well as an additional percentage based on sales. The franchisee may also be required to pay a fractional share of the franchisor’s promotional costs and to purchase certain supplies from the franchisor.

Contract and sales laws pertaining to franchises are comparatively new. If the franchise involves the resale of goods or food, both the franchisor and franchisee will usually be liable under a breach of warranty if the food or other merchandize is not wholesome or proper from the consumer’s standpoint. However, tort liability to a third person is usually the responsibility of the franchisee alone. In a case where the franchisee’s truck struck  and negligently injured a pedestrian , the franchisor would normally have no responsibility.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Distinctive Capabilities


A close examination of a market-driven firm will reveal two particularly important capabilities: market sensing and customer linking. First, the market-sensing capability concerns how well the organization is equipped to continuously sense changes in its markets and to anticipate customer responses to marketing programs. Market-driven firms spot market changes and react well in advance of their compititors. Second, the customer-linking capability comprises the particular skills, abilities, and processes that an organization has developed to create and manage close customer relationships.

Customer-goods firms demonstrate these capabilities in working with powerful retailers, multifunctional teams in both organizations work together by sharing delivery and product movement information and by jointly planning promotional activity and product changing. While evident in manufacturer-reseller relations in the consumer-goods market, strong customer-linking capabilities are crucial in the business market where close buyer-seller relationships prevail.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Creating an Integrated Marketing Communications Program (IMC)


a)        Use zero-based budgets. Most companies use incremental approaches in allocating promotional budgets. A preferred approach is the objective and task approach. Start with a zero budget and force all promotional managers managers to justify their investment.

b)        Focus primarily on current customers. Many organizations direct 80% or more of their advertising and selling effort activities to trying to win new business (conquest marketing).  An Integrated Marketing Communications (IMC) program recognizes the importance of retention marketing and inverts that ratio so that a majority of the promotional activity is earmarked for relationship building with existing customers. This reduces customer defection, upgrades business relationships, and creates advocates for the firm’s services.

c)        Use highly targeted mass promotion. Direct mail, specialized lists, trade publications, and the Internet can be used effectively to reach prospects rather than suspects. A website has become an indispensable marketing technology for 21st century companies. It has evolved into a one-stop, online corporate information source, customer support tool, distribution channel, order taker, product catalog, price list, promotional vehicle, research technique, segmentation source, and a strategic and tactical marketing differentiator.

d)        Build marketing relationships. Strategic partnering is a major part of a good IMC program. In addition to Internet and intranets (protected corporation information resource centers), progressive companies are creating extranets which link an enterprise’s extended family of suppliers, distributors, retailers, and partners. Hence, customer, channel, referral, and stakeholder relationships can all be nurtured through carefully conceived promotional efforts.

e)        Note that everything an organization does send a message. Image and atmospherics are very important in communicating value to customers. The little things, such as stationery, signage, telephone greetings, and website design, etc., should all reflect professionalism and a consistent message to the marketplace.

f)          Two-way dialogue is key. In an over-communicated society, the marketing challenge is to establish a meaningful dialogue with customers as to how the firm’s service mix can provide maximum benefits/value. Interactivity and involvement on the part of the customers is important for sharing information and creating firmer bonds. The Web is an ideal medium to accomplish this objective. Its selectivity and flexibility create a customized business experience for each user.

g)        Use 21st century communication technologies. In today’s changing marketplace, companies must seek new and better ways to stay in touch with their target markets. Appropriate communication options include e-mail, electronic commerce, fax-on-demand, telemarketing, point-of-sale promotion, special events, multimedia, etc.

h)        Measure promotional effectiveness. Traditionally, advertising executives competed with sales managers for their “fair share” of the corporate promotional budget. Today, management requires accountability and demands to know and justify the return on investment of limited resources—they will no longer accept the non-measurable communications methods used by marketers in the past. A marketing information system/database is the key tool for effectively monitoring and measuring the success of an IMC program. As part of this process, job descriptions and reward systems are likely to be redesigned. In a strong IMC-centered environment, in-house competition is replaced with cooperation and teamwork. Joint rewards help the organization do what is best, rather than just project individual turfs.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Developing the Channel Design


Channel design refers to those decisions involving the development of new marketing channels where none existed before, or to the modification of existing channels. Channel design is an important decision as the channel is a means through which the firms can find new prospects, communicate to customers, and physically deliver the product. Of all the marketing decisions, the ones regarding distribution (channel) are the most far-reaching. It can revamp a promotional program, modify its product line. But once a company sets up its distribution channels, it generally find changing them to be difficult. Channel design, therefore, does not refer to channel structures that have simply evolved, it refers only to those where the management has taken an active role in the development of the channel.

 

Specifically, the channel design decision includes:

1.    the number of channels to employ;

2.    the number of levels to be included in each channel;

3.    the type of intermediaries to employ; and

4.    the number of channel intermediaries at each level.

 

The selection of the best channel (channel design decision) to accomplish the objectives is challenging because:

a)      channels need to be adopted depending on the target segment and positioning;

b)      the goals of the channel members may differ;

c)      the alternatives are numerous.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Same-day Delivery


Same-day delivery, or same-day service, is an excellent promotional scheme for increasing sales at very little additional cost. As the economy becomes increasingly attuned to a “buy it now, have it now” attitude, we become more and more frustrated with waiting days (or often weeks) for purchased products to arrive or for service to be performed. Companies willing to guarantee same-day delivery have found this to be an extraordinarily effective sales tactic that practically ensures a competing edge.

 

Despite the fact that most people regard time as a valuable commodity, few businesses pay any attention to rapid service. Manufacturing, retailers, and service forms want their bills paid on time, but all too often, they do not reciprocate.

 

Although sales tactics that promise and then fulfill same-day delivery within a specific area must always bring in new customers, for some businesses, same-day delivery is impossible.

 

Doing what you say you are going to do when you promise you will do it will inevitably increase service sales as effectively as rapid delivery does in product businesses. It is simply good public relations. Turning it around, when a plumber, electrician, or furnace repairperson promises to take care of your service problems tomorrow and actually does so, the chances are very good that you will call that person again when the service is needed.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight