Unsaid Variables in Marketing of a Product
Welingkar Institute of Management, Mumbai
Business either grow or fade away. Growth can be achieved by either consolidation,
innovation or diversification. Forecasting a new product also has a problem, data available with the company is historical data which may create large amount of uncertainty. If a company build some innovative product, then without innovative marketing product might just lead to failure. Start-ups are making lot of noise these days in the market, but are all of them succeeding, answer is NO: may be the product is brilliant but the amount of awareness and marketing required is not significant. Example Firefox which just got vanished because of poor marketing, Firefox was much better than the other browsers in its time, but couldn’t survive as compared to Chrome which is popular
among PC’s and mobiles because of its innovative marketing and promotion on google webpage.
These are some unsaid variables in the table used directly or indirectly for marketing of the product. User wants to pick not just a product but all of these things associated with the product which marketing or sales person has to understand and leverage on these parameters along with the quality of the product. Customers in 21st century is well informed and salesperson can’t guide him/her as he/she knows exactly the same what salesperson knows because of lot of content floating on internet. Apple was forced by Samsung to increase the size of its mobile to survive in the market that’s the unsaid variable (latent demand) which Samsung leveraged on. Before Designing any product if product management team focusses in brain storming session of finding as many unsaid variables then they could succeed in much better way and they could offer customers what they really want. Banking and NBFC’s products like Paytm, oxygen wallets etc., debit cards, credit cards, NEFT, RTGS are growing a lot in India. Is hard cash free to the government, answer is big NO, according to ‘Ajay Banga’ CEO of MasterCard, it takes around 0.5 to 1.5% of the GDP of the government to print it and to distribute it. US has the GDP of 16.7 trillion dollars and 1 %
Lot of Marketing Analytics using models like decision tree, regression, Logistic regression are being used to predict the requirement of user in time period ‘n’ and what type of product will be required by them in period ‘n+1’. Higher the accuracy of prediction, greater chance that person will stick to particular brand. Offering him before he himself ask for it will be an added advantage. Touch points among customers should be balanced out between customers who are frequently touched and who are rarely touched to generate more business to the company.
Does always product is marketed, not always, consider construction industry, materials required in construction space will remain same most of the times i.e. cement, TMT bars, bricks etc. but techniques can be new and innovative and can be marketed very well or functionality to use the same old products which can save time and cost will give great impact to a business. Example Harpal
Singh constructed 10-storey building in just 48 hours leveraging technology and using pre-fabricated material and including 200 tonnes of steel.
Omni-channel is the new buzz companies are making, which is required to target same consumer in lot different way with increasing market place model. Products with similar specification are there from different brands with almost same price range example: 15 inch, i5 processor (5th gen), 4 GB RAM, 500 GB hard-disk—offered by Dell, HP, Lenovo by almost same price it gets difficult to select the model by customer, now consumer will choose a model which has a higher brand value in terms of their perception, and now companies have to think how to increase the brand equity or brand value or change the perception of the customers. Because every channel will increase the cost of marketing budget, then Word of mouth will play an important role which immediately won’t change the
perception but over a period give a big positive hit to the company.
78% of people trust consumer’s recommendation vs 14% of people trust ads according to Neilson advertising survey 2007, Companies should move on engaging directly with consumers i.e. direct marketing should be promoted apart from advertising, advertising should be done definitely to create awareness but tool like direct marketing must be promoted to give enriching experience to customers.
Consumer spending on digital media content and technology in 2014 was 1 trillion dollars. Top 3 reasons were:
• Increase use of smart phones.
• Increase in use of broadband Internet
• Growing Middle Class in Emerging Market
94% of consumers reported online research to influence purchase decision (Source: AMP agency’s consumer shopping Survey ‘inside the Buy’ 2011). Direct marketing can communicate different product positioning to different prospective client. If Skoda Try to position itself as luxury segment to
Lot of data which we call big data is available with the companies and now companies are leveraging on the data to analyse it and predict future sales, variables driving the sales and customer’s attributes in buying decision so companies can target in proper way. Now if companies are charging ‘X’ dollar as the value of the product and ‘Y’ is the percentage gain of ‘X’, many-times y is kept 0% or very close to zero depending upon the objective of the campaign or company. Now is ‘Y’ 100% dependent on ‘X’ answer is No: it depends on unsaid variables associated with the product.
Location based marketing is also gaining momentum for some products, social networks based on location are booming and marketers needs to work more to engage with customers especially with customers. CEO’s of the company ask the basic fundamental question to their managers. If we
launch the product what will be ROI and PLC of the product and what will be conversion rate. These problems can be solved today by Dynamic marketing where numbers are tracked on real time by the top management of the company i.e. conversion rate is tracked on real time basis and it can impact balance sheet in most positive way. Question arises is weather marketing is Important or Product Quality. Well both are interdependent on each other. Apple seeks higher product quality and is the
most profitable company in the industry, it doesn’t have to invest much on advertising now because of its strong brand equity. But with increasing number of suppliers and companies branding takes lot of weightage and using customer experience of the product to create an experience
At the end costumers are getting benefited, weather take Ecommerce companies, sales of Chroma and Vijay sales and other Brick and Mortar electronics shop’ sales are hit significantly, monopoly is getting reduced and customers are getting exposed to the same product via different channel. Bargaining power is coming in hands of customers and customers are now well informed. With increase of wearable devices more data will be available to the company. Say you purchase product ‘a’ in January, product ‘b’ in February, product ‘c’ in March, and product ‘d’ in April, companies can predict what will your next product and when you will be purchasing. Everything is exposed to them, that means latent needs are observed by companies and at the end customers are getting benefited.