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Advertising
is dead
By Ranjan Madanayake
(Author of Strategic Marketing Plan - the 12 P Model)
"When I write an advertisement, I don't want you to tell
me that it's creative, I want you to find it so interesting
that you buy the product" - David Ogilvy.As the doyen
of advertising puts it, the purpose of advertising is to sell
a utility, a product or service.
The
theory also propounds that products or services are designed
to deliver benefits to the consumer or user, and to satisfy
their needs. Needless to say, that if products or services
do not match perceived needs or wants of the consumer, they
will not be bought, however much they are advertised. If the
infant cereal, mother the customer buys, is rejected by infant
the consumer, mother the customer will not buy it again. We
see lot of advertising around us urging people to buy, promising
what they offer is the best or better than other options available
in the market.
Marketing
Let me attempt to define modern marketing - I see marketing
today as a management process to identify, create and sustain
competitive advantage by positioning superior value, profitably.
The world revolves around opposition, anger and hatred is
opposed by love and kindness, cold by warmth. Contradiction
of anything is the fundamental cause of its existence. In
the consumption world we call them options or competition
- for water for thirst, there are carbonated drinks, fruit
juices, ice cream, tea, coffee, etc. In reality they oppose
each other. They are at war with each other. For what? To
win over those who are thirsty. As long as there is thirst
they will continue, and they will multiply into various different
forms and names, which we call, brands. In effect, the art
of winning continued consumption is the essence of marketing.
Purpose
of marketing
There is only one purpose of marketing, which is - to
identify, create and sustain competitive advantage and drive
a business to sell more goods, services or ideas to target
markets at profitable prices.
What
it means is winning markets, by identifying opportunities
and fulfilling them competitively and profitably. To take
a local example towards illustrating this would be to recall
the story of Marie biscuits. Two companies in the Marie biscuits
category were battling out for market share for their brands,
which were generically similar. Both used tactical marketing,
or the marketing mix to enhance market share and in the process
both were losing money.
A
lot of money was spent on various types of promotions, such
as media advertising, merchandising, free issues, etc. The
battle continued till such time a new marketing manager; one
of the companies recruited came up with an idea of giving
'more biscuits in hundred grams'. Utilising a discarded cutter
to make a smaller Marie biscuit, which his production manager
showed, he found the right opportunity to fulfil. Smaller
Marie had 22 biscuits against 17 of the larger, in 100g. Today
none of them makes large Marie, that category is dead, its
history. That's effective marketing - his rationale was that
customers wanted more biscuits in 100g. Another example -
Dominos Pizza, they created 'home delivery under 30 minutes',
knowing that it takes 22 minutes for a Pizza to cool off.
Marketing
process
It is necessary at this stage to take a bird's eye view
of the marketing process:
- Information
marketing - analysing markets, products, competitors, opportunities
and marketing methods.
- Strategic
marketing - segmenting markets, targeting market segments
and developing the total value proposition.
- Tactical
marketing - using the marketing mix to deliver the total
value proposition.
- Administrative
marketing - developing the strategic marketing plan to implement
the marketing programme.
Total
value of proposition
Once we have all the necessary information, we move to the
next stage, that is strategic marketing, which is segmenting
markets, targeting segments and developing the total-value
proposition. Customers buy perceived value not simply products
or even benefits from products, as we used to know in the
past. When a person wants to clean his teeth he may decide
on toothpaste instead of mouth wash or even tooth powder -
the product, the person then decides on the type of toothpaste,
whether a type to freshen breath, or to whiten teeth, or to
prevent gum decay - the benefit, having decided on one of
them this person will then, depending on the perceived value
will choose the brand - which gives the ultimate value or
deliver the total value perception.
Value
perceptions are formed around brands not products. As much
as a cluster of benefits, a single attribute, like 'more biscuits
in 100g' or 'home delivery' can influence the value perception
for a brand. Unlike the days of yore, today the quality of
two products is similar and is usually not inferior to the
other. This is largely due to the availability of technology
in abundance. Therefore, developing the value proposition
supersedes products and benefits yielding brands to win and
sustain consumption based on value the customers perceive.
Customers
buy value
To illustrate this further, I would like to bring the
example of Southern Airways, an Airline with no agents, no
food, no hostesses; but some customers value this service,
much more than the other airlines that provide everything
that they don't.
Developing the total value proposition is achieved through
positioning and focus. Creating the appropriate positioning
for a brand is the genius of the marketer, it is the strategic
direction to drive markets to one's brand. Though this may
sound very complicated and philosophical, they are always
simple aspects that address a customer's need and can provide
a consumer's delight. Just as seen in the examples quoted
- 'more biscuits in 100g' and 'home delivery under 30 minutes'.
The techniques of positioning a brand within its category
and among its competitors is as follows:
- Broad
positioning.
- Specific
positioning.
- Value
positioning.
Broad
positioning
Professor Michael Porter's generic strategies model offers
three options - cost leadership: produce at the lowest cost
and sell at the lowest price or differentiation: incorporate
an additional value and gain a competitive advantage, 'home
delivery under 30 minutes' or focus: concentrate on a smaller
segment or niche and deliver superior value.
Michael
Treacy and Fred Wiersema also offered three options - product
leadership: be the leader in improving and innovating products
or operational excellence: achieve excellence in operations,
like McDonald's or customer intimate: develop very close relationships
with customers. They believe that a brand must be the best
in one of the above and keep improving to be indestructible
by competitors and simultaneously achieve a reasonable performance
level in the other two areas.
Specific
positioning
This can be achieved by providing a specific aspect that
will be perceived as a value, like 'more biscuits in 100g'.
They are:
- Benefit
positioning - best performance, BMW.
- Attribute
positioning - tallest hotel in the world, Raffles.
- Use
and application positioning - fair and smooth skin, Fair
and Lovely.
- User
positioning - best for designers, like Apple Computers.
- Competitor
positioning - better than the best known, Avis.
- Category
positioning - leader in scouring powder, Vim.
- Quality
and price positioning - great quality high price, Mercedes.
Value
positioning
Financial value for a brand is important, no one would buy
a Volkswagen at a high price of a Mercedes. And Mercedes for
generations is at the top end.
- More
for more - high quality at a higher price than others.
- More
for same - high quality at a similar price as others.
- More
for less - high quality at a lower price than others.
- Same
for less - same quality at a lower price than others.
- Less
for much less - lower quality and a lower price than others.
A
combination of the above positioning will provide the long-term
strategic direction for the brand. The purpose of positioning
is to create and establish the brand in the mind of the customer
based on the above criteria so that each and every time the
need occurs the brand will come to mind and dominate the mind.
Talk of Chicken - recalls KFC, thirsty Coke, tired and worn
out Nestomalt, sewing machines Singer, headache Panadol, toilet
soap Lux, washing soap Sunlight, supermarket Food City, ice
cream Walls (now no more).
Tactical
marketing
The use of tactical marketing is to deliver the brand's
strategic positioning. This is achieved through the marketing-mix
or the 7 Ps. Product, Price, Place, Promote, People, Physical
evidence and Process. The brand must be developed, priced,
distributed and promoted to deliver the decided positioning
and therefore must at all time should focus on its positioning,
the other Ps are there to support.
To
cite an example, there would be no purpose of positioning
Tikiri Marie as a brand with 'more biscuits in 100g' if it
really does not do so, hence it must have significantly more
biscuits, as it did like 22 to 17. Another aspect is Branding.
The most common mistake we make here is Brand extension. If
a Brand is successful in one category; companies extend it
to all new categories they will develop or acquire. Cargills
Ice Cream is a classic example. In the mind Cargills is strongly
positioned as a supermarket and it is now extended for Ice
Cream, then there is frozen food already, also branded Cargills,
confusing it further. Marketing is also about winning mind
share of the customer and positioning must give a clear message
and not confuse the customer, with brand extensions. Products
of different categories must be branded separately and focused
on developing their own personalities, characters and an inimitable
total value proposition - providing superior value, over and
above their competitors. Walls didn't call theirs' Astra,
which is a leading brand.
Promote
The
tactical element for my hypothesis is Promote, which Marketers
today refer to as Marketing Communications and the purpose
of which is to deliver the chosen positioning in the long-term
and not simply to make sales, in the short-term.
To illustrate this let us take an example from the Lemon Puff
category. Munchee repositioned its Lemon Puff as evident from
their TV commercial as the one with more cream when in actual
fact the re-launch of their brand was an improved or a 'better
biscuit' using superior dough mix. This fact would have been
the brand's specific positioning and the strongest aspect
in delivering superior value, but was never addressed. Instead
the lesser and very easy to imitate element, 'more cream'
was given priority. Maliban answered this appropriately.
The
essence of this is that they simply advertised a benefit of
the product rather than using marketing communications to
deliver positioning that it was in effect a 'better biscuit'.
It would have been a more difficult proposition for the competitor
to emulate, as it would mean that they themselves would have
had to go through a lot of processes to get there, whilst
Munchee would have got that critical leadership of being the
first to make an improved Lemon Puff. Delivering the total
value proposition through broad positioning, specific positioning
and value positioning is the purpose of marketing communications.
It is long-term and destined to build a strong personality
and character for the brand. The other elements of the marketing
mix are also important to support the delivery of the brand's
positioning.
Much
of the advertising today is only concerned with selling products
or services and really not assisting in the delivery of a
product's positioning. A good example of clever positioning
and using marketing communications to deliver that positioning
is Nestomalt, which was repositioned as an energy drink, with
a multi-segment targeting strategy.
Therefore
the old advertising agencies should even consider renaming
them as marketing communications agencies and being strategic
in approach they should necessarily request a written brief
from their clients which must primarily include the positioning
strategy and statement, which is the prerogative of the marketing
department of the client. Believe me this does not happen
often! Marketing communications should be aimed at delivering
the positioning of a brand, and ensure its consumption over
and over again and every time the need occurs, whilst advertising
which is a narrow focus to sell what is advertised is now
dead.
Condoms
aid productivity in workplaces
In
Africa, many workers are ei ther dying from HIV/AIDS or staying
away from work attending funerals of friends and relatives,
causing disruptions in industrial production and stifling
productivity.
In
Sri Lanka, a non-governmental organization is providing peer
education to senior employees of companies mainly in the country's
free trade zones, where the bulk of the workers are women
in garment factories, on how to handle HIV/AIDS in the workplace.
As
the HIV/AIDS syndrome grips the world and affects economic
growth particularly in developing countries, a lot of companies
are beginning to realize the related impact on their bottom
line and are taking steps to promote awareness on HIV/AIDS,
safe sex and even provide condoms in the workplace.
"There
are many companies that have developed strategies to combat
HIV/AIDS and these have helped companies to improve productivity
and efficiency levels," noted Dr. Kare Moen, advisor
to the Centre for Health and Social Development (CHSD) based
in Norway.
Speaking
at a Colombo workshop organised by the Ceylon Chamber of Commerce,
Sri Lanka's most powerful business chamber, Moen said employers
need to get involved in the battle against HIV/AIDS because
governments cannot go it alone.
"HIV has a negative influence on the business environment
and the sooner steps are taken to be aware of the problem
and reduce its impact on the workplace, the better it is for
companies and their profitability," Moen, who has worked
with business communities in Africa and other parts of the
world for many years, said.
The
Colombo chamber has driven business initiatives in fields
of peace, education, children's needs and now HIV/AIDS saying
there is greater need for corporate social responsibility
particularly with the private sector being considered Sri
Lanka's engine of growth.
Renton
de Alwis, Secretary General/CEO of the Ceylon Chamber of Commerce,
said the private sector needs to know how to manage this situation
and start now because, "we are in a slightly better position
of having a low prevalence of HIV/AIDS. We have a lot of challenges
in this sector."
Dr.
Iyanthi Abeywickrema, director of the National STD/AIDS Programme
in Sri Lanka, a government agency, said though HIV is late
in coming to Sri Lanka, there should be no complacency in
handling the situation.
Up
to 108 people have died of HIV/AIDS since September 2002 while
there are 436 patients but it is estimated that 7,200 people
are living with HIV/AIDS in Sri Lanka with more and more people
likely to be infected in the next few years.
"We
expect more people to be affected since the first case was
detected some 10 years ago it takes that long for symptoms
to be evident in those living with HIV/AIDS," she said.
Abeywickrema
said the AIDS pandemic has a major impact on companies and
workplaces because even in the Sri Lankan case, 82 percent
of those affected are in the 20-49 year age group which are
the most productive years.
She
said there was a gradual awareness of HIV/AIDS in Sri Lanka,
going by the organisation of seminars of this nature, while
HIV patients who were earlier sent to a specialized hospital
handling diseases, were now treated in general wards of Colombo
hospitals.
She
said the private sector would feel the impact with the loss
of experienced staff and lower productivity levels. "Sri
Lanka is a low prevalence country but we are surrounded by
high prevalence countries like India, Thailand and Myanmar
and if we are not careful, we could have an epidemic on our
hands."
Abeywickrema
said they have began a social marketing programme promoting
the use of condoms but a lot of Sri Lankans are still shy
to go to drug stores to buy condoms. "We are at least
trying to promote the condom for disease control but still
there is a reluctance."
Daya
Abeywickrema, executive director of Sri Lanka's Family Planning
Association (FPA), the main promoter and marketer of condoms,
says the social marketing programme was not as successful
as planned and drew criticism from the Buddhist clergy and
nationalist groups. "Maybe we should have promoted a
brand instead of talking in general about condoms," he
said, adding that even TV stations were initially reluctant
to run the promotional advertisements.
But
he said the FPA programme to provide peer education in HIV/AIDS
to the private sector has been successful with 40 people from
companies in the country's Free Trade Zones (FTZs) being trained,
and more companies being interested. Most of the workers employed
in these zones are women working in garment factories and
other industrial units.
CHSD's
Dr. Moen said HIV/AIDS has a major impact on disposable incomes
-which goes down when the affected have to spend lot on drugs
- savings in society falls, consumer markets shrink, fewer
resources are available for production and investment and
high prevalence countries record negative economic growth.
Companies have to spend more on insurance and pensions, finance
deaths and funerals, while the frequency of replacing staff
gets higher. "Companies should resort to early intervention
strategies which have shown to be more effective than those
who had delayed in putting pro-active HIV/AIDS policies in
the workplace," he said.
In
Asia, the Employers' Confederation of Thailand had initiated
workshops and raised awareness on the issue, global jeans
manufacturer Levi Strauss and Co launched workshops and support
groups, Philacor Corporation in the Phillipines got involved
in peer education while the Ngoc Ha Shoe Co in Vietnam is
providing free condoms and HIV testing facilities to workers.
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