Prof K S Chandrasekar
vc@clujammu.ac.in
To succeed in this competitive world, any organization needs to embrace the latest in marketing. Marketing strategy consists of decisions and actions focused on building a sustainable differential advantage, relative to competitors, in the minds of customers and to create value for stakeholders. Strategy arose from a military context: “The forces available must be employed with such skill that even in the absence of absolute superiority, relative superiority is attained at the decisive point”. This has been discussed at length in Indian and Chinese treatises. Management scholars in the sixties and seventies added two elements to apply the strategy concept to business, the need to make the differential advantage sustainable and the idea that the objective of any business strategy is to enhance firm performance. But by the nineties, marketers argue that it must be from the perspective of the customer. Thus, five key elements are critical to marketing strategy which include, differential advantages over competitors, sustainability, ability to enhance firm performance, customer perspective and guides decisions and actions. Customers represent the fundamental unit of analysis for marketing strategy, because each individual customer is an independent, decision-making entity.
Philips, the Netherlands-based technology company, has become a global leader in consumer technology over the past 125 years. Over a period, Philips has innovated its marketing strategy many times to be competitive. Philips shifted its focus towards being customer centric. Philips builds a strong physical presence in each market it is active in and uses these teams to understand the local market and its consumers’ desires. But as customers’ needs are not static, it needs to innovate to continually sustain its competitive advantage. When GE came to India, Philips faced stiff competition. To this end, Philips has nine research centres around the world that have competencies in various domains and can remain connected to local markets. To stay ahead of the competition, it has also created a “technology incubator” that provides an environment where Philips can create technologies new to both the firm and customers. Through market and technical innovation and a consumer-centric focus, Philips has managed to gain and hold global and regional leaderships in many product categories.
Marketing analytics consists of processes and technologies that enable marketers to evaluate the success and value of their marketing initiatives, identify trends and patterns over time, and make data-driven decisions. Marketing analytics enables to mine customer demographics and behaviours, build target audiences, create statistical models to help predict campaign success. To understand competitors, they need to adjust strategy based on market research and competitive analysis.
Global 1,000 companies spend over $1 trillion on marketing, but only about 16% use marketing analytics. One unit increase in use of marketing analytics (7-point scale) led to a 8% increase (70M$ in net income) for Fortune 500 firms. Same change in competitive markets where customer needs are changing led to 21% increase (180M$ in net income. The analysis can be both quantitative and also qualitative. Qualitative analysis is used to study highly complex and contingent phenomena where linkages and variables are mostly unknown (e.g., what is the next new product). Quantitative analysis is used to study “natural” phenomena where linkages and variables are mostly known (e.g., what is the impact of advertising on sales). 44% of consumers say the majority of their customer experiences are bland. Customers want speed with which the organisation responds, convenience to the customers, personalisation to the effect that the customer feels proud and the price point at which they are willing to buy. in the case of ONIDA, they kept the price of the product higher but through promotions, they made everyone feel that owning a brand like that will add to their status, customers were willing to spend more.
Amul used the marketing analytics effectively as they found the three reasons people buy chocolate: first to gift to others, second to share with a group and finally to eat by themselves. They expanded product line to meet all these needs (individually wrapped candies for candy dishes, fondue baskets for sharing with a group, packaged candy bars for people to eat themselves). Sales have increased by more than 10% per year for many years. An airline which was launched during the 2010’s addressed the customers whom they were looking at and then ensured they are offering the same. Airmantra.com, which had served three destinations viz., Chandigarh, Amritsar and Jammu offered what the customers wanted, 30 minutes check in, zero fare tickets, EMI scheme, advance purchase fares, all passengers get window seats, passengers travelling without check in baggage get lucky and Air mantra special fares. However, due to financial issues, Air mantra could not continue. Titan used analytics effectively. Analytics experts and service providers were invited to take evangelisation sessions and training programmes for employees from across functions at the Titan Company. Professors from global institutes were invited. They gave a worldview of how analytics is playing a role in the digital transformation in companies globally. The target audience was middle and senior level managers.
Experts from marketing, ecommerce spoke about campaign analysis, modelling and website analytics respectively followed by sessions on product and pricing analytics. Across the brands, Tanishq, Fastrack, World of Titan, Titan I Plus, the company has about 1600+ stores. Every year, close to hundred stores are opened. The implication of a wrong store-location selection is very high from a financial perspective. The land lease for the store is signed for a period ranging from 5-15 years. Thus, the cost economics is huge. The retail team has to be empowered with the right analytics for selecting the store location. The target set by the analytics team is to have an incremental revenue of over 1000 crores, which can be attributed to analytics.
Titan then focussed on Merchandising, Supply chain and inventory management, Retail operations team and finally found models based on pricing, product mix for stores, etc. Netflix uses data processing software as well as traditional business intelligence tools along with open-source solutions for collecting and storing massive chunks of information. As a result, the platform enjoys a high engagement rate with original content Netflix renews 93% of its original series. This directly contributes to revenue as it helps drive up viewership for shows and keeps the customers engaged. Apps suffer greatly from people signing up and not using the app but not Netflix.
Social media is where the analytics is much easier and Nestlé’s used Instagram to amplify its ‘Celebrate the Breakers’ campaign, focusing its efforts on generating awareness and message association (through website clicks and video views) among 15 to 34-year-old Instagrammers. There many software companies who are able to offer their services in marketing analytics and startups are being created for this facility. World is changing and the impact of artificial intelligence is imminent. There are great opportunities in the area of Big Data, Data mining and also Customer relationship management. In future, learning the basics of marketing is not enough to get a competitive job. It requires using technology and the lucrative areas are in marketing analytics. In Chapter 3 and shloka 21 of Bhagwat Gita, it is given that “Whatever action a Great man performs, the Common man follows”. Only those who take next step in a riskier area, they will lead. Hence it is high time that one realises that advancements in technology need to be also applied to marketing any products and services.
(The author is Vice Chancellor, Cluster University of Jammu)
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