Saturday, 28 September 2013

12 - STP: Importance of serving customers by grouping


Market segment - Group of customers who share similar set of needs and wants.

Segmentation:
Geographic - class I & II cities; thought of while developing product.
Demographic - SEC AB F 20-34 yrs
Psychographic - Outdoor-oriented lifestyle
Behavioural - potential/ regular users, medium usage rate, readiness - aware & interested, positive attitude towards product. 

Consumer behaviour and demographics provides info on customer perceived value.

SEC - Classify urban households on the basis of education & occupation.
Need based market segmentation - to  identify small, better defined target groups
Segmentation criteria -
·         measurable
·         substantial
·         accessible
·         differentiable
·         actionable

Purpose of segmentation - risk reduction. Determined by behavioural variables for existing categories. Prerequisite for segmentation - established categories. For each segment, there are different brands that occupy a different mind-space.
For a particular category and customers, there is 1 final segmentation.

Targeting:
Lakme has several products in varied price ranges for different segments.
Targets through ad's, marketing mix elements, branding, brand building.
If Lakme wants to take on a competitor for a particular product, it should -
·         Identify segment
·         Decide if it is worth its time to invest on the segment
·         Have relevant POP comparable to competitor and POD which differentiates its product.

Positioning:
The way individuals rank products in their head; most Vs least preferred.
Lakme is the 47th most trusted brand in the world, no 1 cosmetic brand in the country.

Marketers want a brand's acceptance to be so high that there is no mind space for another brand.

11 - Sales management and consumer behaviour


Sales at Lakme does not follow a funnel structure.
Sales promotion - leads to incentive for action
·         Advertisement - least credible
·         Word of mouth - most credible

For Lakme, promotion can be:
·         Selective: Products promoted at malls, Health & Glow outlets, select online sites
·         Intensive: Products promoted at small stores (better distribution)

At Lakme - Informative & Reminder Advertising is required to let people know about product, to buy it.

Howard Sheth model of consumer behaviour:
1.       Motives - Even skin tone
2.       Brand comprehension - Safe cosmetic; suits Indian skin
3.       Attitude - Price-sensitive customers
4.       Confidence - No 1 cosmetic in India
5.       Intention - Skin should appear non-oily
6.       Symbolic - emotional - Kareena wears Lakme Absolute range in 'Heroine' movie
7.       Stimulus ambiguity - If consumer's are unsure if cosmetic will suit them, look up blogs of opinion leaders --> leading to  overt search.
8.       For a cosmetic category, people have in memory - choice criteria & brand comprehension.
·         Choice criteria - Take feedback from family, reference groups and social class.
·         Brand comprehension - After using the cosmetic to the finish over a period of time, consumers will have an opinion and will know if they want to repurchase/ switch brands.

10 - Promotion: IMC, ATL, BTL


While launching a new product, should write off entire advertising cost in 1st year.

Message:

Creative brief content:
mssg
TG
comm objective
key benefit
support for brand promise
media

Creative development execution:

TV ad's : Brand personality (colours used for diff cosmetic types)
Print ad's : Picture, headline, copy matter in that order.
Legal and Social issues:
ASCI (Advertisement Std Council of India)- self regulatory; women should not be portrayed in subordinate manner.
Monopolies and Restrictive Trade Practices Act 1969 - Wrong representation  is unfair trade practise

Sales promotion offer an incentive & attract brand switchers; however creates clutter.

Interactive Marketing:
Search ad's - when consumers search on google, ad appears depending on -
the amount company bids
search engine algorithm

Mobile marketing - ability to personalize mssg based on demographics, consumer behaviour characteristics.

Opinion leaders:
Clique - small group, frequent interaction
Effective comm; insulates them from new ideas
Challenge : Bring in Bridge - people part of clique, linked to person in another.


9 - Difference between Brands and Branding


The AMA defines brand as - name, term, sign, symbol, design or combination of them - to identify goods/ services of 1 seller or groups of sellers and to differentiate them from those of competitors.

Points of difference POD - mid-price range, reasonably long lasting for its price
Points of parity POP - category - cosmetic - compact, case with mirror and powder puff

Lakme - On top of the world
 



Branding - Endowing products & services with the power of a brand.
Brand equity - Added value endowed on products; reflected in consumer's reaction & market share.

Building Brand equity
·         Initial choice for brand elements - Lakme` (derived from Lakshmi)
·         Marketing activities supporting product - ad, events, blogs, lakme salon,   movie tie up's
·         Assosiation indirectly transferred to brand - Kareena Kapoor in 'Heroine' endorsing Absolute range

Brand reinforcement -
Partnered with cosmetic houses in Milan & Germany; accordingly develops technology.

8 - Distribution - Channel concepts: design, manage, control


Hybrid channels and multichannel marketing - 2 or more marketing channels to reach customers.
Lakme uses - online, retailer like health & glow, fancy stores
Manufacturer selling physical products needs 3 channels - sales channel, delivery channel and service channel.

Marketing flows in Marketing channel for Lakme
Physical flow - When transporters involved at every step of title flow.



MTF - offers consumers max benefit
In the case of Lakme:
ATL (Above the line) - Ad
BTL (Below the line) - Person deployed at the Lakme counter at Health & Glow, in malls.

Direct & Interactive marketing
Direct - Through websites - products can be purchased.
In their official site, they have Sabya (popular designer) write series of blogs.
Interactive - Users provide feedback on products, on official site

Word of mouth marketing
Opinion leaders blogging
People who purchase from flipkart, healthkart etc providing feedback

For Lakme, Distribution can be:
Exclusive: Products sold at Lakme salons or exclusive counters at malls
Selective: Products sold at Health & Glow & select stores
Intensive: Products sold at fancy stores







7 - Pricing concepts, effects and decisions


When price is high, the volume of the goods sold are relatively less i.e inverse relation. 
  •  Product -  the basis on which customer purchases product - awareness through different media. Customers can be innovators, early adopters, middle majority or laggards.

A connection is made between the product life cycle and the price by the consumer. It is compared to its competitors by consumers, ultimately competition determines its survival in market.
  •          Price - the customer perceived value for a product and if he feels the price is justified.
  •          Place – how the product is distributed(supply and distribution chain strategy). The length, width and depth of a product determine its distribution.
  •          Promotion - how aware the customer is about the product through packaging, ad and distribution strategy - push or pull.

How companies price?
1) Reference price - Lakme has priced this compact comparable to its competitors; all 3 compacts perform similar function.
·         Colorbar UV Perfect Compact 9g (Rs 250)
·         Lotus Herbals Naturalblend Botanical Compact (Rs 314)
2) Price quality inferences -
Mid-price range; hence an effective cosmetic to give an even skin tone for 8 hours; does not change the texture of the skin(not cream based).
3) Price endings-
Rs 265/ 275 - As it ends with 5, it is to facilitate easy customer recall.

Setting price
Selecting pricing objective - It is priced wrt competitors; however within lakme compact range also there is a significant difference between the different compacts.
Determining demand - Seller can charge higher price if he can convince customers that it offers lowest total cost of ownership.
If demand is elastic, sellers will consider lowering the price.
Target costing:
The firm should examine cost elements - design, engineering, manufacturing, sales - final projections should be in target range

Competitors-
Have profit maximization objective, as they react by improving ad budget or improving product quality.
As it is a product in mid-price range, it is at the orienting point.
Price - Only revenue bearing element which contributes to topline.
Cosmetic companies base their price on customer's perceived value.
Buyer's image of product quality, Trustworthiness, esteem - Due to brand name Lakme.
Warranty - 3 years
Customer support - Providing feedback on blogs; inform others.
Supplier's reputation - Health & Glow renowned to provide quality cosmetics.

To avoid increasing prices:
  •          Shrink product price
  •          Increase pack size
  •          Use alternate low-cost ingredients

Monday, 9 September 2013

6 - Differences from Products, GAPS model


INDIA:

According to Drug & Cosmetic act in India the labeling requirements for cosmetics are:
  •           Name of cosmetics and name and manufacturing address should carry on the both inner and outer labels.
  •      For small size containers on the label instead of mfg address the principle place of mfg and pin code are sufficient.
  •      The outer label should contain the amount of net contents of ingredients used in the manufacturing.
  •      The inner label addresses the direction of safe use and any warning indication or names and quantities of the ingredients those are hazardous or poisonous in nature.
  •      The label should carry a distinctive batch number and it indicated by the letter “B” and for soaps  the month and year of the manufacturing shall be given instead of “B” and this is not apply to cosmetics which are having 10grams or less for solids or semisolids and 25ml or less for liquid state products.
  •         On the label the letter “M” is indicate the manufacturing license number.


Some amendments have been notified in the labeling clause of D&C act, which are:

I. The ingredients should be declared in the descending order of their concentrations down to 1% and in any order below 1%.
II. Use before date instead of best use before date which was earlier declared as xx months/year from the date of packaging.
III. The  Import & Registration of Cosmetics rule says “no cosmetic shall be imported into India unless the product is registered under these rules by the licensing authority appointed by Central government”. The amendment comes into force with the effect from 1st day of April 2011.

Service:
In terms of my marketing diary product compact powder, I have explained the services provided by a store called 'Health & Glow' which sells my product.

Definition: Any act or performance one party can offer to another that is essentially intangible and does not result in ownership of anything.

  • Lakme compact powder 9g - pure tangible good
  • Service provided by 'Health & Glow' caters to customer's - personal need.
  • My product falls in the 'high in experience qualities' category - only after a person use's it, she will get to know if it suits her best.
  • This product has a mid-level credence quality - a buyer can evaluate product in fair manner only after consumption.



Distinctive characteristics of services provided by 'Health & Glow':

1) Intangibility -
·         Place - Exterior and interior have clean lines; passages have space so that people can look at products without blocking the way; layout across other branches are similar.
·         People - There is 1 person to look after each section eg: 1 person for lipstick etc; we can take suggestions from the person to know which cosmetic suits us best. Also if they have a display sample, we can apply it on our hand to know the specific colour.
·         Equipment - Billing is efficient.
·         Communication material - The employees will inform us about present offers.
·         Symbols - The symbol suggests a well-stocked cosmetic store where they do not tamper with products, most of which come without a seal.
·         Price - It sells recent-stocked cosmetics at MRP price.

2) Inseparability - Employee-customer interaction

3) Variability - Employees are trained and well informed across different branches, serve customers in proactive manner.

4) Perish-ability - On supply side -
·         peak-time part-time employees
·         peak-time efficiency from employees
·         increase consumer participation - bag their cosmetics



     Customer care contact:
     If you're a consumer, contact Levercare executive at -
     Toll free number: 1800228080, 18001022221 
     SMS 'levercare' to 54555 (BSNL 4555) 
     PO Box No 1470, mumbai 400099 
     Email: lever.care@unilever.com

     

     For feedback on Lakmé Salons and Ayush Therapy Centres please write tocare@lakmelever.com

Service-Quality 5 GAP model:


1) Gap between consumer expectation & management perception - Eg consumer wants a cosmetic that lasts long without reapplication but management has not realised need.
2) Gap between management perception & service-quality specification - Service quality is a comparison of expectations with performance.
Eg compact not catering to different skin tones.
3) Gap between service-quality specification & service delivery - Eg If customer service is bad, nobody responds to queries.
4) Gap between service delivery & external communications - Eg when consumers expectations after viewing the ad are not met.
5) Gap between perceived service & expected service - Eg when consumer thinks compact will even them even skin tone, but compact does not.
  •          Reliability - dependability, promised time
  •          Responsiveness - customer informed
  •          Assurance - instil confidence
  •          Empathy - individual attention to customer
  •          Tangibles
Zone of tolerance - Minimum level consumers are willing to accept and the level they believe can and should be delivered.