Posts Tagged ‘consumer behaviour’
Google and P&G on ZMOT
Posted on: September 24, 2011
According to Proctor & Gamble shoppers make up their mind about a product in three to seven seconds, just the time it takes to note a product on a store shelf. This time lapse is called (by P&G) “first moment of truth” and it’s considered the most important marketing opportunity for a brand. The term “First Moment of Truth” (commonly called FMOT) was coined by Procter & Gamble in 2005 to define the first interaction between a shopper and a product on a store’s shelf.
While this first moment of truth is still important, the rise of full internet adoption and increased search engine use often lead to many brand interactions taking place between a consumer and a brand before that consumer ever sees a product on a shelf. This phenomena is what Google calls as “Zero Moment of Truth”, or ZMOT.
So, essentially the Three moments of Truth changed to Four moments of Truth as below:
1. Zero Moment of Truth: When the user is searching online for a product with an intention to understand the product that he intends to consume or buy.
2. First Moment of Truth: When the consumer goes to the store and interacts with the brands in the store
3. Second Moment of Truth: When the consumer brings home the product and experiences the product. The consumer checks if they delivered on the promises made or not.
4. Third Moment of Truth: When the consumer gives feedback or how the consumer advocates the brand?
Please refer to google-zmot to get a comprehensive understanding of ZMOT. Thank you.
Strategic Channel Management
Posted on: September 6, 2011
A sales channel is about where you’re going to sell and how you’re going to sell. In fact, it is about where you’re consumer is willing to purchase your product, where the consumer expects the product to be available, what is the consumer decision making process regarding your category and product, and what is your positioning in the market. All the channel decisions should go hand in hand with Segmentation, Positioning, Pricing and other elements of the Mix.
For example, let us consider the purchase process of Toothbrush. Most consumers even today don’t know exactly which variant of the toothbrush they use, and many of them don’t really bother about the product much. The consumer may know that he uses an Oral-B (mother brand), but may not recollect the brand of the toothbrush. A consumer generally doesn’t remember a brand and ask for that particular brand at the retail store. Mostly the retailer displays or the consumer browses through the toothbrushes available and the consumer may recollect the brand, or the advertisement, or like the in-store promotions and product design for those toothbrushes and one of these elements of advertisement recall, product design, etc. may make the consumer consider and choose a particular toothbrush. So, in such categories, there is a lot of dependence on you’re presence in the store as the consumer remembers you only when you’re present in the store. There are lot of categories ranging from deodorants and refrigerators to laptops and anti-viruses. It depends a lot on your availability in the stores and consumers choose among what is available. So, channel becomes a crucial part of marketing strategy which is where to sell and how to sell. The channel and distribution management comprise the Place element in the Marketing Mix.
Under channel management, the company deals with external organizations(channel members or partners) to achieve its desired marketing goals and profitability. There are different types of channel partners like C&F Agents, Distributors, Retailers, OEMs, Value-Added Re-sellers (VARs), Brokers, etc. Each of the channel members business goals will differ in their expectations of profitability, sales, ROI, long-term prospects,etc. The right channel strategy will help bring coherence and build value to the customer, channel members and the company. So, a strong channel network has become a key component in corporate strategy.
As discussed, there are many factors that influence channel management, but following are the broad factors that influence a channel design or strategy:
1. Understanding of the Target Group, Target Segments, the consumer needs and the consumer behaviour
2. Understanding of the Marketing Mix and the product features, brand persona, positioning, pricing, etc.
3. Understanding of the retailers needs and behaviour
4. Channel goals and the functions to be performed by the channel
5. Legal Issues
6. Reach required
Refer IBM Route to Market Strategy for an understanding of how effective channel management helped IBM.
The Rural Consumer
Posted on: July 8, 2010
The rural consumer behaviour exhibits certain behaviour unique to rural settings and this makes it important for marketers to understand rural consumers through appropriate research. Rural consumers, for example, tend to lead a more relaxed lifestyle compared to the urban counterparts and exhibit little urgency. Consumers in rural markets tend to have greater trust in products and services endorsed by the government and its agencies. They tend to be more brand loyal, as habits once formed are difficult to change and they tend to feel a pride in getting a good deal rather than paying premium prices for products and services.
The cultural values and norms have a strong influence in determining buying and consumption behaviour in the rural areas. There are restrictions on the type of food and the type of intoxicants that can be consumed in the villages. Similarly, women occupy a more traditional place in rural areas and therefore western apparel may not be accepted in the rural markets. However, the rural youth are open to any new ideas, and influenced by the urban consumption patterns.
Rural communities tend to be closer than urban societies and reference groups have a greater importance. Relatives and people from the same caste are important reference groups. Joint families still exists in villages although the trend is towards the nuclear families. In rural areas, the consumption is driven to a large degree by the occupation and income of the consumers. Low income levels and inadequacy of credit facilities also affect the consumption patterns. Another important factor that affects demand patterns in rural areas is the instability of the income of the farmers, which is linked to the seasonality of agricultural production as well as to the unpredictability of the harvest. Similarly, the landless labourers and daily wage earners get their remuneration on a day-to-day basis and therefore they purchase in smaller quantities of products at a time, mostly on a daily basis.
As compared to the urban counterparts, the rural consumers have different interpretations of colors, symbols, and social activities. As the exposure to mass media and information technology is increasing, rural consumers are being more informed about products and services and their dependence on traditional reference groups is waning.
Should Kodak create a new brand ?
Posted on: May 18, 2010
Kodak reminds the consumers of the small yellow boxes of film. The consumer doesn’t perceive the latest digital technologies when he sees the image of Kodak. It is because Kodak had too much success in the era of the non-digital photography market. Its success began to become its failure. As Kodak is so successful with its own formula, it was dithery in its decision to enter the digital market, though it knows the whole world is going digital.
Kodak’s persistence with conventional market
Kodak entered the digital market in 1995 with the creation of the Kodak Digital Science brand. However, Kodak, never wanting to leave its niche segment of the non-digital market, invested heavily on a brand called Kodak Advantix System. Kodak Advatix System, with the internal technology name Advanced Photo System, gave many advantages to the consumer including three different print formats. These Advantix cameras and films were very expensive. Furthermore, there were distribution problems and there were not enough places where the Advantix films could get processed. Al Ries questioned Kodak’s decision to invest so heavily in conventional photography at the time when the whole world is going digital. Kodak has a problem, it doesn’t want its successful brand to die. Kodak failed to make a mark with its Advantix camera and people went digital.
Kodak – the brand that is not digital
Kodak is perceived as a leader in conventional photography market, but when it comes to the digital photography market consumers feel Canon, and Sony are better associated with the digital market. Kodak’s brand perception is not in sync with the digital market. Sometimes when you are very good in a category, people don’t accept you in other categories. It also has to do with Kodak never leaving its conventional market and taking a safe approach of keeping one foot in conventional market and one in the digital market. But, sometimes people perceive of what you are doing with your other foot too.
Should Kodak come up with a new brand for its digital market ?
There are two problems that Kodak faces: Firstly, the technology has changed and it has to keep up with it and Secondly, it wants to leverage upon its Kodak 100 year brand. I say this is a unique problem, because if you observe carefully the second point hinders the growth of the first. Kodak is so successful with conventional photography that people associate it with film photography. So, if you use this brand to project your digital technology, it may not be effective. At the same time, Kodak doesn’t want to leave this brand altogether because it wants to bank upon its brand equity and brand value. I feel, though this decision is difficult, Kodak should create a new pseudo-brand for its digital market. Because, it is going to be very difficult to change the perception of the consumers and Kodak will need to do a lot of unlearning in the consumers mind, which is very difficult and sometimes impossible. So, the better bet is to create a pseudo brand for its digital technology, because people think Kodak doesn’t think digital.
Yes, Kodak should create a new brand for its digital market.
Comments