Benefits of Advertising on the Internet.

The Primary Benefit of internet advertising is that it is very cheap. secondly it gives you the benefits of videos, pictures audio and customer interaction all in one go. For example some ads have games in them and others compel you to click by asking questions. This interactivity can intrigue the customer and make them develop interest the product. Also product information can be obtained quickly as all the customer has to do is click the link on the ad, which takes him to the company or product website.

References: Principles of Marketing by Kotler and Armstrong

Is Market Research always Necessary?

We have seen many examples of products failing despite heavy market research which predicted success, case in point the new Coke. However there are many products out there which made it without any market research and ones which could never have been discovered as a result of Marketing research. Take the example of the Sony Walkman. No Market Research took place and it was not even known that such a product would ever be demanded. However was is one of the best selling products of its time. Similarly Coke was originally intended as a cough syrup and is now one of the best known soft drinks around the world.

The point is that sometimes intuition and vision may be a better judge of product success and research. However this does not mean that companies should abandon Market Research altogether in favor of trying their luck. Marketing Research is still important as it lowers the risk of failure.

Here is a list of products which were discovered by accident:

http://www.scribd.com/doc/2677699/9-Things-Invented-or-Discovered-by-Accident

Accuracy of Primary Research

Despite the usefulness of primary research, it might not be always be accurate because of the following types of bias:

1) Sampling Bias, which means that the sample chosen does not completely represent the target market. This is why sample sizes need to be large so that the level of inaccuracy is minimized.

2) Questionnaire Bias, which means that the questions asked make respondents answer in a certain way. this limits its accuracy primarily because the company might be led to believe that their product will sell well even though that is not the case.

3) Other Forms of Bias which include People not being honest about their answers especially when it comes to personal interviews. this can lead to more inaccuracy.

References: Business Studies by Peter Stimpson

Types of Retailers in Pakistan

Specialty Store: Royal Tag or Men's Store

Department Store: H. Karim Bukhsh

Supermarket: CSD

Factory Outlet: Notable clothes retailers like the Cambridge shop or Levi's

Warehouse Club: Metro and Makro

Franchise: McDonald's or KFC

Shopping Center: Pace

Levels of Product: iPod

Core benefit: The core benefit is that of a music player which allows you to listen to music wherever you want.

Actual Product: The actual product is the Apple iPod which offers other benefits such as a video player and a large storage capacity for contacts and photos. It is renowned for its quality and design which made it one of the most popular gadgets of the decade.

Augmented Product: Offers additional services like access to iTunes and the iTunes store which allows you to purchase podcasts and songs. Also has one year warranty and after sales services.

Ideal Portfolio Position

The above graph shows the ideal position for a firm's product portfolio. As you can see, as soon as one product enters the decline stage, another reaches maturity. This is considered ideal because firstly the firms sales stay stable and secondly, there are no interruptions in the cash flow of the business. This situation is however difficult to achieve and maintain.

Direct Mail

Direct mail is a marketing channel which avoids intermediaries such as wholesalers and retailers by directly coming in contact with the customer by mailing them catalogs or special offers.

The effectiveness of this type of marketing is debatable because most consumers consider these mails as junk and throw them away. However certain consumers do tend to respond to these offers and hence discredit the myth that everyone hates these junk mails.

There are a lot of ethical concerns regarding direct mailing. Firstly environmentalists are against it because it leads to a waste of paper as most of these mails are trashed and hence wasted. Secondly these companies tend to have a lot of sensitive information about the households like their income, mortgage details etc. which makes many of these potential customers uncomfortable. Despite all this direct mails have endured largely because they are cheap and their effectiveness can be measured easily.

For more in-depth details of direct mailing, click the link below:

http://www.time.com/time/magazine/article/0,9171,971769-7,00.html

The reason I found this article relevant because it shows both sides of the picture with regards to direct mailing.

Worst Ad- Omore

The first thing that came to mind when I saw this ad was "who eats ice cream in the bathroom?" apparently, the folks at Omore feel that its a norm for kids these days. Not only was it confusing but the image of food items like ice creams being eaten on a toilet was quite nauseating and uncomfortable. The entire ad had an aura of inappropriateness.

View the ad on this link:

http://www.youtube.com/watch?v=iqZJGlbTx08

Best Ad- Ufone

One of my favorite ads is the one by Ufone, where hell is let loose when a customer in a restaurant makes a comment about the high rates being charged. This leads to a furor, and chaos ensues as every chef, waiter, customer grab various items and charge towards the dissatisfied customer. The reason this ad is one of the best I've seen is because of its originality, and for its use of humor, which aptly gets the message across, like when everyone leaves after the customer says that he has no problem. The funniest part however was at the end where one of the waiters still couldn't break the bottle.

This video can be viewed here:

http://www.youtube.com/watch?v=HUrGOLIKwro

Stealth Marketing

In stealth marketing, rather than using the traditional channels of advertising through TV, newspapers, billboards etc, companies use a variety of non-traditional means. Because of the large number of methods that can be employed, there are no restrictions to this definition. Good examples if stealth marketing is how well known brands are shown as a part of the storyline of a movie or a TV show. Like in the Transformers movie, General Motors loaned Chevrolet Camaro, a recently introduced model at the time to play the role of Bumblebee. this generated a lot of publicity for the car. And also in the movie Evolution, where a well known shampoo head and shoulders was used to fight the alien.

Other forms include people or actors hired by firms to stealthily promote their products. A relevant example from the article pasted below would be someone pretending to be a tourist asks you to take his picture from his camera phone. What this does is that the person who will take the picture would take interest in the phone and hence will want to know more about it.

For more information on stealth marketing, read the article below:

http://www.time.com/time/magazine/article/0,9171,1003158,00.html

Product Life-cycle Extension Stratedgies

In a product life-cycle, the product goes through three main stages (other than development and introduction) which are growth, maturity and decline. However not all companies let their products enter into the decline stage. They employ extension strategies, which extend the life of the product beyond the decline stage while it prolongs the maturity stage. Companies employ the following extension strategies:

1) By Changing the shape or the design if the product, e.g Coke and Pepsi routinely change the shape of their bottles. Toyota changes the designs of its Corolloa models.

2) By finding a new market for the product, e.g sports shoes used to be used for sports only but now are a fashion accessory.

3) By changing the name of the product for wider appeal

4) Price reductions and other forms of promotion.

Here is how an extension strategy would look like in the product life-cycle graph

Taglines: How Effective are They?

"Just do it" (Nike), "i'm lovin' it" (McDonalds), "Connecting People" (Nokia), "sab keh do" (Zong), "Think Different" (Apple); these are taglines we've heard so much that they're difficult to forget. The purpose of these taglines is to associate a positive phrase with the company or the product so that it can be identified. Now the question is, how effective are these taglines? How do they help the comapny sell their products?

If you were to consider these taglines in Isolation, you would notice that these are just vague phrases which dont say much about the company or the product. Consider the tagline "Connecting People". On first look, one wonders: connecting people how? By connecting cities with rail links? by offering an online application which allows you to chat with your friends? All this gets very confusing, which is why the tagline needs to be supported images, videos and sounds to make it relevant to the company and the product. In Nokia ads, you see images of mobile phones, hear the sounds of people talking on these phones and then successfully interpret that by "Connecting People" they mean they connect people via mobile phones.

Hence to conclude, a tagline on its own wont do much, however if it is supported with images etc. its likely to be effective.

Global Marketing- Effect of Global Politics on Corporate Stratedgy

It is imperative for todays multinational firms to have a good feel of the current political environment when coming up with a global marketing strategy. Take the case of Coca-Cola in the 1960's. This was an era where tensions between the Arab world and Israel were sky high. At this time, Coke was serving the lucrative Arab market while furtively avoiding the Israeli market out of fear of a boycott from the Arabs. Coke gave economic reasons for not locating in Israel, which although worked for some time, eventually was exposed leading Coke to be labeled as anti-semitic which damaged its image and reputation. Under pressure from the Jewish community, Coke decided to open a bottling plant in Israel, leading to a boycott of Coke in all Arab countries. Competitor Pepsi, took this opportunity and launched in a Coke-free Arab Market.

This is important because todays companies should learn a lesson from Coke's fiasco. It lost a considerable share of the global market and lost a lot of sales while damaging its reputation. Hence companies should be more careful when designing global marketing strategies. you can read more about what happened by clicking on the following link:

http://www.snopes.com/cokelore/israel.asp

Marketing Don'ts- Terrible Ideas for Sodas

Today's markets have been flooded with hundreds of varieties of soft drinks, colas, sodas with so many different flavors that it gets hard to keep track of all of them for the ordinary consumer. The constant introduction of new flavors keeps these companies on their toes as the market gets very competitive and their R&D departments work on overdrive, generating hundreds of ideas. As you know when anything is overworked or overstressed, bad results are likely to follow as in the case of these drinks.

http://www.time.com/time/specials/packages/article/0,28804,1913612_1913610_1913552,00.html

Marketing Don'ts- Bad Advertising

Advertising is very important for creating awareness for the product. However the purpose of advertising is not restricted only in creating awareness but its to impress the consumer, get his attention and convince him to buy the product. Good advertising does all three. However bad or misguided Ads will have the opposite effect. Not only will it discourage sales but will also damage the companys' reputations putting them in a lot of hot water

Here is another list compiled by Time Magazine showing the worst ads. these ads are considered terrible because they involve racial stereotyping, inappropriate sexual innuendos and others simply did not make sense or get the message across. Most of these ads left consumers either disturbed or offended. View at your own risk.

http://www.time.com/time/specials/packages/article/0,28804,1907218_1907236_1907377,00.html

Marketing Don'ts- Bad Corporate Name Changes

The corporate name or logo is perhaps the most important brand name any company can carry. having an accessible and understandable corporate name which makes sense to consumers is vital as they tend to attach certain expectations and feeling with these names e.g people expect The Body Shop to be environmentally friendly as the company advertises itself as such.

the issue here is that companies, in an attempt to create a new image for themselves will try to change their corporate name to fit with that new image. the change may fit in perfectly well or might go horribly wrong as the following list compiled by Time Magazine shows how some name changes caused confusion among consumers.

http://www.time.com/time/specials/packages/article/0,28804,1914815_1914808_1914804,00.html

Marketing Genius

If i tried to sell an ordinary rock, do you think anyone would buy it? I'm sure your answer is a huge NO, but I beg to differ. consider the following example and give your feedback.

http://www.time.com/time/specials/packages/article/0,28804,1947621_1947626_1947687,00.html

Beliscity-Pakistan's leading online retailer

Beliscity is one of Pakistan’s most well known online retailer based in Karachi. People can order their products online, by phone, by text message and the company are currently planning on opening a retail outlet. The company started in 2001 and specifically dealed in electronics like cell phones and laptops. Today Beliscity has expanded its product line to include jewellery, cars , office supplies and toys. Their corporate aim is to provide customers products as quickly as possible at reasonable prices.

The offer a wide range of brands and even offer brands which are not available in Pakistan. Other than that, Beliscity offers free delivery of products, which customers find very convinient

You can visit the website on this link:

http://www.beliscity.com/

Can Country Compete with Nestle?

In our last class we discussed whether Country Juice is a competitor of Nestle. As both sell juices we could assume they are competitors. However we must take other things into consideration as well. For example Nestle markets its juice to slightly more affluent upper middle class people who wouldn’t mind paying an extra 5-10 rupees for a juice. Country on the other hand targets those who earn much less, probably lower middle class who prefer the cheaper product.

Also both companies are not in the same league. Nestle is a brand with worldwide recognition and a reputation for high quality whereas Country is merely a local company. And it is difficult to consider them competitors since Nestle’s resources are far greater than Country’s.

The Toyota Production System

Toyota has been by far one of the few companies to have applied lean production techniques with the most success. Toyota effectively uses the just in time system, whereby stock of raw material is only ordered when needed. Management firmly believes in empowering the workers and they are given the responsibility of finding and correcting all defects. Cell production is also an important aspect of the Toyota Production System (TPS). This is when the entire car making process is divided into smaller processes which are confined into ‘cells’ for example the painting process will be done at one cell and the bumper will be fitted in another. Materials are provided to these cells through the kanban system where the materials are brought in through bins. A method that Toyota increases productivity is by making cells which do the same job compete against each other. This healthy competition improves the rate at which cars are produced. The following are the 7 principles of the TPS:

1. Reduced Setup Times:

All setup practices are wasteful because they add no value and they tie up labor and equipment. By organizing procedures, using carts, and training workers to do their own setups, Toyota managed to slash setup times from months to hours

2. Small-Lot Production: Producing things in large batches results in huge setup costs, high capital cost of high-speed dedicated machinery, larger inventories, extended lead times, and larger defect costs. Because Toyota has found the way to make setups short and inexpensive, it became possible for them to economically produce a variety of things in small quantities.

3. Employee Involvement and Empowerment:

Toyota organized their workers by forming teams and gave them the responsibility and training to do many specialized tasks. Teams are also given responsibility for housekeeping and minor equipment repair. Each team has a leader who also works as one of them on the line.

4. Quality at the Source: To eliminate product defects, they must be discovered and corrected as soon as possible. Since workers are at the best position to discover a defect and to immediately fix it, they are assigned this responsibility. If a defect cannot be readily fixed, any worker can halt the entire line by pulling a cord (called Jidoka).

5. Equipment Maintenance: Toyota operators are assigned primary responsibility for basic maintenance since they are in the best position to defect signs of malfunctions. Maintenance specialists diagnose and fix only complex problems, improve the performance of equipment, and train workers in maintenance.

6. Pull Production:

To reduce inventory holding costs and lead times, Toyota developed the pull production method wherein the quantity of work performed at each stage of the process is dictated solely by demand for materials from the immediate next stage. The Kanban scheme coordinates the flow of small containers of materials between stages. This is where the term Just-in-Time (JIT) originated.

7. Supplier Involvement: Toyota treats its suppliers as partners, as integral elements of Toyota Production System (TPS). Suppliers are trained in ways to reduce setup times, inventories; defects, machine breakdowns etc., and take responsibility to deliver their best possible parts.

Reference: http://www.1000ventures.com/business_guide/cs_efficiency_toyota_ps.html