Initially referred to as just going to the market to sell or buy goods and services, Marketing is defined as a set of activities, institutions, and the process for creating, communicating and exchanging offering that have values to customers, clients, partners and society at large.
Marketing, seen as a very creative industry that keeps on reinventing itself, involves advertising, distribution and selling. A market research is done to establish the customer need hence the marketing strategy is designed in such a manner that it is basically concerned with customers’ future needs and wants. Further, marketing is influenced by many of the social sciences especially psychology and sociology. It also involves creative arts especially in the area of advertising (Leslie, 2004.P.148)
The company performance actions that can influence the consumers positive reaction by purchasing the products is mainly influenced by marketing approach. This has developed in to what is popularly known a ‘marketing mix’, that is the companies activities and actions that influence the consumer purchasing behavior. The ‘marketing mix’ involves Product, price, place and promotion (Robert, 2005. Pg 88-91).
Paul F.Nunes and Woodruff W. Driggs views
Marketing dilemmas have been said to influence so many companies different approach to marketing methodology especially how much to spend on showcasing the companies products. When the president of Scotch whiskey maker Glenmeadie decided to spend a half of the company’s cost on marketing by introducing a new interactive capabilities on the company’s website, product information call center, and several other approaches, several mixed reactions came from all quotas of the marketing fraternity. Some criticized this front-end innovation as highly costly. However his approach has seen more consumer loyalty and sales moving up. However Glenmeadie’s master distiller, Ellis Cameron criticizes this expenditure on customer relations at the expense of other programs like his R&D efforts. He says the approach does neglect customer’s basic needs by trying to trap the customers rather than redesign their needs. He says this has dented the general growth since some of the expenses cut are consumed by the marketing department (Paul, F et al 2006.)
This kind of dilemma has griped many businesses’s decision making organ and slowed down the process. Where it is common to find it difficult to come to a consensus on what to do, it always poses a challenge to the management of the company
Even though the company’s sales may go up, as in the case with Scotch whiskey management, the top management kept questioning if the customers’ loyalty is due to the need and value of the product or it just because they (customers) have been bought in the so called touch point kind of marketing strategy. By transferring the whiskey to sherry butts, Madeira drums, and port barrels before bottling, the approach even asserted this belief of buying the customers loyalty. By doing this the company was achieving a unique taste with new depth and complexity.
Another dilemma long term versus short term views of the different top executives. While some executives look at the long term strategies as a worthwhile approach, some see it as just another unnecessary venture. For example, whether to do single cast bottling at scale or not is a dilemma. This would definitely be an expensive venture because it would need some new automation just to get every cast bottled separately and given a label giving them the dates, the number of cask giving them limited edition stature. However, the approach may prove a masterpiece, but the question that may arise is the fact that at long run customers may only need superior whiskey and not all these attractive packaging and no quality improvement in the distillation process. Carl, 2007.pg112-114.
First impression Vs reality
There is the common believe that first impression counts in all the psychological aspect of customer reaction and how the customer will respond to the new product when it goes to the market. That having the right interface is sometimes what is needed to compete effectively. That a prospective employee goes to the interview and the kind of reception he or she receives makes him or her chose to work with the company rather than the previous one. A warm reception in a heart warming room by a lovely secretary / receptionist gives the prospective employee an impression of a better working condition awaiting him/ her. Just like a superior quality reception would give a head start in attracting the best employees, a well packaged quality product of Glenmeadie’s spirits would win the hearts of the targeted consumers as time would prove.
San Francisco World Spirits Competition had affirmed the superiority of Glenmeadie’s spirits by giving them four gold medals in addition to the three gold medals won earlier in another competition organized by International Wine and Spirits Competition. Once such events goes public, the fiction remains in peoples minds that the best is found in a company that wins the medals. This notion is engrossed in the public opinion that it becomes impossible for a new competitor to get into the market and outclass such an established brand. This was achieved through aggressive marketing approach that informed the consumers of the presence of such a product and superimposed its superiority.
Price, quality and demand
There is normally confusion over the customer need and price of the commodities that puts the companies in great dilemma. Some marketers believe that lower prices attract more customers while some argue that many customers prefer quality as the main factor for purchasing a product. This is clearly seen in the way some companies set huge prices for similar products which are charged much lower. The difference could be the packaging. In this case of Paul Nunes and Woodruff Driggs, “What serves the customer best?,” HBR (October 2006), Mr. Bob wonders why the small gadget in the name of an iStream was charged all that expensively and still people still forked out money to purchase it. His tribulation is not unique especially to those who have a marketing experience. Otherwise why would one walk into a supermarket, peruse different companies’ products and instead of finally picking the cheaper product, the more expensive products moves faster from the shelves. This unique customer behaviour prompts marketers to think of ways to trap customers by beating the path to their doors rather than wait for the customers to beat the path to your door. Sometimes the strategy employed by the company’s marketing team may not be seen in the short term as a success but the building of the customer base is what made the product of Glenmeadie be recognised in all spheres of the business world. The Glemeadie’s taste makers program had been recognised by a major magazine that dedicated the whole of its publication the program. The magazine was explaining its goals, success factors and resource requirement.
According to David Herman, even though front end initiatives and product development are very important aspect of satisfying customer needs, innovation at customer interface is very important and need to be looked at with keen eyes. He explains that a careful balance is necessary for the company to continue excelling towards its goals. He gives an example of his luggage and leather goods company, Hartmann Incorporated, which has been in the business for quite some time that is, since 1877, and was still growing strong. That the leather making. Hartmann Incorporated is owned by a luxury consumer products company, Brown-Forman Corporation. He further asserts his argument by singling out one of their most profitable channels of distribution, Southern comfort, who communicate with their customers direct and therefore get feedback direct from the customers. He advises that because Glemeadie cannot sell directly to the consumer, it is necessary to allocate more funds to their marketing innovation strategies than the product innovation. Secondly, as the company is trying to win new customers, retaining the old ones may be jeopardised. This is because the current loyal customers may need some improvement on the quality of their preferred product of Glemeadie. According to David Herman, the product innovation will do this magic of retaining the current loyal customers. He therefore suggest the proposed Master distiller Ellis Cameron’s idea of cementing the personal relationship between the most loyal customers and the Glemeadie’s product through single-cask bottling to deliver a customized product to the company’s preferred upscale consumer. He also suggests the use of third party resellers to distribute their upscale products to the end consumers. The cost of production may be a very expensive venture but this seemingly is the best way of retaining your most loyal customers that has kept the company afloat. However, this idea of using huge sum of cash to redo the production may not be the best way. This is because the consumer will likely be treated to a new set of product in the name of re-branding that may have a negative impact on the customers. This approach may also risk success because it will require the company to give their most loyal customers the information on re-branding and repackaging. This may take toll on the company’s profit for some time.
Wendy Wray asks what Should Be the Glenmeadie’s priority for Innovation Efforts. According to Wendy, the marketing dilemma comes between the marketers and the business owners. The former sees Bob’s efforts as successful because it has realized numerous successful results. The latter sees it differently as it is seen as very costly and is likely to dent into the dividends and other benefits. This makes the arguments more of a political rather than logical argument. Wendy states that the two opposing arguments are not necessarily two different views but just one view given in different statements. Why? Because the two approaches are all focused toward how to reach consumers. While the Ellis idea is front end innovation production, the Start with the fact that Ellis’s idea is about as front end production innovation to give the consumers new taste and flavor, while Bob’s is to make the product appealing to the end user consumer by aggressive marketing. The common feature here is the two different views with one goal of attracting the consumer to the product.
However, this Wendy’s argument has slightly significant different view. Logically, looking for the consumer at the ground and re making a product to attract the consumers are two different ways of doing things. It is therefore clear that the two may give two different results and are likely to cost different amount of cash to implement. The two efforts are meant to turn around what the industry need to what consumer need. The effort to attract the end market is the only reason why the company wants to add value to their products. At the same time, doing the marketing to let people get the knowledge of the product is also important (Joel, 2002. pg45)
Founder and Chairman Marketspace, a digital strategy advisory company, Jeffrey F. Rayport puts it candidly that without mass to consume and appreciate the good artwork of production, the better mousetrap Ellis proposes would definitely go nowhere. So according to him, Mr. Bob should be worried if his strategy is not doing anything to uplift sales. If it does lift then it is necessary to spend as much in the program to continue moving the sales up. The company’s front office sales success has not come at the expense product innovation according to Jeffrey F. Rayport. Therefore there is no point of one castigating the front office approach to marketing. Jeffrey therefore concurs with other fellow experts that the problem is not with the trade offs between Bob and the directors, it is with the organization
Steven Dull, Vice President of Strategy at Greensboro wonders whether Bartenders in discotheques can talk up the new vodka drink when he ask what should be priority for Gleanmeadie’s Innovation Efforts? Dull argues that a single mass marketing is likely to spoil the scotch as a brand, which is considered a luxury item, exclusively made for a particular segment of the society. It is therefore not prudent to spend huge sums of money to promote this brand associated with quiet conversation in an exclusive joint. That mass marketing will spoil the brand’s allure with a particular class of people associated with it.
However I tend to disagree with this fact. The product being marketed to the entire mass is a good way forward to make it appealing to a bigger section of the population and not as a way of exclusion. And the bigger the number of clients and market share, the higher the chances of survival even in a competition. Furthermore, the common notion that has been there about this luxury product is that it is for a particular class of people. Therefore, bringing it down to ordinary folks makes them feel special and the response was seen in the case study. What’s the catch? Every body would like to be associated with a upper end of the society hence consuming the product gets them this golden opportunity of belonging to the class (Paul, et al. 2006.pg76-77)
The marketing as a very creative industry, should be very flexible and be determined by the new customer understanding and demand. Proper marketing gives the customer a sense of belonging hence the customer is likely to develop loyalty toward the product. It is the long term strategy of the companies that is normally prompting huge investment in marketing hence the justification of the outcome. If the marketing strategy does not work, then the company looks for other alternatives.
The marketing realities are totally different from what people normally imagine. Its complexity send fear among executives who would want success to the products of their company but fear spending as they feel that is risking a lot and instead settling for back office marketing investment. However, most of the front office marketing strategy has proved success as the customers feel their presence in the production process by interacting with the people responsible. This creates a sense of belonging amongst the consumers hence is likely to push the sales up, a final destination of any existing company (Colleen, 2007. pg 69). However, marketing still remains a complex affair that needs critical analysis hence the need of a combined effort and risk taking.