Saturday, November 21, 2009
Now this is a new era, in this era technology has made significant changes ,the power of blogs, social networks and open sourcing has given customer a whole new range of weapon ,as customers the individuals are much more powerful and to this aggrandized set of individual the formal branding rules may not hold very effective.
The new era beckons for interactive branding, A kid of branding strategy that will take into account both marketers as well as customers, where the role of customer can no longer be restricted to someone who has a need and whose need has to be fulfilled by the producer by giving him some sort of value in the product,todays customer will play vital role in each and every aspect of branding, such as eliciting his need, the price which he is ready to pay, the kind of value that he wants. Even in trivial issues like aesthetic sense of the product, looks and style of the product customers will be playing an important role.This new branding technique will have positive impact not only for the customer but also for the marketer himself. With the help of this interactive branding The marketer can come up with a huge degree of cost cutting, because a major degree of input will be provided by the customer himself and that to with the help of tools like blogs and social networks which simply costs nothing. This field is an emerging field in the landscape of marketing management .It calls for a great degree of study ,research and analysis ,I will like to write more on this topic and at the same stage of time a expect a lot of inputs from the free thinkers.
Saturday, November 14, 2009
Competitive strategies in business and wars have always shown resemblance; if closely looked most of the business warfares take its inspiration from wars.
Here in this post i will like to bring one such resemblance between the attacks made by great war tactician HANNIBAL BARCA against the ROMANS in the PUNIC WAR and the attack made by the Japanese auto makers like TOYATA ,NISSAN AND HONDA against the big three ie GM,CHRYSLER AND FORD.
For those who do not know regarding punic war i will like to explain, punic war is a set of three wars fought between the romans and the north african empire of carthage which finally ended up in the culmination of carthage.Out of the three wars our concern here is with the first part of the second war where the carthagian general hannibal barca took a military of around 50,000 soldiers,crossed the alps and attacked the romans in their own land. A similar kind of strategy was adopted by the Japanese automakers in the early 70's when they attacked the american auto industry in their own market.
in 218 bc Hannibal left new carthage(spain) and left for rome,the basic strategy of Hannibal was very clear, there were two major ideas involved-
• Romans always considered themselves as a very superior force,the smug romans could never prognosticate that the army of carthage whom they considered as an inferior stock can ever dare to attack the romans,this sudden attack will completely confuse them and since the Romans are unprepared they will find it tough to respond.
• The second part of the strategy was to fight the war in the roman soil, this can create chaos in Rome and carthage can leverage it.
This carthagian strategy really paid off.They defeated the Romans continuously in three consecutive battles and got a major part of the roman empire (though it should be noted over here is that finally it was not rome but carthage that tasted defeat ,thanks to the retaliatory moves by the romans who used the strategy of hannibal against him only, details on this on some other blog)
These very same tactics were used by the Japanese auto companies against their american counterparts. Japans companies entered in the American market in the early 1970's with their small cars which were better in quality but lesser in price than the cars produced by the American auto majors. American automakers were not prepared for this attack, they perceived these japanese makers as manufactured of inferior quality and instead of fighting them they relegated the segment of small car market to them and started focusing on big car segment, they were sure that Japanese companies were not capable enough to fight them on this segment, but unfortunately they were wrong ,after holding their ground in the small car segment the Japanese attacked the us auto makers in the segment of big cars also and on account of their idea like TQM IE TOTAL QUALITY MANAGEMENT they defeated the us in this segment also ,Finally the American automakers tried to take shelter in the segment of light truck manufacturing but here also the Japanese did not spare them ,as per the present data gm is bankrupt, Chrysler has been taken over and ford is on the verge of bankruptcy. Well, large part of Japanese victory can be attributed to various reasons such as better product, cheap labor in contrast to their American counterparts, better culture in their companies but a very important part that worked in their favor was there strategy of attacking the American on their own profit sanctuaries ,it repeatedly attacked the Americans on all those domains which have been their major source of making profit and thus created a great chaos in there structure, one important point to be noted over here is that while American auto makers were under great pressure of loosing there revenue from their core market the Japanese makers were not only winning ground in the usa but they were making good deal of money from there japanese business also, in fact there safe base at Japan give them the opportunity to take risk against their American counter part by attacking on their territories. This was very much in line with the Hannibal’s strategy of restricting the warfare in the roman land and keeping a safe base at carthage.
Thus we can see that there has been a great similarity between the attack by Hannibal barca and the Japanese automakers. (Baring one difference, though the Japanese have almost won the battle , Hannibal finally lost it to the Romans who learned slowly from Hannibal and used the same strategy against him.)
REFERENCE:- HARDBALL: GEORGE STALK AND ROB LACHENAUER
Tuesday, November 10, 2009
The rule of 250 is a wonderful networking cum selling strategy, it stipulates that while you are dealing with one customer you are in reality dealing with 250 potential customer because every individual on an average knows 250 such individuals whom he can influence to some extent, according to this rule if you have made strong relationship with one of your customer on account of your services as well as on account of personal grounds then this one customer has the potential to bring you 250 new customers with the help of his personal network.
The father of this rule is an US based auto salesman named JOE GIRARD,according to Wikipedia Joseph Samuel Gerard, better known as Joe Girard, (born November 1, 1928 in Detroit, Michigan) is an American salesman. He is recognized by the Guinness Book of World Records as the most successful salesman, selling 13,001 cars at a Chevrolet dealership between 1963 and 1978.JOE has authored a book called "HOW TO $ELL ANYTHING TO ANYBODY" where he has described the rule of 250,according to him your one single customer is equivalent to 250 potential customers, Joe always believed in making very good relationship with his customers, he was in a practice of sending them cards(every month he used to send 13000 cards) and he generally used cards of different color and size for his customers so that customers should never think that this is a junk mail, this helped him in building strong relationship with his customers who in turn brought him loads of new customers. These new customers again has the potential of bringing 250 new customers, thus a whole new network of customers can be established.
The story behind finding this unique no. 250 is again very interesting, once what happened Joe went to a funeral ,there he was given a prayer card ,unlike other prayer card this card was having the photo of the deceased on the top, this prompt the sales man inside Joe to give a serious thought, he thought since the exact no. of mourners turning up for the funeral is not known how can someone decide how many cards to print, the no of cards shouldn't be very low but the same time it cannot be very high because that will lead to unnecessary wastage( this kind of card cannot be reused since it was having the photo of the deceased ).After the funeral he went to the funeral director and asked him how did he decide the no of cards to be printed, the director replied that over the period of service he has noticed that for any kind of person generally 250 mourners turn up for his/her funeral. This led JOE to think that every individual is linked to some 250 individuals on whom he has some sort influence because until unless you will not be having some influence on some one the guy will not turn up for your funeral, from here the rule of 250 came into existence.
So next time whenever you are dealing with any customer always keep in mind that in reality you are dealing with 250 potent customers.
REFERENCE: a) HARDBALL: GEORGE STALK AND ROB LACHENAUER
Sunday, November 8, 2009
The puppy dog ploy is a life saving strategy that any start up needs to follow in its initial days,As illustrated by the name this strategy suggests that during initial days of it's growth when any start up company suffers from lack of resources and doesnt have deep pockets as it's competitor's the company should mantain a low profile and should try to reamain unnoticed in the competitive arena.puppy dog ploy helps the start ups to avoid onslaughts from established players of the market thus ensuring uninterupted growth for the start up .The logic for this is very simple ,suppose you run a start up company and if you want to compete against well established players in the market you need to come up with some inovation,because thats the only way you can make a niche for your product ,now the problem is that if your idea clicks and you grab a lot attention for it then surely and certainly the well established players in the market which have got deep pockets will be attracted towards investing in this new idea and with the kind of pocket they have and the kind of brand value they enjoy the chances are very high that will beat you very easily on your own game.
So these new start ups should alawys resist the temptation of making big claims in the begining of there growth,one very good lesson can be learned by" NETSCAPE" ,the company came up with a web brouser navigator in 94 and with in 8 months the company captured 90% of the web brouser market,from day one the company was challenging microsoft heads on,The cofounder of the company MARK ANDREESSON AND JIM CLARKE never missed any oppurtunity in debasing microsoft,they claimed microsoft as the deadstar and declared that very soon the the MS window will become obsolete,though it helped the strat up in gaining publicity but at the same time it also made BILL GATES very cautious of netscape,he made internet his top priority and and used all of his resources to beat netscape,MS used both soft as well as hard power to beat netscape,not only did it strated delivering it's web brouser interenet explorer free but also it paid heavily to companies like KPMG AND AOL to switch from navigator to internet explorer,as a result of this netscape started losing it's market share and finally lost the battle to micro soft,in the end it was taken over by AOL in 10 billion us dollars.While netscape made the blunder TRANSMETA adopted this puppy dog ploy very perfectly,this micrioproccessor manufacturing firm was founded in 1995 but from the very begining it kept a low profile,very little was known regarding it's business,by 2000 it came up with a new version of microproccessor that can run both window as well linux operations by utilizing a fraction power used by INTEL micropocessors,the company got a lot of media attention after the launch of the product and finally when it went public in 2000 it got a market capitalization of some 6 billion us dollars(though the company was not very successful in the near future),transmeta knew that in case they would have created lot of hoopla in the begining Intel a large company would have used a great part of it's resources and expertise in developing a better product than transmeta in the similar segment.
Thus it is advisable for a new start up to play the puppy dog ploy and maintain a low profile as long as it can,it not only averrts strong competition but also helps the sart up in concentarting on it's product.
REFERENCE:-a)JUDO STRATEGY:-DAVID B.YOFFIE AND MARY KWAK
b)HARDBALL :-GEORGE STALK AND ROB LACHENAUER
Judo strategy is written by David b. yoffie and Mary kwak and is published by Harvard business school press. The book basically talks of the resemblance between judo and the strategies that have been taken by various newly emerging business to fight against established players. In judo weight and physical strength doesn’t matter what does matter is your strategy and with the help of right strategy and right move you can use the strength of your opponents for your own benefit, the same principles are valid in the ambit of business where no matter how strong your competitor might be but with the application right moves and strategies you can bring him to ground.
The book is diveded into three sections with the first two sections having three subsections each and the last one having two. The first section deals with the fundamentals of judo strategy in business, like in real judo where you have three steps that is movement,balance and leverage ,in real world business also players adopting judo strategy against their strong competitors need to make use of these three steps. In the movement step one needs to maintain a low profile so that while his business is under growing stage he can avoid attacks from well established players, at the same stage of time he needs to define competitive space where the company can apply its core competencies and once the competitive arena is decided the company should escalate fast so that the firm could emancipate its strength and can enjoy some substantial advantage over its established rivals.After making proper movement the company needs to balance itself from the opponent’s attack,this balance cannot be achieved by fighting neck to neck with your competitor but by griping your competition with the help of various means such as striking deal with your own competitor or striking deal with your competitor's partner or by designing your strategy in such a way so that you can use the moves of your competitor for your own advantage as in case of fight between Wal-Mart and Kmart back in 1980's ,at that time the average price of retail item was slightly lower in Wal-Mart in comparison to Kmart, but Kmart was investing a lot in advertisement ,Wal-Mart was reluctant in spending so much into advertisement ,what it deed was that it posted Kmart's weekly circular in front of it's stores and challenged that walmart will match or beat any of the deal thus converting the strong advertising campaign by kmart in it's own favor .After movement and balance the third part of the game calls for leverage ,this part is the most important part in designing your attack here you use the strength of well established player and use it against them only,the best example can be the case of dell and compaq,back in 80's compaq was a well established brand in the pc segment and it's selling network relied on a very strong network of retailers and wholesellers ,it was difficult for dell a newcomer in that time to afford such a strong network,dell adopted a fairly different plan,it took orders directly from there customers,gave them customized solution for there need and finally delivered it directly to the customers there by slashing any need for middle man ,this new model of distribution called as "DIRECT FROM DELL" was very successful and it helped dell to increase its market share drastically, Compaq on the other hand was very worried on account of its loosing market share,it was having two option either to continue with its earlier model of selling or to switch over to the dell's model of direct delivery, but it went went for the third one where it adopted both the strategies which simply was a dud,not only did it lose it's good relationship with the vast network of retailers and wholesalers which had so far helped Compaq to be one of the dominant player in pc segment but also it was not in a position to adopt the direct delivery system properly which was somehow an alien idea for the company.Compaq's market share kept on decreasing year by year and finally the company was taken over HP.The penultimate part of the books gives us the example of various successful individuals such as Jeff Hawkins,Donna Dubinsky(Palm ),Rob Glaser(Real Player) ,Halsey Minor and Shelby Bonnie(Cnet Networks) who have used judo strategy very perfectly against there competitors.The last part gives some strategy to beat a judo player by adopting the game of sumo where the big players needs to adopt strategies such as intimidation, use of strength ,propagandas and outspending your weaker competitors on account of your deep pockets and rich assets, additionally it also contains a user manual for using "JUDO STRATEGY".
The best part of this book is that it contains a lot of examples from the business world,as a result of which it becomes easy for a reader to grasp the main ideas of the book properly, the book has given various examples of the firms such as FREESERVE,PALM,REAL,EBAY,DELL,SEGA,FRONTIER AIRLINES,INTUIT, ETC who successfully adopted judo strategy against there well established competitors and received favorable result ,at the same time the book also gives illustrative examples of firms like ETOYS,NETSCAPE, ETC which couldnot use judo strategy in a right way and had to suffer.Though book is very comprehensive and illustrative fraught with a large no. of examples one drawback which the book is having is that most of the examples and cases of which the book talks about have been taken from the IT and related industry, had there been more examples from other sectors such as FMCG,RETAIL,AUTOMOBILES, ETC the book could havce been better.As a whole this book is well written and is worth reading for MBA students, entrepreneurs, managers as well as general read
Wednesday, November 4, 2009
Back in 1967 both coca cola and pepsi were leading cola brands and the word cola was synonymous with the word beverages .Both Coca-cola and Pepsi were having strong dominance in the psyche of cold drink lovers,at that stage according to conventional thinking 7 up which was or in fact is basically a lemon drink could have been done two things either it could have introduced a cola brand of itself or it could have positioned itself as a lemon drink thus highlighting some of its salient features as lemon drink.Following the first would have been suicidal because with two leading brands already in the market it would have been really tough for 7 up to invest its resources and to come up with a 3rd brand that could change the status quo,had they followed this course of action 7up would have definitely made huge losses. The second course of action though could have been better from the first one but solely emphasizing on the type of drink it produces would have never helped it to to configure itself accurately among the psyche of customers with respect to its competition.
An intelligent ad design is one where you position yourself with respect to competition ,the competitive space where you are waging the war should be clear to your customers,and thats what 7up did,it came up with its famous campaign “7 up the uncola” thereby at one end waging a war also with there competitors which were basically cola brands and at the same time not waging it since it is not a cola.The uncola campaign positioned 7up in a very tactful way,it made its message clear to the public "here is a drink that is not a cola,it is different and it is very proud on its difference ."It clearly gave an alternative to try for the prospective customers of that time, and this paid off.With in a very short interval of time the sales of 7 up skyrocketed. It enjoyed huge market share in the coming few years.
The campaign was really successful in changing the competitive space itself for 7up which gave 7up in getting a clean sweep for first few years.
REFERENCE: a) POSITIONING:JACK TROUT AND AL RIES.
Sunday, November 1, 2009
Well what do you really understand by commodities,according to wikipedia A commodity is some good for which there is demand, but which is supplied without qualitative differentiation across a market. It is a product that is the same no matter who produces it, such as petroleum, notebook paper, or milk.
As i have explained branding in the previous section branding can be regarded as some aspect of your product or service with which a customer relate himself,in other word it is some thing which helps you to differentaite your product from rest of the competitors.definately as per the defination of commodity it becomes a very tough job to brand your product in case its a commodity,though tough its not completely impossible to brand your product.Here are some of the ways in which you can brand even a commodity-
- by providing products which are much more reliable than your existing competitors.exp-the case of acme bricks,while most of the bricks on an average gurantee a relaiblity of some 5 years acme gurantee a relaiblity period of 100 years.As a result of which it commands a very strong brand loyality by its customer.Such sort of branding can be done in steels,bricks,cement etc.
- after sales service,this is another aspect where one can differentaite from its customer,after sale service will ensure strong customer company relationship which will finaly lead into more business with the same customers in the near by future.
- providing some additional services at the same price,exp: suppose you are dealing in the business of milk,you might give your customers pasturized milk at the same price where your competitors are providing normal milk,one another case could be providing free home delivery to your customers in case you are dealing with steels,bricks,farm products or metals,
- by establishing the image of your company as some thing which is very ethical and which is very active in discharging its obligation towards society,though this is some thing which doesnt have a direct relationship with your product but the basic root of this idea lies in the emotional aspect of costomers,one must always believe that emotions play a vital role in making desicions,every customer will keep an ethical organization in high esteem and will always be emotionally inclined in striking a deal with such organization.
Often we come across the term brand,from automobile,tv sets to jeans we wear we hear this word.Even most of us have our own personal favourite brands,often we hear that companies like Ibm, MICROSOFT,GE,BOEING,BMW,MCDONALDS,TATA are big brands,so what is it all about, to be very clear the defination of brand is very large and it contains both tangible as well as intangible aspects.A very short one line defination for brands would be to say that its the name,logo,tagline or product (or some specific quality of the product)of a company with which a customer relates it self ,you might love levi jeans and you feel your self connected with it and always prefer wearing it,thus levi becomes your favourite brand when it comes to buy jeans.
But if seen with a broader perspective brand is just not only this,its some thing beyond.The brand value of a product refers to the totality of experience which a customer has when ever he uses the product,the experience of the customer includes various factors such as the quality of service which he is recieving ,the price which he is paying,the value for money which he is going to get,the value of risk reduction with the product(take case of electriacl equipments)brands can include various other factors such as aesthetic sense of the product or the resale value of product(in case car,mobile phones etc).Now any product cannot becaome a brand in itself in just a small interval of time ,to be a brand some time is always needed,a proper branding strategy for a company is some thing which needs to include both ,ie right product and right promotion,neither product nor promotion can single handedly create a brand ,to make a brand company needs to create some short of impression in the minds of the prospects or costomers with the help various promotional strategies and when the customer purchases the product the product must justify this,the standard of the product must be in accordance to the image which the customer was holding in his mind.This can only ensure brand loyality from the side of customers,if your product is of very high quality but it is not supported with a strong promotional campaign it can never penetrate deep into the customer minds,at the same time if you have created a lot of hoopla with the help of a strong campaign regarding your product .But when being purchased your product is not upto the mark then how ever strong your promotions may be,sooner or later your product will be rejected by the public.
When it comes to branding it should be known that branding is not only asssociated with a product ,it can also be associated with a group of product or a whole company itself.More on this in some another blog.
REFERENCE:B2B BRANDING BY KOTLER AND PFOERTSCH