 "How to make the most of a small budget")
Marketers need to operate with limited resources, more so when changes in the external environment - such as economic slowdown - negatively affect revenue and profits. Here are five steps that can help organisations market brands on a tight budget.
Define the target market and positioning
The key element of a marketing strategy is how well you define your target audience. Newer approaches such as exploiting data analytics can help achieve finer customer segmentation than what was possible through traditional means. Through target marketing, organisations can identify the right set of customers whose needs they can meet effectively and profitably. They can identify customers who are most interested in buying a given product. Specifically for new products, identifying and convincing early adopters to purchase a product alone completes half the marketing task. They would now don the role of brand communicator, spread word of mouth and bring in more customers.
Marketers are often tempted to communicate every possible benefit of their brands. The old idea of consistently communicating a unique selling proposition to your target customers is still indispensable; it costs less and almost always delivers.
Build and communicate the brand strategy
Building strong brands requires a carefully crafted brand strategy. The key aspect of a brand strategy is brand identity, that is, how a company wants its brand to be perceived, and how it defines what the brand stands for. Just having a brand strategy is not sufficient; it should be effectively communicated, not only externally but also internally in the organisation. An organisation should achieve employee buy-in. A brand is all about promises made to customers; employees, especially those interfacing with customers, must know these promises as they need to eventually deliver on them. Remember, internal communication just requires willingness and some effort, not cash.
Leverage umbrella branding
Brand building costs can be economised by nurturing one major brand, and leveraging it for multiple products. Investing in one brand allows organisations to distribute the advertising and other marketing costs across different products. Companies like Nirma and Amul have maximised their returns on marketing spend using this approach. However, having an umbrella brand for economy segment may not help if an organisation wishes to target premium consumers subsequently. For instance, Nirma, a highly successful brand in the economy segment, failed miserably in the premium soap segment. At the same time, the Amul brand has been used to successfully launch a range of dairy products for different customer segments as it was never positioned exclusively for the economy segment.
Make organisations relationship-centric
Relationships have always been at the core of many world-class organisations. These organisations seldom use traditional brand-building approaches; instead, they focus their energy on building long-term mutually beneficial relationships, not only with their customers but also with their employees, suppliers and alliance partners. Starbucks is one such organisation. Its total advertising expenses were about $20 million over a period of 20 years - an average of just $1 million per year. This is minuscule when compared with P&G's annual advertising expenditure of $30 million in 2001 on just a single brand: Pampers. Despite its significantly lower spend, Starbucks as a brand is often ranked above Pampers.
Co-create with customers
Another way for companies to efficiently use marketing resources is to involve customers to co-create value instead of just giving them the passive role of buying products and services. Customers can be involved in generating new ideas, product development, advertising and brand communication. By co-creating value with customers, organisations can achieve higher customer satisfaction, customer loyalty, and long-term relationships with them. Companies such as eBay, Napster and Netflix have harnessed the power of co-creation. Ebay enjoys vibrant customer communities, which continuously provide new ideas to the company and actively participate in its feedback system where buyers and sellers rate each other.
To conclude, companies must also undertake extensive audits of their marketing campaigns from time to time. This will help them identify what is working and what is not.
Define the target market and positioning
The key element of a marketing strategy is how well you define your target audience. Newer approaches such as exploiting data analytics can help achieve finer customer segmentation than what was possible through traditional means. Through target marketing, organisations can identify the right set of customers whose needs they can meet effectively and profitably. They can identify customers who are most interested in buying a given product. Specifically for new products, identifying and convincing early adopters to purchase a product alone completes half the marketing task. They would now don the role of brand communicator, spread word of mouth and bring in more customers.
Marketers are often tempted to communicate every possible benefit of their brands. The old idea of consistently communicating a unique selling proposition to your target customers is still indispensable; it costs less and almost always delivers.
Build and communicate the brand strategy
Building strong brands requires a carefully crafted brand strategy. The key aspect of a brand strategy is brand identity, that is, how a company wants its brand to be perceived, and how it defines what the brand stands for. Just having a brand strategy is not sufficient; it should be effectively communicated, not only externally but also internally in the organisation. An organisation should achieve employee buy-in. A brand is all about promises made to customers; employees, especially those interfacing with customers, must know these promises as they need to eventually deliver on them. Remember, internal communication just requires willingness and some effort, not cash.
Leverage umbrella branding
Brand building costs can be economised by nurturing one major brand, and leveraging it for multiple products. Investing in one brand allows organisations to distribute the advertising and other marketing costs across different products. Companies like Nirma and Amul have maximised their returns on marketing spend using this approach. However, having an umbrella brand for economy segment may not help if an organisation wishes to target premium consumers subsequently. For instance, Nirma, a highly successful brand in the economy segment, failed miserably in the premium soap segment. At the same time, the Amul brand has been used to successfully launch a range of dairy products for different customer segments as it was never positioned exclusively for the economy segment.
Make organisations relationship-centric
Relationships have always been at the core of many world-class organisations. These organisations seldom use traditional brand-building approaches; instead, they focus their energy on building long-term mutually beneficial relationships, not only with their customers but also with their employees, suppliers and alliance partners. Starbucks is one such organisation. Its total advertising expenses were about $20 million over a period of 20 years - an average of just $1 million per year. This is minuscule when compared with P&G's annual advertising expenditure of $30 million in 2001 on just a single brand: Pampers. Despite its significantly lower spend, Starbucks as a brand is often ranked above Pampers.
Co-create with customers
Another way for companies to efficiently use marketing resources is to involve customers to co-create value instead of just giving them the passive role of buying products and services. Customers can be involved in generating new ideas, product development, advertising and brand communication. By co-creating value with customers, organisations can achieve higher customer satisfaction, customer loyalty, and long-term relationships with them. Companies such as eBay, Napster and Netflix have harnessed the power of co-creation. Ebay enjoys vibrant customer communities, which continuously provide new ideas to the company and actively participate in its feedback system where buyers and sellers rate each other.
To conclude, companies must also undertake extensive audits of their marketing campaigns from time to time. This will help them identify what is working and what is not.
Anand Kumar Jaiswal
Associate professor, Marketing, Indian Institute of Management, Ahmedabad
Associate professor, Marketing, Indian Institute of Management, Ahmedabad