Marketing Challenges

With marketing in transition, the old ways of doing things is becoming outdated and ineffective. Among several challenges posed, here are two big ones and some of the ways in which companies are responding to them. The challenge of polarization – Across Europe and the United States, markets in several industries are getting polarized with migration to high end and low or value end offerings. It looks as if there is room for brands only at the two ends and the space in between is getting squeezed. For example, grocery, airlines, PC servers and notebooks have moved to the value end while coffee machines, digital cameras, wine, toothpaste and compact cars are some of the categories that have migrated to the high end. Some of the products that have offerings at both high and low ends are apparel, banking, refrigerators and beer among others. For example, haute couture brands have been pushed by high street brands like Zara to launch prêt-a-porter or go mass better known as ‘masstige’ (prestige brands going mass). The mid range products have fallen victim to this trend and are gradually declining.

The polarisation phenomenon has been brought about by low cost brands from Emerging Economies coming onstream and mid tier brands being put under pressure from premium brands. Companies are constantly challenged to choose one or the other. Interestingly, the speed at which migration happens and towards which end or both varies by region and country. While markets have still not matured in Emerging markets it would be interesting to map products and categories to see which end is contributing to growth.

The challenge of proliferation – There is a great amount of proliferation – in product categories, brands, distribution channels and communication vehicles. Rather than making it easier to reach target consumers, it leads to fragmentation of spends and raises overall marketing costs. It is becoming increasingly important to differentiate the product offering and message to bust the clutter.

Managing the challenges

It is interesting to see how some companies are grappling with these challenges. Challenge of polarization -Brands stretch not just up or down.
Is there a way out of conventional thinking of the market as high or low end. Electrolux, a mid tier brand was feeling the pressure from low cost entrants from Emerging Markets and upmarket brands in Europe. It has now consolidated most of its business under one umbrella brand (Electrolux) with sub brands. Rather than segment the market by just two price points, they look at different value offerings by customer lifestyle and purchase pattern; so steam ovens are sold to health oriented consumers and compact dishwashers that were earlier made for just smaller kitchen segment are now marketed to anybody who needs to wash dishes more frequently.

Fast moving consumer goods historically have grappled with the issues of brand stretch up or down, perhaps more than others. In the toothpaste category, both Colgate and Crest have come out with different propositions and brand benefits such as – tartar control, gum protection, fluoride, fresh breath, enamel protection, teeth whitening and so on. They are sold under one umbrella brand and segment consumers by lifestyle and need rather than price.

Challenge of proliferation – How about a U-turn

In another response to challenge of branding in today’s crowded markets, Dove has taken a U-turn. In its widely lauded campaign – beauty products for real women, it shuns the conventional 16 something, size 0 models and uses middle aged women to advertise its products. This rides on the growing spending power of ageing baby boomers and rising sentiment against ‘unnatural’, skinny looking models giving rise to a whole generation of anorexic and bulimic women.

One can argue that conventional advertising has largely been ignoring the 35+ ageing gracefully women. However, does it now gain their franchise at the cost of alienating younger women? If that were so, it would still mean gaining a larger market share given that this segment is growing in the West. But what if it manages to alienate even the middle age segment it set out to woo. What if the campaign is seen as a license to grow fat and be comfortable with the status quo. Advertising is about creating just a little bit of tension with the way things are, it exhorts you to the next level be it skin care, car purchase, food, holidays et al. To me the ad is dangerous because it allows you to be in your comfort zone, suggesting that there are millions others like you and that it is ok to be fat and ungainly.

My bete noire suggests that in this era of brand and message proliferation a contrarian approach to marketing is good because it makes people sit up and take notice. Now that Dove has earned brownie points from the media, advertisers and feminists across the board, it is time to talk product benefits to win over the ever fickle consumer.