Blog 10

Blog 10

In this last blog, I am going to talk about our final group project. We focused our attention on parents who have recently had a baby. As it is known, when a baby is about to come in the picture, parents must change their lifestyle so as to adapt it to the baby care. The room we were given was the bedroom. Thus, to create and design a product prototype for our target, we needed to approach them in order to gain their insights.

In spite of having serious difficulties in the very beginning, we finally found the required sample to make a good analysis of our target. With the analysis I have been able to practice all what we had learned at class and although there are several issues I would like to highlight in this last blog, the two main ideas from this course that I believe I have understood better as a result of working on this project are:

Before assuming that you know your customers, you must understand not only what they do but also why they do it. Check your assumptions before going on your analysis

When I first knew that the room for our target was the bedroom, I immediately thought that the product prototype should be something related to the baby’s entertainment. Assuming that parents work all day long and when they are at home what they want is to get relax, a product for the baby’s entertainment fit exactly with my own conception. Nevertheless, while doing our approaches, I realized that bedrooms were less adapted to the baby care than what I had expected. In the great majority of bedrooms, everything was organized as if the baby wasn’t in the picture, except for the cradle and some other items. Therefore, more than being the place to take care of the baby, bedroom was still the place for parents to get relax (first) and then being with the baby.

In other words, if we hadn’t taken into account issues such as the uses of the bedroom or the changes now that a baby is in the picture, we wouldn’t have been able to find out the real needs we had to cover. Moreover, the kind of items we expected to see in the parents rooms were also very different from what we had thought because we realized that there were no toys for the baby in the room but a lot of small electronic items for the entertainment of the parents and also for the baby care.

Summarizing, we hadn’t met the real needs of our target if we wouldn’t have checked our initial assumptions. And to do so, we used two different kinds of approaches –online surveys and pictures of the bedroom-. Online surveys helped us realize our target’s concerns, expectations and other issues related to the bedroom and the link between the bedroom and the baby and the pictures of the bedrooms helped us figure out other issues more difficult to discover trough any other approach such as the type of items in the room, the organization of the space, the items for the entertainment of the parents or the items for the baby care. So, to finally design our product prototype we assured that we know not only what our target did but also why they did it.

Sometimes you can satisfy your target’s needs only by adapting an existing product. Therefore, more than thinking about the product features, marketers must analyze their target because once the analysis is done properly, the product comes immediately. Simplicity is the key

Once we gain our target’s insights, we were able to design our product prototype. In fact, this was the easiest part of the group project because we knew exactly which needs we had to cover and the only thing we had to do is imagine how to do it. As we are “marketing minds”, imagination and creativity flew so easily that in a few minutes we had the main idea of our prototype.

As I have mentioned before, the information gathered in our approaches was very useful to design our prototype. Particularly, our research findings showed us that:

- In the bedroom there were small electronic items
- Parents were mostly worried about the baby care
- Bedroom was not the place to entertain the baby
- In the bedroom there were items for the entertainment of the parents

With these findings we thought about a product which could let parents take care of the baby while at the same time they could be relax and unstressed. So, more than trying to find the perfect innovation, we adapt the usual baby monitor to create “THE HINT”.

The Hint is a small electronic item which identify when the baby is crying or is making some loud noise to then send a message to the parents. THE HINT is oval, so it can’t hurt the baby and it allows parents to calm down the baby through the voice –like a phone call-. The key point for developing this product was that it allows parents to be constantly “next to the baby” wherever they are. Therefore, without “almost any effort” we find the ideal product: THE HINT was a small electronic item, easy to carry and easy to have in the bedroom; it allows parents to get relax while at the same time they can control the baby wherever they are.

Summarizing, we did it simple and we succeed; and we succeed because we had worked very hard to identify the most relevant part of our group project: our target’s insights.

Blog 9

COMMENT ON TONI CANDINI’S BLOG: GUERRILLA MARKETING

In this blog, I would like to comment the topic of Toni Candini’s paper, which is Guerrilla Marketing. Although I am pretty sure he is going to carry out a very good paper, my main objective is to analyze some points I have already discussed with him in order to expose some different ideas.

Guerrilla marketing can be described as an innovative marketing technique to appeal customers and persuade them. What differentiates Guerrilla marketing from other “traditional marketing techniques” is that relevant issues to success are imagination, creativity and energy rather than huge marketing budgets.

As Toni clearly explains in his blog, Guerrilla marketing is a very useful marketing tool for small businesses. Budgets needed to develop this kind of marketing campaigns are easily affordable and if it is designed properly, impact on potential customers can generate substantial improvements in brand awareness. Nevertheless, small firms are not the only ones which can take advantage of Guerrilla Marketing. From my point of view, I think that big companies can be even more effective using it because they have enough power and financial resources to use it as a complementary tool to other marketing campaigns. Thus, by using Guerrilla Marketing or other cheap marketing techniques such as viral marketing, big firms can enhance and enforce the message they want to transmit in their “more traditional campaigns”.

In his blog, he literally comments that “new generations are immunized against TV, radio or newspaper marketing campaigns, so we need to take different roads, use different tools and convince these generations by using other techniques”. Although this is a real tendency, traditional advertising channels must be taken into account for all companies, even when they want to appeal new generations because using TV, radio or newspaper marketing campaigns does not mean that these campaigns will not be appropriate to have a clear influence on new generations’ purchasing decision-making process. One clear example of what I am trying to explain is the last Heineken’s TV advertising campaign (http://www.youtube.com/watch?v=nb2nnkai_Hg) because by being creative, Heineken has been successful in convincing its target.

Another important point to highlight is the effectiveness of Guerrilla Marketing. From my point of view, companies must be careful about when they can use this technique or not because depending on the product and the target, results of a Guerrilla Marketing campaign could have a bad impact on any company’s performance. For instance, if ROLEX wanted to improve its brand awareness, Guerrilla Marketing would not be the right method to use because the niche market ROLEX wanted to appeal would never be attracted by this kind of marketing technique. Therefore, before using Guerrilla Marketing, companies need to analyze their target in order to see if its use is coherent with their objectives or not.

Summarizing, Guerrilla Marketing can be useful to all kind of companies; small ones can be more easily recognized while big ones can use it as a complement of other marketing campaigns. However, companies must understand that although its benefits are commonly recognized, this is just another marketing tool that should be used only when it is required.

Extensive paper outline

Zara

Is it common for you to think that the most expensive should always be the best option? I thought it until I met Zara.

1) Introduction

a) The Fashion Industry

b) The company

Zara is one of the largest international fashion companies with stores almost around the world. Its strategy and the way the company understand the industry has dramatically changed “the fashion background”, and now competitors must adapt their strategies to every Zara’s movement. Therefore, it is very interesting to observe the differences between Zara’s and the other competitors’ strategies so as to identify a different but effective way to do business and gain customer insights.

c) Zara’s current strategy vs. the traditional retailer

Zara differs from its competitors due to its core competences that provide them with a competitive advantage in the industry. Usually, traditional retailers in the industry outsource their production to concentrate only on distributing and retailing. Nevertheless, Zara works on the whole value chain, which means that they are able to have much more influence and control over the industry than its competitors.

2) Body

a) What makes Zara appeal to customers?

The key point to Zara’s success is that every time potential customers go to Zara, they realize that what they saw two weeks before is not in the store anymore. Controlling the whole value chain, Zara is able to be flexible in the variety, amount and frequency of the new clothing designs produced. Therefore, as customers only have a few opportunities to get the product wanted, purchasing in Zara becomes a unique and unrepeatable experience for them.

b) What makes Zara special?

When comparing Zara to a traditional retailer, the key point to understand differences is the climate of scarcity created in Zara’s stores. This allows them to minimize costs to sell their items at full price. In other words, they don’t have to reduce prices once merchandises become obsolete. Moreover, they take advantage of its quickness so as to respond to the demand better than competitors.

c) Gaining insights or “creating” insights

One of the features of Zara’s strategy is that they don’t have a strict department of marketing. By developing Zara’s philosophy, they can anticipate and persuade the customer habits. Therefore, they don’t follow fashion trends, they just create them.

3) Conclusion

Zara’s ability to control the whole value chain allows them to be the most efficient in the industry. This can be seen, among others, in the marketing strategy they follow which let them the opportunity to lead the whole market and persuade customer habits.

VIRAL MARKETING

VIRAL MARKETING

How many times have you sent a friend some interesting link because you found it funny? Or how many times have you heard about an advertising never watched on TV? All these situations are not experienced by chance; they are part of companies’ marketing strategies. Currently that new technologies such as the internet have acquired more importance in the area of mass communication, firms have realized that a broad range of opportunities are available for attracting large social networks for free. They benefit from a word-of-mouth process done by millions of Internet users which consists of transmitting a message, an event or a promotion so as to produce increases in brand awareness. This is known as viral marketing.

The field for marketers has completely changed within the last 15 years. Now, they must imagine and improvise to win because traditional ways of doing marketing are not as effective as they used to be. Marketers as well as all manufacturers want to find their economics of scale and scope and the cheapest way to do it is by trusting potential customers as they are totally involved in the success of the companies; they not only purchase products but also influence others’ brand perceptions and purchase behaviors. Nevertheless, marketers must be careful using viral marketing because it could seriously damage the image of their companies if campaigns are not developed properly at the appropriate time.

What makes viral marketing special is that it can be used for everyone. It doesn’t matter the size of the company or the recognition of the firm, the critical aspect that makes viral marketing successful is the ability marketers have to create in order to appeal their target. For instance, I could create an ad promoting a local Spanish brand and email it to my immediate friends and clients. Once they received it, they would have the possibility to email it to the people they know. Therefore, just encouraging others to email my ad I would be able to create the potential required for exponential growth of my brand awareness. Assuming that half of my network -70 people- would email my ad to 30 people each, I would effectively reach 2100 potential customers. Now, imagine what would happen if these 2100 potential customers did exactly the same. Without any cost or effort my viral marketing campaign would have an impressive impact on the overall performance of the company.

Although important and necessary, financing issues are not the most relevant anymore. In the 80’s appearing on TV was enough to get popularity but currently marketers have to deal with a lot of substantial changes. They, first of all, must segment the target market they want to persuade and then explore all the alternatives available to find out which fits their specific needs. Develop an entire marketing campaign is not an easy thing and not always viral marketing helps marketers obtain valuable information or the expected benefits.

Summarizing, viral marketing can be useful to all kind of companies; small ones can be more easily recognized while big ones can use it as a complement of other marketing campaigns. However, marketers must understand that although its benefits are commonly recognized, this is just another tool to carry out their job efficiently but not the essential one.

THE PERSUADERS

THE PERSUADERS

Have you ever noticed that your purchasing decisions are taken unconsciously? Have you ever felt analyzed while you are shopping? I suppose that the majority of people have never thought about that. However, Dr. Rapaille, a recognized marketer guru, believes that we (consumers) are driven by unconscious needs, impulses and associations. Dr. Rapeille has been analyzing the behavior of customers for a long time. Moreover, he has been cooperating with a broad range of major companies with the objective to find out the hidden desires of consumers.

As far as his opinion is concerned, the key assumption in his researches is that he doesn’t believe in what people say, he only believes in what people do. He highlights that everybody has a mental code which lies very deep in our brains. Therefore, to analyze accurately the customers’ real preferences which lead them to purchase and to decode their mental associations, he identified and developed a 3 stage technique: PAST REASON, THROUGH EMOTION AND TO THE PRIMAL CORE.

- Reason: when Dr. Rapaille starts a focus group, he lets participants talk about a product, an idea or a topic. Although they usually think they are making a good job, he uses this initial stage not as a way to study their insights but as a way to prepare the field for the following stages.

- Emotion: This step consists of letting participants tell an invented story. In the example shown in the video, they had to tell a story as if they were trying to explain it to a 5 year old from another planet. The main purpose in this step is to persuade them not to be logical and reasonable anymore so as to let their imagination run wild. In this stage focus group members feel disoriented as they don’t understand the meaning of such a strange activity. Nevertheless, this is an essential step to achieve Dr. Rapaille goal.

- Primal core: in this final step, Dr. Rapaille looks for the members’ primal insights. The way he arranges everything drives them to feel as they were not in a focus group. He has them lay down so as to give them the opportunity to feel enough comfortable to remember their first experiences about a topic, an idea or a product. He mentions this final stage as the reptilian hot buttons and as he literally says “the reptilian always wins”.

Summarizing, what he gets with his 3 stage-technique is to recover the first and primal feelings customers had with a product to identify real connections which drive them to purchase it. This is a clear example of what we discussed in the “Kenna’s dilemma” chapter because first impressions not always lead to successful results; in every step marketers take, they have to assure that all issues are covered from their origins.

Concerning the Song’s example, its marketing strategy to appeal its target was very ambitious but not well oriented. What they pursued with its campaign was to create a lifestyle around the brand. In fact, they were able to create it but not the way they had expected. People felt identified with Song’s ads but they didn’t realize the meaning or the company’s purpose. Thus, although trying to be innovative and proactive –as their campaign was well thought and developed- they forgot the most relevant point in any campaign, which is selling the product.

KENNA'S DILEMMA

KENNA’S DILEMMA

How can marketers find how to appeal customers properly? How many issues do they have to take into account to be sure that their performance is the required one to achieve their marketing goals? Reading accurately “Kenna’s Dilemma” chapter, one can observe and detect that even the best marketers can fail if they don’t realize which are their exact unmet needs required to solve the problems they face. All the examples explained in the chapter define the usual mistakes marketers do when they try to analyze customer insights. Thus, this chapter is very useful to learn about others’ mistakes and identify good marketing practices.

Cases such as Coca Cola and Pepsi or E&J and Christian Brothers show the reader that first impression sensations are not always the right ones or the ones which define the whole process of consumption. In the example of Coca Cola and Pepsi, due to the first blind taste tests, where 57% of the tasters preferred Pepsi; Coca Cola invested in R&D to produce the New Coke, which was a little lighter and sweeter than the classic Coca Cola and much more similar to the taste of Pepsi. At that moment, although blind taste tests were favorable to the New Coke, its sales were such a disaster that Coca Cola Company was forced to bring back the original formula as Classic Coke. In the end, the key point was that the amount of Pepsi and Coca Cola in the blind taste tests was much smaller than the real quantity of liquid in regular cans; tests participants appreciated the sweeter taste but when they had to drink an entire bottle, they preferred Coca Cola.

Cases such as the previous example help me identify instructive and helpful lessons for a marketer trying to gain insight from current or potential customers. I would like to highlight two of these lessons; the first one is about ensuring that every marketing step of a research is under control when the final decision must be taken and the second one refers to the fact of assuming that having the best product does not mean a company is going to sell more than its competitors. By assuring that these two lessons are followed strictly, companies will not fail as much as they do in the art of attracting and gaining insight from customers.

To explain the first lesson I would like to address the topic of the water Perrier. When Perrier’s marketing department saw an opportunity to be the first mover in creating a premium niche in the water industry, they realized that the distribution channel they had to use included elite and sophisticated bars, restaurants and pubs. The cost of the bottle was almost 5 € and the packaging was modern and fashionable. Moreover, they made a big effort to be positioned as an innovative and exclusive brand. Unfortunately, Perrier’s sales didn’t have the success expected because, although target customers were willing to pay that amount of money for just one bottle of water, they didn’t have the habit of consumption in the overwhelming majority of places where Perrier was sold.

One of the most common conceptions among entrepreneurs is that their products will have great success just because of their superior quality. The problem is that although this is an important factor, it is not enough because marketing includes a lot of different but relevant issues. Simplifying, marketing mix is defined by 4 P’s (Product, Placement, Price and Promotion) and the previous stages are the definition of the market, the segmentation and the positioning. Therefore, if any one of these features is not considered in detail, all the effort done will not reap benefits.

My paper topic

ZARA

Do you know any multinational firm which doesn’t use traditional marketing campaigns to attract customers? I do and its name is Zara. As it has 1529 stores around the world, Zara is one of the largest international fashion companies. It belongs to Inditex, one of the largest distribution groups in the world which owns other fashion brands such as Pull and Bear, Massimo Duti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. Created in 1975 by Amancio Ortega, Inditex and Zara has followed such an innovative and effective business model that in less than 40 years has become an example of best entrepreneurial practices.

This is a very interesting topic to study so as to realize a completely different way to do business and attract customers. From my point of view, Zara is so proactive that they don’t need to spend their budget in gaining brand awareness because they know that by being in the most popular and expensive places they will have the required success to achieve their goals. Moreover, as I am going to develop in my paper, their operational process allows them to be constantly changing merchandises in the stores. In other words, they have the ability to renew their stores once every two weeks.

The key point to Zara’s success is that they know how to appeal and persuade because every time potential customers go to Zara realize that what they saw a week before is not in the store anymore. Therefore, as they only have one opportunity to get the product wanted, purchasing in Zara becomes a unique and unrepeatable experience for them. Moreover, all this process affects to its prices because they can reduce their inventories by having high rates of rotation.

The relation between my topic and customer insights is quite obvious. Zara’s business model allows them to define and identify their target market without making any effort. Although they have Zara kids and Zara home, the majority of stores are focused on men and women between 15 and 45 years old. Thus, if we take into consideration the fact that Zara is located in the most visited and crowded places, then we will realize that by having these strategic locations and being constantly up to date, they can appeal potential customers quite easily if we compare it with other competitors.

To sum up, I would like you to see this article I have found surfing the internet. As you will see, all the issues mentioned above are explained in more detail. It is a very short article (2 pages long) but very interesting and illustrative:

http://www.uniquebusinessstrategies.co.uk/pdfs/case%20studies/zarathespeedingbullet.pdf

In fact, I think that Zara’s case should be studied in all Businesses Schools because it shows an effective but completely different way of doing and understand business and success.