Emergence of new marketing channels BY Shraddha Amritkar IIM Trichy When we hear someone saying marketing lowing questions: a product, what comes to our mind? We What my customer expects from my prodimmediately think that this person aims to uct? How can I add value to the product in sell his product. Marketing has been there terms of time duration of delivery? ever since human beings started selling What are the major objectives that the the products. Be channel must it a newspaper address? advertisement or What are the through the word alternative chanof mouth. In fact, nels? Etc. people didn’t To sell the prodeven realize back uct to the targeted then that word of segment, it must Fig 1. Flow of value delivery network mouth or their be advertised first recommendation could also be a market- so to create awareness about the product ing strategy of the marketer. This not only and to tell the consumers how is our prodhelps in selling the product but also helps uct different from the existing set of prodin brand penetration to the targeted and sometimes non-targeted segments too. Marketing channel consists of upward and downward channels, each channel adding value to the product. According to me each channel is equally important and carries some significance in the value delivery network. For example, procurement of raw materials from supplier side needs to be carefully monitored for obvious reasons like quality maintenance, cost minimization etc. But the marketers pay special attention to the downstream marketing First ever newspaper advertisement channels so at to maintain “customer centricity” for the product. To be customer centric, marketer’s decision of choosing ucts. In the age of digitization, there are a the marketing channel must address follot of tricks and turns as far as advertising
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channels are concerned. But how can we discuss about such emerging marketing channels before peeping into the history of these channels.
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method involves first knowing your consumer’s wants and needs and then differentiating your product such a way that your consumer could easily relate to it. Figure 2 depicts Experiential the channels marketing helps with which we in establishment all are very faof the emomiliar but nowtional connect a-days we now with the target come across consumers by some jargons different means. like content E.g. LG innovamarketing, tion story- LG Fig 2. History of advertising channels SEO, communielectronics is ty marketing and experiential marketing, celebrating their 21st anniversary using an but what exactly are these? These are the emotional storytelling approach, emphaemerging marketing channels… let’s have sizing the importance of innovation and a look at these.. technologies in realising the dreams and Content marketing depicts a strategic aspirations through the tale of a father and approach of marketing to create awareness daughter. among the target consumers. This cannot Community marketing on the other hand be achieved if you don’t know what your deals with maintaining healthy relationcustomer wants from your product. This ship with the existing customers, through
online media like facebook, twitter etc. This leads to customer satisfaction as they feel valued and the company receive valuable feedback about the product. This ultimately helps in retaining the consumer loyalty. The ‘Brilliant moment’ ad campaign run by Hyundai and LG are now discussed widely on the social media. Now in the year 2020, the Artificial intelligence (AI) and virtual reality (VR) is going to take over as the main advertisement channel. Where, we could imagine seri giving us the test drive of a car or google cardboard in real estate giving us the feel of how our new house would look and what all changes we would wish to see before moving in or using VR, we could see how a medicine is going to act inside our body and the list would go on and on… But story does not end here, through these advertisement channels we were able to reach out to our customers but our main motive is to increase the reach of our product to the consumers. For this purpose, marketer needs to decide the correct distribution channel. Depending upon the product type the distribution channel is
selected. Earlier retailers made use of brick and mortar system to distribute the product but now it has all changed. From the advent of Amazon, people learnt to buy books online. Apple iTunes replaced the CDs and DVDs retail business. Amazon then expanded to become Walmart of ecommerce. And now app-based taxi ride service providers Ola-Uber have redefined the business of transportation. In the near future VR would replace the taxi drivers in these service providers, the problem of touch and feel need of the consumers while buying any product online would be solved with the help of VR. If the trend continues and the technology progresses to another version of Industrial revolution i.e. Industry 5.0, then in all probability the VR is going to eat away a lot of mundane jobs. This would give us the feel of modernization but we would be left with the high unemployment rate. But marketers would still need to sell their product and hence they have to make use of these channels. Steve Jobs used to say, “A lot of times people don’t know what
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they want until you show it to them�, but nowadays the consumers are much more aware of the latest trends, are knowledgeable about their wants and needs. Hence, it is a great challenge to the marketer to use the emerging marketing channels wisely
and correctly, so as to maintain a position in the market. Now, it would be interesting to notice, how marketers strike a perfect balance in choosing the marketing channels to maintain the value delivery network.
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Impact of Omni-channel Fashion BY Itishree Behera Retailing IIM Rohtak Omni-channel is the latest buzzword in the retail industry. Every brand competes for the maximum market share and ultimately grab most of the wallet share of consumers. Brands want to be present across all possible channel be it online or offline, this space is further growing through Omni-channel model. Online platforms act as virtual markets for fashion brands and they make their stocks available in personal websites or app based for easy usage through smartphones. As physical and online retailing begins to converge, one can make a purchase online and pick up at store or purchase at a store and get the product shipped to their doorstep. The most known Brick and mortar stores are expanding their horizons on the World Wide Web.
Salient features of an Omni-channel consists of a seamless shopping with multiple payments mode and efficient logistics. This makes the buying experience efficient and effortless.
Retailers can accept payment multiple ways which simplify the whole process, reduce human error and resource wastage. It gives the customer the benefit of using their preferred payment mode. Retailers today have access to important customer data to analyze customer behavior, buying patterns, payment preferences that help in driving better insights. Hence retailer can use it for various purpose such as to drive sales, offer personalized options, and discounts. This enhances the shopping experience of a consumer, which helps in gaining new customers and retain the existing ones. This overall affects customer loyalty positively. Considering an example of Aspect Software, an American multinational call center technology, and customer experience company, which recently reported that businesses that adopt an Omnichannel strategy witness a 91 percent higher year-on-year retention rate as compared to businesses that don’t. Further, the Aberdeen Group, a similar tech MNC noted that companies that
focus strongly on omnichannel customer engagement retain on average 89 percent of their Customer, as compared to 33 percent of the companies that don’t. It may be concluded from this data that retailers have to unify their online and physical presence to reap the benefits of a wider market and the new opportunities that come with it. While providing seamless service to the customer across these diverse platforms, retailers may face challenges in terms of payment. Retailers adopt multiple pay-
ment methods such as bank transfers, digital wallets, cards, scan, and pay etc. Multiple payment channels will lead to an operational issue in managing the different system, reports and tracking the financial transaction. Bearing processing cost as each service provider charges differently will translate into a certain margin loss. As the whole model is technology driven the retailer has to be well equipped with newer technology, tools, and processes. This, therefore, has to come from understanding customer shopping pattern. For
e.g. - Shoppers switch from web to smartphone to tablet while browsing and completing purchases. Creating a brand-specific app, that would save their shopping cart so they can access their information across multiple devices and browsers, can give an advantage. This app can also enable customers to pick up where they left
off no matter where they are in the shopping process! In this era of omnichannel various retailers who are e-commerce, conglomerates are slowly driving their way to ‘Brick and mortar’ format outlets. This can be best cited by e-commerce giant Alibaba, which has been buying physical stores, engineer-
ing a bold experiment to revamp China’s entire retail landscape. The e-tailer has been opening supermarkets in major cities of China Hema Xiansheng brand, thus changing the face of China’s retail market. Similarly, the homegrown supermarket chain Dmart is voyaging on the virtual marketplace by launching a mobile app and a website, to take on big-box retailers such as Star Bazaar and Big Bazaar besides online players such as Bigbasket, Grofers, and ZopNow. The 150-200-sqft stores named as ‘Smart Ready’ will act as centers that will act as pick-up points for custom-
ers who order products on its app. Empowering in-store associates with mobile devices that give shoppers on-the-spot information on product availability. These devices can be used by the store staff to ring up customers from anywhere in the shop. And if an item isn’t in stock, the staff can use their mobile devices to place online orders for the customer. Hybrid or omnichannel business models are needed to address diverse consumer needs and manage a variety of business constraints.
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BY Puja Ashwini IIM Rohtak
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INDUSTRY ANALYSIS
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INDUSTRY ANALYSIS
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BY Dhrumil Waghela IIM Rohtak
" Listen to your customers, n competitors.�" -Joel Spolsky
not your
t
#BUZZFEED
How Hindustan Unilever clinched GSK Consumer Healthcare deal
Hindustan Unilever’s bid for GSK Consumer Healthcare from those made by Nestle, Coca-Cola and ITC was a game changer as it went on to be the only to provide all-stock option. GlaxoSmithKline which is home to the iconic brands Boost and Horlicks was bought by the largest fast moving consumer goods. The accompanying market capitalization of HUL in India is over ₹3.95 trillion. The company focused on three major criteria for evaluation—valuation, certainty and ability to close the deal quickly and a distribution arrangement for the rest of the products that are not being sold. On all the three criteria HUL scored the highest. As a growing trend in the space of deal-making in the current macro environment, HUL’s all-stock merger option was a huge offer.
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This Diwali a brighter one for at least one street vendor, says HP
TGBL has approached key shareholders of Hector Beverages with a proposal to buy out the company along with its popular brand Paper Boat to spice up its portfolio. Even though a formal approach has been made, the talks around Paper Boat are still at an exploratory stage and there is still no guarantee that it will lead to a transaction. However, Kakkar has categorically denied any discussion with Tata Global Beverages or a possi-
One of the most heart-warming campaign created by Autumn Worldwide shows the efforts put in by the local artisans who make diyas and requests its viewers to opt for diyas this Diwali. A small act of empathy can have a positive impact on someone else’s life. HP India has launched a digital video on the occasion of Diwali, Umeed ka Diya, under its #TuJashnBan campaign. The video focuses on the need to buy products from street vendors and local artisans. It is an inspiring campaign; where technology acts as an enabler. The video is to make an effort towards the local vendors and create awareness.
McDonald’s – ‘Follow the Arches’
Not many brands that would chop up their logo and be sure consumers would still recognise it. Inspite of that McDonald’s took the risk and did one of the cleverest bits of outdoor advertising this year. It’s ‘Follow the Arches’ campaign, created alongside agency Cossette, saw McDonald’s cropping its golden ‘M’ to help create guiding arrows to direct drivers to the nearest fast-food outlet in high-traffic areas of Toronto, Canada. The campaign originally consisted of four billboards, three static and one digital, with sections of the golden ‘M’ appearing alongside slogans such as “just missed us”, “on your right” or “on your left”. Messing with a logo often seems to serve brands well, but context and tone are everything. This campaign from McDonald’s was bold yet simple. And it was so well-received, it won the Outdoor Grand Prix at this year’s Cannes Lions Festival.
#BUZZFEED Personalisation: The New Era of
Uber on its ambition to move from a ‘viral Marketing app to a viral brand’
Uber, the ride-sharing company has planned to shift its focus from customer acquisition to brand reputation as it looksadvocates to build its brand story. Uber shifted marketing Personalised marketing for fitting of athas least oneitsparts of the focus from customer acquisition to brand reputation after the company experienced its association’s advertising blend to indicating the individual client. Personalised marfirst decline in rides last year. Other than the ride-sharing giant’s brand needketing shows extraordinary division, section of sizea ed attention, thean decline also suggested that Uberwith mustan lookobjective beyond price to kick-start brandThere transformation buildofupone-to a brandone image. To let human insights within theand app one. are twoand types marketing: personalization can help disrupt in marketing as well as the app experience. It helps develop its brand customization. Personalization is the point at which the firm chooses, and creative, manage its marketing campaigns, as well assist in driving a social clean-up.
generally in light of beforehand gathered client information, what marketing blend is appropriate for the person. A decent illustration is Amazon.com’s customized book and music suggestions. Amazon utilizes cooperative sifting to figure out what music or books to prescribe to its customers. Systems of large-scale manufacturing, beliefs of standardization, working on efficiencies, and the one-measure fits-all creation mindset have driven in the past to rationality of business that burdens pitching a standard item to however many shoppers as would be prudent. Advertisers who try to recognize and achieve buyers more absolutely have applied a contrary draw. Accordingly, there has been a continuous
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Customer Relationship Management BY Pranay Banga
IIM Rohtak
Customer Relationship Management (CRM) is a popular buzzword in the current decade and will grow in importance as technology takes over the human. Most people think of CRM as a technology and a tool. However, the meaning of CRM is incomplete without the words customer retention and customer satisfaction. So what basically is CRM? Customer Relationship Management is a strategy for managing an organization’s relationships and interactions with customers and potential customers. The core focus is to build a long lasting relationship with the customers. It has emerged as a top management’s priority in recent years. It involves the conscious allocation of marketing resources towards retaining
and enhancing the patron- age of existing customers. CRM forms an integral part of marketing and ensures the right customers are given the most privileges. Marketing ensures that the customers are attracted and satisfied whereas CRM helps to retain those customers and enhance their experience with the organization. It is significant for organizations to understand the benefits of CRM to be sustainable in the dynamic business environment. Based on organizations experience with CRM, they can have a better understanding on which customers to target and how should they be targeted. It is imperative to keep the customers satisfied as 95% of the unhappy customers don’t directly complain but they spread negative word
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of mouth about the company. At the same time, it is observed that most loyal customers discuss their problems with the company. Hence ensuring customer satisfaction will increase customer loyalty. This, in turn, simplifies the buying and consuming task. After sales service plays an important role in retaining the customers as the customers’ usage experience is driven by the product performance and the service provided during breakdowns. There are 4 key steps in the relationship building process also known as the IDIC framework These are identified, differentiate, interact, customize. To identify, the firms look into the customer database to gather insights and understand them better. After this, the companies use that information to differentiate them. Customers can be differentiated on the various basis. The next step is to interact with them. During interactions, companies get to validate the information that they have collected. Interactions can take place when the customer is buying a product or during after-sales service. Not all customers need to be offered personalized services, so it is also paramount to customize offerings for loyal customers so that they are left satisfied after the purchase. This framework can be used by the companies to their advantage and retain their customers. Some of the examples of relationship management programs are loyalty cards, birthday offers and personalizing follow-ups. The astonishing part is that even satisfied customers can switch to other brands. So, it is also crucial to understand the reasons for customer defections.
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Many customers feel that they are not valued by the company. Other reasons include better competitive products, not satisfied with the offering etc. Once a customer defects, it will be difficult for the company to get him/her on board. Also, this can hamper the company’s brand image and reduce their profitability. Customer defection can be difficult to measure. So preventing defection is increasingly important to increase the lifetime value of the customer. Here comes another important word in the dictionary of marketeers – Lifetime Value. The company calculates LTV to know who are the most loyal customers and will give the maximum benefit in the long run. However, there is another side to this as many experts feel that the company gives lots of discount and additional benefits to their loyal customers which reduce the profit per customer. At the same time, these critics believe that a company can gain from part-time high-value customers rather than longterm low-value customers. So gaining from both loyal and part-time customers are important for an organization Benefits of relationship management are much more than the cost associated with it and a right implementation of CRM can bring in large benefits to the organization. CRM system requires integrating front-end customer-facing functions with the back-end systems. Whether technology takes over human or not, one thing is sure that one on one relationship with customers will be of utmost priority to the organizations and will shape the way firms operate.
Marketing Automation – A Design Tailored for the SMEs BY Tushar Swami DBE, Delhi There was a time when there used to be just one or two selective channels for marketing (like TVs & newspapers), being a 90s born I perfectly remember those engaging TV commercial songs like Washing Powder Nirma & Vicco Vajradanti. Frankly speaking, I still sometimes mumble those jingles. And I’m pretty sure you as well might have some nostalgic feeling yet attached to such ads. But I don’t recall that I ever tried or bought any such products ever. The toothpaste I use is Dabur Red, the washing powder I use is Surf Excel, and soap, Cinthol. So, if we check the practical scenario, all that money invested by the respective products’ companies’
in showing all those ads to me wasn’t much worth spending. Well, maybe or maybe not. I mean indeed they managed to develop a brand value in the market by displaying those advertisements but not sales, at least not for me, can’t argue on that. And advertisements are just one such example, marketers devote a lot of company’s budget in building-up their sales and accessing the untapped potential consumers. But most of those techniques fail to deliver the desired results. As per my opinion, what many of the industries (especially SMEs) are missing is to realize the power of marketing automa-
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tion. Because if they did, they could easily have saved all that money by providing the right audience with the right content at the right time, which is far more important than displaying ads on every channel to everyone (half of whom don’t even understand your product/service properly). The technology wasn’t upgraded enough a few years ago, but now we are blessed enough to have access to this blessing. So, the very first question is “What is Marketing Automation?”. Well, it’s making the use of specific software to automate specific repetitive marketing tasks (in order to reduce the human efforts), so that the Marketers can re-focus on their primary responsibility i.e., coming up with innovative and effective marketing techniques. The process of Marketing Automation is just like any other one in manufacturing or assembling, where a specific number of steps and procedures are defined and then a big machine is used to automatically handle the whole process (and update it if needed). The repeated tasks defined here (in Marketing Automation) are like sending emails/texts of the products’ range, discounts, and offers, storing the prospective clients’ data in order to send relevant content that interests them, analyzing their activity on the company’s website/ application and share similar content with them.
I know you all might be intrigued to know “How this level of engagement can help anyone boom up their sales?”. Well, more the people start engaging in your content means more will be the sales. Because according to Scientists, we as humans have an average attention span of 8 seconds (which is even less than a Goldfish), so if you successfully able to hold the audience to your website for this long, then you can be sure that people are genuinely interested in your products/services. That is how human psychology works, doesn’t it! And why did that happen? Because you showed your prospective customers what they really wanted to see, and all of that’s credit goes to Artificial Intelligence and Machine Learning. In the Digital Era, if we talk about any customers’ online shopping journey. You get a visitor on your page, he/she will surf all-over, view the products, check their prices (even might compare them with the competitors’), and they may or may not submit his/her contact details. But if they do, then Voila! half of your task is done because now you’ve some data about your potential consumer, which is the foundation to begin with the process of Marketing Automation. Based on the page and type of products the person spent most of his time - the automation process will send an email
to them sharing more details, offers, and prices of the same. So, if he spent maximum time on the products’ features page, you can program your machine (for such scenarios) to send an email saying, “Hi! Thank you for considering our products, this is what our products can deliver to you”. Or if anyone showed interest in knowing about the company then an SMS can be shared with him which says “Do you know this amazing fact about our company?” Hence in a way, marketing automation is defining a customer’s journey and guid-
ing him to receive the best of the services from the company and its products. But there’s a myth prevailing within the marketers, that setting up an efficient marketing automation process like this is nerve-wracking and needs you to be a perfect coder to devise such a design, plus most of the SMEs are often afraid that all this can make a big hole in their pockets (which they’re not ready). Let me tell you, there are lot other things as well that most of such people don’t know. Firstly, there are several open-source software available that can help you in
this process, that too free-of-cost (unless you wish to buy their enhanced features, which are generally not so useful for the SMEs), and secondly, their operation and integration has also been made as easy as ABC that even a non-techie can handle such platforms these days. This whole process of preparing a marketing automation platform of your own can
be divided into three parts. First is to find a handy automation software. Some of the most recommended ones are HubSpot, Pardot, Marketo, & Getresponse. Second, you’ll need a website for your company, and what’s better than WordPress for that. Your company will also need a CRM to store all the leads of potential consumers, a task which ActiveCampaign Software can handle pretty easily. Now since you
are clearing all the pre-requisites, what you need next is a software to integrate all these three platforms, Leadsbridge can do this job so now you don’t need a developer to do that job. So here we are, with a low-budget Marketing Automation platform designed for you and most importantly, by you. Your Sales team can now easily track the leads and get an idea of what your future consumer actually expects from you and your product. And with you having the website visitor’s data (collected in the CRM), which can be used to flash the customer’s favorite/shortlisted products in form of Google or Facebook ads to bring them back to the offers’ and prices’ page. Or one can even email or text them directly sharing the offers best-suited for them. Therefore, we can say that opportunities & methods are endless, and it’s not like that these new-gen technologies are designed just for the big names, but also the new entrants in the market can employ these mechanisms (if done correctly) to get the best out of it.
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Conversational commerce BY Priya Yadav IIM Rohtak Conversational Commerce, consumer purchase of products and services via voice assistants such as Google Assistant, Amazon’s Alexa, and Apple’s Siri, will revolutionize how consumers and brands interact in ways not witnessed since the dawn of e-Commerce. It is so much more than a new interface or an additional channel in an omnichannel world. It promises to be a curator of services and experiences that intelligently meet needs and engage consumers emotionally—anytime, anywhere. We are still at the very beginnings of Conversational Commerce, but the extraordinarily rapid early adoption will drive investment and innovation, consequently enabling an entirely new way for brands to build relationships of value with consumers. These relationships will seamlessly extend across consumers’ relationship lifecycle with brands—from marketing to sales and service—creating an entirely new, more instinctive way for consumers to engage with brands. The consumer will be connected in a multitude of locations—at home, on the go, and in the store with increase in number and variety of devices supporting voicebased applications . This ubiquity of connection will allow retailers specifically to extend the relationships they have with consumers beyond the four walls of their stores—we call this boundary-less commerce. The very nature of a dialog be-
tween a consumer and a brand will create a rich source of information and insight—insight that allows for heightened contextual understanding and empathy on the part of brands, presenting an unparalleled opportunity to develop relevancy, trust, and emotion-based connections with consumers. Brands can use this new-found customer intimacy to drive brand preference and affiliation, the highest form of loyalty. From sources, the Digital Transformation Institute and in the companion point-ofview document created by Capgemini in partnership with the MIT and Intel, consumers are ready and eager to interact in this way. They are ready to engage with and share information with the brands that offer them value in return. There are, of course, questions and concerns, and the brands that succeed will be those who both reassure and deliver the anticipated value to their consumers. The past year has been decisive for Conversational Commerce. While previously restricted to chatbots accessed via messaging apps for shopping, the definition of Conversational Commerce has significantly expanded with the arrival of voicebased personal assistants. More than forty large retailers, such as Walmart, Target, Costco, Walgreens, and Home Depot, have partnered with Google to introduce voice-based shopping to consumers via Google Express. Google
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has coupled this effort by adding support to enable Google Home users to place voice-activated orders for select stores. Several smart speakers enabled by voice assistants have launched or expanded their portfolios. Recently, Amazon launched a new generation of devices as part of its “Echo� line, which now offers improved conversational facility, better memory, improved voice recognition, and an experience that is more akin to natural human interactions. Shortly thereafter, Google launched new Google Home devices. These capitalize on Google’s search advantage, and tie in multiple Google accounts, to offer users a more synchronized experience. Moreover, voice assistants are being made available in more and more devices. BMW announced that Alexa will be available in its 2018 model year cars starting mid2018. Earlier in 2017, Google added its virtual assistant to Android wear watches. However, three years from now, that rises to 40%. And close to a third (31%) would prefer to use a voice assistant instead of visiting a shop or a bank branch in the future, compared to 20% today. A survey by Capgemini Consulting shows, a majority of consumers (51%) are already users of voice assistants, and interacting with voice assistants via smartphones (81%) is the dominant mode of use. Twenty-one percent of consumers have been using voice assistants from devices other than phones or smart speakers.
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It is evident that voice assistants are likely to be used for commerce through devices other than phones or smart speakers in the future. Users have adopted voice assistants for a variety of functions. More than four in five consumers have used voice assistants for seeking information (82%) and two in three have used them for playing music (67%). Usage has also extended to commerce-related activities. Over a third (35%) have bought products like groceries, homecare, and clothes. Users also shared the product categories they would be most interested in. More than half (52%) would be interested in buying electronics via voice assistants, with significant interest also shown in areas such as clothing, groceries, and home furnishings. 82% users say fast and accurate replies are the most compelling feature that influences the use of voice assistants. Conversational Commerce represents a significant opportunity for brands and retailers to interact with their consumers in new and innovative ways. Rapid technological advances, coupled with increasing consumer appetite for voice devices, is driving investment and innovation. Brands must harness this interaction opportunity to build relationships of value with consumers across the lifecycle and offer an entirely new, more instinctive way for consumers to engage with them.
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marketingclub@iimrohtak.ac.in DISCLAIMER: The views and opinions expressed in this magazine are those of the author and do not necessarily reflect the opinion of the stake holders of IIM Rohtak EDITOR : Isha Garg DESIGN : Sriesh C R FOLLOW US ON :