"Trinethra" being rebranded as "More" by Aditya Birla Retail

Chennai, Dec 20: Aditya Birla Retail Limited will rebrand 'Trinethra' grocery retail supermarkets to 'More', to offer consumers a more fulfilling retail experience. Talking to newspersons here today, Aditya Birla Retail Limited CEO Sumant Sinha said the 'More' stores would offer the customers a wide range of products, including fruits, vegetables, home care and dairy products.

''The acquisition of Trinethra Super Retail has provided Aditya Birla Retail a strong retail footprint in South India, extending to 260 stores over more than half a million sqft in Andhra Pradesh, Karnataka and Kerala,'' he said. He said the 'More' stores were developed after an in-depth research to understand the needs and expectations of Indian consumers.

Mr Sinha said to ensure supply of fresh fruits and vegetables to the customers, the company was building direct linkage with the farmers. ''It is also investing to develop a robust supply chain, connecting households more directly with the farmers,'' he added.

Stating that the demographic movements in India over the last two decades had made organised retail a necessity, he said ''the retail industry is today valued at around US Dollar 320 billion.''

Consumer firms widen Health Food portfolio

In a bid to address the needs of health-conscious Indian consumers, FMCG majors have lined up a slew of products for launch in 2008. ITC's foods division is launching Sunfeast Benne Vita Flaxseed biscuits early next year to expand its health biscuits portfolio.

The company already has two other health offers under Sunfeast Sachin Fit Kit, Sunfeast Sachin's FitKit Vitamin and Protein enriched biscuits and Sunfeast Sachin's Fit Kit Multi-grain biscuits.

Since consumer tastes have changed towards a healthier one, we foresee a good growth in the health foods category and expect our portfolio of these products too will continue to grow in the years ahead, added Naware.

The company also offers a health pasta option Sunfeast Benne Vita pasta in four variants.

PepsiCo India's food arm, Frito-Lay India, has already cut down the use of around 5,000 tonnes of saturated fat by switching to rice bran oil for its core products. The company is now aiming to cut trans fats further by using whole grains for its snack offerings. Says a FritoLay India spokesperson,

In recognition of the fact that consumers are living smarter and constantly making lifestyle choices, we have made our core product range healthier, encouraging consumers to snack smart.

Our core product Lay's Kurkure, Uncle Chipps and Cheetos is now being cooked in rice bran oil. In the process, we have reduced saturated fats in these products by 40 per cent, while maintaining the same great taste and at the same price. This is in addition to the fact that all our products have zero-trans fats.

Homegrown FMCG company Dabur India, which has already made heath and wellness its focus area, introduced ChyawanPrakash, a sugar-free variant of Chyawanprash last month.

The product is targeted at the calorie-conscious consumers.

Says K K Chutani, general manager, marketing, Dabur India, The launch of this product comes at a time when Dabur is putting in a concerted effort at expanding the category and use of Chyawanprash. Dabur's entry into the sugar-free segment with Dabur ChyawanPrakash is yet another step in this direction.

According to industry experts, due to increasing health concerns and rising rates of chronic lifestyle diseases, consumers are today asking for products that address their health needs and with this trend growing, food companies will continue to extend their portfolio to healthier offerings.

Hindustan Unilever (HUL) is believed to be in the process of introducing a range of nutritional drinks and snacks for children next year. The range is set to be launched under Amaze Brainfood, a part of HUL's parent company Unilever.

Amaze Brainfood has already been launched in Turkey and the range is said to include tasty bite-size cereal treats and milk drinks for children that contain iron, iodine and protein. __________________________________________________________________ All the major FMCG's are expanding their Foods business. Whether the move towards healthy alternatives is a consequence or a cause towards the general mindset of the consumer is going back to an age old debate. What is interesting to wait and see is the positioning ITC's Bingo would take in response to Lay's new Health statement.

Marico's Distribution Network

Marico's distribution width and penetration is acknowledged as one of the best in the industry and is a leverageable strength.
Every month, 56 million consumer packs are sold to about 1.8 million households through 1.6 million retail outlets spread across the country.
Marico's distribution network covers almost every Indian town with a population of over 20,000. The chart below depicts Marico's distribution network in the urban & rural markets:

Thus, 1 out of every 10 Indians is a Marico consumer.

Distribution Alliance:
Our distribution strength has been recognised by Indo Nissin Foods Ltd. through their association with us for the distribution of Top Ramen products on a national basis.

Rural Sales & Distribution:
Marico's parallel rural sales and distribution network ranks among the top three in the industry and contributes 24% to the company's topline.

Their infrastructure comprises 882 direct distributors, 153 super distributors, catering to 2393 small stockists and 4523 van markets. A dedicated team of Territory Sales Executives and Pilot Sales Representatives distribute Marico's as well as alliance brands through this vibrant network.

Sales Capacity:
They have made significant progress in the areas that enhance sales capacity. Quality of our distributors Quality and number of the distributor field force Upgradation in the role of the company's front-line sales force.

Technology (IT) in Sales:
Marico has been making investments in IT to ensure:
Supply Chain efficiencies
Availability of the SKU at the right distributor point,
at the right time in right quantities
Timely availability and reliability of Sales
MIS, which help in taking prudent decisions on a real time basis.

In order to reap maximum benefits from its sales and distribution network, Marico embarked on an internet-enabled application - MI-Net - to establish a network between Marico and its distributors through a web interface. This project is aimed at providing real time information on the status of various business operations between Marico and its distributors. This initiative is expected to provide business benefits in the form of increased penetration by the sales force, reduced communication costs, reduced working capital requirements, etc. The project went live on April 1, 2002 with connectivity to 330 urban distributors, who together account for about 3/4th of Marico's domestic turnover. The business benefits are expected to accrue over a period of time.

Sales Promotions

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Essar to invest Rs 1,200 cr in telecom retail expansion

Essar Telecom Retail has entered into an agreement with the UK-based Virgin Group for brand licensing, technical and consultancy services for its mobile phone retail chain.

Virgin will provide its expertise in branding, customer care, store operations and staff training, and will also get royalty for use of its name.

The logo `Powered by Essar & Virgin' will accompany the store name of `The MobileStore'.

Telecom retail, it seems, is the latest buzzword in India, with Essar Telecom Retail, a unit of Essar Group, planning to increase the number of its stores from 250 at present to 2,500 by 2010. The company will invest Rs 1,200 crore over the next three years in its multi-brand telecom retail stores that operate under the brand name of MobileStore.

The company will also increase its headcount from 1,500 to 10,000 by 2010 and expects to close the fiscal with a revenue of Rs 1,000 crore. With this, it joins players like HotSpot, RPG Cellucom, Pantaloon and Subhiksha, who have announced big-ticket investments to tap the Rs 35,000-crore mobile market.

“Essar Telecom will also sell mobile phone connections, accessories, new connections and provide after sales support, repairs and other services. With these offerings, we are eyeing a 10% share in the next three years,” Essar Telecom Retail CEO Rajiv Agarwal told FE.

Currently, Essar has about 1.5% market share in the country and 4% market share in the 22 cities where it operates. In Delhi it enjoys a market share of about 8%. The company wants to focus only on telecom and related products to garner this pie and denies venturing into other retail formats.

Buoyed by sales of Rs 5 crore on August 15, the company has decided to continue with its scratch and win scheme, where its promises customers a gift worth Rs 5,000 on every purchase.

“Earlier we wanted to run the scheme only for a week, but after getting a positive response, we have decided to continue it till the competition does that,” said Agarwal. The scheme helped Essar sell 1 lakh phones in a single day.

Lee bets big on ‘concept’ stores

Denim brand Lee is betting big on ‘concept’ stores to create brand stickiness.

(Concept stores essentially are built around a theme and convey a certain brand ethos, thereby, enhancing the shopping experience.)

Lee recently opened a boutique store in Greater Kailash, Delhi – in an upmarket shopping area frequented by women. This store conveys an uppity attitude and “celebrates snobbery” – right from its diamond studded signage to store interiors with modern minimalist furniture, vanity mirrors, plasma screens and foot massagers.

While the Lee store in Bangalore is all about the “vintage meets contemporary”, its Pune store addresses the youth primarily. Lee is all set to open up a ‘Buddy Lee’ café in its store in Ahmedabad (Buddy Lee is the brand’s advertising icon). The café is aimed at being yet another “point of connection with the youth.”

“Concept stores give consumers a complete brand experience and convey the values and ‘lifestyle’ imagery of the brand,” says Mr Chakor Jain, Business Head, Lee.

“While a multi-brand outlet stacks our merchandise like just another product, large concept stores try to bring about all the images of the brand. After all, the store is an extension of the brand,” says Mr Jain. Lee is looking to take the concept story forward by setting up more such stores in various cities.

VF Arvind Brands will have 90 exclusive Lee outlets in place by December.

Source: Business Line Similar concept stores are also running on a pilot basis for Reebok simultaneously with their existing showrooms. The Franchise needs to be flexible enough to adopt an innovative model which will be running on a pilot basis. The entire store is extremely colorful and targets women and the metrosexual male in particular.

The Missing Metric: Measuring Shelf-Space Profitability

The shelf may well be the most precious real estate in the consumer-retail value chain: In some categories, as much as 80 percent of all purchase decisions are made at the point of sale. Regardless of how much effort went into promotion or product design, the shelf is the point where the consumer meets the retailer, the brand, and the product. The outcome of all those relationships and the buying decision depends entirely on what happens halfway down Aisle 2.

Yet surprisingly little is known about that interaction. In fact, many crucial shelf-space questions are still surprisingly difficult for retailers and manufacturers to answer on the basis of anything but gut instinct. How much is this store’s shelf space worth? What products and brands would make the most profitable use of my space? What products and assortments drive the greatest growth at the shelf? How do I make sure that these are the products my customer wants? These essential questions are still very difficult for retailers and manufacturers to answer.

It doesn’t have to be this way. If retailers and manufacturers had an objective and easily duplicated metric for shelf-space profitability, they could craft better decisions about which products to stock and how to best make use of all that space. Retailers would know which products to carry and which brands to push. Manufacturers would know which promotions were working and which products were underperforming.

The idea isn’t new. In fact, a number of companies have tried to develop ways to find this missing benchmark but have never been able to create a solution simple enough to make the measurement useful. Technological approaches to measuring shelf profitability, such as the use of data from RFID tags, have turned out to be too expensive and complex to serve the purpose. Furthermore, the high level of distrust that typically exists between retailer and manufacturer has made it difficult for the two parties to collaborate deeply on anything, including data sharing.

Fortunately, there are relatively simple ways to measure shelf-space profitability (SSP). The first step is to calculate the cost per linear foot of space in the store network, including all product-related costs: for instance, total store costs, internally funded marketing support, distribution, and servicing and repairs. Next, to understand the overall costs associated with selling a particular product across the store network, apply these total costs to the space allocated to the product in a store. Apply this shelf-space cost to the net cash margin that the product or brand generates across the network to find the SSP for a given manufacturer, category, brand, or set of products and thus better understand growth and profit contribution. By using this metric, retailers and manufacturers are able to learn not only which items are most profitable, but which are most profitable given the amount of space each item uses.

Better information about product performance enables retailers to make better stocking decisions. Better stocking decisions, in turn, make it easier to build a strong relationship not only with manufacturers but with consumers as well. Stocking the right products in the right places is a good way to engender consumer loyalty toward both the store and the brand. Everyone wins with good shelf-space profitability metrics: The store earns a reputation for carrying a strong assortment of goods that are always available, and the manufacturer
can focus on stocking product lines that are recognized as winners.

Source: Booz Allen

Methods used for valuing brands

A number of authors and consulting firms have proposed different methods for brand valuation. The different methods consider that a brand’s value is:

1. The market value of the company’s shares.

2. The difference between the market value and the book value of the company’s shares (market value added). Other firms quantify the brand’s value as the difference between the shares’ market value and their adjusted book value or adjusted net worth (this difference is called goodwill).

3. The difference between the market value and the book value of the company’s shares minus the management team’s managerial expertise (intellectual capital).

4. The brand’s replacement value

4.1. Present value of the historic investment in marketing and promotions.

4.2. Estimation of the advertising investment required to achieve the present level of brand recognition.

5. The difference between the value of the branded company and that of another similar company that sells unbranded products (generic products or private labels). To quantify this difference, several authors and consulting firms propose different methods:

5.1. Present value of the price premium (with respect to a private label) paid by customers for that brand

5.2. Present value of the extra volume (with respect to a private label) due to the brand

5.3. The sum of the above two values

5.4. The above sum less all differential, brand-specific expenses and investments. This is the most correct method, from a conceptual viewpoint. However, it is very difficult to reliably define the differential parameters between the branded and unbranded product, that is, the
differential price, volume, product costs, overhead expenses, investments, sales and advertising activities, etc.

5.5. The difference between the [price/sales] ratios of the branded company and the unbranded company multiplied by the company’s sales. This method is used by Damodaran to value the Kellogg’s and Coca-Cola brands.

5.6. Differential earnings (between the branded company and the unbranded company) multiplied by a multiple. As we shall see further on, this is the method used by the consulting firm Interbrand.

6. The present value of the company’s free cash flow minus the assets employed multiplied by the required return. This is the method used by the firm Houlihan Valuation Advisors.

7. The options of selling at a higher price and/or higher volume and the options of growing through new distribution channels, new countries, new products, new formats … due to the brand’s existence.

Consumers’ Paradigms: A Challenge for Retailers

Source: Booz Allen Hamilton: Retail Innovation in Latin America

Consumers know that they can’t have it all, in terms of getting the best of everything, all the time. Most purchasing decisions involve some form of trade-off in light of constraints such as price, distance, time to shop, or credit.

Our study revealed that consumers have preconceived notions of how to address these trade-offs in the retail world. Whether these notions reflect negative experiences or simply consumers’ perceptions, they often hide frustrations and desires in equal measure. We call these preconceived notions “consumers’ paradigms” and they are associated with the trade-offs that need to be made with respect to products, services, design, quality, assortment, and location.
Although not exhaustive, the following paradigms are based on our fieldwork and reflect the most relevant information at the time of this research. While the concept of trade-offs is applicable to most income classes, our analysis and examples are focused on emerging consumers.

1. “Access to high-ticket items requires a long term-sacrifice.” As shown in our previous study, emerging consumers dedicate a proportionally higher portion of their income to household purchases: In Latin America, they spend approximately 50 percent to 75 percent of their budget on consumer products.

As a general rule, daily needs are the top priority for emerging consumers, followed by emergency purchases and large purchases to stock up. As a result, savings are very limited and so is the emerging consumer’s ability to acquire high-ticket items, such as cars, computers, and household appliances like freezers and microwaves. As an illustration, a 42-inch plasma TV can cost as much as 20 percent to 25 percent of the annual salary of an emerging consumer in Brazil.

The purchase of high-ticket items is made even more challenging for emerging consumers as access to financing is limited. The primary reason for this limitation is clear: Only about 45 percent4 of emerging consumers possess bank accounts in Brazil, for example. Yet even for the “bankable” consumers, obtaining credit can be a challenge, since financial institutions require extensive documentation, such as proof of income, which the vast majority of emerging consumers do not have. Furthermore, even when consumers are able to obtain credit, there is little or no room for debt renegotiating, which impacts the consumers’ credit history,
another important factor in the financial institutions’ decision to grant credit.
In the context of their limited savings capability and financing options, the key question for emerging consumers is, “Can I possibly buy a personal computer or a car?” Our discussion groups indicate that emerging consumers do not believe this is the case, unless they are willing to make a long-term sacrifice: They have to save for an extended period of time and pay relatively high installments, thus giving up on shorter-term consumption. A C-class consumer in Mexico characterizes this situation very well: “Before Elektra, I remember how hard it was to have the discipline and the sacrifice to save to get us our first color TV.”

2. “Better quality must be more expensive.”
“Can I find trendy, quality furniture at a reasonable price? Are my choices limited to traditional, unfashionable staple products if my budget is limited? Can I get higher-quality products at competitive prices?” In the minds of emerging consumers, the answers to these questions are, “No, yes, and no.” They believe superior quality, which they generally associate with intermediate or leading brands, carries a premium in price. This belief can drive the purchasing process to the point where emerging consumers don’t even compare prices and limit the number and type of stores that they visit. A D-class consumer in Chile stated, “I buy my clothes in La Polar or in Lider, because Falabella is not for me.” The same belief holds when emerging consumers shop for other products, such as furniture and electronics.

3. “If a store is nice and trendy, its products must be expensive.”
Emerging consumers take for granted that a modern, trendy shopping environment, carrying
stylish products, also carries a premium price. “C&A stores are really nice and chic; it is not for people like me,” stated a Brazilian C-class consumer. Alternatively, as a B-class Mexican consumer said, “Palacio is expensive, but you find better things, more modern, exclusive; they get the products before other stores, and they run the best brands.” The perception is clear: If a store is trendy, the products must be trendy as well, and therefore expensive.

4. “If the store is small, the assortment must be very limited.”
Emerging consumers believe the store area is an indication of the available assortment. Consequently, they believe that if the store is small, one has to shop around in many other stores or commute to a larger store to access greater variety and, in certain cases, feel comfortable about making the “right choice.”
It is important to note that emerging consumers have often stated their preference for shopping at small stores nearby, as going to larger stores a distance
away requires more time and more expensive transportation, which is significant in the context of their limited budgets.
In the case of mid- to high-ticket items, this paradigm of a clear trade-off between store size and assortment has a much greater impact, as lower-income consumers usually do more research to purchase. As a D-class consumer in a small town in Brazil said: “I bought a new washing machine last month to replace the old one. But it took me five months to have my husband take me to Campinas, where there was a store with broad variety.”

5. “Better service and sales assistance must be more expensive.”
Our study identified service as a highly valued attribute for emerging consumers.
Nonetheless, they usually do not have positive experiences in this respect. It is common for them to find sales assistants too “sophisticated” to understand lower-income consumers, or believe that assistants have a cold and snobbish attitude toward them.

Accustomed to not having technical assistance and good service, emerging consumers believe that complimentary services can only be obtained with higher prices. When one C-class consumer in Colombia commented, “I like K-tronix; they have good products, nice people to help, and they even installed the refrigerator I bought for free,” another consumer responded, ”Nothing is for free, my friend. The cost is somewhere inside the price you paid.”

CMO Thought Leaders: A Snapshot

The book explores how leading marketers are grappling with and surmounting the challenges of heightened customization demands, fragmentation of media and markets, growing pressure for returns on marketing investments, and other crucial issues.

Key Challenges	What the CMOs Are Talking About
Put the Consumer at the Heart of Marketing	􀀗Knowing what consumers are actually thinking & doing 􀀗Changing research and knowledge management practices 􀀗Transitioning the mind-set of a whole organization	“HP knows the top 10 factors that drive customer loyalty, and it measures them constantly. Corporate marketing can then go back to each business and say, ‘Here’s where you’re falling behind in terms of the customer experience you’re providing, and here’s how it relates to market share and margin growth.’” -- Cathy Lyons, CMO Hewlett-Packard
Make Marketing Accountable	􀀗Marketing accountability on two levels 􀀗ROI metrics and the marketing dashboard 􀀗Measuring the impact of new media 􀀗Developing the measurement capability	“The most important thing that’s changed in the last 10 years is measurability of what we do… New channels are regularly emerging that allow us to understand what it is we’re doing as it related to acceptability with the marketplace. And we can do it with much faster turnaround.” - John Hayes, CMO, American Express
Embrace the Challenges of New Media	􀀗Openness to experimentation 􀀗Balancing the new and the old 􀀗Pull vs. push	“ …consumers are in control. It’s more than just click the remote capabilities or the ability to do a browse/search on the Internet. Consumers are telling us that they want to be in control of the storytelling. And as part of that desire, they want to engage in advertising in different ways.” - Beth Comstock, President, Integrated Media, NBC Universal
Live a New Agency Paradigm	􀀗Identifying the right agency partners to meet marketing’s needs 􀀗Creating a new kind of partnership between marketers and agencies 􀀗Balancing cooperation and competition to get the best ideas	“[Agencies] need to get more integrated. They need to collapse structures. They need to go digital. Those that are making those changes are turning away business. Those that haven’t adjusted are struggling.” - Jim Stengel, Global Mktg Officer, P&G
Recognize the New Organizational Imperative	􀀗Balancing generalist and specialist skills 􀀗Driving the training agenda 􀀗Integrating with other functions	“ In marketing, you need to use both halves of your brain…You need to have the analytics. You also need to have the intuition. And you have to be quite flexible at using and leveraging both parts of your brain” - Rob Malcolm, CMO, Diageo
Remain Adaptable	􀀗Making adaptability an inherent part of the marketing agenda 􀀗Raising senior leadership awareness of issues and implications 􀀗Driving marketing as an integral, integrated part of the enterprise	“ I’ve never worked for the same company for more than two years in a row, because FedEx keeps changing. We have new marketing challenges every day.” - Mike Glenn, CMO, FedEx

GRP and TRP

GRP (short for Gross Rating Point) is the sum of ratings achieved by a specific media vehicle or schedule. It represents the percentage of the target audience reached by an advertisement. If the advertisement appears more than once, the GRP figure represents the sum of each individual GRP. In the case of a TV advertisement that is aired 5 times reaching 50% of the target audience, it would have 250 GRP = 5 x 50% -- ie, GRPs = frequency x % reach.

A Target Rating Point (TRP) is a measure of the purchased target rating points representing an estimate of the component of the target audience within the gross audience. Similar to GRP (short for Gross Rating Point) it is measured as the sum of ratings achieved by a specific media vehicle of the target audience reached by an advertisement. For example, if an advertisement appears more than once, reaching the entire gross audience, the TRP figure represents the sum of each individual GRP multiplied by the estimated target audience in the gross audience.

In the case of a TV advertisement that is aired 5 times reaching 50% of the gross audience with only 60% in the target audience, it would have 250 GRPs (= 5 x 50%) -- ie, GRPs = reach x frequency and 150 TRPs (=250 x 60%).

Both of these metrics are critical components to determine the marketing effectiveness of a particular advertisement.

http://www.ksg.harvard.edu/case/3pt/berkovitz.html

Here is a link towards a more detiled outlook on an entire Media Plan.

More to come on these topics in detail soon..

Unique Customer Perception (UCP)

Marketing is a domain which is dynamic i.e. involves change, an important phenomenon not to be overlooked. We have come across a term “Unique Selling Proposition”(USP) which companies feel as a constant factor . Every organisation is an open system of management which means change is inevitable and is associated with environmental factors. Companies need to focus not only on USP of their products but also on the “Unique Customer Perception”(UCP) of the final end users.

The prop of marketing is based on the need identification and the USP's are prepared based on the identified needs . If the needs are wrongly identified then even the USP's which are unique to the product would not serve the purpose. USP identifies a product/service from its competitors while UCP is the perception or picture a customer develops from all types of promotional inputs from the company about their product or service. It is often seen that some brands do extremely well compared to other brands having the same resources. The reason for the brands not to do well is probably the communications which does not reflect the customers perception. So it is not the USP but UCP that plays an important role .This has lead to the concept - “Customer Perception is the Rule and not Customer Satisfaction”.

Remember that a customer always buys a product or service with a lot of expectations which he has derived from the promotional inputs of the company or other sources including word-of- mouth . So a customer would be satisfied when Performance is equal to Expectation while would not be satisfied when Performance does not match with Expectations. Now this expectation is what has been derived from perception.

Perception is not good or bad, right or wrong, it is just the way someone judges an experience based on their value system of what they believe should happen. Since people are unique, each of their perceptions are unique .On the other hand each situation is a "point of contact" with an employee that will tell the customer a "truth" about the company's idea of customer service. Each situation will create expections of what the next experience will probably be like.

Companies spend considerable amount on advertisement and in this world of competitive advantage advertisement has to be repetative in nature. Brand hammering results in brand recall which is a costly affair. So companies need to understand the Unique Customer Perception to facilitate Advertising and Sales Promotional (ASP) efforts towards a better bargain. The cost incurred on advertisement is huge i.e. if we refer to the 5 M's of advertising, http://fmcg-marketing.blogspot.com/2007/11/5-ms-of-advertising.html

Money is a budgetary constrain for an ideal advertising canpaign. Thus UCP has to be rightly analysed for better results by the company to match performance and expectation.

the 5 M's of Advertising

Advocacy Advertising

• Advertising used to promote a position on a political, controversial or other social issue.

• Expresses a viewpoint on a given issue on behalf an institution.

• Is often provided by government agencies and non profit organizations

Advocacy advertising almost always is related to a specific public policy or upcoming legislation. The ad will express an opinion on the issue or position the sponsoring industry or company as a leader in its field or area of expertise, such as health care, the environment, or education.


•Public Health Promotion:
Anti smoking , AIDS prevention

•Public Safety Promotion:
Seat belt usage and fire prevention

•Education-related issues:
Literacy programs

What Makes an Advocacy Advertisement Effective?

A quality advocacy advertisement is well-expressed, phrased in human terms, and articulates the debate on your terms, rather than the opposition’s point of view. Providing research to substantiate your claims make the advertisement more powerful.

Repetition of the key message is important. Although separate advertisements within a campaign may be targeted to different audiences, each of these advertisements should communicate the same central message of the campaign.

Companies use that kind of communication to develop their public image and promote their values (Benetton, De Beers, Kellogg's, Philip Morris…)

Philip Morris : 1996 :
launch of an advertising campaign to publicize its position that kids should not smoke
Broad effort to repair the company’s battered public image
Message provided through athletes and celebrities

Benetton : From 80’S to the end of 2000 :
pointed out society issue but without giving any opinion (AIDS, war, sex, culture…)

DeBeers :
Creates the Diamond Trading Company and implements the « supplier of choice » strategy Publishes the « Best practice principles » which encourages proper working conditions, as well of the respect of the environment

Vertical Marketing Systems (VMS)

A vertical marketing system (VMS) is one in which the main members of a distribution channel--producer, wholesaler, and retailer--work together as a unified group in order to meet consumer needs. In conventional marketing systems, producers, wholesalers, and retailers are separate businesses that are all trying to maximize their profits. When the effort of one channel member to maximize profits comes at the expense of other members, conflicts can arise that reduce profits for the entire channel. To address this problem, more and more companies are forming vertical marketing systems.

Vertical integration is the expansion of a company by moving forward or backward within your vertical market or industry.

An example of forward integration might be ITC buying wheat from farmers to produce Aashirwad atta and Sunfeast biscuits recently.

• Corporate VMS - A group of companies performing different tasks under one ownership.
• Contractual VMS - Independent companies that join together for mutual benefit. Producer, wholesaler and retailer have sub-groups.

• Producer/Wholesaler - Franchise operations fall in this category. The manufacturer licenses the wholesaler to distribute the product.
• Producer/Retailer - Another franchise operation where the retailer must meet certain quotas to operate under the company name. Must be a strong company name.
• Retailer/Wholesaler - If the wholesalers are the owners they encourage retailers to band together to buy as a group to receive more desirable pricing. If the retailers are the owners, they are called co-operatives. They buy from the jointly-owned wholesaler and share the profits those purchases generate.

• Administered VMS - The big dog in the meat house concept. Whoever wields the most economic power within the group can force greater cooperation and support from other members of the group.

If you can't go vertical, go horizontal. Horizontal simply means that instead of companies being under your control in a vertical stack. They are beside you as equals. You don't control them, they don't control you. But, you still need each other. If you are a small business or just starting you may need them more than they need you.

SERVQUAL or Gaps Model

There are seven major gaps in the service quality concept, which are shown in Figure 1. The model is an extention of Parasuraman et al. (1985). According to the following explanation the three important gaps, which are more associated with the external customers are Gap1, Gap5 and Gap6; since they have a direct relationship with customers.

· Gap1: Customers’ expectations versus management perceptions: as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management.

· Gap2: Management perceptions versus service specifications: as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardisation and an absence of goal setting.

· Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork.


· Gap4: Service delivery versus external communication: as a result of inadequate horizontal communications and propensity to over-promise.


· Gap5: The discrepancy between customer expectations and their perceptions of the service delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations are influenced by the extent of personal needs, word of mouth recommendation and past service experiences.


· Gap6: The discrepancy between customer expectations and employees’ perceptions: as a result of the differences in the understanding of customer expectations by front-line service providers.

· Gap7: The discrepancy between employee’s perceptions and management perceptions: as a result of the differences in the understanding of customer expectations between managers and service providers.

The SERVQUAL instrument has been the predominant method used to
measure consumers’ perceptions of service quality. It has five generic dimensions or factors and are stated as follows (van Iwaarden et al., 2003):

(1) Tangibles. Physical facilities, equipment and appearance of personnel.

(2) Reliability. Ability to perform the promised service dependably and accurately.

(3) Responsiveness. Willingness to help customers and provide prompt service.

(4) Assurance (including competence, courtesy, credibility and security). Knowledge and courtesy of employees and their ability to inspire trust and confidence.

(5) Empathy (including access, communication, understanding the customer). Caring and individualized attention that the firm provides to its customers.

PEST Analysis

PEST factors play an important role in the value creation opportunities of a strategy. However they are usually beyond the control of the corporation and must normally be considered as either threats or opportunities. Remember macro-economical factors can differ per continent, country or even region, so normally a PEST analysis should be performed per country.

In the table below you find examples of each of these factors.

Political (incl. Legal)	Economic	Social	Technological
Environmental regulations and protection	Economic growth	Income distribution	Government research spending
Tax policies	Interest rates & monetary policies	Demographics, Population growth rates, Age distribution	Industry focus on technological effort
International trade regulations and restrictions	Government spending	Labor / social mobility	New inventions and development
Contract enforcement law Consumer protection	Unemployment policy	Lifestyle changes	Rate of technology transfer
Employment laws	Taxation	Work/career and leisure attitudes Entrepreneurial spirit	Life cycle and speed of technological obsolescence
Government organization / attitude	Exchange rates	Education	Energy use and costs
Competition regulation	Inflation rates	Fashion, hypes	(Changes in) Information Technology
Political Stability	Stage of the business cycle	Health consciousness & welfare, feelings on safety	(Changes in) Internet
Safety regulations	Consumer confidence	Living conditions	(Changes in) Mobile Technology

Completing a PEST analysis is relatively simple, and can be done via workshops using brainstorming techniques. Usage of PEST analysis can vary from business and strategic planning, marketing planning, business and product development to research reports.

Sometimes extended forms of PEST analysis are used, such as SLEPT (plus Legal) or the STEEPLE analysis: Social/demographic, Technological, Economic, Environmental (natural), Political, Legal and Ethical factors. Also Geographical factors may be relevant.

Ansoff Matrix

The product/market grid of Ansoff is a model that has proven to be very useful in business unit strategy processes to determine business growth opportunities. The product/market grid has two dimensions: products and markets.

Over these 2 dimensions, four growth strategies can be formed:

- market penetration,

- market development,

- product development, and

- diversification.

Market Penetration:

Company strategies based on market penetration normally focus on changing incidental clients to regular clients, and regular client into heavy clients. Typical systems are volume discounts, bonus cards and customer relationship management.

Market Development:

Company strategies based on market development often try to lure clients away from competitors or introduce existing products in foreign markets or introduce new brand names in a market.

Product Development:

Company strategies based on product development often try to sell other products to (regular) clients. This can be accessories, add-ons, or completely new products. Often existing communication channels are leveraged.

Diversification:

Company strategies based on diversification are the most risky type of strategies. Often there is a credibility focus in the communication to explain why the company enters new markets with new products. This 4th quadrant (diversification) of the product/market grid can be further split up in four types:

- horizontal diversification (new product, current market)

- vertical diversification (move into firms supplier's or customer's business)

- concentric diversification (new product closely related to current product in new market)

- conglomerate diversification (new product in new market).