Culture Based Positioning and Changing Marketing Factors - Essay Example

?Consumer Behaviour and Decision Making Introduction Marketing is a concept that has emerged and evolved over years. There will be no other discipline in this universe that is as influenced and affected by the changes in the environment as marketing is. Sometimes, it takes years to observe a change in the marketing pattern. Sometimes, even a small technological leap in the industry can change the marketing pattern very easily. The main reason for this is that marketing deals with the behavior and aspirations of people that are highly influenced by changes in the environment. It is only a few decades back that consumer behavior emerged as a highly specialized area under marketing. “Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use.” (Management Study Guide, 2012) There wasn’t the concept of consumer behavior when Ford started making their cars on assembly line. The only color that the customers could get then on the car was black. But as and when industrialization happened and more and more products came into the market, companies started focusing on the desire and need of the customers. This became more important with the beginning of globalization and when companies started cross border business. The concepts that the marketers were focusing on was market segmentation, targeting and positioning. But in the recent years, the marketing practitioners are puzzled about these concepts. They are doubtful whether these traditional concepts are valid for current marketing environment. The objective of this essay is to analyse the situation in the light of these concepts in the current environment and advise the marketers for the best way to approach customers. Traditional Marketing Practices Segmentation, targeting and positioning are three core concepts of traditional marketing practices. Marketers have been focusing on these concepts to the core of understanding the consumer behaviour and introducing products that the customers want. Segmentation: Market segmentation is the process of identifying and targeting the right customers. “It is about identifying the specific needs and wants of customer groups and then using those insights into providing products and services which meet customer needs.” (Riley, 2010) Marketers segment the market because the needs and wants differ from one customer to the other. But there definitely can be a group with common characteristics which is in other words called a segment. The most common kinds of segmentation are geographic, demographic, behavioural and psychographic. Geographic segmentation groups customers based on customer location and region. Demographic segmentation does it based on age, gender, occupation, and other demographic factors. Behavioural segmentation divides customers based on the customer behaviours and psychographic segmentation does it based on the personality and lifestyle of the customers. Debates have emerged recently regarding the relevance of market segmentation in the modern marketing environment. The behavioral aspects of customers are changing in such a way that they are not limited by the demographic, lifestyle, or other segmentation factors. An example for this is the initial failure of the world’s cheapest car Tata Nano. Tata segmented the market and targeted the Nano car to the common man. Least importance was given to value of the product. But when the car was actually launched in the market, it made terrible low sales. When the company made a post launch market study, it was understood that the customers does not want a car that is of least value and the one that is tagged as a cheapest car. The company now revamped the car and entirely changed its marketing strategy and experienced success. (Cleveland, 2011) Targeting: Targeting is the activity that follows segmentation. Targeting is the process of aiming the market that has been identified through the segmentation process. “Target Marketing refers to a concept in marketing which helps the marketers to divide the market into small units comprising of likeminded people.” (MSG, 2012) Identifying the target market helps the marketers to formulate strategies based on the market. It is very important to identity the target market before formulating the strategies. In the previous example of Tata Nano, the company though that their target market is the common people who travel by Motor Cycles and are badly looking forward to buy a car. They designed the marketing efforts based on this targeting objective. But when the product failed in the market, it realized that common people who want to upgrade to a car is actually concerned about the image too. They never want to settle down for the cheapest car. This is how a bad targeting can make a product fail. Positioning: “The positioning of the product consists of creating the message likely to reach this group. Positioning involves symbol and message manipulation, including displays and packaging.” (Inc, 2012) Positioning is still a very important concept in the marketing at present. As mentioned about targeting, positioning is also a follow on activity after segmentation. The success and future of a product is determined on the basis of how it is positioned in the minds of the customers. The current marketing situation is such that a company cannot run a successful marketing campaign just with the traditional segmentation, targeting and positioning. Definitely, they are important concepts. But marketers need to look beyond these three concepts to successfully run a marketing campaign. Especially in the current scenario where companies are involved in cross border marketing, cultural factors play a very important role. The segmentation and targeting that is successfully done in UK may fail in China. Cultural difference is the reason behind this. In certain diverse countries, the marketing activity that was successful in one part of the country may fail in another part. This opens up marketers towards the fact that all marketing theories will be successful only if it is viewed along with cultural aspects. Culture plays a bigger role when it comes to branding. Branding: Branding can be defined as the process of creating a name, logo and certain brand promises associated with the brand. For example, the brand name Starbucks will bring the Starbucks logo, the ambience of the store and the high quality of the coffee to one’s mind. A brand is said to be successful only if it is successful in creating for itself a brand promise and image in the minds of the consumers. Branding is an area where culture plays a huge role. Modern branding practices are entirely different from traditional branding. Even global brands that have presence in various countries fail in certain markets due to cultural differences. An example for this is the Chinese market. Many global brands fail in China because of its typical cultural aspects. “While China’s growing market has become a major profit center for brands like Intel and Nike, an unusually high number of global brands have failed to live up to expectations in the world’s second largest economy.” (Rein, 2012) Renowned brands like Best Buy and Home Depot has failed terribly in China. Marketing experts who analysed all the failed brands in China said that Chinese market requires huge localization of products. They will not accept a product just by the fact that it is a hot cake in some other markets. Most global retail chains face huge culture related positioning issues in China. Such case studies draw attention to the fact that culture should not be isolated in a marketing strategy. Changing Marketing Factors Post modernists are of the opinion that many modern theories that shaped up the marketing are based on myths. (Campbell, 1990) Though it could not be agreed upon completely, it does point to the fact that marketing cannot just be based on the developed theories. The changing aspect of the market is of course an important element. This can be understood by studying the challenges faced by modern marketing. The major change that has happened to current marketing environment is the advancement of technology. Technology has in fact made this world a small place. It has brought about opportunities as well as challenges to the marketers. “This has opened up immense business opportunities in the shape of the entire globe being one huge market, it has also posed threats to existing market share with the entry of foreign giants in the domestic markets.” (Arora, 2012) Marketers find it very easy to gain access to the customers. Most brands are now either an app on the customers phone or a friend in the social network. Such is the association that a customer has with a brand. Any brand that is not able to be frequently in touch with the customers will just fail in the market or its market share will be nosedived. Though it is a huge opportunity for the brands, there are inherent challenges as well. The main challenge is the huge competition in the market. The customers come across several hundreds of brands in a day. The number of players in the market is so high that most brands in the category are being perceived by customers as the same. Therefore, retaining the brand in a customer’s mind requires differentiation to the core. The brand should explain clearly in what way it is different from that of the one that sits next to it. Differentiation therefore is a very important factor that determines success in the current market scenario. Another important challenge for the modern marketing is the need for local branding. Companies that are huge success in one market fail in the other because of local branding issues. China’s case is again relevant in this context. One major observation in the Chinese market is that the local brands in China are equally strong. Many foreign firms that entered China underestimated the local competition. But the fate of companies like Walmart, whose market share fell from 8% to 5% over the past three years, shows the importance of valuing even the local brands. It is seen that the market share of Wal-Mart is grabbed by the Chinese brands that has small outlets in the country. Chinese customers’ want convenience and they are comfortable with small or medium sized shops for making purchases. This is the main reason why Walmart’s big retail format is failing in China. Therefore, to be successful, a global brand will have to create for itself, a local brand in Chinese market. An example for effective localization is Starbucks’ success in China. “China is not one homogeneous market. There are many Chinas. The culture from northern China is very different from that of the east.” (Wang, 2012) China is traditionally a tea drinking country. Being known this, Starbucks never marketed them as a replacement of tea as they knew that it would make the people feel it as a threat towards its culture. The second strategy they adopted is that they did not introduce their global menu all of a sudden into the Chinese market. Though coffee is the main product of Starbucks, they began operation in the Chinese market with the local beverages like green tea along with coffee products. The third thing is that they portrayed them as a cool brand which attracted the growing young population of the country. The case of Starbucks shows how a branding based on cultural understanding can help a brand to be successful especially in a country like China. Global brands should not think that localization will dilute their brand image. Instead it should merge with the culture of the market where it operates. Implications to current marketing: The changes in the marketing factors have created many implications on current marketing. “There are a number of key cultural elements that international marketers need to take into consideration when designing products, developing promotions and implementing distribution systems in foreign markets. These elements include values, beliefs, thought processes, symbols, traditions, religion and language.” (NSW, 2012) The major implication to current marketing is that companies now need to spend more on marketing. It is not just important for a brand to have a global marketing campaign but it also requires local campaigning. Therefore, a single brand will have several identities based on the market in which they operate. The technological advancement helped to the development of a separate area of marketing called social media marketing. Social media marketing is at present one of the most popular marketing techniques and all big brands in the world use it for reaching the customers. Conclusion Based on the factors analyzed in the previous section, it can be said that current marketing is affected by various factors and companies need to adopt certain new ways while approaching the customers. Some of the common points that the marketers need to focus are as follows. Culture based positioning: Culture based positioning should be a prime strategy of any marketer. Marketers should give extreme focus on the cultural aspects of the customers while executing the marketing activity. Any flaw in the cultural aspects can even claim the life of the product in the market. The success of Starbucks and the failure of Best Buy in China should be a reference case for marketers. Personal Appeal: Marketers should focus on deploying the technological advancement in order to stay in touch with the customers. Companies that are able to be part of a customer’s daily activity can be really successful. Therefore, marketers should begin highly innovative marketing strategies. There is more scope for such activities to be carried on through internet. Segmentation: Marketers should not blindly rely on the basic segmentation of the market. The segmentation should be compared with the existing behavior of the market in order to ensure that the segmentation is at par with the actual market. Communicate the Differentiation: Marketers should carefully observe the changes in the market. They should carefully analyze if new products are coming in the market. Extreme focus should be kept on maintaining product differentiation and communicating it carefully through advertising or other marketing activities. Localization: While entering culture sensitive markets, marketers should localize their products and create advertisements exclusively for the local market. Bibliography Arora, K. 2012. Meeting the modern marketing challenges. [Online] Available at: [Accessed 9 December 2012] Campbell, J. 1990. Transformation of Myth through time, Harper & Row, New York, NY. Cleveland, J. 2011. Why the Failure of the Nano has been a Success. [Online] Available at: [Accessed 9 December 2012] Inc. 2012. Product Positioning. [Online] Available at: [Accessed 9 December 2012] MSG, 2012. What is Consumer Behaviour – Meaning and Important Concepts. [Online] Available at: [Accessed 9 December 2012] MSG, 2012. Target Marketing – Meaning, Basis and its Need. [Online] Available at: [Accessed 9 December 2012] NSW, 2012. International Marketing Challenges. [Online] Available at: [Accessed 9 December 2012] Rein, S. 2012. Why Global Brands Fail in China. [Online] Available at: [Accessed 9 December 2012] Riley, J. 2010. What is Market Segmentation. [Online] Available at: [Accessed 9 December 2012] Solis, B. 2012. Culture Shock: Culture’s Impact on Social Marketing and Business. [Online] Available at: [Accessed 9 December 2012] Wang, H. 2012. Five Things Starbucks Did to Get China Right. [Online] Available at: [Accessed 9 December 2012] Read More