Top 5 Marketing Concepts. Number 3: Timing

Why do many companies advertise most heavily and use push and pull strategies at times such as the holidays? How do marketers know to target early majority consumers when a product enters the growth stage? How do they know that a generation has entered a certain lifecycle stage and will thus alter its buying habits? What do we mean when we claim that buying patterns (and hence revenue streams) are cyclical? These questions all have one principle in common: Timing. 

There is no single all-encompassing definition to this concept in terms of marketing. Still, as a marketing manager, I have come to realize how crucial timing really is to marketing.

However, timing, as a strategy, can be an elusive skill. Many seemingly unimportant forces and social patterns combine in various ways to influence the popularity of any idea, products, or service. Thus, it is sometimes difficult to understand how or why some products become popular when they do. Returning to the North Face example, I can recall when the jacket (pink for girls, black for guys) became amazingly popular. Before the brand had multiple offerings, its appeal was that it was a unique jacket with high brand equity. After a few years, the product reached the late maturity stage with young college-aged adults. This segment eventually became saturated, which reduced its exclusivity or uniqueness appeal (except for laggards). During one trip, I recall waiting in airports, noticing that every five or so young men and women were wearing a North Face shirt. In my opinion, this was the time for the North Face to begin targeting younger segments (aspiring to seem older) and perhaps older segments (aspiring to seem younger). 

When I wrote the first version of this report in 2004, I gave another example of a product whose “time had come”, at least with the college segment. It was the then-new Föm pillow, which was available exclusively at Brookstone. Back then, its growth seemed to have been moderate, though more and more students (mainly women) were using this comfortable new pillow in their rooms and while traveling.

I wrote, “Assuming the product is not a fad that will fade like some others, I would estimate that it is between its late introduction and its early growth stages. This is a time when competition begins to emerge.”

Soon after, Brookstone began to warn its customers of new substitutes: 

Don’t fall for imitations—available only at Brookstone, genuine Föm is thousands of high-quality, cushiony microbeads in a luxuriously soft, stretchy shell that will snuff out your daily stresses and bring happiness to your world. Föm, it’s what fun feels like! 

This was Brookstone’s attempt to increase and protect its brand equity. Perceived quality was definitely a goal when competition increased. Another tactic of increasing perceived value was the price. Brookstone charged up to one hundred dollars for the largest Föm pillow. The company also began targeting new segments with new extensions of the brand: the Föm Curlee Junior targeted a younger segment, while the Föm Body Pillow might have targeted the singles segment. Shortly thereafter, there was an entire Föm Collection.

Since then, however, many “microbead” substitutes have come to market. Prices have been driven down to around ten dollars for a travel microbead pillow. Brookstone realized the time was right to alter its strategy, and it now offering an entire series of comfortable therapeutic (personal care) products, from pillows to socks. These are still in the early growth stage and hence justify high prices and higher margins.

So is this science or art? Timing is one of many strategies marketers like myself use in their ongoing attempt to turn marketing into a science. Wouldn’t it be nice to input some information into a program that then tells us exactly what we should do to maximize ROI every time. Well, no, I don’t think that would be optimal. Frankly, the implications of that are scary. Thankfully, no matter how hard we try to quantify human behavior, much of our discipline has remained, and will always remain, a form of art. 

Now what could be more important than timing to marketing?

Top 5 Marketing Concepts. Number 4: Segmentation & Targeting

Once we recognize that a company has a successful brand we need to ask: 

Who is this brand being offered to?

…Everyone is an unrealistic answer, as companies are subject to capital restraints. No company, not even Coca Cola, can serve the needs and wants of an entire market, especially in the United States. People’s preferences are far too varied. The vast majority of marketers must target their offering at very specific, narrowly-defined groups of people.

A second concept, one that is not covered adequately in marketing texts, and one that I find to be extremely important to our discipline is target marketing (that is, market segmentation and the development of target markets).

The goal here is to identify a group or groups that are adequately distinct, in that they are measurable, responsive, stable, and sufficiently large. We may do this by differentiating groups based on variables such as demographics, lifecycle stage, location, behavior, needs, wants, and usage. A company may then target that segment based on the factors its offering can best fulfill. Rather than trying to influence all consumers, most companies focus one brand on one (or few) segment(s).

Clearly, as different segments are targeted, different marketing strategies are needed. So, influencing multiple groups would require multiple strategies, each of which requires its own set of resources.

Interesting Side Note: It is worth noting that marketers sometimes target one well-defined segment by appearing to target a different segment. This “false” segment (the group marketers are “pretending” to target) may be a group that the “true” segment (the group marketers are actually trying to influence) aspires to become like. The goal here is to induce this reasoning process: I want to be like this group. Therefore, I should behave like them. If they use this product or service, I should too.

An example of this is a recent campaign for a body wash. The campaign asks, Who should use this body wash? It then shows various “goofy” (slightly unusual, yet funny) high school boys claiming the type of body wash does not mater, or that it will not help them “get the girls”. The commercial ends by showing a young professional man in an urban setting. The image of the young man implies that he is well educated and confident, yet care-free; his appearance implies that he has a well-paying job; even his brief case has an implication – he is carrying a black leather satchel that implies he is professional, but still young and trendy. In short, this is a young man that has attained what many teenage boys aspire to. The young many clearly uses this brand of body wash. He sums it up with just four words, “It works for me.” The commercial concludes that this type of person uses the body wash.

Here, the young professional is the false target. The campaign is clearly targeting the high school boys who aspire to be like him, or at least to be unlike the boys previously shown.

Another advantage of segmentation is an added degree of control for companies. In today’s highly-regulated, consumer-controlled market, companies have little control of environmental factors. These include regulatory factors, industry norms, and consumer expectations, among others. By utilizing a segmentation process, firms can choose to target only the most profitable groups. They can also go as far as creating new segments.

Focusing on one or few segment also enables firms to more easily conduct marketing research regarding the buying patterns and preferences of their target market.

When I was a student, one firm that did this well was Student Advantage. The company offered a card to fulltime students, with which they could save up to fifty percent buying products and services from over 15,000 partner firms (online and brick & mortar). As a student, I used the card for discounts on Amtrak and Greyhound, which saved me significantly more than the cost of the card. Had I not used the card, I may have chosen different methods of travel. This, along with the name, makes it easy to identify this company’s target market: price-conscious college students. The company has also gathered valuable information, including the buying habits of college students. In this way it attracts partners who may wish to target this segment.

Segmenting, in short, is a way to maximize marketing’s impact (by tailoring the message to the audience) while ensuring that resources are spent in an efficient manner (by not trying to be everything for everyone).

This brings me to the three broader concepts that, in my experience, are the most important to marketing. Understanding these concepts is of even greater importance than the two previously discussed. These concepts are usually not covered specifically, though they are implied on a daily basis.

Top 5 Marketing Concepts. Number 5: Branding

As a former marketing major and a practicing marketing manager, I think that every fundamental marketing textbook should have a chapter devoted to branding. In today’s competitive markets, companies have two broad options. They can either mass-produce low-end, low-cost, generic products or they can specialize and create a unique brand. This is true with both goods and services. Because the cost of distributing and “mass-producing” certain services are so low, differentiation and branding becomes even more important to non-tangible goods. Since competition is such a primary element in business today, and since consumer-centricity is peaking, it is very important that marketers give potential customers a reason to buy; but they must also give current customers a reason to keep buying (repeat business and customer loyalty are the primary source of revenue for many companies; and the cost of acquiring – or losing – a loyal customer can very high).

Also, branding creates perceived differentiation and allows companies to avoid competing solely on price. If this were the case, large firms would undercut smaller ones, and industries would consolidate. Logically speaking, the end result would be an economy of monopolies. Firms combat this by attempting to differentiate their products from others, creating and developing awareness and perceived quality of their brands, and developing brand equity.

Obviously, none of this would be possible without marketing research (a form of market research), testing and evaluation. Still, in this discussion, let’s keep it broad.

The world’s most well-known companies all have a primary or core brand and high brand equity. Coca Cola is an example used below.

Keep in mind that firms can sometimes overemphasize their brand (such as by over-advertising or by over-extending their brands), which can lead to brand dilution. Coca Cola, over many decades, has developed and added value to its brand. Today, Coke’s is the most widely-recognized brand on Earth. In fact, Coke’s brand worth is estimated at around $70 billion. Now, with the saturation of the soft-drink market and with health awareness becoming a driving force for more consumers, Coke has launched and acquired other health-oriented brands such as Dasani, Nutriwater, Evian, Fresca (…the healthy way to stand out.), KMX (Coke’s answer to Redbull), Minute Maid, Odwalla (…different from any other juices you see in the store…), Simply Orange, Sparkletts, and Swerve chocolate milk.

This is sound marketing practice on Coke’s part, as many people do not recognize that these brands belong to Coca Cola. However, at times Coke has also extended its own brand. In other words, it has marketed new products under the same name, or new forms of Coke. The soft drink conglomerate has added caffeine-free diet coke, caffeine-free coke, vanilla coke, diet vanilla coke, Coke C1, diet coke with lemon, diet coke with lime, and more. Many of these new offerings were rebuffed by consumers and have since been discontinued. By doing this Coke has somewhat diluted the brand it worked so hard to build.

The Five Most Important Concepts of Marketing (Introduction)

The Five Most Important Concepts of Marketing:

An Unconventional View of what Successful Marketing is All About

INTRODUCTION

This marketing mini-series covers what I perceive as the top five elements of successful marketing, based on my experiences and research. It is mainly intended for aspiring marketers who want to get a firm grasp of the basics of marketing from a broad perspective, though it can also serve as a great reminder to more experienced marketing professionals. Rather than being a how-to guide, this series should be viewed as an overview or a reminder of what really matters in marketing. These concepts apply to all forms of true marketing.

Being such a broad topic, identifying just five marketing concepts was a challenge in itself. I wanted to select a few concepts that stand out above the rest and that apply across the entire discipline.

The five concepts I will discuss are commonly implied throughout marketing texts. Unfortunately for aspiring marketers, they are usually not discussed directly, at least not at the basic level. Yet, as mentioned, these are some of the most important marketing concepts to understand.

I begin this mini-series by discussing two specific, well-defined marketing concepts, neither of which is covered sufficiently in basic Marketing texts. The final three concepts are more broadly-defined and are of paramount importance to marketing. In my opinion, each of these five topics deserves its own chapter in any Principles of Marketing text. Throughout these postings, I have inserted links, in case you would like to learn more about some of the marketing terms used.

Each week, I will post my thoughts on a new topic, in descending order, like a countdown. Feel free to send me any comments. But remember, I have attempted to keep this discussion as broad as possible. Also, if you have another opinion, please let me know what you think are the top marketing concepts that aspiring marketers should keep in mind.

OK, let’s jump right in…