The world is our market and we are in the world market', a philosophy that has been followed by most of the large organizations after globalization. Organizations started preparing themselves for the shift from domestic to international, international to global and then to transnational companies. They had to overcome various challenges like scaling up of operations, investments, competitions, product obsolescence, new technologies and effective leadership during this journey. The companies which managed them successfully could sustain in the marketplace and achieve the leadership position. This may be attributed to one or many parameters of business like technology, volume, market share, price, quality or service.
(For example – Domino's in Pizza, Maruti in Small Cars and Colgate in Toothpaste)
It will be interesting to understand what these companies did differently to attain this position and what the critical areas of focus were. We will cover this in 2 parts. In the first part, we will speak about the concept of
1. Market Orientation
1. Market orientation:
Since most companies sell to a variety of customers with varying and even conflicting desires and needs, the goal of getting close to the customer is meaningless. It is important to be market driven or customer oriented and for which you need to have adequate information on all the buying influences.
a. Environment Scan – What are the key trends/ changes in the following and identify whether they represent risks or opportunities for the company?
● Demographic trends
● Customer habits & behavior
● Changes in economic fundamentals
● Industry structure
b. Understanding of Customer and Market – What are customer needs?
● Are there any need gaps (Stated or Latent)
● Do our products have the capability to create or shape new needs What is the source of growth i.e. new users, repeat buyers, shift from similar products of competitors, cross sales from existing users?
What are the alternatives to our products?
● What is the context in which our products are used
● Why do customers trade across them
● Who and Why
● Barriers to adoption
● Potential incentives to convert
c. Understanding of people who decide whether to buy its products or services –
In some industries, wholesalers and retailers have a profound influence on the choices customers make so it's important to understand the trade. In other markets, non-buying influences specify the product although they neither purchase it nor use it. These include architects, consulting engineers, and doctors. In commercial and industrial marketplaces, a professional procurement organization may actually purchase the product while a manufacturing or an operational function uses it. Market and Customer information must move beyond the market research, sales, and marketing functions and permeate every corporate function including R and D, Engineering, Manufacturing, and Service.
Positioning is the act of designing the companies offering and image to occupy a distinctive place in the mind of the target market. The end result of positioning is the successful creation of a customer-focused value proposition, a reason why the target market should buy the product. (See Table 1)
A company must decide how many ideas to convey in its positioning to its target customers. Many marketers advocate promoting only one central benefit. This makes for easier communication to the target market. It results in employees being clearer about what counts and align the whole organization with a central positioning. Different types of positioning which are used by other leading companies are –
● Attribute Positioning: Attribute such as size or number of years in existence (Disneyland)
● Benefit Positioning: Leader in a certain benefit (Sula Farms)
● Application positioning: Product best for some use or application. (Everest Tikha Lal)
● User positioning: Best for some user group (Magic Mountain for thrill seekers)
● Competitor positioning: Better in some way than a named competitor (LG or Samsung)
● Product category positioning: Leader in a certain product category (Mahindra Tractors)
● Quality or Price positioning: Positioned as offering the best value (Godrej)
To sum up Market Orientation & Positioning are two important elements for the companies in the journey of Marketing Leadership.
Note – This is the first Article in the series relating to Marketing Leadership
Awesome article! Would love to read more such articles in future..