Picasso Perfume: Marketing Management in Practice - Case Study Example

Picasso Perfume - Marketing Management in Practice Planning forms an integral part of management. A Marketing plan is a way of achieving something within the available resources and time limits. Such a plan basically involves, setting objectives and selecting strategies accordingly. Communication is a crucial part of managerial activities. Marketing communication in turn helps a company in building a brand, creating brand loyalties, increase in sales, cutting costs, etc. Picasso perfume, in its urge to join the billion dollar club, has made elaborate plans to move ahead in this direction. With the south island site nearing completion for their first green field international expansion, Picasso Perfume requires a suitable marketing plan, so that it is able to make an impact with its range of offerings. Perfumes are a multibillion industry with many big and small players vying for the market space. Fragrance forms the critical component of perfumes. According to Williams and Curtis (2006) researchers have established a variety of roles for marketing people, which includes; Researching and analysing the market Planning for the marketing campaign Managing the bouquet of brands that the company wants to include Implementing different types of marketing programmes with the help of responsible marketing teams Once the marketing programmes come into operation, their effectiveness and required course of correction is also take care of by the marketing management To carry out all such tasks the marketing management has to effectively manage the marketing people. As such there are other cosmetic items which have fragrance, but these items are supposed to cater to some other needs as well. Cosmetics have been around for many thousand years now. Use of cosmetics can be traced back to earlier times when people used to paint their body for religious ceremonies, war, and mating rituals (Kumar et al, 2006). Range of items like powders, soap, shampoo, toothpaste etc. also form part of the cosmetics industry, but the first thought that comes to mind on hearing the term 'cosmetics' is makeup and perfumes, especially for women. Though perfume as such doesn't come in the category of items required for living, but over the years it has certainly acquired a status of an item required to make a 'decent living'. It is this aspect that is required to be explored optimally, using marketing communication techniques. Marketing Communication Strategies Traditional marketing mix concept, first proposed by McCarthy in 1960, consists of Product, Price, Place and Promotion (better known as the 4Ps). Each particular marketing mix adds up to a certain amount of effort the company is making for the purpose of generating sales. Any plan to develop a competitive advantage must be based on a sound analysis of the company's competitors. Communication forms a crucial part of managerial activities. Marketing communication in turn helps a company in building a brand, creating brand loyalties, increase in sales, cutting costs, etc. North American market is a very diverse market in general which caters to customers/ consumers from different walks of life, different cultures, ethnic groups and age groups. There is lot of diversity in the perfume market itself. With so many varieties of perfumes available in the market it'll require a committed and consistent effort on the part of Picasso perfume to attract the customers. One of the biggest markets for perfume is the youth segment and Thomas (2007) finds out that this segment is not very loyal to the brand, what they ask for is the fragrance. Studies (Datamonitor, 2007) have suggested that blended fragrance is the most preferred fragrances followed by musk, sandalwood and others. Therefore, Picasso will have to take note of the customer's preferences to establish itself as a quality product in the market. Thomas (2007) further adds that the celebrity endorsement of some particular brand also helps in attracting the youth segment towards the brand. Perfume companies have been extensively using the well known celebrity figures like Jennifer Lopez, Britney Spears, Paris Hilton etc. on their scent formulations to attract the customers in general and the youth segment in particular. Therefore Picasso will have to make efforts towards creating an identity with some well known celebrity, depending upon his/ her mass appeal, acceptance in the society etc. Jade Goody, a well known film and television face in UK used to be a celebrity promoter for The Perfume Shop. But the company had to withdraw sales of the perfume range Jade Goody's Shh... fragrance after the reality television star was accused of being racist towards Shilpa Shetty, a fellow housemate on the show of 'The Big Brother' (Davies, 2007). In today's market driven economy concept, the art of communication to existing consumers as well as prospective consumers takes a great deal out of the managerial brain storming sessions. The communication is said to be successful if 'a customer goes to buy the shoes of a particular brand, not for keeping his feet warm and dry but because the shoes make him/ her feel masculine/ feminine, rugged, young, glamorous etc.' Now a days corporations are supposed to remain in continuous touch with customers, suppliers, bankers, government and the general public. Some of the communication happens to be casual, some is made to be informative while some other is designed to be persuasive (Kotler, 1974). For selling a product like perfume, the communication doesn't require to be informative as very few people are inclined to know the chemical composition of the perfume. It is used to keep a fresh aroma around us. Therefore, the marketing communication campaign has to be persuasive towards the targeted customers. How the persuasion is carried out by the company depends upon the market composition, customer preferences and the way market is analysed. Kumar (2006) states that the cosmetic industry as a whole is a very lucrative, innovative fast paced industry. Therefore innovation in marketing approach and product remains the key to success, as product life cycles tend to be short. Technology plays an important role both in the production as well as in the marketing process. Technology has made it possible for the industry to come out with different combinations of fragrances, bottle design, testing process etc. Similarly e-business, e-procurement, online advertising, online retailing etc have given newer dimensions to marketing. Therefore, making an impact on the net is equally important for the marketing communication to be more effective. This calls for an integrated marketing communication (IMC) strategy. To achieve effective communication with IMC requires blending different communication forms like advertising, publicity, road shows, sales promotion, direct marketing etc. into a single, seamless entity (Nowak, Cameron, and Delorme 1996). Launching the Campaign Williams & Curtis (2006) argue that marketing as a management philosophy cannot be segregated from the other components of management. Customer focus must be apparent in the entire production chain and quality assurance, besides the marketing team. Then only the company will be able to come out with products which are preferred by the customer. Picasso should start the marketing communication blitz in right earnest. No doubt it's a well recognized and respected brand in the market, but in order to sustain the momentum the brand must be a regularly visible brand in the market. The consumer is faced with a typical dilemma and pressures of being nudged towards the competitor brand through continuous invitations with unique features and product differentiation forming the key. The media hype helps in sustaining such pressures. Therefore Picasso too must not underestimate the long term effect of such an investment. Such an investment may not be translated entirely into profits, but it helps in the long run, by way of inviting the curiosity of newer customers and even if the company is able to pursue a part of these curious customers into loyal customers, the communication is stated to be successful. The launch will prove to be a big success if; 1. The marketing reports are well analysed by the marketing team. 2. The market is segmented into different categories requiring different types of focus. A report by Datamonitor (2006) on the use of fragrances segments the market into three main categories, viz male, female and unisex. The female category happens to be the most preferred in the market. Besides treating the market into male and female segments, Picasso can also invite more curious eyebrows by segmenting the markets into groups like; a. Youth: This segment is the most vibrant market of all for couple of reasons. One, the youth of the day has become very demanding. Second, the youth is very much quality conscious. Third and most important, the growing trend of looking smart and sweet amongst the Gen-X easily makes the segment an ideal choice for marketers. With the youth taking over the reins of business in their hands, they become formal party animals as well, which requires again them to appear as fresh. b. Family: Though perfume is a very personal item for an individual, but there are families who believe in having a common fragrance as a tradition. This calls for requisite strategies to invite their attention towards the new product. c. Business Community: Business community requires an ambience where it can invite potential clients/ customers and seal a deal over lunch. Therefore, such sessions (generally long sitting sessions) require the air to be filled up with soothing fragrance around them to seal the deal. 3. Thereafter comes the all important task of devising the promos, advertisements, newspaper supplements etc. As per the study conducted by Datamonitor (2006), USA commands a good 27.9% of the fragrance market. Therefore Picasso needs to tap a share of this market with the help of well devised marketing communication strategies. The Canadian market is another North American market with the dominance of female fragrance segment, which accounts for over three-fifths of the total annual sales (Datamonitor, 2004). This study forecast for the year 2008 states that the market is to have a volume of 23 million units, an increase of 12.6% since 2003. 4. Then comes the actual launch in the media. Print and Electronic media are the two potent sources of publicity campaigns. a. As part of print media campaign, it helps to start some familiarization contests, quizzes etc in couple of English dailies as well as some vernacular dailies. This way we get to know the initial feedback as well. Approaching directly to the prospective customers too helps. b. For this we will have to coincide the launch with some youth festival, college festival etc and not to make it during the examination season. c. Electronic media, a very potent weapon, has to be used judiciously. Too much exposure in the beginning itself may not be good from strategy point of view. Unlike Print media campaigns, Radio jingles and Television commercials consume lot of time in preparing the actual media copy. At the same time, electronic media campaign must have a foresight to it, for example the commercial indicating a range of perfumes for winter season must not be released after the winter season is over. This makes the media copy outdated. d. As part of PR exercise it always helps to invite journalists & opinion builders and explain to them 'why the customer should go for a change in their preferences now, and rely on us for all their fragrance needs'. e. To leave a message in the minds of prospective customers the messenger has to be someone with whom the prospective customer can identify himself i.e. the ad campaign must be started with a face known and respected (or a neutral yet attractive personality). For a product like perfume, film personalities and sportspersons are the ideal choice. The first Six Months: How to communicate the launch for the first six months Once the new range of perfumes is placed on the launch pad, the first six months prove to be the most crucial for the company. The Marketing Information System (MIS) of the company must start working from the day the new range of perfumes is launched. Such a support system gathers information about market, changes in market dynamics, response to some of the recently launched products and information about the strategies of its competitor/s and new entrants in the market. Smith et al (1968) defined the marketing information system as; "A structured, interacting complex information systems of persons, machines, and procedures designed to generate an orderly flow of pertinent information, collected from both intra- and extra-firm sources, for use as the basis for decision making in specified responsibility areas of marketing management." Therefore Picasso will have to keep in touch with the pulse of the market, and its reaction to the range of perfumes that the company launched recently. The company will have to make all out efforts to converts the 'curiosity' and 'attention' into business. It is worthwhile here to mention that Picasso is coming out with a brand new range, from its newer production site, therefore the first six months might prove to be very crucial for the company. In order for the production machinery to keep working during the first six months and in subsequent years to come, Picasso needs to keep in mind that there are some other perfume brands already in the market having similar range and attracting similar customers. Established businesses have some loyal customers as well. We need to attract such customers with lucrative offers. For example; Youth can be attracted with discount schemes, combo offers (like buy one get one free etc.), loyalty bonuses, special attraction for the students of colleges/ schools. Such promotional schemes help attract the customers. It becomes the duty of the management to put in full use the concepts of Customer Relationship Management (CRM). The business community is the most difficult one to invite with such bargains. This 'formal class' often requires one-to-one meeting with officials and offering them better bargains and scores of incentives to switch loyalties. Comparison charts and statements are a perquisite for such missions with business leaders. Each business group requires a different set of persuasion technique. Families can also be attracted with better bargains for the entire family, bridal collections. In addition, the company will do a favor to itself, if it goes into strategic tie-up with some reputed retail stores. Retail stores in turn go in for their own marketing communication campaigns. Therefore, such a strategic tie-up results in Picasso perfume being prominently displayed at the most appropriate place in the store, the customer is informed about the qualities of the perfume and invited by the sales person to 'try it'. This helps in lifting sales and sustaining the brand. Competition is in fact a very important part of a market driven economy. This encourages the business community to come out innovative techniques towards customer satisfaction. But at the same time we must remember that while inviting the loyal customers of other brands we must keep in mind the sensibilities of all concerned and must respect the marketing ethics expected of a professional group. That goes on to say that Picasso must not get embroiled into any controversy during the initial months of its launch, which may prove detrimental for the company and its products. References 1. Datamonitor (2006). Fragrances in the United States - Industry Profile- December 2006. Datamonitor USA, NY 2. Datamonitor (2004). Fragrances in Canada - Industry Profile - February 2004. Datamonitor USA, NY 3. Davies, Caroline (2007). Sponsor drops Big Brother. The Daily Telegraph 19-01-2007. 4. Kumar, Sameer; Massie, Cindy and Dumonceaux, Michelle D. (2006). Comparative innovative business strategies of major players in cosmetic industry. Industrial Management & Data Systems, Vol. 106 No. 3, 2006. 5. Nowak, Glen J., Glen T. Cameron, and Denise Delorme (1996), "Beyond the World of Packaged Goods: Assessing the Relevance of Integrated Marketing Communications for Retail and Consumer Service Marketing," Journal of Marketing Communications, 2 (3). 6. Philip Kotler, (1974), Marketing Management, 2nd Ed., Prentice Hall 7. Smith, Samuel V, Richard H. Brien and James E. Stafford, eds., (1968) 'Readings in Marketing Information Systems'. Boston: Houghton Mifflin Company 8. Thomas, Pauline Weston (2007), "Consumers and C21st Perfume Trends-Perfumes and Fragrance Loyalty". available online at http://www.fashion-era.com/perfumes/perfumes_fragrance_trends.htm (Accessed Apr 26, 2007) 9. William, John and Curtis, Tony (2006). Marketing Management in Practice. Published: Butterworth-Heinemann, Oxford, UK. Read More