Adding value through marketing - Essay Example

? Evaluate the extent to which a sustainable and green approach to marketing can add positively to the bottom line in an age of consumer confusion and possible indifference. In today’s world, consumers are being bombarded with a multitude of products and services with the entailing cacophony of messages that vie for attention. The result is an increasing confusion and indifference on the part of the buying public. This can breed consumer discontent that, in itself, is becoming increasingly difficult to address. According to Kaptan (2003), if this confusion, indifference and discontent are not dealt with successfully, any relief created will be transitory and that later on new symptomatic issues and complaints would arise. (p. 45) There is, hence, a need to introduce products and services and build brands that aim to rise above the rest. This objective is best served by adopting sustainable and green approach to marketing. The Concepts Essentially, green marketing is the holistic marketing concept wherein production, marketing consumption and disposal of products and services happen in a manner that is less detrimental to the environment, especially with growing awareness and consideration to prominent environmental issues like global warming, non-biodegradable solid waste, harmful impact of pollutants, and so forth. (Chandrasekar 2009, p458) Sustainability follows and reinforces the same principle, and is characterized by activities that seek to change existing framework in favour of sustainability. (Saren et al., p205) Pursing this strategy is significant to consumers for several reasons. The most important of these include: its contribution to the consumer’s “empowerment” since it allows the consumer to make a difference by using “green” products and services; and, it provides credibility since sustainability related claims can make consumers believe and trust in the product. (Ottman 2011, p110) The gist of the benefits of sustainable and green marketing is that their associations with the positive impact to environment provides a product or brand a mantle of uniqueness and responsibility that adds value in the eyes of the buyers. Successful sustainable and green campaigns include the Levi’s recently launched Eco line of 100 percent organic cotton jeans; Wal-Mart’s “Green” push consisted of diverse initiatives such as reducing energy waste, opening green supercenters, stocking more organic products, and working with suppliers to get them on board as well. (Hawkins & Mathersbaugh 2010, p102) Ottman emphasized that sustainable and “green” products offer tangible and direct benefits that are actually meaningful and important to a number of consumers. (p110) Making a Difference The principles at work here is that green products can rise above the din of commerce that are peppered with superficial solutions to individual needs. Slater pointed to the social dilemma that emerges as a consequence. In his view, the production of more goods and services that provide false satisfactions to human needs in greedy pursuit for profit contribute to the increasing disorganization, disorientation and confusion not just with regards to their needs but also their identities. (p126) In the past, marketing and advertising could have gotten away with it with what Slater called as: an innumerable series of images are forced upon the individual, like mirrors, seemingly empathetic and totally credible, which bring their secrets to the surface and display them there. In these images, people are continually shown the unfulfilled aspects of their existence. The illusion ingratiates itself, promising satisfaction; it reads desires in one’s eyes, and brings them to the surface of commodity. (p126) The problem now is that consumers have been satiated with these messages and strategies. This and the crass materialism had not satisfied many people’s innermost desires. (Sattar 1992, p. 41) One may say that, today, the average buyer is both aware and confused about the way products are pandered to him. Slater concluded that the distance between the aesthetic illusions offered by commodities and the real needs that are left unsatisfied makes consumers thirst for products that are more tangible and satisfactory to their needs and requirements. (p. 126) This is the reason why there is now an increasing number of consumers that are socially conscious and very particular in their quest to find products, which are not only satisfactory to their personal needs but also those that promote the social and environmental well-being. This has been proven by a number of empirical studies. According to Georgescu-Roegen et al. (1999), consumer activity should be seen as a manifestation of the consumer’s personality and his relationship with his surrounding environment that is why it is inevitable for them to be attracted to those products and services that offer utility. (p114) A survey by Laszlo of several financial institutions found that 31 percent of customers identify ethical and ecological policies as important reasons for opening and maintaining account. (p79) Finally, there is Hendriks’ Double Filter Model (see fig. 1), which explains how consumers perceive quality as the basis for purchase and how this “quality” is equated with “green” characteristics. (p228) Fig. 1: The Double Filter Model Conclusion All in all, sustainable and green marketing adds value to a product. This value may vary in importance to different segments of the buying public. But it is value, nonetheless. Consider a very simple analogy: If a consumer is faced with a buying decision – whether to buy product A or product B, with both having almost the same product characteristics and specifications. But if product A offers “green” or sustainable features, then it would certainly have the competitive advantage. 2. In competitive markets, the best and strongest firms sustain growth and maintain profitability over the longer term through successfully developing and launching a steady stream of new products and services – Kotler et al (2005). Discuss the extent that this statement is correct in maintaining high customer loyalty and retention. All About Innovation The classic theory of imminent economist Joseph Schumpeter is that innovation permeates any entrepreneurial enterprise and that it specifically provides the “soil in which startups’ competitive advantage can take root and grow. (Longenecker, et al. 2009, p. 308) Through innovation, an organization is significantly widening the gap of its competitive advantage because it provides its customers a better and more novel alternative and value from those being offered by the closest competitor. New products or new varieties of horizontally differentiated products are always equated with innovation. (Grossman and Rogoff 1995, p1320) This relationship is highlighted in Tidd, Bessant & Pavitt’s research that found a strong correlation between market performance and new products. (p5) The reason is that additional values to a product or service, can extend its utility and attractiveness to the buying public until such time that they switch on to another product that is more desirable, most especially newer ones that assume the organization’s position as innovator. Stahl and Grigsby offered a specific explanation and example in this regard. To quote: In many markets, customers demand the latest in new technology in products/services without delay. By shortening product development cycle times, the firm can be the first to market with the new product/service… The cost of being late to market can be huge. Just three months “slip” in the schedule to new product introduction can cost 50 percent of the gross profits in a fast-moving industry like personal computers. (p190) With the above statement, several important elements are highlighted. For example, there is the use of technology. Computer-aided design and manufacturing radically speed up the entire process that new products are being introduced into the market in very short span of time. (Kahn 2001, p37) This becomes the norm and one may be sure that customers expect this kind of system from manufacturers. Benefits of the Product Development Process Then, there is the fact that new products are being developed not just for the novelty that is attached to them by consumers. That alone cannot justify or constitute value that would influence clients to be loyal for a period of time. There are additional crucial variables that reinforce the benefits of being new. The most important of these is the significance of the product development process itself. When a new product is launched, it first undergoes intensive market research and a series of experiments so that the organization is equipped with correct and up-to-date needs and requirements of customers, including the selection of characteristics, technologies and strategies for the product, the way it is marketed and sold. (Mital et al. 2007, p25) This is depicted in an example model used in product development (see fig. 2) What this means is that a new product is better able to meet current customer needs and requirements in comparison to a product that has been merely improved with an extended maturity phase in its life cycle or one that is only “milking” an existing product/service for sheer profitability. (Stahl & Grigsby, p189) Thrown in a three-way competition, the new product will certainly win, for sheer innovation. Fig. 2: Product Development: Customer Value Creation (Lindstedt & Burenius 2003, p486) Effective Diversification New products also allow a company to be more effective in securing and maintaining a highly segmented market. This point can be illustrated with the case of Nike. In the past, giants like Adidas and Reebok dominate the sports apparel industry. But when Nike was founded, it immediately seized the lead from these two firms. The reason behind this breakthrough is that Nike diversified. Instead of manufacturing a general type of athletic footwear, it diversified these and also branched out into apparel and sports equipment. (Grant 2009, p130) Nike diversification strategy and its penchant for developing new products also worked when it acquired Converse and turned it from a losing into profitable organization. (Lussier & Kimball 2009, p98) This is underscored by how Nike invests heavily in research and development since 1995. (Turner 2001, p26) The “New” in Building Brands Then, there is also the variable of brand identity. This area is not exclusively independent from innovation or other related variables. As a matter, of fact, they work excellently together and must do so in order for the potentials of new products and services to be realized. Following the principle behind innovation and the product development, brand identity must follow “change” in their context. For example, brands like Apple, BMW, Nike, IKEA, Diesel and 3M are known for their ability to shape and strengthen their image along with each new product that is systematically and consistently introduced. As a result, they assume the innovator and market leader positions in their respective markets. The potency of the brands like Apple – with way they are carefully engineered to project the concept of the new and advanced – demonstrates for us why introducing new products is an effective marketing strategy, particularly in the battle for the minds and hearts of the buying public. Conclusion It must be underscored that the most important rationale behind the introduction of new products and services is its link to customer value. With the emergence of high technology, product life cycles are consistently and drastically shortened. New products, along with the highly dynamic tactics and strategies such as how brands are engineered – constitute the very concept of innovation, which is essentially adopted in order to surprise and gain advantage in a cutthroat and globalized market. References Chandresakar, R 2009, Marketing Management: Text & Cases. Tata McGraw-Hill Education. Georgescu-Roegen, N, Mayumi, K and Gowdy, J 1999, Bioeconomics and sustainability: essays in honor of Nicholas Georgescu-Roegen. Edward Elgar Publishing. Grossman, G and Rogoff, K 1995, Handbook of international economics. Oxford: Elsevier. Grant, R 2009, Contemporary Strategy Analysis. John Wiley and Sons. Hawkins, D and Mathersbaugh, D 2010, Consumer Behavior, 11E (Sie). Tata McGraw-Hill Education. Hendriks, Ch. F 2004, The eco-costs/Value Ratio (EVR): materials and ecological engineering. The Netherlands: Uitgeverij Aeneas BV. Jansen, Michael. (2006). Brand Prototyping: Developing Meaningful Brands. New York: Kluwer Publishing. 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