Generic Marketing Strategies and Competitive Market Positioning - Literature review Example

Running Head: MARKETING ONLINE BRAND TRUST Marketing Online Brand Trust [The [The of the Marketing Online Brand Trust Abstract This research explores generic marketing strategies and competitive market positioning in the context of the several online brand industry. The key research issue is the degree to which traditional planned concepts, like competitive market position and sustainable competitive advantage (SCA), are relevant in the latest world of e-marketing. The mainly significant subject that emerges from the study is that the tools and idea that are pertinent for offline firms are evenly applicable for online firms. Dissimilar generic strategies call for a diverse market position and this is borne out in this case study. Particular concentration is given to the significance of a channel management general strategy in the e-marketing background. Firms consider this alternative require to have a high level of capability in relationship marketing skills (Jeeves, 2005). Now question is what is a brand "Your brand is the relationship you have with your customers," says L. Kareem Geiger, founder and vice president of client relations at TechnikOne (www.technikone.com), like him other professional says branding answers the questions: What do people think of us Who are we Who are our customers How are we making bigger ourselves in an association with them (Cravens, D., 2000) Introduction Hi-tech products can be an outcome of a fantastic innovative idea, superb technological breakthrough but if customers don't accept the value proposition since they don't perceive the similar, it will not last long with sustainable revenue model. The technical products can be substituted extremely rapidly as technological advancements are extremely fast also these products can reach the adulthood levels rapidly and can become outdated in no time (Barney, J., 1991, 99-120). Nowadays it is much easier for a competitor to copy your goods, services and systems. Technology is becoming a product business, and the comparatively established hi-tech companies discover themselves being sucked in to the product trap (Chowdhury. J., 2001, 72-86). Coca-Cola. McDonald's. Jaguar. every name evokes a mini universe of things you've come to be expecting from them. Coke's branding, for instance, pervades its product excellence, packaging, advertising, the look of its trucks, dispensers, and machines, and it has supervised to productively port its image online. Smart move bearing in mind online sales will reach $126 billion by 2004, according to an eMarketer report (Costa, J. & Teare, R. 2000, 156-169). Like all other organizations Coca-Cola recognized premature on that the Web would play a significant role in not only cementing brand faithfulness but also in draw latest customers to its product (Conant, J., 2000, 365-383). Let's take a look upon Adds Carrie Williams, owner of Williams imaginative Marketing in Seattle, "Brand transcends your products. If your brand communicates effectively, it can bring a culture together, whether it's an internal audience (the company) or an external audience (consumers)." (Dabholkar, P., 2003, 3-16) A company doesn't produce a brand just for the product or overhaul it sells, it does it for the association and trust that go with it. "Brand has a lot of essence; it's not just a graphic look," says Patricia Belyea, president and planned director of Seattle's Belyea Marketing/ Communication /Design. "Brand is graphics, customer service, quality of product, and dependability of delivery. It is performance, not public relations." (Day, G. 2004, 37-52) There are quite a few ways to draw consumers online using both. Offline marketing gives consumers a chance to examine your Website and get further information concerning your products and services. Innovation/Contribution in Marketing The Brand One of the major benefits of the Internet is its cost-effectiveness when contrast by other marketing methods such as straight mail, television, radio, prints advertising, and outdoor ads. Though, this doesn't mean you ought to abandon customary marketing methods, just that you ought to believe using online resources to get better them. "We believe in a hybrid approach," says Barry Cooper, CEO of the African American online community BlackVoices.com (www.blackvoices.com). "It's important to market to consumers on the Internet and offline as well," he explains (Deighton, J. 2005, 151-161). Let's take a look upon BlackVoices.com, lots of companies have found that, as costlier than online advertising, customary advertising is still the majority effectual way to draw consumers to their Websites. There are quite a few reasons for this. But the major cause is that the Web is a comparatively latest medium that motionless doesn't have the reach of, say, TV or radio. So the finest way to reach the widest audience is to unite customary by online media (Dibb, S., 1996, 16-29). There are quite a few ways to draw consumers online using both. Offline marketing gives consumers a chance to examine your Website and get further information concerning your products and services. In this example, it can be used to get the consumer's notice and give him or her a possibility to think the product. The Website can then be used to set customers up for the sale by giving them the extra details, incentives, and buying tools they require. You cut expenditure costs by collecting data from those who visit your site and articulate attention in receiving further information and samples of your manufactured goods. This is further effectual than "street" or mall marketing to a mass market, and it allows you to spend less on mailings of brochures and promotional items (Donthu, N. & Garcia, 2002, 52-58). One more method is associate marketing (advertising on other Websites), where you aim consumers based on demographics (their site) and psychographics (their attitude, opinions, and interests). One of the most well-liked methods of online marketing, though, is viral marketing or word of mouth (Harker, M. 2001, 197-206). Seamless Transitions All have to be reliable online and off--the brand design and message, the performance of the product, and your purchaser service. A Website is as significant a medium nowadays as the telephone, whether it survive as a brochure site to pass on customers to your phone line or offices, or as a full-blown e-commerce site. If you don't have a Website when potential customers are looking for you at, say, 3 a.m. or from halfway around the world, you're losing your audience and brand trustworthiness. If a significant person hears of you, but you don't have a Website, you will seem, at most excellent, outmoded and, at nastiest, fly-by-night (Kourteli, L., 2000, 406-413). "It's very important to maintain consistency" says Geiger. "Oprah.com has doing well in doing this. The Website reproduces the similar image as the talk demonstrates Oprah and O magazine. In turn, these two media directly their audience to the Website" This constancy in plan and tone makes the brand stronger since the consumer right away recognizes the image, which engenders emotion and brand faithfulness (Ducoffe, R., 2005, 21-35). Sentiment aside, consumers are also confidence and time-conscious, so your brand ought to work hard (and rapidly) to expand a association and a level of trust by consumers. The key is to appreciate your audience: Know what they value concerning your brand and what they are expecting from your manufactured goods. And keep them concerned (Lozada, H.R. & Calantone, R.J. 1996, 17-41). Again we are going to highlight, Coca-Cola benchmarked this technique throughout one of its subsidiaries, Sprite, by allowing consumers to visit Sprite.com and enter codes found beneath Sprite bottle tops. Consumers earned points that could then be rehabilitated to prizes. And when Nike had merely a month to register runners in a 5K to 10K race in London, the company leveraged the value of its brand on the Internet by targeting its core audience with e-mail cartoons hopeful them to register (Grant, R. 2001, 114-135). If we analyze then we come to know that Games, contests, viral marketing, interactive icons that can be downloaded to your desktop, and manufactured goods giveaways are further methods that allow customers to interrelate with a company. Different television commercials, which are unreceptive, games and viral marketing techniques, permit you to imprison the viewer's interest and permit them to learn more concerning the product (Lozada, H.R. & Calantone, R.J. 1996, 17-41). It is significant to appreciate that branding cannot be done during the night. Like any association, it takes years to expand and have to be well coordinated to be effectual. Cooper points out that online consumers are all looking for the similar thing: expediency, savings, and service. If their wants are not content, they'll merely go elsewhere (Hoffman, D. & Novak, 2005, 50-68). Protect Your Brand Defensive your brand on all fronts takes vigilance. But each time you protect it, you also make stronger it. There are things you can do to make it easier such as decide a business name unlike an important person else's in the similar field, and making sure there's a easy domain name obtainable when you're prepared to go online. Once you're online, follow these tips to secure your individuality (Homburg, C., 2000, 459-478): Majority people post a copyright notice on every Web page and set up rules for the use of their logo and company name in print. There is opportunity to search the Web for instances of stolen logos, art, or text, and ask their attorney to send cease and desist letters to thieves. If your domain name has been bought by an important person who just needs to resell it at a senior price, believe the following: The most excellent way to protect your brand, though, is to offer quality products and customer service, and to transport on what the brand promises. Method or Critical Analysis of Key Issues The study has a two-part design using qualitative and quantitative methods. The first part was a watching brief, to monitor and analyze the Australian online-book market over the two-year period, 1999-2000. The qualitative analysis of the generic marketing strategies used an expert panel of three academics who were expert in strategic marketing principles. All three were involved in teaching a subject called strategic marketing. There was on-going debate as to the most relevant generic marketing strategy for each e-retailer, with consensus the final arbiter. Debate does not mean that there were major disagreements between the panel members. Far from it, there was a high level of agreement in the attribution of generic marketing strategy to particular firms (Hunt, S. & Morgan, R. 2005, 1-15). Generic Marketing Strategies of the Three Online Book Retailers The two Australian-based online bookstores, Angus and Robertson and Dymocks, were readily allocated into one of our four-type generic marketing strategies. Clearly, Angus and Robertson emphasized a low-price strategy. This was explicitly tagged throughout their site; with "ten percent off all books" being the dominant message. It Was also implicit with respect to all of their other e-marketing activities that were very weak relative to competitors. There was limited online service and the site itself was not very streamlined or helpful (Saxby, C.L et al. 2002, 28-34). That is, a very "no frills" service was offered. The impression is almost a "me too" online store. Broadly, the online service is just an added activity, a type of brand extension, to supplement their already strong brick and mortar operation, where they are the largest book retail chain in Australia (Porter, M. 2002, 61-78). Marketing Strategy for Brands An innovation generic strategy was certainly critical to Amazon.com in their initial years of business. The concept of Internet selection and online purchase of books was novel in the early 1990s and Amazon.com designed and implemented a new way of doing business. However, after 2-3 years of business, once it was better known, the company moved to a combined branding and channel management generic strategy. We cannot separate being one of the world's best-known e-brands from its generic strategy. However the channel management aspect is equally important. The emphasis on simplicity, helpfulness, convenience, reliability, trust, memory of past habits and customer-relationships generally evoke a powerful image of a customer-driven organization. Indeed, there is a sense in which the customer-driven (channel management) aspect is the e-brand. If the channel management side did not work as well as it does then the brand of Amazon.com would have a lot lower brand equity. The low price aspect is important, but not enough to make it a generic marketing strategy compared to competitors (Rowley, J. 2000, 20-35). Recommendation/Discussion The generic marketing strategy typology used here provides a useful framework to interpret the respective competitive market positions of the three online booksellers. Both the strategy typology framework and the snake position map incorporate other elements of a marketing strategy. For example, the sustainable competitive advantage of Amazon.com is primarily related to superior relationship marketing. A similar conclusion applies to Dymocks in a comparison of the two local online booksellers. Although not reaching the heights of Amazon.com, Dymocks have been able to use customer-responsiveness, a convenient returns policy and their book club program to nurture their own loyal base of customers. We have also shown that the superior channel management strategies of both Amazon.com and Dymocks are soundly supported by appropriate capabilities (Varadarajan, P.R., Clark, 1992, 39-49). The overall model of strategic marketing management that we started with has been woven together by each of the firms. In the case of Angus and Robertson, the "weaving" has spun a "no frills" cloth, but it has nonetheless been woven in a consistent, harmonious way. This is not to say that their low price strategy offers them a sustainable competitive advantage. Far from it, it is an advantage that could be easily copied (Rowley, J. 2000, 20-35). Our most important finding in this paper is that the traditional strategic marketing tools, including generic marketing strategy, competitive market position, SCA, and capabilities, are readily usable in the e-marketing environment. The approach shown in this paper has the potential to be applicable to most markets in most countries. These tools can be used by academics to study different markets or by practitioners researching their own market. It is critical that practitioners firstly determine their generic strategy as this provides an over-arching guide to the remaining components of a marketing strategy, including their SCA and competitive market position (Slater, S. 2004, 79-86). The other important lesson here is that the components of the marketing strategy need to be suitably integrated with each other. Different generic strategies require different integration tactics and capabilities. Some generic strategies, like low price, require a fairly straightforward set of integrating tasks, namely to vividly display low prices and to run all other operations on a no frills costing basis. Other generic strategies like channel management; require more complex integration of tactics and capabilities. Though the recompense in the last cases is that a sole set of competencies are created that help maintain a competitive advantage over a longer period of time (Varadarajan, P.R., Clark, 1992, 39-49). The study has additional practical importance in terms of its advocating a snake position diagram, rather the traditional two-attribute position map. The snake diagram should be particularly helpful for busy executives who often prefer a visual picture of where their business stands relative to competitors. A special benefit of the snake diagram is that it can potentially quickly reveal that a firm is a "me too" e-retailer, with very limited distinctiveness. This was the case of Angus and Robertson, where the snake diagram revealed that they had an inferior position in most areas. The snake diagram can guide firms to deliberately and purposefully redevelop their business so as to be better positioned against competitors (Kourteli, L., 2000, 406-413). The analysis has some broader implications in that selection of a channel management generic strategy in the e-marketing context has much merit. We have already discussed the notion that this type of generic strategy is more likely to create a sustainable competitive advantage. Importantly, the fact that a major competitor develops a competitive advantage using a channel management strategy does not preclude any other firm doing the same. The Amazon.com and Dymocks cases are testimony to this point. Indeed, the channel management strategy lends itself to the development of distinctive (unique) capabilities, often inextricably linked to a loyal and satisfied customer base (Snow, C. & Hrebiniak, L. 2004, 317-336). In contrast, there is unlikely to be room for more than one or two low-price generic strategy firms and this may not be sustainable. Similarly, at any time, there is likely to be only one or two really innovative firms and these fads may not be sustainable either. From the consumer's perspective, novelty may be fine for a short time, but in the long-term more practical aspects like reliability and time-saving convenience are likely to 'be more important. It is telling that our analysis provides some insight to the critical enduring qualities for e-marketing success. Reliability, flexibility and convenience would seem to be the hallmarks of the excellent channel management firms. Convenience rather than low prices is the most critical need of consumers in the new world of e-marketing and the more that the e-marketing strategies reflect this, the more successful they are likely to be (Snow, C. & Hrebiniak, L. 2004, 317-336). Conclusion The study has analyzed the marketing strategies of the three leading firms in the online brand retailing industry. The firm with the highest market share is American-based Amazon.com, reflecting the global nature of Internet markets. The other two firms are International-based, where the online business is an add-on to very strong bricks and mortar operations. The three sites have been monitored over a two-year period using qualitative research. Additionally, a quantitative component of the study used a convenience survey of 151 respondents, providing a user-consumer basis for the snake competitive position maps. Snake maps are essentially image maps, showing how different firms were perceived from a consumer point of view (Harker, M. 2001, 197-206). Amazon.com was found to have a dual generic marketing strategy, combining branding and channel management. They are in an extremely strong position worldwide. Their very strong position in the International online book/cosmetic/ technology/ food or etc market is reflected in the snake position map. It was also shown that Amazon.com support their market position with high performing, relevant capabilities, such as communication and technology. Dymocks was found to be performing very strongly as well, with an well-articulated channel management generic strategy. This broad generic strategy has similarities to that of Amazon.com, but Dymocks have refined it in a way to develop their own distinctive competencies linked to a loyal base of customers (Walsh, J. 2000, 85-92). The critical finding is not simply about the different strategies of three competitors in a given market, but the potential of the methodology for the analysis of any online market. It now seems likely that the conventional tools and concepts of strategic marketing can be applied to other online markets. In other words, strategic concepts such as generic marketing strategy, competitive market position, the snake position map and SCA, can be readily and productively applied to the e-marketing environment. Evaluating this proposition was the central purpose of the current paper. Either academics or practitioners can use the concepts to give insight into how competitors compare. In particular, the snake position map might be seen as especially helpful as a visual aid to ensure that practitioners are not entrapped into inadequate "me too" e-positions. The other main lesson for e-marketing strategy in general is the potentially important role of a channel management generic strategy. It was argued that a channel management generic strategy is more likely to create a sustainable competitive advantage. Through a program of relationship-management and technology management a firm can build their own distinctive competencies, linked to a loyal base of customers. At a more detailed level, quality relationships on the Web can be managed through a greater understanding of site-customer communication and interactivity (Walsh, J. 2000, 85-92). Table 1 Protocol To Attribute Generic Marketing Strategy to a Firm Marketing activities associated with particular generic marketing strategies Low-Price Generic Strategy Channel Management Generic Strategy Very strong emphasis on low Very strong emphasis on distribution prices Limited services Strong customer relationships Limited range of product Strong vendor relationships No frills (low budget) Database marketing operations Loyalty programs Key account management Category management Branding Generic Strategy Innovation Generic Strategy Very strong emphasis on Very strong emphasis on products promotion Promotion features the brand Constant flow of new products High rate of advertising Constant flow of process changes spending Integrated marketing Advertising features innovativeness communication Consistent image in all aspects More flexible work structures of marketing Source: Cravens, Merrilees & Walker (2000) Table 2 Average Ratings of the Three Online Booksellers Across Key Buying Attributes (10 point scale used for ratings, 10 high) Angus & Site Image Attribute Robertson Dymocks Amazon.com Low prices 7.41 6.50 7.90 (b,c) Latest books 7.86 8.13 (a) 8.71 (b,c) Wide selection of books 7.43 7.75 (a) 8.85 (b,c) Fast delivery 7.26 7.66 (a) 5.96 (b) Fair & easy returns policy 6.58 7.60 (a) 7.33 (b) Overall shopping experience 6.29 7.03 (a) 7.32 (b,d) Close, personalized relationship 6.08 6.68 (a) 7.02 (b,d) Notes: (a) Denotes that rating for Dymocks was significantly greater than Angus & Robertson at the 0.01 level (b) Denotes that Amazon was significantly greater than Angus & Robertson, 0.01 level (c) Denotes that Amazon was significantly greater than Dymocks, 0.01 level (d) Denotes that Amazon was significantly greater than Dymocks, 0.05 level. Table 3 Average Ratings of the Three Online Booksellers Across Various Channel Management Capabilities (10 point scale used for ratings, 10 high) Angus & Channel Management Capability Robertson Dymocks Amazon.com Good two-way communication 6.48 6.81 (a) 7.30 (b,c) Good interactivity between user and the firm 6.46 6.96 (a) 7.60 (b,c) Queries or questions answered well 6.62 7.07 (a) 7.32 (b) Privacy of customer information protected 7.51 7.74 (a) 7.96 (b,d) Wealth of information & ideas 6.43 7.19 (a) 8.55 (b,c) Notes: (a) Denotes that rating for Dymocks was significantly greater than Angus & Robertson at the 0.01 level (b) Denotes that Amazon was significantly greater than Angus & Robertson, 0.01 level (c) Denotes that Amazon was significantly greater than Dymocks, 0.01 level (d) Denotes that Amazon was significantly greater than Dymocks, 0.05 level. Reference Article Title: Re-branding Means That Jeeves Will Be Searching for a New Job. Newspaper Title: The Birmingham Post. 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