Marketing Value of Advertisement Campaign for New Product Launch - Case Study Example

The marketer-consumer relationship has changed due to changes in the economic environment. Marketing does not merely involve ‘using a pinch of internet, a sprinkle of product sampling and a dash of PR’ (Vollmer and Precourt, 2008: 15). Changing social behaviours combined with increases in consumer choice in media consumed has led to the fragmentation of mass audiences (Driussi, Isaacs & Davis, 2005). Hence today there are several small personal audiences or niches. Media planning is a vital part of the marketing strategy as today marketers too have several options available to them – the internet, the newspaper, buzz marketing or viral marketing, events, public relations or even through direct mail. Today even the human body is used as a bill board (Newman, 2009). Media planning would again differ for established brands and for new product launches. The entire strategy can be different depending on that target market and the product positioning. Reliance on traditional media is decreasing because marketers want a direct relationship with the consumers. This is the reason that Proctor & Gamble (P&G) has been experimenting with viral marketing. P&G is an established brand and can afford to take such risks. When they found selling coffee to the youth was difficult through the traditional media, they place video clips on Web sites like adcritic.com, boardsmag.com, buzzpatrol.com, and YouTube.com (Vollmer and Precourt, 2008: 52). After the ads are placed agents are employed to spread the buzz about the product through their own social network (SD, 208). The process is not costly but requires creativity and innovation. While this media is very quick at spreading the good word, adverse publicity is spread equally fast. A new product would first try to penetrate the market but established brands like P&G seek long-term relationship with the customers. For a new product launch, if the negative publicity marks the beginning, they stand to lose the market share. An established product has mush less at risk in using this media. An established brand is as concerned about which media the competitors use as the new product launchers would be. For instance, Levi decides on its media and the budget with rival expenditure in mind. In advanced countries TV is the dominant advertising media and is heavily used by Lee Cooper and Wrangler and hence Levi’s too has to follow suit (Vrontis & Vronti, 2004). However, Zara, the Spanish clothing company, since inception, has not spent on advertising and the media. No billboards carry their commercials nor do they advertise on the television. While normally fashion retailers spend about 3.5% of their revenue on advertising, Zara’s parent company Inditex spends just 0.3 percent (CNN, 2001). They use their shop windows as their advertising media and feel this is sufficient. Their offers are localized, they follow the pull model, and they meet the needs of the customers without spending energy on brand building (Heyden, 2007). They do not participate in fashion shows and their advertising is limited at the start of the sales period at the end of the season (Ghemawat & Nueno, 2003). They use their shop decorations, window dressing and the staff as the media for creating awareness (Wharton, 2003). Zara’s PR reflects in its product offering and the way people are attracted to its stores by positive WOM publicity. They rely on WOM and the in-store experience of the customers as their channels of advertising. They do not invest in brand because they believe that women are loyal only to the existing brand and hence they prefer to invest in business. When a product with new technology is being launched in an environment where technology is rapidly changing, the positioning of the product depends upon the technology used. However, if technology is emphasized in the media, the marketers may fail to attract the attention of the target. Besides, it may also cloud the benefits that customers stand to gain from the new technology. Hence for such new product launches the benefits have to be highlighted. Kodak wanted to launch its new imaging technology and hence they tailored the applications and positioned the products on benefits rather than on features (Beard & Easingwood, 1996). For introducing and convincing the customer about the benefits, firms use reference sites as the media to acquaint the customer with the product. References sites usually develop from the beta test sites which increase the trialability of the product. They also use PR activities to educate the market about the benefits of the technology. Lectures, seminars and roadshows were used by Kodak to build awareness. Well-established brands like IBM position the product as a ‘safe between’ thereby overcoming customer uncertainty but Dell could not apply the same strategy when they wanted to penetrate the market. New product launches have to assure different service guarantees, agreements etc to position the product. When Compaq was introduced, its main competitors were IBM. Hence, Compaq being a new brand devoted huge resources to a big media splash aimed at communicating the success of the new product (Beard & Easingwood, 1996). Apple also used the same technique to launch the Apple Macintosh. New product launches have to address customer uncertainties and they need to build credibility. They also organized PR events to establish word-of-mouth communications among users. Grand Met launched Häagen-Dazs, an ice cream brand in Europe in 1989 amidst recession and with several established competitors already in the market such as Nestle, Unilever, Mars and several small but strong local ice cream manufacturers. Häagen-Dazs launched its product at 30-40% higher price than its closes competitors and several times higher than the local brands (Joachimsthaler & Aaker, 1997). Normally a new product would attempt at penetrating the market with massive advertising effort but Häagen-Dazs chose a different route. They opened several ice cream parlours in different up-market locations and the design too was different than the regular ice cream parlours. They also placed their ice creams in quality hotels and restaurants with the condition that their name be prominently displayed on the menu. They also followed the WOM approach and placed branded freezers in food retail stores. They not only sponsored cultural events but they also linked the brand to art sponsorship. One of the best moves was to incorporate their ice cream in the show. In the Opera Factory’s production, Don Giovanni, when the Don called for a sorbet he was given a container of Häagen-Dazs. This brought them a windfall of publicity among its target consumers. All of the media used by them were unique and within a few months the brand awareness had reached more than 50 percent. Within four years their sales jumped from $10 million to $130 million. At the same time, Farggi, as established brand in pastries launched ice cream under the same brand name. The name had too many associations and messages. It had already been used for standard-quality ice cream sold to food service establishments. The Farggi strategy had too many elements that did not allow it to meet with success. It was trying to cash in on the American style ice cream while having an Italian sounding brand (Joachimsthaler & Aaker, 1997). An established brand thus is affected by the image that its other products carry and are unable to carve a niche for themselves. In the airline sector, both established brands and new entrants focus on direct selling as customer service has become important. Direct selling or personal selling is an important marketing communications tool (Long & Schiffman, 2000). Both established brands and new entrants focus on web presence to have direct customer relationship but the approach differs. British Airways (BA) has various products like Club World, Club Europe, World Traveler Plus and the Executive Club. An established brand like BA has to be cautious as new airlines enter the market and competition intensifies. Accordingly, BA has given itself a more fashionable brand image by launching two websites. One is the Social Networking World Forum which "challenged the perception of the brand" and made the airline seem more "up to date and exciting" (Marshall, 2009). The Metrotwin is a single online community meant for people who often commute between New York and London on BA. These are very powerful media tools to propagate the message as the users post their views and recommend the airline. When EasyJet, budget airlines, wanted to enter the market, they started sales over phone but soon launched their own website. They inserted the company URL everywhere possible and launched a massive internet-only promotion in the newspaper with impressive results (Chaffey, 1997). Their focus was to get rid of empty seats. Their website serves as a PR tool and they regularly update the journalists and newspapers through personal communication. In nutshell, they do not spend on traditional media like advertising but use the web to even conduct competitions to attract consumers. BA also engaged in advertising and their campaign “Go with those who know” was educational and relevant to the context (NYAMA, 2006). This campaign was put up at five hundred unique outdoor sites which were carefully selected for their high impact, high traffic worth. The campaign included viral elements, giveaways and sweepstakes. Both established brand like BA and a new entrant like EasyJet offer online bookings but BA offers additional service like interactive dictionary, a British slang translator, a guide to recommendations about the types of places, events and experiences (NYAMA, 2006). This site created a buzz as the users could actually use the "Britspeak" words in SMS messages or emails to their friends. Media strategy would also depend upon the target market – there is difference in products being marketed in developed and developing countries. When P&G wanted to introduce care and cosmetic products in Hungary, they faced resistance. In such a market where culture and social values dominate the lifestyle and behaviour patterns, advertising and in-store promotions could generate only short-term sales (Coulter, Feick & Price, 2002). P&G used opinion leaders who were heavy users of cosmetics and who became important conduits of information not only about the product but also about its usage. In the automobile sector established brands like Toyota too have to use PR as an essential media to keep up the brand image of the cars and overcome resistance by those who value home grown products. Toyota is established as the third most admired organization in America (SD, 2007). With the intention of enhancing its PR, Toyota used PR as a media to rehire many of the 3000 staff laid off by GM for the joint venture by its rival at the Freemont Plant in California. Toyota is marketing itself as more of an American car than the homegrown models. Their marketing campaign of the full-size pick up vehicle Tundra focuses on strength and reliability. To further its stronghold in areas like San Antonio where they faced the strongest resistance, they introduced a community literacy program within a school. Another very strong move to enhance their PR was to share technology with the local brand Ford. Body Shop is another example of a new product launch without using the traditional advertising media. They focused on their core identity and all their programs reflected this strategy of theirs. They created a differentiation strategy by opposing testing on animals, focusing on women’s issues, helping third world economies through its trade and contributing to rain forest preservation efforts (Joachimsthaler & Aaker, 1997). Their in-store staff wears a Body Shop t-shirt carrying a social message which reflects their core values. They are entirely different from other care and cosmetics products that promise health and beauty and have similar product attributes. It can thus be seen that today very few use the traditional media for advertising or creating awareness – be it for established brand or for new product launches. Certain companies use their differentiating qualities as their tool for marketing. For instance the in-store experience and the staff wardrobe serve as a powerful media, as in the case of Zara and the Body Shop. New product launches have been successful even without advertising while established brands have to take into consideration the strategies of the rivals as in the case of Levis. In the case of technology products, the focus should not be on the technology but on the benefits to the end user and this start worked with Kodak and IBM but they were established brands. Dell has to use another media – the web interaction to and service guarantees to attract the customers. Today very powerful media tools are available to the marketers to reach the consumers – the internet and the social networking site. These can leverage benefits at minimal costs but these can also lead to adverse or negative publicity if not exploited in the right manner. References Beard, C & Easingwood, C 1996, Marketing Action and Launch Tactics for High-Technology Products, Industrial Marketing Management, vol. 25, pp. 87-103. Chaffey, D 1997, Introduduction - easyJet case study, accessed April, 12, 2009 from http://www.davechaffey.com/E-commerce-Internet-marketing-case-studies/easyJet-case-study CNN, 2001, Zara, a Spanish success story, accessed April, 12, 2009 from http://edition.cnn.com/BUSINESS/programs/yourbusiness/stories2001/zara/ Coulter, RA Feick, LF & Price, LL 2002, Changing faces: cosmetics opinion leadership among women in the new Hungary, European Journal of Marketing, vol. 36, no. 11/12, pp. 1287-1308. Driussi, A Isaacs, D & Davis, T 2005, An Actuarial Approach to Measuring Media Effectiveness, The Quantum Group 2005, accessed April, 12, 2009 from http://svc012.wic020p.server-web.com/PublicSite/convention/doco/Driussi_Adam.pdf Ghemawat, P & Nueno, JL, 2003, ZARA: Fast Fashion, HBS Case 9-703-497 accessed April, 12, 2009 from http://wehner.tamu.edu/mgmt.www/v-buenger/466/zara.pdf Heyden, L, 2007, Business Model Innovation - M&S vs. Zara, INSEAD, accessed April, 12, 2009 from www.solvay.edu/FR/Programmes/documents/ulb_gestd201_MSvsZARA.ppt Joachimsthaler, E & Aaker, DA 1997, Building Brands Without Mass Media, Harvard Business Review, Jan-Feb 1997. Long, MM & Schiffman, LG 2000, Consumption values and relationships: segmenting the market for frequency programs, Journal of consumer Marketing, vol. 17, no. 3, pp. 214-232 Marshall, R 2009, British Airways social networks strategy takes off, accessed April, 12, 2009 from http://www.vnunet.com/vnunet/analysis/2238297/updates-image-online Newman, AD 2009, The Body as Billboard: Your Ad Here, New York Times, February 18, 2009, accessed April, 12, 2009 from http://www.nytimes.com/2009/02/18/business/media/18adco.html?em NYAMA, 2006, British Airways: Go with those who know, accessed April, 12, 2009 from http://www.printsells.org/documents/cases/british_airways.pdf SD, 2007, Driving ahead, Strategic Direction, vol. 23, no. 10, pp. 21-24. Vollmer, C and Precourt, G 2008, Always On. McGrawHill. N. York. Wharton 2003, Fashion Chain Zara Reclaims the Glory of Spain, accessed April, 12, 2009 from http://wharton.universia.net/index.cfm?fa=viewArticle&id=565&language=english&specialId= Read More