Marketing for Low-Income People - Gillette vs Nivea - Research Paper Example

MARKETING FOR LOW INCOME PEOPLE A case study of Gillette vs. Nivea By Introduction In marketing,a well-executed marketing program is determined by the level of revenues and profits drawn from them. The major aim of executing marketing programs is to carefully target attractive customer segments, create the desired image and product within that segment, and to strengthen the brand within that segment. Most importantly, brand management ranges from competitive positioning, impact on the marketing mix, to resource allocation on sales and profits. In this case, therefore, the approach that most firms use involves an initial cultivation of trust, allocation, and building of a strong brand management. Nivea brand is one of the famous skin and beauty brands in the globe due to its intense and cultivating marketing strategies. The advancement of the brand is attributed to its extensive ranges of products worldwide like the moisturizers, deodorants, and shower products. These brands have magnificent appeals to both segments, especially the high income segment of customers, yet Nivea products sell across all segments. On the other hand, Gillette has evolved its marketing strategies approaches over the past few years to establish a more consumer-focused approach. The company has successfully installed brand confidence among the increasingly skeptical male consumer base in the world. In a keen analysis of these two brands, Nivea and Gillette, this paper purpose to examine their marketing strategies to the low income segment of the UAE (Dubai). Analysis Acquisition of new customers often results from the implementation of a product strategy. Products attract new customers by offering new features, eliminating old problems, and solving different needs. Products will be matched with viable market segments. Product development is a marketing strategy in which new goods and services are developed and then added to current lines (Bergh & Behrer, 2013). These are marketed to existing customers. Product diversification occurs when new goods and services are created for new market segments not currently served by the company. Unmet needs, cultural trends, and other developments lead to development and diversification strategies. Recent cultural trends associated with diet have led to new food products, while the desire for connectivity has been associated with the creation of new electronic devices. One key to developing products is following through with a well-designed plan of implementation that brings the whole company into the process. Product improvements solve specific problems. Many products have been made smaller, faster, more efficient, and more user-friendly over the years. Product improvements may help firm capture new customers and acquire competitors’ customers when it appears the company is selling a “better mousetrap.” Product line extensions allow the marketing team to meet more specific consumer needs. A customer with blood pressure problems is likely to try a no- or low-sodium food product. Someone with diabetes will watch for unsweetened or artificially sweetened products (Tungate, 2011). Marketing campaigns must be married with focus, relevance, intentions, and clear objectives on the targeted segment. Targeting a low income segment in UAE (Dubai) involves a better understanding of the challenges that are real and those that are expected in Dubai. Most of these challenges are initiated from the political, social, cultural, and religious domains, yet, there are still customers whose demand can only be satisfied by the concerned products like Nivea or Gillette. In the following analysis, the brand competitiveness of the two brands, Nivea and Gillette for the male customer base in the low income segments of Dubai is based characterized by the necessary marketing strategies that are adopted by each brand (Ramaswamy & Namakumari, 2009). The nature of the segment is also a factor, considering the varying demographic characteristics and the local receptions of the products. Comparative analysis between Gillette and Nivea The comparative analysis of these two major brands is best done using the powerful tools of brand awareness, brand equity and the brand loyalty. These three basic marketing aims are best realized when the marketing mix are suitable for the target market. In this case there, the marketing mix of each brand form the basis of the competitiveness of the products under these brands. By pursing an international marketing strategy in Dubai, the Gillette and Nivea brands have managed to advance to the low income market segments. Taking shaving cream as the product line for competition between these two brands, the following marketing mix provide the center stage for the gamble for the low income market segment in Dubai. Marketing Mix’s four P’s Price: Price is the main factor that affects demand in any segment market. This market, characterized by low-income people, will have a higher demand for brands whose products have relatively lower prices. According to Bergh & Behrer, (2013), the 10 product variant manufactured by Gillette shaving creams from the Dubai market fall in a little lower than in other countries like India. In India, Gillette is leveraging the brand loyalty of its already existing customers. However, in Dubai, the low income scenario forces the brand to sell at a relatively lower price. Nivea on the other hand, the company knows the fact that many factors, such as the cost of production, affect the end price of a product. Yet, the product price needs to provide value for money in the market and attract consumers to buy. In the market manifested by low income people, there is a realistic reduction of prices to suit their purchasing power. Nivea’s products are relatively lower in price than Gillette in Dubai. Place: According to Ramaswamy & Namakumari (2009), the big and extensive distribution network of Gillette originates from the existing network with the P&G’s distribution network in Dubai. It also has its own networks in Dubai and its hub in the major cities in the world. In the same way, Nivea has a powerful network in the country, thereby paving way for a strong and competitive relationship between the products of both brands in Dubai. Promotion: the major tool used to market a brand is through promotion. All these brands, Nivea and Gillette have highly invested huge amounts in marketing and promotional efforts. The promotional methods, like television and cinema adverts, adopted by both firms reach a wider audience. The promotional efforts that these firms adopt must suits the criteria of a low-income market. Current Major Issues affecting Gillette in Dubai The corporate objective of Gillette is to develop a global focus on the consumer product and wants to develop a globally competitive advantage in not just the value added personal care, but also in the quality of the products too (Mueller, 2011). More importantly, the firms has aimed at spreading its niches to the eastern blocks like Dubai, a dynamic environment, where the following factors (environment) have largely affected the marketing and spread of the product. Economic environment According to Mueller (2011), Dubai offers a unique business environment that sets it apart from other places. The environment is different since money and luxury are directly linked together and the spending power is very high. As argued by Tungate (2011), various activities and operations including trade, manufacturing and processing, transport and distribution and regional offices makes Dubai one of the hot business sites internationally. Dubai, through its various trading strategies, offers an outstanding potential market for overseas companies in a wide range of sectors. A leading regional trading hub, Dubai satisfies many conditions which make it an important trading post in the world market. The economic boom of the region owing to its businesses hub and oil den economy makes the economic environment very suitable for Gillette to make its marketing operations have positive results in terms of increased revenues and profits. It is thus expected that due to the high income elasticity of demand in Dubai, there will be/is a sharp increase in the demand for personal grooming products at the rate at which it is expected to grow at a rate higher than the income levels of many people in Dubai. Market segmentation of Gillette Based upon certain marketing mixes such as price and promotional levels, the demand for the Dubai market has been divided based on these mixes like sensitivity of price and influence on customers due to the additional features. Gillette has faced challenges of segmenting the Dubai market due to the booming economic condition, but has maintained a differentiated marketing strategy to suit the interest, tastes, and preference of different market segments. Cultural environment The cultural dimension of the Dubai customers is well linked with the religion, Muslim. In marketing, the target country’s culture and religion must be well studied as it helps the firm to find the target potential markets in the country for Gillette. Over 80% of people in Dubai are Muslims and may not necessarily welcome the use of Gillette products owing to their strict cultural and religious dimensions. However, the small section that is not strictly rooted to cultural and religious background of the region is focused. Political and legal environment Some of the expected challenges from a foreign country are the political and legal challenges (Mueller, 2011). The political freedom and peace has made most of the foreign businesses to boom in Dubai. More importantly, the legal issues that may affect businesses in Dubai are very limited and favorable. Unlike other international business centers, Dubai can provide secure cost advantages to overseas companies. No requirement of corporate taxes, foreign exchange controls, income taxes, trade barriers enable free contact with the place. Competitive labor, energy, import duties and real estate costs catapult Dubai to the happening market it is today Statistics According to the statistics below, there is a clear analysis of the market characteristics of the target market based on the survey done by this study. The demographic characteristics Out of the 15 interviewed men, 60% were between the age of 21-30 years old.13.3% were aged between 31-40 years, while 26.7% were below 20 years as shown in the table below. age Frequency Percent Valid Percent Cumulative Percent Valid Less than 20 4 26.7 26.7 26.7 21-30 9 60.0 60.0 86.7 31-40 2 13.3 13.3 100.0 Total 15 100.0 100.0 As shown in the table below, 86.7% (have bachelor degree) are well educated and understand the value of marketing and product quality. A small percentage of 6.7% have education below degree as shown in the table below; Level of education Frequency Percent Valid Percent Cumulative Percent Valid high school graduate 1 6.7 6.7 6.7 college diploma 1 6.7 6.7 13.3 bachelor 13 86.7 86.7 100.0 Total 15 100.0 100.0 the job / occupation Frequency Percent Valid Percent Cumulative Percent Valid Labour 1 6.7 6.7 6.7 staff 3 20.0 20.0 26.7 managerial position 2 13.3 13.3 40.0 business person 2 13.3 13.3 53.3 others 7 46.7 46.7 100.0 Total 15 100.0 100.0 According to the table above, 20% of the people are staff, 13.3% managerial and business persons, while 6.7% are normal laborers. This gives the product a favorable segment. The total household income of 40% of the people interviewed ranged from 5,000 and below, while only 13.3% had a total household income of more than 20,000. This means that majority of people in this segment are low income individuals hence perfect for the study objectives. Consider the table below. According to the analysis below, most people are Muslims and have lived in Dubai for more than 10 years. The Hindus are 20%, while the Catholics are 6.7% as shown in the table below; religion orientation Frequency Percent Valid Percent Cumulative Percent Valid Muslim 10 66.7 66.7 66.7 Hindu 3 20.0 20.0 86.7 Catholic 1 6.7 6.7 93.3 Orthodox 1 6.7 6.7 100.0 Total 15 100.0 100.0 Market Characteristics for Gillette The market characterized by a majority being low income individuals have the following analysis based on the response fished from the survey study. Out of the 15 men who have used Gillette in the past 3 months and other foams, 66.7% affirms that Gillette brand is the best. 33.3% had the strongest affection for the brand as shown in the table below. Among brands with which it competes, this brand is one of the best? Frequency Percent Valid Percent Cumulative Percent Valid Agree 10 66.7 66.7 66.7 Strongly Agree 5 33.3 33.3 100.0 Total 15 100.0 100.0 In the same way, 53.3% strongly agrees that the Gillette brand is growing more popular than other competing brands in the area as shown in the table below. 46.7% strongly agrees that the brand is a category leader in the area. is this brand is growing more popular? Frequency Percent Valid Percent Cumulative Percent Valid Agree 7 46.7 46.7 46.7 Strongly Agree 8 53.3 53.3 100.0 Total 15 100.0 100.0 Many people agree that they have a strong attraction to the brand, 46.7%, while 6.7% do not have attraction to the brand. This shows the loyalty level of this segment to the brand is relatively higher. I am very attracted by this brand Frequency Percent Valid Percent Cumulative Percent Valid strongly disagree 1 6.7 6.7 6.7 Neutral 4 26.7 26.7 33.3 Agree 7 46.7 46.7 80.0 Strongly Agree 3 20.0 20.0 100.0 Total 15 100.0 100.0 Perceptions based on the marketing mix employed by the brand According to the table below, 53.3% says that the brand is a good product for the price, 40% strongly affirming the same above as shown in the table below. In the table after the table below, 46.7 strongly agree that the brand is economical and would suit their economic level. This brand is a good product for the price Frequency Percent Valid Percent Cumulative Percent Valid Neutral 1 6.7 6.7 6.7 Agree 8 53.3 53.3 60.0 Strongly Agree 6 40.0 40.0 100.0 Total 15 100.0 100.0 This brand would be economical Frequency Percent Valid Percent Cumulative Percent Valid Neutral 2 13.3 13.3 13.3 Agree 6 40.0 40.0 53.3 Strongly Agree 7 46.7 46.7 100.0 Total 15 100.0 100.0 In terms of quality, the table below shows that 53.33% and 33.3% agrees and strongly agrees respectively that the brand has a consistent quality. This brand has consistent quality Frequency Percent Valid Percent Cumulative Percent Valid Neutral 2 13.3 13.3 13.3 Agree 8 53.3 53.3 66.7 Strongly Agree 5 33.3 33.3 100.0 Total 15 100.0 100.0 On the same issue, 66.7% and 33.3% agree and strongly agree respectively that the brand has an acceptable standard quality. This brand has an acceptable standard of quality Frequency Percent Valid Percent Cumulative Percent Valid Agree 10 66.7 66.7 66.7 Strongly Agree 5 33.3 33.3 100.0 Total 15 100.0 100.0 Considering the fact that Dubai is a cultural and religious country, the following table shows that 20% says that the brand respect moral norms, 26.7% supported that point strongly, while 40% remained neutral. Only 13.3% disagreed with that assertion. This brand respects moral norms Frequency Percent Valid Percent Cumulative Percent Valid strongly disagree 2 13.3 13.3 13.3 Neutral 6 40.0 40.0 53.3 Agree 3 20.0 20.0 73.3 Strongly Agree 4 26.7 26.7 100.0 Total 15 100.0 100.0 With a segment whose religious belief affect all manner of dealings in life, about 53.3% being fairly affected by religious beliefs as shown in the table below, the marketing strategy and plans must be adopted so as to suit the religious standards of the segment. Religious beliefs influence all my dealings in life Frequency Percent Valid Percent Cumulative Percent Valid somewhat true of me 2 13.3 13.3 13.3 moderately true of me 3 20.0 20.0 33.3 mostly true of me 8 53.3 53.3 86.7 totally true of me 2 13.3 13.3 100.0 Total 15 100.0 100.0 Summary and conclusion The reality of the matter is that Gillette has the widest and the greatest product line in terms of men’s shaving market and can use this advantage over Nivea. In most cities and market segments in the world, the product has reached its marketing maturity stages, whereas in countries like UAE and India, the product line is still at the growth stages of the marketing cycle. In this low income market segment, Gillette can aggressively promote its product line to revitalize and extend its maturity to such market zones. In order to do this, the brand must comply with the religious, political, social, and demographic preferences of Dubai in order to stamp a strong brand ties with that market segment. Based on the result of the data above, strong religious affluence coupled with changing demographic activities may pose future challenges to these brands, especially Gillette. As argued by Tungate (2011), perceptions of excellence will be not only based on tangible product features but also emerge from intangibles. In order to get customers in the low income market segments in Dubai, brands like Gillette must go beyond providing superior products and make sure the items are delivered on time, in accurate amounts, with correct billing procedures, and with quality service after the sale. Reference List Bergh, J. V. D., & Behrer, M. (2013). How cool brands stay hot: branding to Generation Y. London, Kogan Page. Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2007). 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