Category: Consumer behavior

Environment focused campaigns

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“Go Green” is the new buzzword and Marketing Communications cannot ignore the environment focused campaigns. Companies need to build a perception about themselves that they have a socio-environmental agenda. This increases the acceptance of their products in the market. Not only the product’s features or its manufacturing but also the other activities the company indulges in should have a positive bearing on the ecosystem.

Communication in Environment focused campaigns

There are several themes around which communications are developed for environment focused campaigns. Some are around environment conservation theme. A few companies advertise that their product does not cause any damage to the nature due their bio-degradable nature. They do innovations in the packaging to make it bio-degradable as discarding of the packaging material is a big challenge for the users. A few also advertise that they have reduced their dependence on natural resources and are using more of industrial wastes so that natural resources are conserved for future generations.

JSW Cement has built its marketing campaign around being an eco-friendly cement company. They are trying to take the pole position in promoting Portland Slag Cement (PSC), which is considered to cause lesser CO2 impact to the environment than Ordinary Portland Cement (OPC). PSC manufacturing uses slag, an otherwise useless by-product from steel industry and gives better long-term strength than OPC.

Conservation of energy is another popular marketing message in the environment focused campaigns. Companies claim that usage of their brands will lead to lesser electricity usage at home. A few companies promote the fact that they are harnessing solar or wind energy or using recycled water for their manufacturing processes. Few companies have switched to technologies which allow for conservation of energy. For a few companies, it is not possible to conserve energy due to the nature of their business. So, they engage in activities which are towards providing renewable energy or clean environment to a community and use it for their PR activities.

Today’s consumer is more environment conscious and is willing to pay an extra buck if the product contributes to the cause of sustainability. Environment focused campaigns also help in bringing the influencers like architects and interior designers to the company’s fold. The role of architects becomes here more important as “Green Building” or “Net Zero” are good selling points for them when they are pitching to their clients and they are looking for products which helps the buildings designed by them achieve this. The support from the government bodies in promoting a particular product category is also more forthcoming if the product does not harm nature or conserves natural resources.

Internal challenges

Apart from advertisement, companies also try to imbibe being environment focused in their work culture, and not just do lip service to the environment. They undertake cleanliness drives and often encourage their customers to participate in them. Care is taken to ensure resources within the company are not wasted.

Environment focused campaigns need to be very carefully planned as any wrong claim can be challenged in a court of law and cause unnecessary damage to the company’s reputation. All claims should have proper data back-up.

Why should we have Data Driven Approach

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Data is a collection of numbers, labels, or symbols, collected through observation. It can be qualitative or quantitative variables about one or more persons or objects. When there is no structure to data, nobody can make meaning out of the numbers and names. Data organized in rows and columns carry specific meaning. A commodity company with a data driven approach takes decisions basis the data. Its transition to a brand will be faster than one which ignores data, other factors being constant.

To look at data and to make meaning out of it needs focus. It has to be inculcated as a culture in the company. It is necessary that all decisions are based on a data driven approach. All reviews must be backed with data.

Types of data

Types of data available with the company fall in three categories:

  • System data: This includes data registered in company’s system through a standard software. Chances of error in data due to human estimation is minimal. A few examples of system data are sales volumes of customers, number of outlets selling our brand, purchase frequency of the customers, company’s production figures, number of quality complaints logged, etc. Company’s ERP system captures this data from the invoices.
  • Market data: This includes data where the employees make estimates of numbers like competitor brands’ sales volume or shop share, retailers profile, number of outlets selling competition brands, production volumes of competition, quality of the competition brands, competition pricing, etc. are examples where of market data where the employees make estimate basis the interaction of people operating in the market. This is often accepted with a pinch of salt by the management as the biases of the sales person creep into this data collection.
  • Agency data: This includes data collected by agencies either independently or for a commodity company when asked to do so. Data collection happens either by sample survey of consumers or through interaction of the trade partners/ influencers. Changes in consumers’ consumption behavior, growth trend of the industry, market share of the various brands, media consumption trend of the consumers, etc. are examples of agency data. This data is considered more credible by the management as there are no biases from the market research company.

Benefits of Data Driven Approach

There are several decisions which can be taken with more diligence if data is looked closely. They will yield better results. A few examples are below:

  1. Sales planning- If the sales team closely follows the purchase frequency of trade partners/ consumers, seasonality of the product and recent growth trends, it will be able to predict the sales forecast with more accuracy.
  2. Trade scheme devising- Last scheme’s achievement, timing of the last scheme, type of scheme influencing various types of trade partners, are important parameters, which if tracked will help in devising the next schemes. Often companies do not evaluate the scheme’s performance after scheme closure, thereby not learning from the failures.
  3. Pricing decision- The pricing strategy of a commodity company will be successful only if it has information of the price waterfall existing in the market vis-à-vis competition or various element of the value chain.
  4. New product launch or capacity expansion- Companies should invest in new production facilities or storage facilities only if it has concrete information on the existing market size and competition market share. Basis this information only, the company will be able to decide the positioning strategy for its product. Similarly, when coming out with new products, the company must have all market data including consumers’ changing consumption trends.
  5. Advertising strategy- An important input is the media consumption data of the target audience. This data driven approach helps commodity company strategize media campaign diligently.
Importance of Data Driven Approach
Importance of Data Driven Approach

In a nutshell, data driven approach avoids decisions being taken on a gut by an individual. In a way, the decision maker takes the responsibility of the decision.

3 Types of consumers

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Most companies do not sell material directly to the end user. There are often channel partners in between. But they have realized the importance of various types of consumers because end customers will recognize the commodity as a brand only if they have had an experience with the brand. As a result, companies are trying to have touch points with all types of consumers.

The engagement with the customers happens sometimes even before they start using the product. For instance, building materials companies are getting information from retailers about new construction activity to start in their area and sending handbooks on good construction practices to the house builders. The handbooks also promote a specific brand.

Similarly, when the house builder is doing roof-casting, the companies are sending their technical personnel to supervise the work. At the site, the technical person is also demonstrating how their brand is superior to the customers. A paint company is providing complete house painting as a service. Customers just need to call their customer care and the company sends its personnel with the catalogue for colour selection. After the customer has made his choice, the company arranges for painters to paint the house under their supervision.

It is due to the recognition of importance of consumers that commodities companies are now-a-days participating in trade shows. There is no guarantee of getting any order there but it will increase their brand recall. Company personnel also get an opportunity to interact with the house builders and understand the latent needs of the market. This also gives an opportunity to gather Competitive Intelligence.

Companies are trying to even make the purchasing of the commodity also an experience for the customers. Case in point, Ultratech Building Solutions shoppe, where the customers just don’t get cement only, but also all other building materials like paints, white cement, steel, etc.

It is due to the recognition of the importance of consumers that companies are conducting awareness meetings with the customers, wherein they explain their products’ USP. To incentivize them to taste their product, they are running short-term offers like freebies, scratch cards, etc. Surveys are conducted with the customers to understand the brand’s strengths and weaknesses to get pointers for any course correction if needed. End users are gradually becoming the primary focus for commodity companies and those who realized it first are the brand leaders now.

Types of Consumers

While it is important to recognize the importance of consumers, it is also imperative to understand the types of consumers. Customers come in all shapes and sizes and have to be dealt accordingly.

types of consumers
Types of consumers
  1. Followers: Most of the customers will fall in this category. They are looking for functional need satisfaction. Their dealings with a brand very transactional. They enquire about the various options available from the retailers or influencers and purchase the best option. They are more influenced by the influencers like masons & retailers, advertisements, celebrity endorsements, etc. If they like the product after usage, they keep this to themselves. If they don’t like a product, they follow up with the company’s customer complaint redressal channel and are satisfied with refund or replacement.
  2. Independents: Apart from hearsay, the independent customers also gather information from other sources like online reviews or talking to users known to them. They have more specific functional needs than the followers and compare the various options available in the market on various parameters.
  3. Promoters: The promoters are emotional customers. They go an extra mile to actively promote a product if they like it. They will post messages online on why they are liking the product, like social media pages of the company and actively promote the product to their acquaintances/ followers. In case of a dissatisfaction also, they will go an extra mile and do negative propaganda of the product.

Despite a few distinct characteristics of each type of consumer, it is difficult to bucket every consumer in one type. Also, the characteristic changes for different types of products.