Transcript A. MARKETING PRACTICES

GLOBAL MARKETING TRENDS
FOR CONSUMER PRODUCTS
Kostas Dermoussis
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GLOBAL MARKETING TRENDS
The following three (3) areas are covered:
Marketing Practices
Consumer Behaviour
Retailing
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A. MARKETING PRACTICES
REAL PRODUCT DIFFERENTIATIONS ARE BECOMING MORE RARE
 Companies struggle for launching NEW products which will be different
from the existing ones
 Consumers’ perceptions for what a new product is, do not coincide with
companies’ marketing strategies and policies
 Big supermarket chains “encourage” companies for new differentiated
products
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A. MARKETING PRACTICES
MARKETING EXPENDITURES WILL CONTINUE TO RISE
Regardless of sales increases, marketing budgets will be higher:
 due to competition (impact on advertising and promotion spending)
 due to complexity of distribution channels and the increasing requirements
of retailers for shorter delivery times and more regular shipments (impact
on logistics)
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A. MARKETING PRACTICES
DRAMATIC INCREASE OF OUTSOURCING
 During the last 2-3 years, we have experienced a considerable increase
of outsourcing in marketing and sales
 For the next 3-5 years, the expenditures related to outsourcing will be
dramatically increased in the following areas:

Marketing communications

Logistics

Marketing and sales strategy & planning

Marketing and sales training
 Outsourcing will be a suitable strategy for large and SME companies
 Main reason for outsourcing: Cost reduction and “fresh”/ more creative
approach by a third party
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A. MARKETING PRACTICES
EXCEPTIONAL CUSTOMER SERVICE WILL BE A KEY STRATEGY
 Customers recognize excellent service as a unique differentiating factor
 One unsatisfied customer talks about his/her negative experience to
seven people
 Mass advertising and promotion activities can not easily reverse the
situation
We are going to see:
 A bigger number of customer service departments
 Friendlier call centres
 Service oriented and customer-focused employees
 Better trained people in customer service
 An increasing number of customer satisfaction measurements
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A. MARKETING PRACTICES
MOVING FROM CALL CENTRES TO CONTACT CENTRES
 Today, the main purpose of call centres is selling products/services
 During the next years, their image will be “redefined”. Their new name
will be “contact centres” and apart from sales, there will be greater
emphasis on high quality service
Main characteristics
 Handling of complaints
 Customer satisfaction measurements
 Information to consumers
 Profit centres
 An integral part of the marketing and service strategy
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A. MARKETING PRACTICES
HUGE INCREASE OF CALL CENTRES WORLDWIDE
 50% increase in Europe, Middle East and Africa, up to 2008
 According to research in 26 countries, the number of call centres will
exceed 45,000, employing more than 2,6 million people
 Threat: Many call centres will operate in countries with low labour
cost and low taxation
 Call centres will be specialized, covering new markets:
hospitals, clinics, hotels, restaurants, department stores, public
services.
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A. MARKETING PRACTICES
COMPANIES FOCUSING ON THEIR MOST PROFITABLE BRANDS
 Product portfolios are shrinking, especially in multinationals
 Products with lower brand awareness and brand purchase will be
eliminated
 Concentration in mega-brands with big market shares and higher profit
margins
 Advertising investments in mega brands
Risks
 Consumers acceptance of global brands is not the same
everywhere
 Consumers may switch their brand which has been abolished
with a competitive one
 A new war in supermarkets for shelf dominance
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A. MARKETING PRACTICES
INCREASING SCEPTICISM OVER ADVERTISING MESSAGES
 Too many advertisements - clutter effect
 Advertising promises are not taken into consideration by consumers
resulted to a lower degree of brand loyalty
 Research shows that viewers do almost anything during a commercial
break except watch the TV
Implications
 Companies will increase the frequency of social marketing and
cause related marketing programmes, decreasing budgets of
the traditional commercial advertising
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A. MARKETING PRACTICES
SALES PROMOTION IS BECOMING A STRATEGIC MARKETING TOOL
 As a result of advertising clutter, an increasing number of marketing
people have started to use sales promotion as a main element of
their marketing strategy
 Sales promotion objectives:
 Increase sales - short and medium term
 Increase brand loyalty - long term
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A. MARKETING PRACTICES
CO-ADVERTISING AND JOINT PROMOTIONS ARE BECOMING
COMMON PRACTICE
We are going to see:
 Joint efforts between two or more brands of the same company or
between different companies
 Joint efforts between retailers and their suppliers
Why?
 Lower advertising budgets
 Marketing synergies with complimentary or non-competitive
products
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A. MARKETING PRACTICES
LOYALTY MARKETING CAMPAIGNS WILL BE ENRICHED
 Although the number of loyalty programmes are increasing,
consumers require more creative and innovative approaches
 Consumers have experienced loyalty cards, air miles, etc, but now
they want more in terms of quantity and quality
Implications
 Companies will have to use new techniques which will require
deeper consumers’ involvement
 Loyalty campaigns will be an integral part of the marketing
communication strategy.
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A. MARKETING PRACTICES
MYSTERY SHOPPING COMES OUT OF THE SHADOWS
 Mystery shopping is more than “spying” on the staff
 Companies focus on improving the service offered to consumers
by their staff
 Mystery shopping is used as part of the training process which is
related to personal selling, negotiation skills and customer service
 Companies receive accurate information, regularly, about the
shopping experience of their customers at the time of purchase
 It is going to be used as a motivational tool for people
 Spending on mystery shopping will be steadily increasing
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A. MARKETING PRACTICES
USE OF ON-LINE SURVEYS TO INCREASE
 The on-line market research sector in Europe and N. America is set
to rise, according to a recent survey
 More than 80% of interviewed managers expect that on-line research
will be booming since it is a cheap and fast way of collecting data
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A. MARKETING PRACTICES
CRISIS IN BUSINESS DECISION-MAKING RELATED TO MARKETING
 Two surveys - in Europe and USA - reveal the continuing trends of
marketing executives making more complex decisions in less time,
flooded by data
 The main problem will be the volume of data which will double and
triple compared to previous years, making decisions more complex
SOLUTION
 Development of CRM and MIS from the company’s centralized
data warehouse which will act as information provider to the
marketing and sales departments
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B. CONSUMER BEHAVIOUR
AGE COMPLEXITY

Children are becoming teenagers before reaching their teens. Today, a
12 year-old kid is more likely think he/she is 17.

So, manufacturers are developing children products with “cool teen”
attributes
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B. CONSUMER BEHAVIOUR
INDIVIDUALISM

Consumers want even more personalization. Therefore, we are talking
about one-to-one marketing instead of mass marketing
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B. CONSUMER BEHAVIOUR
SENSORY EXPERIENCES

We are becoming more tolerant of risk and change

We are actively seeking out more intense experiences. Hence, the
increase in extreme sports and short and busy weekend breaks

Consumers are more prepared to experiment with new products,
discover ethnic foods and try new tastes
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B. CONSUMER BEHAVIOUR
HEALTH

Three-quarters of Europeans are now more concerned about their
health and well being

People will put greater value on healthiness such that sales of healthy,
de-stressing and self-medication products will be booming
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B. CONSUMER BEHAVIOUR
SUPERMARKET SHOPPING WILL NOT BE A “DECLARATION” OF
LIFE STYLE ANYMORE

During the past years, consumers were buying products from
supermarkets based on their brand image. “Prestige” as a brand value
was taken seriously by consumers

This has started to change and in the next few years, consumers will
express mainly their need for self-esteem and recognition, by buying
products and services which have higher prices, such as cars, holiday
packages, etc.
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B. CONSUMER BEHAVIOUR
PRETERMINED PURCHASES AND HIGHER FREQUENCY OF
SHOPPING VISITS

An increasing number of consumers visit supermarkets having a
predetermined shopping list. The picture was not the same 5 years ago

Reduction of consumers’ disposable income

Consumers prefer to visit supermarkets more often (European average:
twice a week), spending less each time
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B. CONSUMER BEHAVIOUR
CRITERIA FOR PURCHASING A NEW PRODUCT IN THE
SUPERMARKET

The type of sales promotion activity is one of the most important criteria
for consumers to buy a new brand for the first time

Although, consumers act less and less impulsively, certain sales
promotion techniques will help new brands to achieve higher rates
of brand trial.

Consumers prefer the following types of promotions for new products:
•
Free samples
•
Coupons
•
Displays/ Point-of-purchase (POP) material
•
On-pack promotions
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C. RETAILING
INCREASING POWER OF LARGE SUPERMARKET CHAINS
 Quick expansion of discounters
 Strong competition between retailers
 Price war and “squeezed” profit margins
Impact on suppliers
• Higher listing fees
• Lower prices
• Bigger quantitative discounts and year-end-discounts
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C. RETAILING
CONTINUING EXPANSION OF DISCOUNTERS IN EUROPE
WHY?
 Consumers are becoming more price-conscious
 They are less brand loyal
 They are less interested in brand image
Main characteristics of discounters
• Smaller outlets
• Less staff
• Limited product categories/ product lines
• Private labels
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C. RETAILING
DOMINANCE OF PRIVATE LABELS ?
NO!! Brands will prevail
However:
 Private labels are gaining consumers’ acceptance. They are not
considered as “inferior” products
 They are cheaper or much cheaper compared to advertised brands
 Private labels will make marketing people’s life more difficult since they
have to develop and pursue strategies aiming at:
• new product development
• continuous advertising and promotion support
• focus on merchandising stronger presence in supermarkets
• quality improvements
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SOURCES
 British Market Research Association
Marketing Society
 Advertising Research Foundation
Marketing Week
 American Marketing Association
Point of Purchase Advertising Institute
 Association of Relationship Marketing
Product Development & Management
Association
 Business Marketing Association
 Datamonitor
 Euromonitor
 Forrester Research
 Federation of European Direct & Indirect
Marketing
 Institute of Sales Promotion
Sales Marketing Network
World Advertising Research Center
Goldman Sachs Research
A.C.Nielsen
M&M Eurodata
UBS
 Marketing Research Association
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