Managing The Commercial Communications Process
(Week 20)
Market research is a format of gathering information. It is the result of advancing knowledge created in the past. Research is essentially designed to solve a particular existing problem or goal so there is a much larger audience eager to support research that is likely to be profitable or solve problems of concern. It is also key to understand how research impacts decision-making. The research process requires time, effort and sometimes money to present sound evidence. The data gathered will then have an impact on future performance.
The
importance of research can impact your success if it is conducted well. One way
to help achieve this is by carrying out various concepts and models which will
be outlined next. Research plus action will most likely guarantee a successful
research plan.
The Five Forces
The issues influencing brand potential and the future of
brands are shown in the figure below (DeChernatony & McDonald, 2008, partly
based on Porter’s original theory, 1979);
PESTEL Analysis
A PESTEL analysis is a
technique used for identifying and listing the political, economic, social,
technological, environmental and legal factors in the industry most relevant to
the specific organisation. Ultimately, it is a useful tool for assessing and
evaluating the external influences in a situation as part of the marketing
process. Each of the factors will affect or influence the business, its
marketing plans or the situation that is being analysed (Evans-Pritchard et al,
2006).
SWOT Analysis
A SWOT analysis researches the internal and external
factors influencing a brand’s marketing and business activity. According to
Brassington & Pettitt (p.436, 2007), it generates “a huge amount of
material that has to be analysed and summarised to sift out the critical issues
that will drive the marketing plan forward”. The critical analysis includes
strengths & weaknesses (internal) and opportunities & threats
(external).
Strengths & Weaknesses focus mainly on the present
and past as well as internally controlled factors including the 4 P’s and
marketing material (including customer service and public relations) offered to
the target market. These internal factors can also be compared amongst how
competitors have performed.
Opportunities & Threats focus mainly on the present
and future, “taking a more outward-looking strategic view of likely development
and options”; (Brassington & Pettitt p.436, 2007). These external factors
can be easily reflected in market situation, competition etc. Many other
opportunities and threats emerge from the marketing environment, when shifts in
demographic and cultural factors are taken into consideration.
Ultimately, strengths and weaknesses represent “where we
are now” and opportunities and threats “where we want (or don’t want) to be” or
“where we could be”, then the gap, representing “what we have to do to get
there”, has to be filled by the John Lewis team, as justified and formalized in
an effective marketing or business plan (Brassington & Pettitt p.437,
2007).
Ansoff Matrix
Brassington & Pettitt (p.438, 2007) explains the
Ansoff Matrix as “a useful framework for considering the relationship between
strategic direction and marketing strategy. The overall concept considers
various combinations of product-market options. Each cell within the matrix
presents distinct opportunities, threats, resource requirements, returns and
risks”.
Market Penetration
– The aim of this is to increase sales volume in current markets, usually
conducted by more aggressive marketing. In other words, using the full range of
the marketing mix (4 P’s/7 P’s) to achieve greater leverage.
Market Development
– This means selling more of the original, existing product to new markets,
which may be based on either new geographic segments or new segments (e.g. age,
product usage, lifestyle etc.)
Product
Development – This essentially means selling completely new or improved
products into already existing markets.
Diversification –
This happens when a business decides to move beyond its current boundaries to
exploit new opportunities. It can be risky as it means entering familiar
territory in both product and market aspects. There are two specific types of
growth in relation to diversification; Concentric & Conglomerate.
Concentric Diversification happens where there is a link (technological or
commercial), between the old and new set of activities. As a result, the
benefit is gained from a “synergy with current activities”. Conglomerate
Diversification is when a business undertakes new activities in new markets.
Again, this can be a highly risky strategy as there could be trouble in both
the product development aspect as well as gaining acceptance within the market
sector.
Boston Matrix
The Boston Matrix refers to market growth and market
share in a given industry. The first dimension looks at the general level of
growth in the marketplace, while the second measures market share relative to
the largest competitors within the industry. This type of analysis helps to
provide a useful insight into the likely opportunities and threats associated
with the particular brand.
Market growth particularly refers to available
opportunities within the industry. It can also indicate the current competitive
atmosphere. For example, high growth markets allow for plenty of room for
business expansion and all organisations can make gains whereas low growth
markets reflect intense competition where effective growth can only be achieved
by taking some share away from competitors.
The matrix consists of “Stars”, “Question Marks”, “Cash
Cows” and “Dogs” in relation to Market Growth and Market Share.
Push & Pull
Strategy
The figure below depicts the “push-pull strategy” which
emphasises two different lines of communication between a brand’s stakeholders.
Firstly, with a push strategy, “the
manufacturer chooses to concentrate on its communication with the distribution
channel immediately below them. This means, in relation to John Lewis and other
retailers, the wholesaler producing the products on behalf of the brand has a
warehouse full of products and thus an incentive to use communication to make a
special effort to sell it quickly on to the retailer (John Lewis stores/online
webstore), who in turn promotes to the end consumer” (Brassington &
Pettitt, p.300, 2007). As a result, communication has flowed freely and the
product has been ‘pushed’ down all channels from each member in parallel with
the John Lewis own-branded products. Overall, there is little or no
communication between manufacturer and consumer. In this case, John Lewis uses
a “push strategy”.
In contrast however, there is the pull strategy in relation to
other brands. This requires the manufacturer to create demand for the product
through direct communication with the consumer. Brassington & Pettitt
(p.301/302, 2007) explain this as “the retailers will perceive this clear
demand and, in the interest of serving their customers’ needs, will demand the
product from their wholesaler, who will demand it from the manufacturer. This
bottom-up approach pulls the product down the distribution channel (in contrast
to the push strategy which pushes the product down), with communication flowing
in the opposite direction.
The Ashridge
Management Model and Critical Success Factors Analysis (The CSF Model)
Organisations
need to take numerous factors into consideration when building a successful
brand name. For example, own-name brands are becoming more and more recognised
as part of the company’s overall capital/brand equity and produce added
benefits for the business.
Kapferer
(p.11, 2004) reinforces “we live an attention economy; there is so much choice”
particularly in the retail sector. Own-branded products/services must convey
certitude, trust and brand power to influence buyers. This can be achieved
effectively by incorporating the Ashridge Management and CSF model into
marketers’ decision-making;
The Identity Pyramid Model
Kapferer (p.222/223, 2004) illustrate the concept that a
brand is made up of three layers; kernel, codes and promises. Each of these
theories (“source of inspiration, statement, codes and communication themes”)
work together in a pyramid model which is used to aid managing the John Lewis
own-branded identity. The pyramid consists of three separate tiers as follows;
At the top of the pyramid, is the kernel of the brand – in
other words the source of the brand. For example: Where did the brand come
from?? How did it start? How does it work? “It must be known because it imparts
coherence and consistency”.
At the base of the pyramid, are the brand’s
themes/acts/products/services – this is known as “the tier of communication
concepts and the product’s positioning, of the promises linked to the latter”. For
example: What products does the businesses range(s) offer its customers? What
recurring theme is imminent across the ranges? How are these products
positioned within the marketplace? What aims does the product range hope to
achieve?
Finally, the middle level relates to the “stylistic code –
how the brand talks and which images it uses”. It is through the organisation’s
style that the theme is decided and helps to reflect the firm’s overall image.
Overall, there is a close relationship between the facets of the three tiers
within the pyramid (as shown below) as with the identity prism.
The Identity Prism Model
According to Kapferer (2003), effective brand identity of
a company can be defined by answering the following questions;
- What is the aim and individual vision of the brand? What makes a brand distinguished?
- What is the brand’s equity/image? What are the brand competence, validity and legitimacy? What are the features of its recognition?
- How can customer satisfaction be achieved if they were to purchase the brand?
It can also be argued that the theory includes the uniqueness,
meaning, aims, values and personality of the overall organisation to
potentially positioning the brand name more efficiently, and thus, achieve
higher competitive advantage.
In
conclusion, communication of the brand identity prism helps to build a
successful identity and image for market research into a specific organisation.
It helps to build relationships amongst stakeholders and conveys its key
messages towards them. It truly is a building process. Kapferer (p.110/111,
2004) summarises the overall prism as;
“The six facets within the prism define the overall
identity of a brand as well as the boundaries within which it is free to change
or to develop. The brand identity prism concept/map helps to demonstrate that
these facets are all interrelated with one another and form a well-structured
entity. The content of one facet echoes that of the rest. The identity prism
originally derives from one basic theory – that brands have the gift of speech.
Brands can only exist if they communicate well.”
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