2.4 Follower’s Strategies

2.4.1 Strategic Objective

Keep on surviving

-To target at a market segment which is not attractive to high-ranking firms, hence avoiding their competitive challenges

Set sequence: To imitate the leader’s marketing mix by downgrading it by one level

Thorough cost reduction is indispensable.

Market position	Characteristics	Objectives	Fundamental Strategy
Leader
Challenger
Nicher
Follower

3. Read the text and describe the trends given below.

Users Report Dissatisfaction with CPA Offers: Mobile Offers are the Biggest Offender

Our survey asked users to rate their experiences with three different kinds of CPA offers: free, paid and mobile. The survey defined each type of offer for the user to make the distinctions clear. Offers are CPA advertisement that users complete in exchange for in-game virtual currency. Free offers require no form of payment, but do require users to submit personal/contact information while mobile offers require a user to submit their mobile phone number and agree to a subscription fee. Paid offers require a user to purchase something with a credit card in exchange for more in-game currency.

Nearly 90% of users we surveyed were either unhappy or neutral when it came to mobile advertising offers. Only 10.84% of users research surveyed responded positively to mobile offers (marking “satisfied” or “very satisfied”).

Comparing this with the data we collected on free and paid offers, it’s clear that users do not like mobile offers. These mobile offers are the type of offers Arrington referred to at the Virtual Goods Summit Friday as deceptive.

57.85% of users responded positively to free offers, marking “satisfied” or “very satisfied”, while 41.33% of users reported some degree of satisfaction with paid non-mobile offers such as Netflix and DirecTV.

Nearly 4 out of 5 (79.11%) users surveyed indicated they have never completed an advertising offer that required any form of payment for more in-game currency.

4. Scan the text and think of other criticisms of marketing.

Criticism of the marketing mix

While the mix provides a ‘backbone’ to marketing theory, which is both memorable and practical, it is not without its critics. Like any academic theory, the marketing mix does need to evolve in line with the business environment (e.g. the 7Ps for service marketing), and while criticism is both valid and healthy, it does not negate the importance of the concept.

Common criticisms are:

• The 7Ps make no direct reference to forming, and sustaining, long-term relationships. If such relationships are critical to business success, why are they not directly addressed?

• The mix can promote a view of product, price, place and promotion as being separate entities, as opposed to the integrated product offering most customers evaluate.

• Internal resource constraints need to be considered, and without active acknowledgement of such factors, the inappropriate combinations of marketing mix variable may increase customer expectation beyond the organization’s ability to deliver.

• Application of the 7Ps can promote standardization, or mass production, at a time when society increasingly values individuality.

• The mix can be viewed as manipulative. The right combination, and intensity, of factors could pressure the buyer into purchase.

Critical thinking

1. Analyzing cause and effect

1. Think about the most recent product you bought. Describe the marketing mix in connection with that product.

2. List some examples of situations in which people buy things that they don’t really want or that they are not really good for them. Why do you think they do so?

3. Work in pairs. You have bought some goods that you really did not want or you thought were not good for you. Discuss: Why did you buy them? Who (what) is to blame for this purchase

2. Analysing data

Review current business publications such as the Wall Street Journal, Business Week, Forbes, Money, Advertising Age, Brandweek,and Sales & Marketing Management. Find one current research activity and write a one-page report on the nature and scope of the research activity.

3. Challenge

Group work. You are the marketing manager of a company which manufactures some product. Your task is to design a questionnaire to find out what ideas consumers have for a new product. Your questionnaire should not take more than three minutes to answer and should include wh-questions, yes/no questions and statement questions. Keeping in mind that survey research involves gathering primary data by asking people questions about their knowledge, attitude, preferences, and buying behavior you should:

1) choose group of customers your questions will be aimed at;

2) design a questionnaire;

3) try your questionnaire on the other members of your class.

Writing

You work for a group of marketing consultants. Last week, you gave a presentation at a conference in Warsaw about marketing on the web. After your talk, a woman named Francesca Radici came to talk to you and mentioned that her company might be interested in hiring your services. Unfortunately, you didn’t have time to discuss her requirements in detail, but she gave you her business card.

Write a letter of 100-150 words to Mrs Radici, including the following points:

Name/Class:

•remind her about when and where you met

•apologise for not having more time to talk to her at the conference

•refer to her interest in your consultancy services

•refer to a brochure you are enclosing, and to your company’s website

•point out that your company has a lot of experience in web marketing

•offer to phone or visit her company to discuss her company’s needs

Case

Key features of Zumo

• Contains caffeine, vitamins and glucose.

• Has a secret ingredient, “herbora”, made from roots of rare African plants.

• Scientific studies show that the body absorbs Zumo faster than water or other soft drinks.

• The unique formula contributes to Zumo’s taste thirst-quenching properties.

Background

The best-selling sports drink, Zumo, is produced by Zumospa, a food and drink company based in Valencia, Spain. In the last financial year, Zumo contributed 30 million euro to Zumospa’s annual sales revenue , accounting for 20 % of company’s total turnover. It is, in fact, Zumospa’s cash cow, generating more revenue than any other of its products.

At present, Zumo is sold only in Europe. However, the sports drink market is the most rapidly growing segment of the world beverage market. Zumospa is now looking outside Spain for markets and would like to make Zumo a global brand.

2.5 Listen to this excerpt from a radio programme, Business Today. Ricardo Gonzales, Zumospa’s President, discusses Zumospa’s plans to globalise.

Make notes on the company results, future plans and competitive advantage.

Marketing

• Launched in the mid-1980s. Positioned as an energy product for fitness-conscious people, especially sportsmen and women, between ages of 20 and 45.

• Distributed mainly through grocery stores, convenience stores and supermarkets. Also through sports clubs. Additionally, sales are generated through contracts with professional leagues, such as football, golf and tennis associations.

• Press, TV and radio advertising is backed up by endorsement contracts with famous European footballers and tennis stars.

• Zumo is offered in four flavors and its price is in the medium range.

Developing a global brand

Zumospa needs to reposition it for the global market. Initial research suggests that Zumo is perceived as a Spanish drink, and its close identification with Spain may not be suitable when developing a global brand.

Zumospa would like to launch a global campaign focusing first on South America, Mexico, the Southern states of the US and Japan, where they have regional offices. A decision has been taken to use a standardized advertising theme in this markets, although the copy of the advertisements and language of the TV and radio commercials will be adapted to local needs.

Before setting up focus groups in these areas and commissioning market surveys, the Marketing Department of Zumospa have organized an informal departmental meeting to brainstorm ideas for their global marketing strategy.

Task

You are members of the Marketing Department of Zumospa. Work in groups and brainstorm the points listed in the rough notes. One person in the group should take notes. Then meet as one group and select some of the best suggestions for further study.

Brainstorming Session

1. Does Zumo need a new name? If so, what?

2. Introduce new Zumo varieties for different market segments e.g. Diet Zumo? Other versions.

3. Redesign Zumo bottle/can? If so, how?

4. Create a new slogan. Suggestions?

5. Ideas for TV or radio advertisement? Also, newspapers and magazines?

6. Price – medium range?

7. How to compete against similar products from Coke, Pepsi, Heinz, etc?

8. New market opportunities for Zumo?

9. Create a special division to market Zumo worldwide?

10. Apply to be official sponsor at next Olympic Games?