HOLISTIC MARKETING

A marketing strategy that is developed by thinking about the business as a whole, its place in the broader economy and society, and in the lives of its customers. It attempts to develop and maintain multiple perspectives on the company’s commercial activities. Holistic marketers engage in a host of carefully planned, interconnected marketing activities and satisfies an increasing broader set of constituents and objectives. They also consider a wide range of effects of their actions.

Holistic marketing include the following,

Relationship marketing:

The concept of customer service led to a new concept called relationship management. As competition increased, the organisation started to realise the importance of customer value. They realised that it’s not just always low prices, but also other aspects like delivery, image, brand associations and the relationship with the customers becomes key factors. The ultimate aim of a relationship marketing approach is for the customer to become a ‘partner’ of the organisation, by contributing to marketing decisions through a one-to-one relationship.

Internal Marketing:

Internal marketing is based on the fact that the employees are the internal customers of a company. Employee satisfaction is the utmost important for a firm to achieve its goal. Internal marketing ensures building a skilled and self-motivated workforce and that every member of the organization properly understands the company’s marketing orientation and philosophy towards the customer satisfaction. Internal marketing is also about maintaining harmony and co-ordination among various marketing functions and activities within the organization. There should not be any conflicts within the marketing department or between marketing and other departments because that would somehow negatively affect external marketing also.

Integrated Marketing:

Integrated Marketing is the tactical delivery of blended strategy to ensure that you capture all touching points with your clientele. As we are morphing into a more digital arena we are seeing an increasing trend of consumers using different forms of communication with respective brands through various platforms.

Social Marketing:

Cause-related marketing supports a cause. Different kind of organisation conduct social marketing in India that includes, government, autonomous institutions, foundations, NGOs etc. Choosing the right goal and objective of social marketing is difficult. Corporate social responsibility is one of the major part of every major player.

Bingo’s Holistic market approach:

Relationship marketing: Bingo connects to the consumers as the trendy and wacky brand (brand identity is disseminated through various advertisements and promotions). Though the brand loyalty level isn’t very high, Bingo still comes across as a brand that gives the costumers a ‘cool image’. The brand value is also created because of the legacy of its parent brand- ITC.

Internal marketing: ITC’s approach to its human resource is premised on the fundamental belief in fostering meritocracy in the organisation which promotes diversity and offers equality of opportunity to all employees.

Integrated marketing: The integrated message for bingo is that it’s a wacky and a simple brand. Bingo’s tagline ‘No confusion, Great combination’ helps in developing the integrated marketing message for the whole brand. This helps in avoiding confusions in the brand message that a consumer receive through different media

Social Marketing- Green marketing: All these green projects and initiatives undertaken by ITC have a positive impact on the environment. It goes a long way in maintaining and improving the state of the environment. The carbon positive standard helps in reducing the emission of carbon dioxide in the environment, thereby helping in avoiding air pollution. Being water positive by following the rain water harvesting path is very thoughtful. Also, the watershed development project is very helpful in solving the water woes. In a country like India, where water scarcity is a bane, projects like these come as a boon. Today we see that deforestation is on the rise, but companies like ITC are actively involved in spreading greenery over 80,000 hectares of land. 

Segmenting- Targeting- Positioning

Market Segmentation:

Market segmentation divides a market into well-defined slices. It consists of a group of customer with similar wants and needs. Marketers identify appropriate group/ segment of market to target on.

To segment a market, four major groups are used,

Geographic: This is straightforward and pertains to where your customers live and do business. It is possible that their geographic location plays a role in terms of their cultural makeup and buying habits but these are explored in other categories.

Demographic: This is just a fancy word for statistics like Age, Gender, Size of Family, Education, Income, Occupation, Economic Class, Religion, Ethnicity, and Language

Psychographic: This corresponds to the psychological traits of your customers including attributes such as Personality, Beliefs, Values, Lifestyle, Attitudes and so forth. These are those personal marketing segmentation characteristics that you cannot quantity but are nevertheless important.

Behavioural: These set of marketing segmentation traits answer the question, “How?” How do your customers buy? How do they use your product or service? How loyal are they? How do they evaluate and decide on what to buy? Everything about how your customer behaves and what motives them is included in this category.

Bingo Market Segmentation:

Geographic: Indian Market

Age: 20-25

Psychographic: Modern, carefree attitude

Behavioural: They buy a product because they think it is ‘cool’ to eat bingo.

Market Targeting:

The consumers a company wants to sell its products and services to, and to whom it directs its marketing efforts. Identifying the target market is an essential step in the development of a marketing plan. A target market can be separated from the market as a whole by geography, buying power and demographics, as well as by psychographics.

Bingo and Brand Targeting:

The Company decided that youngsters in the age group of 16-30 are the most experimental and hence they would be the primary target audience.

Market positioning:

Positioning involves implementing our targeting. Market positioning is the manipulation of a brand or family of brands to create a positive perception in the eyes of the public. If a product is well positioned, it will have strong sales, and it may become the go-to brand for people who need that particular product. Developing a market positioning strategy is an important part of the research and development process. The marketing department may provide notes during product development which are designed to enhance the product's position, and they also determine the price, where the product should be sold, and how it should be advertised. Every aspect of the product's presentation will be carefully calculated to maximize its position, with the goal of market positioning being domination. 

Brand positioning depends on the following factors

Bingo & Brand Positioning:

The brand tries to differentiate from Lays by focusing on innovation (in flavours), Snack foods: because of the low financial risk (low price) for the customer, new tastes will be a key in marketing success. Lays succeeded by offering great quality, variety and brand to reach the leadership position. Bingo is following the leader and is trying to overtake the market leader.

Consumer Buying Behaviour and ORGANISATIONAL BUYING BEHAVIOuR

Consumer BEHAVIOuR:

It is a segment or part of human behaviour. Human behaviour refers to the total process whereby the individual interacts with the environment. Every thought, feeling, or action that we have as individuals is part of human behaviour. Consumer behaviour is the study of how individuals, groups and organizations select, buy and dispose of goods, services, ideas or experiences to satisfy their needs and wants. "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on.

Howard Sheth Model of consumer behaviour

Howard Sheth model of consumer behaviour acts as a sophisticated comprehensive theory of consumer behaviour that helps the seller study its consumer’s behaviour.

Input variables: Input variables are depicted in the left portion of the model as stimuli in the environment. Significance stimuli are actual elements of brands that the buyer confronts while symbolic form, such as in advertisements. Social stimuli are generated by the social environment including family and groups.

Output variables: The five output variables in the right hand portion of the model are buyers’ observable responses to stimulus inputs. They are arranged in order from attention to actual purchase and are defined as follows:

Attention – the magnitude of the buyer’s information intake.

Comprehension – the buyer’s store of information about a brand.

Attitude – the buyer’s evaluation of a particular brand’s potential to satisfy his or her motives.

Intention – the buyers forecast of which brand he or she will buy.

Purchase behaviour – the actual purchase act, which reflects the buyer’s predisposition to buy as modified by any inhibitors

It distinguishes three levels of decision making:

1) Extensive problem solving – early stages of decision making in which the buyer has little information about brands and has not yet developed, well defined and structured criteria by which to choose among products (choice criteria).

2) Limited problem solving – in this more advanced stage choice criteria are well defined but the buyer is still undecided about which set of brands will best serve him. Thus, the consumer still experiences uncertainty about which brand is best.

3) Routinized responses behaviour – buyers have well defined choice criteria and also have strong predispositions towards the brand. Little confusion exists in the consumer’s mind and he is ready to purchase a particular brand with little evaluation of alternatives, the consumer and society.

Bingo & Consumer buying behaviour:

Attitude: The purchase decision of Bingo is made with their attitude. The brand’s TG clearly being youth who are trendy and cool, the buyers of bingo are expected to buy it on the go. They buy bingo because they think other brands are not as ‘cool’ as bingo.

Need: There is no specific need/ requirement to buy bingo as such. It is mostly an impulsive buying behaviour.


ORGANISATIONAL BUYING BEHAVIOR:

Organisational buying is the process of decision making by which an organisation establish the need for purchased products and services and identify, evaluate and choose among alternate brands and suppliers. A business market consists of all the goods and services used in the production of products in other companies (primarily including agriculture, forestry, fisheries; mining, transportation, communication, banking, finance, insurance, distribution and services)

The major requirements or the business market that Bingo buys in will be

Agriculture: They get all their raw materials like potato, and spices for production

Technology: To produce chips from the raw materials technology like machinaries, computers etc is needed

Packaging: The produced chips is packaged into packs of Rs.5 , 10 and 15.

Logistics services: They are service providers that help in inventory and supply chain management of the company

Distribution channels: They are the dealers, wholesalers and retailers who take the products to the consumers

Advertising and promotions: They are service providers that help in the branding, image management, reputation management, advertising, promotions, and brand identity of the brand.

Difference between consumer buying behaviour and organisational buying behaviour in respect to different characteristic is given below;

SALES MANAGEMENT

“Good sales management properly applied is the least expensive, most effective, way to increase dollars of revenue and margins, market share, cash flow, return on investment, and net present value, as well as to beat the competition and make yourself a hero. It costs no more to properly hire, train, compensate, motivate, and evaluate salespeople. Effective time and territory management, forecasting, planning, budgeting, and good communication and control are no more expensive than performing these same functions poorly.”

- Robert J. Calvin, Sales Management

Companies use salespeople to find, sign, and service customers, and to build revenue and profits. Sales management is the discipline of maximizing the benefits a company and its customers receive from the efforts of its sales force.

Functions of sales management

• Sales planning
• Recruiting / staffing
• Training
• Controlling / directing
• Evaluating
• Effectiveness / efficiency
• Compensation

The Impact of Effective Sales Management 

While this may seem like a lot to do, effective sales management requires ongoing involvement with the sales force. But effective sales management has numerous positive impacts. It can:

• Increase sales revenue and profitability
• Decrease variability of revenue due to inaccurate forecasting
• Increase sales productivity (revenue per salesperson)
• Increase customer satisfaction and loyalty
• Increase salesperson motivation

Sales Funnel:

The sales funnel is graphical representation of the sales process and the timeline for a future. Sales funnel is universally used in B2B sales - where sales cycles are long (typically several months) and closure of the sale takes some level of executive relationships or executive level selling. Role of marketing in a B2B sales can also be linked to sales funnel.

In the Sales funnel figure shown above, there is a large list of potential customers in the beginning of the sales process - and as the process continues, the number of potential customers decrease. At the end of the sales process i.e., closed deal - a few become actual customers.

Marketing functions in a sales intensive company must therefore be aligned with the sales funnel. The underlying theme of most successful marketing operations is about segmentation, focus and targeting. In most firms there will be more opportunity than what the company can successfully pursue. This makes it imperative for the marketing department to create a strategy or define the rules which will initiate a winnowing process - i.e., narrow down the list of prospective customers which the firm can successfully pursue and close.

One model of the marketing activities in the B2B world starts with branding, and then builds awareness and interest, targeted prospecting, lead management, sales funnel support and, finally, customer life cycle marketing i.e., repeat sales.

The sales funnel is an effective tool to manage and execute a complex sales process. The sales process can be made more effective and successful by aligning marketing activities with the sales process - branding, advertising, targeted seminars, whitepapers, technical pre-sales, account management, closing deals and looking for ways to add incremental value to existing customers.

Bingo in sales management:

Since Bingo doesn’t have a direct selling methodology, the major areas that is covered in the sales marketing of bingo includes logistics, supply chain management etc.

Logistics: Planning, execution, and control of the procurement, movement, and stationing of personnel, material, and other resources to achieve the objectives of a campaign, plan, project, or strategy. It may be defined as the 'management of inventory in motion and at rest.

Supply chain management: Management of material and information flow in a supply chain to provide the highest degree of customer satisfaction at the lowest possible cost.

Supply chain management requires the commitment of supply chain partners to work closely to coordinate order generation, order taking, and order fulfilment. They thereby create an extended enterprise spreading far beyond the producer's location.

Distribution Decisions

Most producers do not sell their goods directly to final users. They design a multi-channel system to reach them. The design of marketing channel, that acts, as a strong interface, can provide competitive advantage to a firm in the industry. By contrast the absence of a good distribution network can also be a major fiasco in today’s cutthroat competitive world. Marketing channel decisions are the most critical ones facing the marketing management today. It is complex and the complexity further gets compounded by the fact that the channel system take time to build usually years. Channel partners are not owned by the company in most cases. The sales force plays a crucial role in getting the best out of marketing channel. Integrating the efforts of channel partners and sales efforts within the whole marketing effort becomes crucial towards achieving organizational goals.

A distribution channel is established for any product to reach the consumer from the seller.

There are different types of distribution

Channel 1 contains two stages between producer and consumer - a wholesaler and a retailer. A wholesaler typically buys and stores large quantities of several producers’ goods and then breaks into bulk deliveries to supply retailers with smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense. 

Channel 2 contains one intermediary. In consumer markets, this is typically a retailer. The consumer electrical goods market in the UK is typical of this arrangement whereby producers such as Sony, Panasonic, Canon etc. sell their goods directly to large retailers such as Comet, Tesco and Amazon which then sell onto the final consumers.

Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells directly to customers. An example of a direct marketing channel would be a factory outlet store. Many holiday companies also market direct to consumers, bypassing a traditional retail intermediary - the travel agent.

DISTRIBUTION OF BINGO

ITC already has a well-established distribution channels through its Cigarette and Tobacco offerings. This leverage to the distribution of Bingo. The company distributed 4 lakh racks across all the retailers to display the brand at point of sale. It has a crucial alliance with future group in stocking only ITC Bingo in its outlets like Big Bazar, Food Bazar. All HORECA and local betel shops are all used to distribute Bingo to a wide range of customers.

Viral Marketing: ITC Bingo is known for its adaptation of different ad strategy. They have developed a new viral development by contests2win. It’s in the essence a spoof on a long winding saas bahu soap on tv.

Promotions- ATL and BTL

Promotions are defined as the advancement of a product, idea or a point of view through publicity and/or advertising.
The promotions for a product can either be above-the-line (ATL) or below-the-line (BTL). 

 ATL: There are a number of approaches to promotion that are open to organisations. Above-the-line promotions use mass media methods. This type of promotion focuses on advertising to a large audience. It includes print, online media, television and cinema advertising.

Making a message memorable to a large audience is not always easy. It is difficult to tailor a promotion to a specific group of consumers through above-the-line promotions. This is because it is viewed by a mass audience with different tastes and needs. Above-the-line promotion is also very expensive.

BTL: Below-the-line methods are very specific, memorable activities focused on targeted groups of consumers. They are under the control of the organisation. Kia uses these techniques to target clearly defined consumer groups rather than a mass audience like its above-the-line activity. The purpose of these activities has been to develop the brand by creating awareness and building a brand profile. Below-the-line methods include:

·         sponsorship

·         sales promotions

·         public relations

·         personal selling

·         Direct marketing

Advertisements:

Advertising are cost effective way to disseminate messages that promotes the brand message, idea or preference. Even in this world that is filled with clutter of messages, outstanding and innovative ads, no matter which ever medium they are released in, pays off.

Bingo potato chips offers extra quantity to attract customers. In addition to this, and to break the clutter and stand out, Bingo used the medium of Indian Railways’ public address systems to target their audience. There are more than 10 billion people travelling in a train every year. Most of them will want to buy some snacks to crunch during their journey. Bingo, realising this opportunity approached the Indian Railways, and received permission to air their audio jingle through the public announcement systems of Indian Railways. The audio advertisement announced the ad in the tone and voice of normal railway announcement, ascribing the reason of the train being late as that the driver was busy munching Bingo. The campaign was a huge success and sales in the stations where the announcement was made increased significantly.

Sales Promotion:

Sales promotion acts as a key ingredient in any marketing campaign. If an ad offers the consumers the reasons to buy the product, sales promotions gives them incentives. Coupons, samples, cash refund offers, price offs, freebies, rewards, etc., are included in the sales promotion activities.

Bingo gained advantage over its competitors by offering more quantity of quality chips in the same price as its competitors’ giving the customers more value than that they receive from the competitor’s.

Events and Experiences:

Sponsoring events enables wider exposure of the company to influence the consumer’s attitude towards the brand. Cricket sponsorship is a big business in India. Major events and conferences are sponsored by the companies who get positive exposure to their well-defined audiences.

Bingo was launched during the World cup season. This enables the brand to generate more visibility and brand recall after the event as it had targeted its TG very well with the series of humorous ads that come in-between the match.

Public Relations:

The company must not only relate to its TG suppliers, and dealers; but also the public in large. PR helps in creating goodwill about the brand within the public and thus avoiding any negativity to its brand image.

Event sponsorship is a part of PR activities that a company does.

Direct Selling:

The usage of Consumer Direct channel to reach to the customers and avoiding all the marketing middle-men refers to direct selling. This enables the brand to enhance their brand loyalty and increase CRM.

Bingo sells its products through stores and not on direct selling. It keeps in touch with its customers through various social networking sites.

The footnote of all the promotional strategies that is used by Bingo are,

PRICING DECISIONS

All business aim their goal on maximizing their profit and increasing their market share. But, at the same time, they make sure that their pricing favours the customer buying decisions. Thus, ‘smart pricing’ is a very important technique to meet this need, but it is not an easy decision to make.

Bingo learnt its pricing lessons from the failed pricing strategy of Frito Lays. Lays increased its price from Rs.10 per 35 grams to Rs. 15 per 45 grams. Since this affected sales, they went back to their old pricing methods. Bingo priced its 16 SKUs at Rs. 5, 10 and 20 per pack and maintained a consistent pricing strategy. This pricing strategy, along with its product differentiation, helped Bingo grow successful in the market.

The factors that affect pricing are given below,

Cost: Price is used as a frame of reference to the quality of the product. To produce a quality product, the sellers spend a lot on making. The selling price thus becomes proportional to the cost price of the product.

Marketing: The money that is spent on marketing is always expected to return when sales happens. Thus, the marketing costs also influence the pricing of any product.

Distribution Channels: When products are sold through intermediaries, the list price is expected to reflect the margins that they require. Sometimes list prices will be high because middlemen want higher margins. But some retailers can afford to sell below the list to customers. They run low-cost operations and can manage with lower margins. They pass on some port of their own margins to customers.

Competition: A company should be able to anticipate reactions of competitors to its pricing policies and moves. Competitors can negate the advantages that a company might be hoping to make with its pricing policies.

Consumer needs: Pricing also depends on what the consumer expects out of our product. Giving them too much for the price will reduce revenues and giving less will not help customer retention.

Setting the price

A firm sets the price of the product/ service that it offers when it builds the idea and research for that product. There are 6 steps that are followed during any pricing decisions,

Step 1: Selecting Pricing Objectives

As a first step, the seller will decide where they want to position themselves in the market. The clearer their objective, the easier it is for them to price.

·         The Bingo brand of chips was launched by ITC on 14th March 2007 with an aim to capture at least 25 percent market share of the Rs 2000 crore branded snack market within five yrs with an aggressive pricing strategy.

·         Presently the relative market share of Bingo is 16% (Lays 45%).

·         They tried to be on par with the leading market players (Lays, Kurkure) by maintaining pricing their products at Rs 5, Rs. 10 and Rs.20. For the competitive edge they tried to offer more weight.

·         To recover the manufacturing cost, transportation cost, distribution and sales cost,etc.

Step 2: Determining the Demand

There is usually an inverse relationship between price and demand. The higher the price, the lower is the demand.

Step 3: Estimating costs

The demand sets a cap to the company for its production costs. The company will want to charge a price that covers the production costs.

Step 4: Analysing Competitors’ cost, prices and offers

Within the range of all the demand and production costs, a company takes into account, the competitors’ pricing strategies before they decide on their pricing. If a competitor offer more features in the same price, the company should make efforts to offer more within the same production costs, or cut down value from its own price.

·      The pricing strategy adopted by Bingo is a clever one. Bingo is priced the same as the Lays brand of chips at Rs10 for a 35g packet and Rs5 for the smaller one. By adopting a consistent pricing strategy and by offering higher margins to the retailers Bingo has won the retailers’ hearts.

Step 5: Selecting the pricing method

The three C’s of pricing summarises the major contributing factors price setting. Companies include the pricing method that include one or more of these consideration.

·      Reference pricing

Bingo priced itself at Rs. 10 for 45 grams as compared to Lays which was Rs. 15 for 45 grams. This gave them an edge to grab in market share.

·      Price cues

It followed odd number discounting i.e. 33% extra

·      Competition based pricing

Step 6: Selecting the Final Price

Company sets their final price with consideration of additional factors that are not mentioned above, like marketing campaigns, gain and risk share pricing and impact of pricing on other parties.

·      Since the initial objective of Bingo was to capture 25% market share but now keeping in mind the increasing inflation rate and production costs it will have to sooner or later re-price its products.

·      But it should wait for the market leader to take the initiative in this context.

·      It should also reduce the quantities it is offering and other discounts.