Please take a look at some real-life examples from the field of strategic marketing:
Practical Examples – Positioning
Starting point: : A fixed line operator had positioned a prepaid calling card on the Austrian market. The target group for this card were Austrian holidaymakers and business travellers, who should thus be able to avoid high roaming charges abroad. The card was sold in the company’s own shops as well as in the shops of a partner company. Unfortunately sales fell far short of predicted figures. Solution: The product was repositioned by turning to ethnic minorities who wish to make calls to their home countries at favourable rates. In addition to a new design for the card, pricing (price categories, charging, billing increment) was adapted to the target group. A marked increase in the dealer’s margin and co-branding for dealers made the product so attractive that distributors, who wanted to sell the product, offered their services of their own volition. Results: Sales figures are significantly above target; the client entered into successful competition in a lucrative customer segment; substantial increase of profit.Example 1: Prepaid Calling Card
Starting point: A producer of chemical consumer goods in Western Europe was facing saturated markets with low contribution margins and an almost non-existent differentiation vis-à-vis its competitors. In addition, a new EU-wide regulation significantly reduced the permitted amount of a certain component, which had been classified as a health concern. An alternative component would raise the product’s price dramatically, while simultaneously changing its properties for the worse. Moreover, competitors were expected to position similar alternative products at an earlier date and with a reference to being beneficial to the environment and health. Thus there was hardly any potential for a clear differentiation there either. Solution:In spite of a price war in the product category concerned, the company chose a third alternative that was going to make the product even more expensive. Tests showed that an all new formula was going to change the product’s properties considerably. The most positive changes were then developed further, and a corresponding communications concept (packaging, sales arguments, advertising) was worked out. In addition, a unique selling point (USP) stressing the high quality of the foam was communicated. Environmental and health aspects were only mentioned casually. Results: Successful differentiation vis-à-vis the competitors, revival of a seemingly “dead” product category, considerable increase in sales and profitability, improved imageExample 2: Spray Foam (Polyurethane Foam)
Starting point: An international building materials group was having problems positioning its product in Austria. Due to quality defects 30 years ago, the product had ended up in the position of a solution for tinkerers and renovating. Its former positioning as a high-quality, innovative wall-building material had also been lost completely through arbitrary communications strategies and a lack of innovation. Neither customers nor distributors, neither master builders nor architects trusted in the product or the brand. Solution: After introducing a first innovation of the product, which increased its heat conductivity, the company dared to risk a new communications strategy and a radically different positioning. Market studies had revealed that the classic “innovators”, i.e. experts among the customers, appreciated the product very much. However, the larger number of “early adopters” had to be won over. Therefore the building material was no longer positioned as an “all-rounder” in house building, but as THE exquisite, high-quality solution for energy-efficient construction. This was communicated in all advertising materials, including the construction of trade fair stands. It was, however, equally important to win over the “opinion leaders” – architects, property developers, master builders, building contractors, stakeholders. A high-class training programme was created for these partners in cooperation with well-known training and research facilities; thus they can in turn position themselves as experts on the competent construction of passive and low-energy houses. This attracted the attention of various target groups and trade media, setting in motion a virtuous circle. Results: significantly improved image with all relevant target groups, massive increase of the number of persons and constructors interested in the product, marked increase in construction activities.Example 3: Wall-Building Material
Starting point: A multinational electronics company was having a profitability problem, given the saturated markets characterised by a high degree of competition. In addition its product range was marked by a high degree of complexity, due to a wealth of features and a number of different models as well as country variants made necessary by technical differences. This increased the number of manufacturing faults and thus also of warranty claims with a negative impact on the image of the brand’s quality and the production costs. Moreover, the market for fax machines for private customers was characterised by an extremely large range of products made in Asia that differed from each other only marginally. Taking the step into the more lucrative market for corporate customers, which had been taken into consideration, would have entailed higher sales volumes, but also involved the risks of a rising complexity and a deteriorating cost structure. Solution: As the company saw its core competencies in the consumer market, the strategic decision was taken to refrain from entering the corporate market. On the manufacturing side, the range of models was reduced radically and all devices were produced on a purely modular basis. Doing so and introducing a new system of cross-divisional development and production helped to further reduce complexity and minimise the number of manufacturing faults. Now the tables were turned, utilising the former weakness of a “high incidence of faults” to help position the company as a high-quality brand. A “24 hour return service” was developed, communicating the message successfully to distributors and customers. Based on market research, a single new feature was developed, which also stood for a new understanding of quality. As financial resources were scarce, the new positioning was communicated directly at the points of sale by means of guerrilla marketing activities. Results: Both measures not only led to a better differentiation from the competitors. Moreover, a unique selling proposition (USP) and a clear positioning were established, enabling the company to once more become the leader in the European market.Example 4: Fax Machines (Consumer Electronics)
Practical Examples – Neuromarketing
Starting point: A comprehensive study on behalf of a U.S. TV channel specialising in TV series and a British telephone company examined what makes TV series successful with their fans and what emotions they experience while watching. Methods: scans of cerebral blood flow (by means of fMRI), measurements of brain waves (EEG) and heartbeat, hormone levels and skin temperature as well as eye tracking. Results: Results varied depending on the genre; however, a number of common features were also found. For example, series they did not care about left viewers literally cold, series they loved made them produce more sweat, their heartbeats and breathing rates became faster. Successful series stimulate almost all emotions (positive and negative ones) more strongly; in any case at least one emotion should be catered to to a degree above average. Characters in the shows should have some “rough edges” rather than being “smooth”. In order to keep viewers watching after the start of the respective series, humans always have to feature in the opening credits. If the series is cancelled suddenly, viewers show physical reactions similar to those of drug addicts.Example 1: “Study on Fans of TV Series “
Starting point: A producer of coffee was planning to install coffee vending machines in a German university campus; the aim was to optimise the sales prices of the hot beverages. For internal purposes, the predictive power of the NeuroPricing© tool for the willingness to pay a certain price was compared to that of traditional questionnaires. Methods: measurements of brain activity (by means of EEG) and questionnaires on price acceptance; field tests on actual price acceptance and willingness to pay. Results: The willingness to pay according to the questionnaires was significantly higher than that measured by EEG; the result determined by means of NeuroPricing© was also confirmed in real life, proving on the one hand the practicality of the more modern method and on the other hand finding the optimum (as it maximised the sales volume) sales price for the client.Example 2: “Latte Macchiato Experiment”
Starting point: The European subsidiary of a U.S. pharmaceutical company was having problems selling one of its rheumatism drugs. They wanted to find out which contents (communication of effectiveness versus examples of application or which kind of messages are given on the effectiveness of the drug) and which design variations in communication materials (categories of images, combinations of ads) make doctors most willing to prescribe a drug. Methods: measurements of blood flow and scans of emotional areas in the brain by means of fMRI with a sample of rheumatologists. The company’s own product and all alternative ways of communicating it as well as products by competitors that are often prescribed were studied. Results: After establishing the corresponding emotional profiles, clear-cut recommendations could be made as far as the choice of advertising messages, slogans and motifs was concerned. This led to a substantial increase of prescriptions for the product.Example 3: “Willingness of Doctors to Prescribe”
Starting point: A German tourism company that lets holiday flats wanted to optimise occupancy and turnover of their flats. Methodik: measurements of brain waves by means of EEG. Results: The price that customers are comfortable with for one-bedroom flats was supposed to be adjusted upwards by 11 percent, that of two-bedroom flats by 6 percent. In addition, the discount granted in the low season should amount to 15 percent. The recommended pricing measures were taken; turnover could be increased accordingly; overbooking and underbooking were minimised.Example 4: “Pricing of Holiday Flats”