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A company’s position is the set of perceptions, impressions, ideas and feelings that consumers have for its product compared to competing products. Marketers often plan brand positions that give their products the highest competitive advantage in the selected target markets, and they then design the marketing mix to create these planned positions.

In planning their positioning, marketers often make use of and prepare perceptual maps that show consumer perceptions of their brand versus competing brands on attributes that are important to the consumer.

Let us first understand what perceptual maps are:

Perceptual Maps

A perceptual map is a visual technique designed to show how the average target market consumer understands the positioning of the competing products in the market. In other words, it is a tool that attempts to map the consumer’s perceptions and understandings in a diagram.

Typically the position of a company’s product, product line, or brand is displayed relative to their competition.

The most common presentation of a perceptual map is to use two determinant attributes such as X and Y axes of a graph.

Perceptual maps prove to be useful for the following four reasons:

• It helps in assessing strengths and weaknesses relative to competing brands based on certain criteria that is important to the customer.
• It helps in the identification of competitive advantage for the brand.
• It identifies market opportunities signified by empty spaces on the map.
• It shows how ideal points shifts as the market matures thereby helping a company to shift its positioning in order to retain or gain a competitive advantage.

These perceptual maps are widely used by companies as a tool in assessing and determining product and brand positioning.

Let us now have a look at how perceptual maps are widely used in determining and evaluating product and brand positioning.

Product Positioning Map

Product positioning map is a diagrammatic technique where the business uses perceptual mapping to visually display the position of the product against its competition. A product positioning map could include two or more variables (represented by axis) but to keep things simple and easy to understand, we usually take only two variables.

The idea of the Product Positioning Map is to determine and show where the product stands in relationship to the other competitor’s products via perceptual mapping.

The process of perceptual mapping involves selection of two variables on the basis of its importance to its customers by taking it on the X-Axis and Y-Axis respectively. We then plot the positions of the existing competitor products according to the extent to which they satisfy the two variables. The marketer now analyses the map in order to identify gaps that might be existing. These represent opportunities which the company in question can take advantage of.

Let us consider an example of a company wanting to analyse the competition for its product – A powder to add to milk which increases its nutritional value. This product is targeted to be used for breakfast.

The two variables to be taken into consideration are cost and preparation time. Here, cost could be taken on the X-Axis while preparation time on the Y-Axis. The extreme on the right would represent high cost whereas the left extreme would represent low cost. The top of the graph could represent high preparation time and the bottom would represent low preparation time.

We now start plotting the position of different products on this map. For example – cold cereal would have low preparation time and would be moderately expensive. So, this would be plotted towards the bottom of the graph slightly towards the right side (indicating that it is moderately expensive).

Similarly, we plot another product such as bacon and eggs which involved high preparation time and is slightly expensive. This would be plotted slightly towards the right (more than cold cereal) and towards the top of the graph.

We hence plot pancakes (high preparation time and inexpensive), hot cereal (moderate preparation time and inexpensive), instant breakfast (very low preparation time and very inexpensive) on the same map.

This gives us an idea of the existing products in the market and the possibility of a unique position that our new product could occupy. It also helps in identifying market gaps that could possibly be tapped profitably. This therefore provides the precise scope of the competition existing in the market and the company can now determine the positioning of its product.

Brand Positioning Map

Next comes the brand concept where we look at the Brand Positioning Map which is a perceptual map showing the current positions of all the existing competition brands as seen from the eyes of the customers.

If you’ve read our article on brand positioning, you’d already know how important brand positioning is for a company.

The brand positioning map helps the company decide the pricing and marketing strategies to be used to increase sales. In the case of the example stated above, it’ll help the company determine how much to charge and how much calorie content to keep in its breakfast offering.

First, we plot the positions of the existing companies according to their pricing and calorie content in a similar way as we did in the product positioning map – by taking the price on the Y-Axis and the calorie content of the X-Axis or vice versa. High price can be on top and low price on the bottom whereas low calorie content on the left and high calorie content on the right.

After plotting the competitor brands according to their pricing and calorie content, we search for an ideal position for our brand. A place next to an existing brand is to be selected if and only if their market offering is weak and it is easy to win their customers. Otherwise, the primary motive of every company is to have a different positioning in the market offering a differentiated product. This helps in creating a differentiated positioning in the minds of the customers.

A major task here in the brand positioning map is to identify the gap which can be profitably tapped by the company and thus selected is the positioning of the brand.

A differentiated brand positioning helps the company to sustain its market position as it generally serves the need of a specific group of customers and has higher chances of gaining a competitive advantage and a higher brand recall.

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Come on! Tell us what you think of our article on product positioning map & brand positioning map in the comments section.

A typical market is occupied by multiple firms competing for the position of the market leader. Marketers always want to occupy a well-known place in the minds of the consumers, and as you can guess – they compete for it. In today’s competitive world, it has become absolutely imperative to not only address competition through the use of competitive strategies but also to gain sustainable competitive advantage but nonetheless, one can be confused as to what strategies to use against competitor strategies effectively.

Here lies the answer:

Competitive Strategies Tailored To The Market Position

A competitive strategy is a long-term action plan devised to make the company gain a competitive advantage over all its competitors.

Since the markets are overflooded with alternatives, it is important for a brand to devise its own competitive strategy. Here’s a detailed guide explaining the competitive strategies of the challenger, follower, and nicher according to their market positions.

Market Challenger Strategies

Frontal attack

In a pure frontal attack strategy, the attacker matches the opponent’s product, advertising, price and distribution. In a modified frontal attack, the competitor can reduce the prices if the leader doesn’t respond in the same way and if the competitor can convince the market that the product is equal to that of the leader’s.

Example – Amul used this strategy when it launched Amul Kool and Amul Masti Dahi at a low price but the same level of the quality as that of other competitors in the Indian market.

Flank Attack

A flanking strategy identifies shifts in the market that create gaps and develops strategies to fill those gaps. It means attacking the competitor on its weak points. Here, the market challenger determines the competitor’s weak areas in terms of two strategic dimensions, i.e., Geographic and segmental, and then pushes its product in that area.

Example—L.G. has successfully used this strategy by introducing the colour television “Sampoorna” for the rural people in India, outshining the other coloured TV players who focused less on these areas.

Encirclement Attack

Encirclement attempts to attack the leader or competitor from all fronts simultaneously. Here, the market challenger launches several offensive campaigns i.e. surrounds the competitor with a varied brand and forcing the competitor to defend himself from all the sides simultaneously.

This strategy makes sense when the challenger commands superior resources. The FMCG industry is a classic example of this where HUL and ITC use this extensively.

Bypass Attack

Bypassing means avoiding the enemy altogether to attack easier markets. This involves three approaches: diversifying into unrelated products, new geographical markets or developing new technologies to gain an advantage over competitors.

Example – Pepsi used this when it launched Aquafina nationally in 1997 and purchased Tropicana and Quaker Oats Company, where it diversified into unrelated areas.

Guerrilla Attack

Guerrilla attacks consist of small, conventional or unconventional sporadic attacks, which may include selective price cuts, intense promotion or occasional legal action to harass the opponent and attempt to secure footholds. This attack can prove to be expensive but must be backed by a strong complementary attack to beat the opponent.

Example—When Coca-Cola was the official partner of the World Cup, Pepsi counterattacked it by using the punch line “Nothing official about it.” This led to legal action by Coca-Cola.

Market Follower Strategies

Cloner

The cloner copies the leader’s products, name and packaging with slight variations. Technology companies are often accused of being cloners.

For example, Ralston Foods, owned by ConAgra, sells imitations of name-brand cereals in look-alike boxes as part of its “Value + Brands” platform.

Imitator

The imitator copies some of the leader’s ideas but differentiates on some fronts, such as packaging, advertising, location, and pricing. Here, generally, the leader does not mind the imitator as long as the imitator is not launching an aggressive attack.

Example – Telepizza chain by Fernandez Pujals looks like Domino’s idea to Spain and is now the market leader.

Adapter

The adapter improves the leader’s product, but the basic value proposition remains similar. The adapter starts by tapping different markets but has often been seen developing into a strong challenger.

For example, tech companies like Dell and Sony adapt and launch new products, making improvements to competitors’ products continuously.

Counterfeiter

A duplicate of the leader’s product is made and sold in the black market through disreputable dealers. This can be contrasted with the other strategies as this is the only illegal follower strategy where the culprit can be penalized.

Apple and other luxury brands have been plagued with this problem for a long time, especially in Asia.

Market Nicher Strategies

Single Niching

Single Niching is where the company is targeting a particular niche market and is sticking to that niche market by offering a high-quality product. A premium can generally be charged in exchange, but a disadvantage is that the niche may dry up or get attacked. The company is then stuck with highly specialized resources with limited alternative uses.

Multiple Niching

In multiple niching, the company focuses on two or more niche markets. This increases the company’s chances of survival because the risk is diversified, and the specialized resources may have alternative uses.

Example—BMW can be seen as a company making carefully crafted automobiles for high-end customers. This is called serving a single niche market. BMW also started making high-quality and high-end bikes, which can be seen as a strategy to diversify risk by following multiple niching strategies.

Bottom Line?

So, as we can see companies are increasingly adopting strategies to address competition according to their market position. There are examples of numerous companies that have lost their presence in the market because they are unable to face competition and change according to the times. This further increases the need for companies to know how and when to react appropriately. What we can safely say is that the relevance of these strategies is increasing day by day.

For a company with a big portfolio, it’s important to assess its product lines regularly to see which product is profitable, which is making losses, and which ones need some work. This practice helps the company to allocate its resources accordingly in order to function more efficiently.

While many practices and tools are available to the company to accomplish this mission, the BCG matrix, developed by the Boston Consulting Group, is considered a gold standard for finding the cash cows, the stars, the question marks, and the dogs.

But what is the BCG matrix, and what do these terms mean?

What Is BCG Matrix?

BCG matrix (also called Growth-Share Matrix) is a portfolio planning model used to analyse the products in the business’s portfolio according to their growth and relative market share.

The model is based on the observation that a company’s business units can be classified into four categories:

• Cash Cows
• Stars
• Question Marks
• Dogs

It is based on the combination of market growth and market share relative to the next best competitor.

Stars

High Growth, High Market Share

Star units are leaders in the category. These products have –

• A significant market share, hence they bring the most cash to the business.
• A high growth potential that can be used to increase further cash inflow.

With time, when the market matures, these stars become cash cows that hold huge market shares in a low-growth market. Such cows are milked to fund other innovative products to develop new stars.

Cash Cows

Low Growth, High Market Share

Cash cows are products with significant ROI but operating in a matured market which lacks innovation and growth. These products generate more cash than it consumes. 

Usually, these products finance other activities in progress (including stars and question marks).

Dogs

Low Growth, Low Market Share

Dogs hold a low market share and operate in a market with a low growth rate. Neither do they generate cash, nor do they require huge cash. In general, they are not worth investing in because they generate low or negative cash returns and may require large sums of money to support. Due to low market share, these products face cost disadvantages.

Question Marks

High Growth, Low Market Share

Question marks have high growth potential but a low market share which makes their future potential to be doubtful.

Since the growth rate is high here, with the right strategies and investments, they can become cash cows and ultimately stars. But they have a low market share so wrong investments can downgrade them to Dogs even after lots of investment.

A perfect example to demonstrate the BCG matrix could be the BCG matrix of Pepsico. The company has perfected its product mix over the years according to what’s working and what’s not.

Here are the four quadrants of Pepsico’s growth-share matrix:

• Cash Cows – With a US market share of 58.8%, Frito Lay is the biggest cash cow for Pepsico.
• Stars – Even though Pepsi’s share in the market has been reduced to 8.4%, it’s still the star for Pepsico because of its brand equity. Other stars are Aquafina (the biggest selling mineral water brand in the USA), Tropicana, Gatorade, and Mountain Dew.
• Question Marks – Since it’s a mystery whether the diet food and soda industry will boom in the future and will Pepsico’s products will find their place or not, Diet Pepsi, Pepsi Max, Quaker, etc. fall in the question marks section of the Pepsico’s BCG matrix.
• Dogs – As of now, there isn’t any product line that falls in the dogs section of Pepsico’s BCG matrix. However, seasonal and experimental products like Pepsi Real Sugar, and Mtn Merry Mash-up can be inserted in this section.

How To Make A BCG matrix?

So far, we know products are classified into four types. Now we will see on what basis and how that classification is done.

We shall understand the five processes of making a BCG matrix better by making one for L’Oréal in the following sections.

Step 1: Choose the product

BCG matrix can be used to analyse Business Units, separate brands, products or a firm as a unit itself. The choice of the unit impacts the whole analysis. Therefore, defining the unit is necessary.

Step 2: Define the market

An incorrectly defined market can lead to a poor classification of products. For example, if we would analyse Daimler’s Mercedes-Benz car brand in the passenger vehicle market, it would end up as a dog (it holds less than 20% relative market share), but it would be a cash cow in the luxury car market. Therefore, defining the market accurately is an important prerequisite for better understanding the portfolio position.

Step 3: Calculate the relative market share

Market share is the percentage of your company’s total market that is being catered to, measured either in revenue terms or unit volume terms.

We use Relative Market Share in a BCG matrix, comparing our product sales with the leading rival’s sales for the same product.

Relative Market Share =  Product’s sales this year/Leading rival’s sales this year

For example, if your competitor’s market share in the automobile industry was 25% and your firm’s brand market share was 10% in the same year, your relative market share would be only 0.4. Relative market share is given on the x-axis.

Step 4: Find out the market growth rate

The industry growth rate can be easily found through free online sources. It can also be calculated by determining the average revenue growth of the leading firms. The market growth rate is measured in percentage terms.

Market growth rate is usually given by: (Product’s sales this year – Product’s sales last year)/Product’s sales last year

Markets with high growth are ones where the total market share available is expanding, so there are a lot of opportunities for all companies to make money.

Step 5: Draw the circles on a matrix

Having calculated the above measures, now you need to just plot the brands on the matrix. The x-axis shows the relative market share, and the y-axis shows the industry growth rate. You can plot a circle for each unit/brand/product, the size of which should ideally correspond to the proportion of revenue generated by it.

BCG Matrix Example

Let us consider the BCG matrix of L’Oréal, for example.

For a simpler understanding, we look at L’Oreal’s business segments and overall growth.

Step 1: Choose the product/firm/brand

We choose the firm L’Oreal for analysis.

Step 2: Identify Market

The chosen market is the Cosmetics Industry which includes primarily- Skincare, Makeup, Haircare, Hair colour and Fragrances.

Step 3: Calculate Relative Market Share

Tabulated below:

Step 4: Find out Market Growth rate

The overall growth rate in the Cosmetics Industry (as of 2018) = 4.8%

Step 5: Draw the circles on a matrix

How To Use A BCG Matrix?

Now that we have segregated the brands under four categories, let us see what strategies the company should use for each:

Stars

Products located in this quadrant are attractive as they are located in a robust category, and these products are highly competitive in the category. There is huge potential for high revenue growth since they have a high market share and a high growth rate. They may have been expensive to develop but are worth spending money on for promotion given the long extent of their product life cycle. If successful, a star will become a cash cow when the category matures (assuming they maintain its relative market share). Yet, not all stars become cash flows. This happens mainly in continuously changing industries, where even innovative products can be displaced by new technological advancements, so a star becomes a dog instead of a cash cow.

Strategic choices: Vertical integration, horizontal integration, market penetration, market development, product development

Question Marks

Most businesses start off as question marks. These require huge investments to capture or protect market share. Question marks have the potential to become stars and eventually cash cows but can also become dogs or exit. Investments should be high for question marks otherwise may produce negative cash flow.

Like stars, Question marks too may not always succeed, and if even after a large investment, they aren’t able to gain market share, they become dogs. Hence, careful consideration is required before investing in this category.

Strategic choices: Market penetration, market development, product development, divestiture.

Cash Cows

They generate profits by investing as little cash as possible in low-cost support and need to be managed for continued profits & cash flow. These are large corporates or SBUs that are efficient in innovation and have the potential to become stars. Cash cows need to maintain a strong market position and defend their market share. The company should take advantage of sales volume and leverage the size of its operations. Cash cows can also be used to support other businesses.

Strategic choices: Product development, diversification

Dogs

Due to low market share, these products face cost disadvantages so they may generate enough cash to break even, but they are rarely, if ever, worth investing in. Unless a dog has some other strategic aim, it should be liquidated if there are fewer prospects for it to gain market share (there is a low scale of economies: so difficult to make a profit). These are situated at a declining stage of the product life cycle. Therefore, the number of dogs in the company should be minimized. A company should optimize its current operations. It should get rid of all non-value-added activities and features. It must then reposition the offering to generate positive cash flow or sell this business.

Strategic choices: Retrenchment, divestiture, liquidation

Let us now see some advantages and limitations of using the BCG Matrix:

Advantages of BCG Matrix

• It is simple and easy to understand.
• It helps you to quickly and simply screen the opportunities open to you and helps you think about how you can make the most of them.
• It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability.
• The BCG Matrix produces a framework for allocating resources among different products and makes it possible to compare the product portfolio at a glance.

Limitations of BCG Matrix

• BCG Matrix uses only two dimensions, relative market share and market growth rate. These are not the only indicators of profitability, attractiveness or success.
• It neglects the effects of synergy between brands.
• Businesses with a low market share can be profitable too.
• High market share does not always lead to high profits since a high cost goes into getting a high market share.
• At times, dogs may help the business or other products gain a competitive advantage.
• The model neglects small competitors that have fast-growing market shares.

Go On, Tell Us What You Think!

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Going green is becoming a profitable business strategy seeing the environmental scenario today. Green business practices not only open a new market of environment lovers, but also enjoy a favourable public sentiment among existing customers, and supportive government policies to help the company grow more.

According to a report by Nielsen, 66% of global consumers say they’re willing to pay more for sustainable brands. This, even though is good news, has led to the creation of an atmosphere of suspicion among the customers as according to a report by  TerraChoice Environmental Marketing, 98% of green-labelled products are actually greenwashed.

With statistics so astounding, you might be curious as to what is greenwashing as why should you know about it?

What Is Greenwashing?

Greenwashing (also called green sheen) refers to the act of portraying an organization’s product or services as environmentally friendly only for the sake of marketing. In truth, the product or service doesn’t have or hardly has any environmental benefits.

In fact, they may be operating in damaging ways to the environment while making the opposite claim.

An example of greenwashing is the American multinational oil and gas corporation ExxonMobil indicating they were reducing greenhouse gas emissions while they were actually increasing.

There are basically two types of greenwashing:

1. A company which claims credit for an existing production method as if they were influenced by an eco-friendly directive. For example, a company may eliminate the use of shrink wraps for packaging to cut costs but portray it as a green initiative.
2. A company might lie about the eco-friendliness of a product by using phrases such as “Best in class ecology”, packages showing green fields and flowers, certifications from ecomaniacs This is a more extreme form of greenwashing.

Types Of Greenwashing

Greenwashing can be categorized into several types, 5 of the most prominent types being –

1. Environmental Imageries

Using images of leaves, animals, green packaging, etc are all ways of classic greenwashing. In truth, genuinely eco-friendly products generally use simpler images and plain packaging.

2. Misleading labels

Certain products are labelled “Certified”, “100% organic”, etc. without any supportive information to prove the same. There is a good chance that these labels are self-created and self-declared.

3. Hidden trade-offs

Corporations can put up an act of being environmentally friendly and sustainable but have a very non-environmental friendly trade-off. An example is when clothing companies use “natural” or “recycled” materials while the clothing is actually developed through exploitative conditions. Genuine companies would definitely provide more information on energy, water conditions, greenhouse gas emissions, etc.

4. Irrelevant Claims

Sometimes, you might come across labels that say they are free of certain chemicals. The substance might actually be banned by the law and is irrelevant to advertise as going green. In addition, you might have also come across labels that say, “not tested on animals”. This becomes irrelevant in places like China where testing on animals is required by law.

5. Lesser of two evils

This refers to when the company’s claim is true within the product category, but a greater risk or environmental impact prevails. An example is a company selling organic cigarettes.

Make sure when your own company or startup is planning on green initiatives, it has to be certified and backed up with all the necessary details. You definitely do not want to risk your company’s reputation.

Greenwashing Examples

Staying true to the promise is very rare when it comes to green products. Here are a few greenwashing examples where companies used green marketing strategies only to increase the sales but were not environmental friendly in true sense.

Volkswagen’s ‘Clean Diesel’

Volkswagen released an ad campaign to debunk the fact that diesel was bad and that it used a technology where it emitted fewer pollutants.

Later, the truth was revealed that Volkswagen rigged 11 million of its diesel cars with “defeat devices,” or technology designed to cheat emissions tests and that the vehicles emitted pollutants at levels up to 40 times the U.S. limit.

The federal agencies made the company to pay $14.7 billion to settle the allegations of cheating emissions tests and deceptive advertising.

EasyJet Less CO2

In a nation-wide press advertisement in 2008, EasyJet claimed that its plane emitted 22% less carbon dioxide than other planes on the same route.

This claim was debunked by the Advertising Standards Agency as the company did not make it clear that the figure was related to emissions per passenger and the airline was able to reduce the emission simply because of the fact that EasyJet planes could carry more passengers than traditional airlines.

Importance Of Addressing Greenwashing

Although greenwashing has been around for many years, the process has escalated alarmingly in recent years. This is because of the growing consumer demand for green products.

Being a consumer in search for quality products, you should be careful about the “Green Lies” that are sold in the name of “Green Goods”. The price for natural or organic labelled foodstuff is much higher than those without such labels hoping that the companies are truthful.

Critics agree that greenwashing is, in fact, harmful to public health as well as environment. In 2008, the Malaysia Palm Oil Council had a TV commercial which portraying itself as quite eco-friendly. However, critics soon pointed out that palm oil plantations are closely linked to rainforest species extinction, habitat loss, pollution, and other effects. The ad was then identified as a violation of advertising standards.

And with the buzz about greenwashing so common, company owners have to be careful of presenting baseless claims of being environmentally friendly. It only takes one complaint to the Advertising Standard Authority (ASA) to instigate an investigation against your company’s claims.

Greenwashing thus takes a toll on everyone who is involved. Customers are duped into buying products that they believed are environmentally friendly but are actually not. Once exposed, the offending businesses suffer from lower consumer confidence.

Go On, Tell Us What You Think!

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In this competitive world with innumerable marketing and advertising mediums and powerful marketing campaigns, you’ve got to communicate a consistent marketing message using a 360-degree approach to strengthen your position in the market and have an impact on your prospective as well as existing customers.

Here’s a guide on integrated marketing communication to help you move forward with this approach.

What Is Integrated Marketing Communication?

Integrated Marketing Communications (IMC) is a concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear and consistent message. It aims to ensure the consistency of the message and the complementary use of media.

IMC is an integration of all marketing tools, approaches and resources within a company which maximizes impact on the consumer mind resulting in maximum profit at minimum cost.

It uses several innovative ways to ensure that the customer gets the right message at the right place and right time.

IMC Tools

The eight major Integrated Marketing Communication tools are as follows:-

Advertising

Advertising refers to any paid form of non-personal promotion of products or services by an identified sponsor. The various media used are print (newspapers and magazines), broadcast (radio and television), network (satellite, wireless and telephone), electronic (web page, audio and videotape) and display (billboards, signs and posters).

The primary advantage of advertising is that it reaches geographically dispersed consumers. Consumers generally tend to believe that a heavily advertised brand must offer some ‘good value’ but at the same time, advertising proves to be an expensive form of promotion.

Sales promotion

It is a variety of short-term incentives to encourage the trial or purchase of a product or service. It may include consumer promotions – focused on the consumer – such as a distribution of free samples, coupons, offers on purchase of higher quantity, discounts and premiums or trade promotions – focused on retailers – such as display and merchandising allowances, volume discounts, pay for performance incentives and incentives to salespeople.

Sales promotion helps to draw the attention of the consumers and offers an invitation to engage in a transaction by giving various types of incentives.

Personal Selling

Face-To-Face interaction with one or more buyers for the purpose of making presentations, answering questions and taking orders. This proves to be the most effective tool in the later stages of the buying process.

The advantage is that the message can be customized to the needs of the buyer and is focused on building a long-term relationship with the buyer.

Public Relations

A variety of programs directed toward improving the relationship between the organisation and the public. Advertising is a one-way communication whereas public relations is a two-way communication which can monitor feedback and adjust its message for providing maximum benefit. A common tool used here is publicity which capitalizes on the news value of the product or service so that the information can be disseminated to the news media.

Articles in the media prove to be more objective than advertisements and enjoy high credibility. Also, it has the ability to reach the hard-to-find consumers who avoid targeted communications.

Direct Marketing

Direct Marketing involves the use of mail, telephone, fax, e-mail, or internet to communicate directly with or solicit response or dialogue from specific customers or prospects. Shoppers have started relying on credit cards and online purchasing more than ever which makes it essential for marketers to approach the consumers directly thus helping them in the purchase process.

Companies have a database of contact details of consumers through which they send catalogues and other marketing material making it easier for the consumer to purchase online. The relevance of direct marketing has increased in recent years.

Events and Experiences

These are company sponsored activities and programs designed to create brand-related interactions with customers. Sponsorships improve the visibility of the company. Companies provide customers with an experience of using the product which ends up leading to a higher brand recall than competitors. These events prove to be engaging with the audience.

Social Media Marketing

The concept of social media marketing basically refers to the process of promoting businesses or websites through social media channels. Companies manage to get massive attention on such channels and can interact with consumers as they browse the internet.

New and modern communication methods are developing on these social media platforms, which are proving to be the future of promotions. They can be highly interactive and up to date with customers.

Mobile Marketing

Mobile marketing involves communicating with the consumer via a mobile device, either to send a simple marketing message, to introduce them to a new participation-based campaign or to allow them to visit a mobile website.

Mobile marketing is cheaper than traditional means for both the consumer and the marketer. It is really a streamlined version of online marketing, the use of which is increasing as time progresses. Examples are advertisements that we see on mobile applications.

Integrated Marketing Communications Examples

Go Pro

The first example of integrated marketing communications that comes to mind is GoPro. GoPro has used IMC components extensively and precisely.

GoPro has mastered using online content to catch the attention of its target audience. The company has a YouTube channel where it seeks out many videos shot with a high-quality mini action cam, including exciting, unique, and simplistically beautiful shots taken by users and by the company itself, to reach its target audience.

They have hundreds of thousands of followers and likes on Facebook, Twitter, and Instagram and have used these platforms to catch the attention of their fan base by posting short, visually stimulating videos taken with their cameras. To maximize SEO, GoPro has a contest almost every day online where entrants have the chance to win one of every product they carry and the newest camera they carry.

The company has also used publicity in its marketing efforts to reach its target audience. In the early days, they relied on word of mouth and slowly moved and heavily leveraged the online platform for its promotions.

Domino’s

Pizza restaurant chain Domino’s created the “AnyWare” campaign to help people order food more conveniently. The campaign allows customers to order pizza with a smart television, tweet, text, or smartwatch.

The idea was possible because two years prior to AnyWare, Domino’s established Pizza Profiles, which saved customers’ payment information, addresses, and an Easy Order. The Easy Order is a customer’s favourite food order, which includes elements like a preferred payment method, order type (delivery or carryout), and address or favourite store.

It very smartly used different IMC components, such as a national television campaign, press releases, and online marketing, to attract customers to its website, AnyWare.Dominos.com, where they can learn about new ways to order.

This resulted in 500,000 more visits to the site, 10.5 percent year-over-year sales growth, and Domino’s achieving its goal of having half of all orders made digitally.

These two primary examples show that IMC components, if used extensively and optimally, can greatly benefit a company’s proposition.

Bottom Line?

In the modern era of digitization, traditional tools of Integrated Marketing Communication (Advertising, Sales Promotion, Public Relations, Direct Marketing and Personal Selling) are proving to be more of a base on which the modern tools (Events and Experiences, Social Media Marketing and Mobile Marketing) are emerging. Modern tools enhance the consumer experience and the impact the messages have on the audience. Modern tools provide low-cost targeted communications with high visibility and influence.

Tools like social media, mobile, online, and i-marketing also offer the advantage of data analysis, where companies can track the reach, effectiveness, and response of messages. After analysing messages with higher consumer response rates and preferences, companies can accordingly tweak and personalize their targeted communications.

Consumers are turning more frequently to various types of social media to conduct information searches and make purchasing decisions. They are often found searching for and comparing product features online, thus making an informed decision.

Creating influence here is proving to give higher returns than ever, and 83% of marketers now place a high value on social media marketing.

It is thus safe to say that marketing communications are becoming more and more personalized with the advent of modern tools, hence paving the way for the future.

Ever seen an ad so good that it made you look for the product on the internet?

While comparing phones, what made you choose Google Pixel over Apple (or vice-a-versa)?

Excited to avail fancy offers on a new app/service?

Little do we realize, but from the moment you get to know of a brand till the time you actually buy it, companies strategically analyse your buying behaviour and try to influence you at every stage.

This is done with the help of the AIDA model. It helps break down customer journey/ behaviour into distinct parts. A brand is then able to plan marketing and advertising strategies of influencing each part so that a consumer is compelled to be engaged with the brand and ultimately buy its product.

What is AIDA?

AIDA model is a blueprint that marketing, advertising and sales functions use to target all touchpoints during a customer’s purchase journey, that is, from getting to know about the product to finally buying it.

The consumer journey is analysed by breaking it into four fundamental stages.

• Awareness
• Interest
• Desire
• Action

This is also referred to as a ‘Purchase funnel’. The number of people targeted at the Awareness stage trickles down and ultimately very few people are left who actually turn into buyers.

Also, an inter-stage movement is possible. For example, people can directly jump from Awareness to Action.

Let us now see all the stages in detail and how some brands have leveraged these to their advantage.

STAGE 1 – Awareness

The first impression can be the last impression. In the first stage, a consumer comes across the Brand. This can be through an advertisement or word-of-mouth or a kiosk displaying products and more popularly these days, through sponsored content.

Many times brands just assume that the existence of a brand will automatically be known to people, which may not always be true. Traditional ways of advertising may not create a differentiating factor for your offering, so it only makes sense to make a creative disruption to make your presence felt. Also, characteristics graphics, colour and size are highly essential in determining what will catch the audience’s sight.

Thus a brand can gain the attention of consumers through:

• Captivating ads
• Personalized messaging
• Intelligent targeting
  Example: A food delivery app targeting the youth should invest in being highly active online on social media than on print ads.

An example top of the mind- Mini Cooper!

Mini Cooper, to attract more eyes and attention, used a quirky guerilla marketing strategy of placing giant cardboard cartons with torn gift wrapping on the streets of Amsterdam.

STAGE 2 – Interest

Undoubtedly, the most crucial of the stages. If the consumer feels the product has no meaning for him or if he does not find it captivating enough, he will never reach the purchase stage. So it is important to deliver your product message in a customized and crisp way that suits the profile of the intended audience.

The highlight of the product communication should point to the consumer’s needs. This leads to the consumer going an extra step in looking up the product to see how it benefits him.

For example, let’s consider this campaign by Adidas.

Notice the caption ‘Every team needs the spark’.

Lionel Messi’s picture initially attracts the consumer, the intended audience being sports (especially football) enthusiasts. The contrasting colours of the shoe and matching caption convey that it’s a shoe advertisement. The shoe appears to be emitting sparks (representing fast performance), and the caption contains the same imagery. So the consumer gets curious and looks up what exactly does the campaign refer to and how can ‘that spark’ be added to the team. At this point, considerable interest has been generated and the consumer has most likely read up the features of the shoe.

Another good example of generating interest by a brand but in an online world is this landing page by Buffer which not only showcases the service features but also the quality validation that 80,000 businesses already use the service.

STAGE 3 – Desire

It is not enough to generate interest. A keen liking for how a brand presents itself may be highly appreciated, but may not necessarily convert in sales.

Interest and Desire can be achieved simultaneously. So immediately after interest is generated, it is important to convey to the audience why they need it. If a customer might not actually NEED that product, the brand can try to create the WANT for it.

Usually, the desire stage is achieved during the time a consumer is comparing the product with other competitors’ offerings. In that case, the brand needs to prominently highlight its outstanding features which the consumer won’t get in other products.

For example, Wendy’s “Where’s the beef” campaign, highlights the fact that their hamburgers contain more beef than those of the competitors.

Another example is how L’Oreal does it.

It caters to consumers’ concerns regarding a product and offers advice for the same. It curates a lot of content on skincare and beauty tips. Once a person reads up a haircare routine, for example, she will be more comfortable following that routine if she has L’Oreal products since she would know exactly how much to use and how to use. L’oreal also utilizes that as an opportunity to create a L’Oreal ecosystem by promoting its other brands within the same space, leading to cross-selling opportunities.

STAGE 4 – Action

Finally, when the consumer has had a positive disposition towards the brand, he/she will be willing to try it or buy it. At this stage, schemes like early-bird discounts, free trials, one-on-one offers, referral systems, etc. can give that one final push to the consumer to go ahead and buy it.

For example, Amazon encourages purchases through its ‘EMI options’. That enables consumers to buy durables and gadgets even when they’re running on a tight budget.

AIDA Model Example

Having understood the stages, let us understand it better through an AIDA model for Netflix in India. It is a big task for Netflix to appeal to and convert Indian users who are accustomed to free content. Here’s what Netflix do to attract them –

STAGE 1: Creating Awareness

Netflix uses some common advertising mediums to inform the users about the offering. The mediums are –

• Print advertisements
• Youtube Advertisements
• Display Advertisements (Adwords)
• Partnerships with service providers like Airtel

It advertises some really famous shows like Narcos and some Indian Netflix Originals like Sacred Games which are exclusive on Netflix.

STAGE 2: Generating Interest

Once the users are aware and visit Netflix’s landing pages, they are offered a one-month free trial to explore experience all the shows and features on Netflix.

STAGE 3: Securing Desire

As the viewers experience some features, they get used to the seamless viewing experience. At this point,  the following additional features create the desire to purchase the subscription plans –

• Netflix Exclusive movies, shows, and documentaries.
• High-resolution videos
• Support for every device (watch anywhere you go)
• Multiple TV series and movies from Hollywood, Bollywood, and other regional industries.
• Multiple profiles under one account
• Download and watch offline option
• No ads while streaming videos
• Personalized recommendations of TV shows and movies, based on viewing patterns
• Multi-screen viewing
• Continue watching a video from where you left
• Support for low-speed internet devices, etc.

STAGE 4: Enabling Action

Once the user is hooked to the offering, Netflix converts him into a real customer who pays. This is done by offering a variety of subscription plans and an option to stop the subscription at any time.

Developments in the AIDA Model

The AIDA model has been modified into many variants, which include the role of new digital media and post-purchase behaviour. However, the basic sequence remains Cognition- Affect- Behaviour.

Some of these variants are:

1. Basic AIDA Model: Awareness→ Interest→ Desire→ Action
2. Lavidge et al’s Hierarchy of Effects: Awareness→ Knowledge→ Liking→ Preference→ Conviction→ Purchase
3. Modified AIDA Model: Awareness→ Interest→ Conviction →Desire→ Action (purchase or consumption)
4. AIDAS Model: Attention → Interest → Desire → Action → Satisfaction

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