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Marketing Strategies or Business Ethics?January 18th, 2012  In this week’s Business Surgery, Stephanie Teow comments on the recent struggles of supermarket giant Tesco over the Christmas period According to an article sourced from the Daily Mail:
Being a shopaholic, articles about retailers always catch my attention. Not only because I am curious to know what sales and promotions are currently being offered, but also, in a way, I think that retailers have a significant impact on our daily lives. In the past few years, repeated reports have been discussing and criticising the disappointing marketing strategies and poor customer service performances within the retail sector. So, when I was browsing through the news recently, it wasn’t a big surprise at all for me to read another negative report on a giant UK retailer:
This is actually nothing new to me, because for the past few years I have seldom taken an interest in these names anymore, not just because of what I felt to be their unattractive prices and products, but also, from my point of view, the advertising and the promotions that they are offering are just not customer focused; in a way, not convincing.
It is self-explanatory that the total sales increment from Sainsbury’s and Morrisons of 2.8 per cent have resulted from that lost by Tesco. It must be shocking for a business to realise that its losses are feeding its rivals. But what shocked me the most are the decisions that have been made at such a critical period of the year by the pioneer of the sector. It’s easy to be smart after the event, trying to lay the blame either to some person or some decision which has been made, but understanding the root cause will always be the most effective solution. Most promotional tools and marketing strategies that a business (in this case the retailer) implements are done to create a positive impact to the business operation and growth. For example, ones most commonly seen in the stores are: “Buy 3 for the price of 2” and “Buy the second one half price”. This is an excellent idea to increase the customer buying potential and to ensure the products are all sold before the next manufacturing and delivery deadlines are up, to avoid over-stocking. From the customer point of view, we only see this happening when the product expiry date is approaching. But do we really need more than 1 item in such a short period, even if the second item is slightly cheaper? Hence the questions: does this strategy really work? How many items are sold in the end? Will the customer fall into the same ‘trap’ again? Or would it be more effective to simply reduce the price of the product by 1/3 from the start? Another example which has been discussed in the article:
Example: Tesco Value Unsalted Butter – August 23: £1.10; August 30: £1.19; September 26: £1.10” As a marketing tool, the retailer will show a price tag with a reduction from the latter 2 dates. In a way, this is a brilliant marketing idea. However, if we are regular shoppers familiar with prices, what will we make of this? A penny saved is a penny earned, but in business this is not always applicable. Not only is focusing on the customer’s needs essential, but at all times we need to stand in the customer’s shoes to understand what kind of service, products and treatment they need. While many customers are happy – and indeed prefer – to be regulars, they expect to be treated well. Businesses should therefore be wary: few businesses are completely unique (i.e. irreplaceable) and once a customer has switched away, they have switched away. £5million is a big price to pay for a few poor decisions made in the festive season which are not customer-focused enough. Is there a role that market research can play to minimise the lost revenue or even to turn around the situation? I think the answer absolutely is yes! The Growth of Market Research in RussiaJanuary 17th, 2012  Curious as ever about how the market research industry is faring around the world, we do of course have a particular interest in developments in Russia, thanks to our Moscow office. It’s pleasing to hear, therefore, that according to the latest estimates from OIROM, the Russian Association for Market and Opinion Research, the country’s market research turnover grew by 16% in 2011 to reach approximately $US 370m. Turnover grew by 20% in 2010, demonstrating the increasing importance attached to Russian market research. If you are interested in carrying out market research in Russia, please email moscow@b2binternational.com or read our white paper on the subject to find out more. Research Shows The Impact Teachers Have On ALL Our LivesJanuary 13th, 2012  A recent study conducted by Harvard University shows the importance of having a good teacher. So much so that the impact can be tracked throughout a student’s life not only from their chances of getting pregnant while they are teenagers but also to the likelihood of them going to University. The study, that was reported in The New York Times, also showed that the quality of your teacher can also affect your future earnings potential as an adult in later life. One economist stated that “by replacing a poor teacher with an average one would raise a single classroom’s lifetime earnings by more than $250,000”. Certainly food for thought! To read more about how B2B International can help your educational organisation provide comprehensive answers to many questions and challenges faced either through student satisfaction surveys, staff satisfaction surveys, brand surveys, facility evaluation research or assessment of the impact of central government changes in education then visit our website. Biggest Chinese BrandsJanuary 11th, 2012  The recently published 2012 BrandZ report on the Top 50 Most Valuable Chinese Brands found that the value of the top 50 Chinese brands has grown by 16 percent to US$325 billion, representing more than five percent of the Chinese economy. Combining both financial data and opinion gathered from interviews with over 35,000 Chinese consumers, the survey also indicated China’s shift from maker to innovator, the phenomenal rise of online and FMCG brands, and an increasingly brand savvy group of middle class consumers. The list includes China Mobile, the world’s largest telecommunications operator; the four major Chinese banks; and a number of consumer brands, such as Mengniu, Sunning and Lenovo. (Find out more by clicking here)
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Although there remains considerable debate as to which of these brands, if any, can become established as global brands, many Western competitors are beginning to realise the long-term threat from their new Asian competitors. In the face of stagnant economic growth in Europe and the US, and the lingering Euro-zone crisis, it is the Asia-Pacific region where many organizations are looking to try and substitute declining revenues elsewhere. The increasing power of Chinese brands within the Asia-Pacific region, not to mention other rapidly developing regions such as Africa, raises several questions for Western businesses intent on growing market share in new international markets: • How can Western brands compete effectively with strong Chinese brands in local Chinese markets? • Should premium-, mid- or low-end brand positioning be adopted in developing markets such as China? • How should Western brand propositions be adopted for the local Asian market? • What measures should be taken to defend brand position and market share in home markets from Chinese competition? • Which Chinese brands represent the most significant competitive threat? • How can social media in China be exploited to build brand presence? As Western corporations tackle these important issues, it is clear that the challenge of Chinese brands is only set to grow in the future. However, while this rise represents a challenge, many Western firms are also looking to take advantage of the opportunities presented by Chinese brands. As Chinese brands aspire to compete more effectively with their global competitors on the international stage, the demand for high quality suppliers, product components, and consultancy services has never been greater. While marketing to Chinese businesses brings its own set of particular challenges for the uninitiated, over the past few years Western firms have begun adapting to China’s unique environment and have made inroads selling to some of China’s largest firms. As Chinese brands continue on their relentless march forward, it will be those firms that are able to grasp the characteristics and requirements of Chinese organizations that are likely to see the greatest success in the long term. Tweet TreatsJanuary 9th, 2012  Well, we’re now in 2012 and are asking ourselves, as we do at the start of each New Year, what will be the next big thing for B2B over the coming twelve months? A little bird told me a secret…apparently social media is quite a hit at present, and there’s this website out there called Twitter which one or two people and companies are using to tell others all about what they’re up to. For those of you who are Tweeting pros already, are you keeping up to date with B2B International on Twitter? If not, what are you waiting for? Follow us now @B2B_Insight. It’s all the rage, you know!
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