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1
GLOBAL MARKETING TRENDS GLOBAL MARKETING TRENDS FOR CONSUMER PRODUCTSFOR CONSUMER PRODUCTS
Kostas Dermoussis
2
The following three (3) areas are covered:
Marketing Practices
Consumer Behaviour
Retailing
GLOBAL MARKETING TRENDSGLOBAL MARKETING TRENDS
3
A.A. MARKETING PRACTICESMARKETING PRACTICES
REAL PRODUCT DIFFERENTIATIONS ARE BECOMING MORE RAREREAL PRODUCT DIFFERENTIATIONS ARE BECOMING MORE RAREREAL PRODUCT DIFFERENTIATIONS ARE BECOMING MORE RAREREAL PRODUCT DIFFERENTIATIONS ARE BECOMING MORE RARE
Companies struggle for launching NEW products which will be different
from the existing ones
Consumers’ perceptions for what a new product is, do not coincide with
companies’ marketing strategies and policies
Big supermarket chains “encourage” companies for new differentiated
products
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MARKETING EXPENDITURES WILL CONTINUE TO RISEMARKETING EXPENDITURES WILL CONTINUE TO RISEMARKETING EXPENDITURES WILL CONTINUE TO RISEMARKETING EXPENDITURES WILL CONTINUE TO RISE
Regardless of sales increases, marketing budgets will be higher:
due to competition (impact on advertising and promotion spending)
due to complexity of distribution channels and the increasing requirements
of retailers for shorter delivery times and more regular shipments (impact
on logistics)
A.A. MARKETING PRACTICESMARKETING PRACTICES
5
DRAMATIC INCREASE OF OUTSOURCINGDRAMATIC INCREASE OF OUTSOURCINGDRAMATIC INCREASE OF OUTSOURCINGDRAMATIC INCREASE OF OUTSOURCING
During the last 2-3 years, we have experienced a considerable increase of outsourcing in marketing and sales
For the next 3-5 years, the expenditures related to outsourcing will be dramatically increased in the following areas:
Marketing communications
Logistics
Marketing and sales strategy & planning
Marketing and sales training
Outsourcing will be a suitable strategy for large and SME companies
Main reason for outsourcing: Cost reduction and “fresh”/ more creative approach by a third party
A.A. MARKETING PRACTICESMARKETING PRACTICES
6
EXCEPTIONAL CUSTOMER SERVICE WILL BE A KEY STRATEGYEXCEPTIONAL CUSTOMER SERVICE WILL BE A KEY STRATEGYEXCEPTIONAL CUSTOMER SERVICE WILL BE A KEY STRATEGYEXCEPTIONAL CUSTOMER SERVICE WILL BE A KEY STRATEGY
Customers recognize excellent service as a unique differentiating factor
One unsatisfied customer talks about his/her negative experience to seven people
Mass advertising and promotion activities can not easily reverse the situation
We are going to see:
A bigger number of customer service departments
Friendlier call centres
Service oriented and customer-focused employees
Better trained people in customer service
An increasing number of customer satisfaction measurements
A.A. MARKETING PRACTICESMARKETING PRACTICES
7
MOVING FROM CALL CENTRES TO CONTACT CENTRESMOVING FROM CALL CENTRES TO CONTACT CENTRESMOVING FROM CALL CENTRES TO CONTACT CENTRESMOVING FROM CALL CENTRES TO CONTACT CENTRES
Today, the main purpose of call centres is selling products/services
During the next years, their image will be “redefined”. Their new name will be “contact centres” and apart from sales, there will be greater emphasis on high quality service
Main characteristics
Handling of complaints
Customer satisfaction measurements
Information to consumers
Profit centres
An integral part of the marketing and service strategy
A.A. MARKETING PRACTICESMARKETING PRACTICES
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HUGE INCREASE OF CALL CENTRES WORLDWIDEHUGE INCREASE OF CALL CENTRES WORLDWIDEHUGE INCREASE OF CALL CENTRES WORLDWIDEHUGE INCREASE OF CALL CENTRES WORLDWIDE
50% increase in Europe, Middle East and Africa, up to 2008
According to research in 26 countries, the number of call centres will exceed 45,000, employing more than 2,6 million people
Threat: Many call centres will operate in countries with low labour cost and low taxation
Call centres will be specialized, covering new markets: hospitals, clinics, hotels, restaurants, department stores, public services.
A.A. MARKETING PRACTICESMARKETING PRACTICES
9
COMPANIES FOCUSING ON THEIR MOST PROFITABLE BRANDSCOMPANIES FOCUSING ON THEIR MOST PROFITABLE BRANDSCOMPANIES FOCUSING ON THEIR MOST PROFITABLE BRANDSCOMPANIES FOCUSING ON THEIR MOST PROFITABLE BRANDS
Product portfolios are shrinking, especially in multinationals
Products with lower brand awareness and brand purchase will be eliminated
Concentration in mega-brands with big market shares and higher profit margins Advertising investments in mega brands
Risks
Consumers acceptance of global brands is not the same everywhere
Consumers may switch their brand which has been abolished with a competitive one
A new war in supermarkets for shelf dominance
A.A. MARKETING PRACTICESMARKETING PRACTICES
10
INCREASING SCEPTICISM OVER ADVERTISING MESSAGESINCREASING SCEPTICISM OVER ADVERTISING MESSAGESINCREASING SCEPTICISM OVER ADVERTISING MESSAGESINCREASING SCEPTICISM OVER ADVERTISING MESSAGES
Implications
Companies will increase the frequency of social marketing and cause related marketing programmes, decreasing budgets of the traditional commercial advertising
Too many advertisements - clutter effect
Advertising promises are not taken into consideration by consumers resulted to a lower degree of brand loyalty
Research shows that viewers do almost anything during a commercial break except watch the TV
A.A. MARKETING PRACTICESMARKETING PRACTICES
11
SALES PROMOTION IS BECOMING A STRATEGIC MARKETING TOOLSALES PROMOTION IS BECOMING A STRATEGIC MARKETING TOOLSALES PROMOTION IS BECOMING A STRATEGIC MARKETING TOOLSALES PROMOTION IS BECOMING A STRATEGIC MARKETING TOOL
As a result of advertising clutter, an increasing number of marketing
people have started to use sales promotion as a main element of
their marketing strategy
Sales promotion objectives:
Increase sales - short and medium term
Increase brand loyalty - long term
A.A. MARKETING PRACTICESMARKETING PRACTICES
12
CO-ADVERTISING AND JOINT PROMOTIONS ARE BECOMING CO-ADVERTISING AND JOINT PROMOTIONS ARE BECOMING COMMON PRACTICECOMMON PRACTICE
CO-ADVERTISING AND JOINT PROMOTIONS ARE BECOMING CO-ADVERTISING AND JOINT PROMOTIONS ARE BECOMING COMMON PRACTICECOMMON PRACTICE
We are going to see:
Joint efforts between two or more brands of the same company or between different companies
Joint efforts between retailers and their suppliers
Why?
Lower advertising budgets
Marketing synergies with complimentary or non-competitive products
A.A. MARKETING PRACTICESMARKETING PRACTICES
13
LOYALTY MARKETING CAMPAIGNS WILL BE ENRICHEDLOYALTY MARKETING CAMPAIGNS WILL BE ENRICHEDLOYALTY MARKETING CAMPAIGNS WILL BE ENRICHEDLOYALTY MARKETING CAMPAIGNS WILL BE ENRICHED
Although the number of loyalty programmes are increasing,
consumers require more creative and innovative approaches
Consumers have experienced loyalty cards, air miles, etc, but now
they want more in terms of quantity and quality
Implications
Companies will have to use new techniques which will require deeper consumers’ involvement
Loyalty campaigns will be an integral part of the marketing communication strategy.
A.A. MARKETING PRACTICESMARKETING PRACTICES
14
MYSTERY SHOPPING COMES OUT OF THE SHADOWSMYSTERY SHOPPING COMES OUT OF THE SHADOWSMYSTERY SHOPPING COMES OUT OF THE SHADOWSMYSTERY SHOPPING COMES OUT OF THE SHADOWS
Mystery shopping is more than “spying” on the staff
Companies focus on improving the service offered to consumers
by their staff
Mystery shopping is used as part of the training process which is
related to personal selling, negotiation skills and customer service
Companies receive accurate information, regularly, about the
shopping experience of their customers at the time of purchase
It is going to be used as a motivational tool for people
Spending on mystery shopping will be steadily increasing
A.A. MARKETING PRACTICESMARKETING PRACTICES
15
USE OF ON-LINE SURVEYS TO INCREASEUSE OF ON-LINE SURVEYS TO INCREASEUSE OF ON-LINE SURVEYS TO INCREASEUSE OF ON-LINE SURVEYS TO INCREASE
The on-line market research sector in Europe and N. America is set
to rise, according to a recent survey
More than 80% of interviewed managers expect that on-line research
will be booming since it is a cheap and fast way of collecting data
A.A. MARKETING PRACTICESMARKETING PRACTICES
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CRISIS IN BUSINESS DECISION-MAKING RELATED TO MARKETINGCRISIS IN BUSINESS DECISION-MAKING RELATED TO MARKETINGCRISIS IN BUSINESS DECISION-MAKING RELATED TO MARKETINGCRISIS IN BUSINESS DECISION-MAKING RELATED TO MARKETING
Two surveys - in Europe and USA - reveal the continuing trends of marketing executives making more complex decisions in less time, flooded by data
The main problem will be the volume of data which will double and triple compared to previous years, making decisions more complex
SOLUTION
Development of CRM and MIS from the company’s centralized data warehouse which will act as information provider to the marketing and sales departments
A.A. MARKETING PRACTICESMARKETING PRACTICES
17
B.B. CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
AGE COMPLEXITYAGE COMPLEXITYAGE COMPLEXITYAGE COMPLEXITY
Children are becoming teenagers before reaching their teens. Today, a
12 year-old kid is more likely think he/she is 17.
So, manufacturers are developing children products with “cool teen”
attributes
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INDIVIDUALISMINDIVIDUALISMINDIVIDUALISMINDIVIDUALISM
Consumers want even more personalization. Therefore, we are talking
about one-to-one marketing instead of mass marketing
B.B. CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
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SENSORY EXPERIENCESSENSORY EXPERIENCESSENSORY EXPERIENCESSENSORY EXPERIENCES
We are becoming more tolerant of risk and change
We are actively seeking out more intense experiences. Hence, the
increase in extreme sports and short and busy weekend breaks
Consumers are more prepared to experiment with new products,
discover ethnic foods and try new tastes
B.B. CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
20
HEALTHHEALTHHEALTHHEALTH
Three-quarters of Europeans are now more concerned about their
health and well being
People will put greater value on healthiness such that sales of healthy,
de-stressing and self-medication products will be booming
B.B. CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
21
SUPERMARKET SHOPPING WILL NOT BE A “DECLARATION” OF SUPERMARKET SHOPPING WILL NOT BE A “DECLARATION” OF LIFE STYLE ANYMORELIFE STYLE ANYMORE
SUPERMARKET SHOPPING WILL NOT BE A “DECLARATION” OF SUPERMARKET SHOPPING WILL NOT BE A “DECLARATION” OF LIFE STYLE ANYMORELIFE STYLE ANYMORE
During the past years, consumers were buying products from
supermarkets based on their brand image. “Prestige” as a brand value
was taken seriously by consumers
This has started to change and in the next few years, consumers will
express mainly their need for self-esteem and recognition, by buying
products and services which have higher prices, such as cars, holiday
packages, etc.
B.B. CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
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PRETERMINED PURCHASES AND HIGHER FREQUENCY OF PRETERMINED PURCHASES AND HIGHER FREQUENCY OF SHOPPING VISITSSHOPPING VISITS
PRETERMINED PURCHASES AND HIGHER FREQUENCY OF PRETERMINED PURCHASES AND HIGHER FREQUENCY OF SHOPPING VISITSSHOPPING VISITS
An increasing number of consumers visit supermarkets having a
predetermined shopping list. The picture was not the same 5 years ago
Reduction of consumers’ disposable income
Consumers prefer to visit supermarkets more often (European average:
twice a week), spending less each time
B.B. CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
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CRITERIA FOR PURCHASING A NEW PRODUCT IN THE CRITERIA FOR PURCHASING A NEW PRODUCT IN THE SUPERMARKETSUPERMARKET
CRITERIA FOR PURCHASING A NEW PRODUCT IN THE CRITERIA FOR PURCHASING A NEW PRODUCT IN THE SUPERMARKETSUPERMARKET
The type of sales promotion activity is one of the most important criteria
for consumers to buy a new brand for the first time
Although, consumers act less and less impulsively, certain sales
promotion techniques will help new brands to achieve higher rates
of brand trial.
Consumers prefer the following types of promotions for new products:
• Free samples
• Coupons
• Displays/ Point-of-purchase (POP) material
• On-pack promotions
B.B. CONSUMER BEHAVIOURCONSUMER BEHAVIOUR
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C.C. RETAILINGRETAILING
INCREASING POWER OF LARGE SUPERMARKET CHAINSINCREASING POWER OF LARGE SUPERMARKET CHAINSINCREASING POWER OF LARGE SUPERMARKET CHAINSINCREASING POWER OF LARGE SUPERMARKET CHAINS
Quick expansion of discounters
Strong competition between retailers
Price war and “squeezed” profit margins
Impact on suppliers
• Higher listing fees
• Lower prices
• Bigger quantitative discounts and year-end-discounts
25
CONTINUING EXPANSION OF DISCOUNTERS IN EUROPECONTINUING EXPANSION OF DISCOUNTERS IN EUROPECONTINUING EXPANSION OF DISCOUNTERS IN EUROPECONTINUING EXPANSION OF DISCOUNTERS IN EUROPE
WHY?
Consumers are becoming more price-conscious
They are less brand loyal
They are less interested in brand image
Main characteristics of discounters
• Smaller outlets
• Less staff
• Limited product categories/ product lines
• Private labels
C.C. RETAILINGRETAILING
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DOMINANCE OF PRIVATE LABELS ?DOMINANCE OF PRIVATE LABELS ?DOMINANCE OF PRIVATE LABELS ?DOMINANCE OF PRIVATE LABELS ?
NO!! Brands will prevail
However:
Private labels are gaining consumers’ acceptance. They are not considered as “inferior” products
They are cheaper or much cheaper compared to advertised brands
Private labels will make marketing people’s life more difficult since they have to develop and pursue strategies aiming at:
• new product development
• continuous advertising and promotion support
• focus on merchandising stronger presence in supermarkets
• quality improvements
C.C. RETAILINGRETAILING
27
SOURCESSOURCES
British Market Research Association
Advertising Research Foundation
American Marketing Association
Association of Relationship Marketing
Business Marketing Association
Datamonitor
Euromonitor
Forrester Research
Federation of European Direct & Indirect Marketing
Institute of Sales Promotion
Marketing Research Association
Marketing Society
Marketing Week
Point of Purchase Advertising Institute
Product Development & Management Association
Sales Marketing Network
World Advertising Research Center
Goldman Sachs Research
A.C.Nielsen
M&M Eurodata
UBS