Common sense marketing

Mahmudur Rahman

Marketing graduates emerging from hallowed institutions often come down to earth with a bump when they confront the vast chasm that exists between the theory of what they have read and the reality of what they discover in business. Too often, one-size fits all theories attempted in markets backfire and regrettably, the mistakes are not learnt from.

Marketing always has been and will continue to be a common sense approach towards understanding the consumer and meeting their needs and aspirations. Unfortunately, in trying to "understand", complex theories and processes are employed at the end of which much of the purpose is lost. It is a proposition that is given credence by the countless small businesses that flourish without any sophisticated marketing endeavours. Small roadside restaurants that do not promise transportation into a surreal world are doing well; lesser known plastic goods companies are making money without promising lifestyles; cheaper candy manufacturers have sale they are proud of.

They don't require price reductions or sales pitches and must have a certain quality standard; otherwise, the consumer simply would not buy.

Companies pursuing marketing finesse are well known for their endless debate over the two basic approaches to sales-value or volume. Ideally, the two should mesh but in unstructured retail environments the compromise is to have a basket of products for specific segments. Based on consumer behaviour and attitudes the products are either value or volume targeted.

A newer trend that of converting value based propositions into affordable volume gainers has emerged. The mini-pack or sachet concept of shampoos and such is a major development to popularise and widen the market consumption of what had at one time been a very value based offer. However, the recent tendency of manufacturers to provide special offers to the consumer by way of free bees in return for the purchase of a product provides for a fascinating phenomenon.

Marketeers work overtime to build a brand with all its attributes and will swear that any "devaluation" through price reductions or discounts undermine these efforts. That makes sense. After years of all the hard work in getting acceptability of a price, it is natural human instinct to smell a rat when there is a price reduction. The common perception is that if the price of an existing product is reduced something must have been taken out of the product in terms of the efficiency it is to provide. There's no such thing as a free-lunch (or a free bee). There is a cost for everything in business and any "free" offer simply has to be a discount and that means a hit on profits; unless of course, the swing is towards a volume based strategy where lower margins can be made up for by the numbers. In such a case it would appear that the product is either losing market share or not growing as much as expected.

If all of this isn't confusing enough for the poor consumer, think of their distress where on one hand they are exposed to the communication of a branded detergent that has had a 22% price slash versus a corrugated tin sheet company that would have them believe that it's always better to pay a little extra for true quality. (The writer is a former Head of Corporate & Regulatory of British American Tobacco Bangladesh, former CEO of Bangladesh Cricket Board and specializes in corporate affairs, communications and CSR. e-mail: mahmudrahman@gmail.com)