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Do not overlook your products and services

By | Advice for Businesses | No Comments

The marketing mix, or customer experience, forms the foundation of a strategic marketing approach. Each element within the mix needs to be considered from a strategic perspective to ensure alignment between business goals, market value and marketing outcomes.

While many businesses understand the core of what they offer, they often overlook the other attributes that consist of their product or service. A product or service will typically have three core components:

  1. The Core  – the fundamental need you provide. The core is the generic need that that is fulfilled by utilising your product or service. For example in hospitality you are satisfying hunger, or shelter for accommodation. This is often cited as one of the reasons for the failure of Kodak, since it failed to consider that its products provide story telling or memories, not photography.
  2. Actual product – the tangible components that customers interact with. This is the physical configuration of the product or service, including packaging, staff interaction and the product itself. Hospitality incorporates the setting of the restaurant, cuisine selection and attitudes of staff. In the case of Kodak, the product included the film quality, packaging and store interaction. Had Kodak considered its product as storytelling or memories, then the actual product would have encompassed digital storage, cameras and photography sharing.
  3. Augmented product – additional components you can offer to differentiate yourself from competitors, which reinforce your value proposition. A fine dining restaurant may incorporate an additional course in a degustation menu for regular customers, while a hotel may offer valet parking or extended check outs.
Product components

A product consists of many components – all of them need to be part of the marketing mix

Failing to incorporate a holistic view of your products or services will cause fragmentation within the marketing mix and diminish outcomes. Marketing needs visibility and influence into product development and service composition to ensure alignment across each element of the marketing mix.

Online retail – just another channel to market

By | Advice for Businesses, News | No Comments

With the growing popularity and proliferation of the internet, there is an increasing perception that online shopping is the key to success in retail. Retailers such as ASOS and The Iconic have achieved mainstream success, and have often been targeted by retailers as the reason why they are losing both sales and relevance.

An online store, from the surface can seem like a simpler, more cost effective way to run a retail operation. Visual merchandise, hiring competent customer service staff, securing the right location and gaining customers can often seem like an afterthought when running an online store but are often still necessities in the online space.

Running an online store does not guarantee success, particularly when there is a single channel and tactics based approach to marketing. It is worth noting that ASOS and The Iconic invest in offline communications, including PR and outdoor advertising.

Running an online store has its own challenges. While some operational costs can be minimised, running an online store attracts its own costs across the supply chain, including warehousing, distribution and freight charges. An online store also faces the issue of attracting the right target audiences to its store and enticing them to commit to a final purchase. This is critical given how easy it is for an online consumer to compare prices of the same product across a variety of channels, including bricks and mortar stores.2016-04-29 online or bricks and mortar

Furthermore, pricing is not always a key incentive, given that some bricks and mortar retailers, actually charge more for some of their products when purchased online.

The reality is an online store is one component of the marketing mix and should not be viewed in isolation. This is why retailers such as Coles and David Jones are encouraging their customers to return to their bricks and mortar stores to pick up their online orders through a “click and collect” system. A bricks and mortar store provides the ability to engage the five senses, and for the customer to develop brand loyalty that goes beyond price comparisons.

Engaging a customer across the marketing mix means that a business has the ability to establish its point of difference, and develop ongoing relationships with its customers. Digital should be viewed as a tool that assists in this success rather than the ultimate solution. Digital needs to reinforce the overall customer experience rather than be considered the only channel to market. Virtual shopping assistants, online communities and digital activations can help bridge the gap between the bricks and mortar presence and online store.

Successful retailers understand the role of place and distribution in the marketing mix, as well as the need to engage customers throughout the journey. A single channel approach, whether physical or online, is destined to fail.