Marketing in Pakistan Updated

8/22/2019 Marketing in Pakistan Updated

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A Strategy Document

The New Marketing Paradigmby

Zain Ul Abideen

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How To Create, Win,

and Dominate Markets

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Two Challenges FacingPakistani Companies

1. Will Pakistani companies be able todefend their market against thegrowing invasion of foreign globalbrands?

2. Can Pakistani companies develop

strong global brands?

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Can Pakistani CompaniesDefend the Domestic Market?

Foreign competitors will not only go after thehigh end market in Pakistan. They will target

the middle and eventually the low end.

The main defense for Pakistan will bedeveloping stronger skills in innovation,

differentiation, branding, and service. In aword, MARKETING!

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But Pakistan NeedsStronger Marketing

Confusing marketing with advertising.

Advertising is hard sell.

Sometimes ads appear before the product

is in distribution.

Some companies over-spend on

advertising and go broke.

Contd.

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Little use of marketing research; cant trust.

Therefore little segmentation of market and

poor targeting.

Over focus on winning through low price;

neglecting differentiation.

Retailers carry the same goods and their

service is poor.

But Pakistan NeedsStronger Marketing

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Marketing is More Importantthan Production!

The Pakistani manufacturer of a Hugo Boss shirt gets only

$12, or 10% of the final price of $120 that is paid by acustomer of Saks Fifth Avenue. The retai ler gets 60% ($72) and the B rand company gets30%, or $36.

Wou ld you rather be the manufacturer, Brand owner, or

retai ler?

The Pakistani manufacturer has no defense if the BrandOwner wants to switch to another manufacturer to whom hewill pay $8 and keep $2 or pass it to the retailer to get more

retail support.

Yet Pakistan pays more attention to the product engineerthan the marketing engineer. But Pakistans futuresuccess will require investing in marketing and branding.

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The Strategic Trajectoryfor Pakistan

Low cost, average quality domestic products.

Low cost, good quality domestic products.

Pakistani high-end products made for other

companies.

Pakistani branded products (regional).

Pakistani branded products (global).

Pakistani dominant brands (global).9


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Ranbaxy Labs.

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Ranbaxy Pharmaceuticals (India)

Originally sold bulk substances to unsophisticatedmarkets but gross margins were too low to coverexport costs.

New CEO, Parvinder Singh, challenged Ranbaxy tobecome a truly global company. He said: Ranbaxy

cannot change India. What it can do is to create apocket of excellence. Ranbaxy must be an island withinIndia.

The company moved into higher-margin businesses

like selling branded generics in large volume marketslike China and Russia.

Ranbaxy then entered the U.S. and Western Europe.In just five years, more than half of its US$ 250 millionrevenues now come from outside of India.

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The Case of Haier

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The Case of Haier

Haier developed through three stages.1. Fix quality

(Zhang Ruimin smashed 76 refrigerators).2. Diversify

(Microwaves, toasters, air conditioners, dishwasher,vacuum cleaners, etc.)

3. Globalize(Asia Region, U.S., Europe)

Haier entered with a U.S. partner and is challengingWhirlpool and GE.

Haiers brand name products are sold in Wal-Mart, BestBuy, Sears, Lowes, Home Depot and Target.

Haier is promoted as a global brand, not a Chinese one.(Many people think it is German).

Puts lower price models in price-only stores and higherprice models in top stores. 13


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Five Cs Favoring Pakistan

Capital: Pakistan has and can attract capital.

Cost: Another 50 years of low cost production

Capability: Large number of trained workers,engineers, scientists, and business people

Consumers: Immense domestic market

Calm and stability: in a world of turmoil anduncertainty

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The Message

Marketings performance has beendisappointing.

You must replace your Old Marketingwith New Marketing that is:

holistic, technology-enabled,

and strategic.

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Facing the Increasing Pressure forMarketing Accountability

Marketing has become a one P discipline =selling.

Marketing involves a great deal of waste.

1 million for 30 seconds on the PTV. Direct mail campaigns with a 1% response rate. Cold sales calls which play the numbers.

High rate of new product failure.

Marketing costs are high and rising. Marketing lacks accountability.

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Five Winning Strategies

Cost reduction: (IKEA, Southwest Airlines, Wal-Mart,Enterprise Rent-a-Car).

Improved customer experience (Starbucks, Harley

Davidson)

Innovative business model (Barnes & Noble,Charles Schwab, FedEx, Sony).

Improved product quality(P&G, Toyota).

Niching: (Progressive Insurance, Tetra)

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Dual Strategies

Planning for today

Defining the business.

Shaping the business tomeet needs of todays

customers

Improving alignmentbetween functionalactivities and businessdefinition

Organization mirrorscurrent business

activities

Optimizing currentoperations to achieveexcellence.

Planning for tomorrow

Redefining the business

Reshaping the businessto compete for futurecustomers and markets

Making bold moves awayfrom the existing ways ofdoing business

Reorganizing for future

business challenges Managing change to

create future operationsand processes

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Some Vertical Marketing Methods

Modulation The juice manufacturer varies the sugar content, fruit

concentrate, with or without vitamins Sizing

Potato chips are offered in sizes 35 grams, 50 grams,75grams, 125 grams, 200 grams, multi-packs

Packaging

Nestles Red Box chocolates comes in different containers:cheap paper box for the grocery trade, premium metal boxfor the gift trade

Design BMW designs cars with different styling and features...

Complements Biscuits with sugar spread on it, with cinnamon, with

chocolate, with white chocolate, with black chocolate, filledbiscuits

Efforts reduction Charles Schwab offers different channels for transacting

such as retail stores, telephone, internet. 19


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into

Cereals for breakfast market

Cereal varieties

New category

STREETS =

The case of Cereal Bars

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Baby dolls market

Doll varieties

New category

Tofeel

as...

=

Teenager

The case of Barbie

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Building Brand Equity

MARKETING IS THE ART OF BRAND BUILDING

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IF YOU ARE NOT A BRAND,

YOU ARE A COMMODITY.

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THEN PRICE IS EVERYTHING

AND THE LOW-COST PRODUCER

IS THE ONLY WINNER!

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1. How Important is Branding?

The NUMMI (New United MotorManufacturing Inc) plant in Californiaproduces two nearly identical models

called the Toyota Corolla and theChevrolet Prizm.

Toyota sold 230,000 Corollas compared tosales of 52,000 Prizms.

And Toyotas net price is $650 higher! 23


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Names are Important in Branding

Donald Trumps family name is Drumpf.

But he cant call it Drumpf Towers.

Alan Aldas name was Alphonso

DAbruzzo.

Chinese gooseberry was renamed

kiwifruit.

Paradise Island in the Bahamas used to beHog Island.

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How Do You Rationalize


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How Do You RationalizeYour Product Line?

Unilever found that the largest 50 brands accounted for63% of its revenues.

Unilever decided to emphasize 400 core brands anddispose, delete or consolidate 1,200 of its marginalbrands.

Unilever selected its 400 core brands based on brandscale, brand power (#1or 2), and brand growth potential.

40 brands were designated as core global brands (e.g.,Dove, Knorr, Lipton), and 360 as regional core brands.

The core brands would get disproportionate investmentsin advertising and promotion, innovation, marketingcompetence and management time. The core brands

would be extended. Weak brands had small market shares; poor profitability;

negative cash flow; weak channel support;disproportionate consumption of management time.

The weak brands would be milked, sold, delisted, or their

attribute would be migrated to another brand. 25

The Evolution of Marketing


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The Evolution of MarketingTransactional

Marketing

Relationship Marketing Collaborative Marketing

Time frame 1950s 1980s Beyond 2000

View o f value The company offeringin an exchange

The customerrelationship in the longrun

Co-created experiences

View of m arket Place where value isexchanged

Market is where variousofferings appear

Market is a forumwhere value is co-created through

dialogue

Role of custom er Passive buyers to betargeted with offerings

Portfolio ofrelationships to becultivated

Prosumers-activeparticipants in value co-creation

Role of firm Define and create valuefor consumers

Attract, develop andretain profitablecustomers

Engage customers indefining and co-creating unique value

Nature of custom er

interaction

Survey customers toelicit needs and solicit

feedback

Observe customers andlearn adaptively

Active dialogue withcustomers and

communitiesAdapted from Prahalad and Ramaswamy 2004

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This time like all times is a good one,

if we but know what to do with it.Ralph Waldo Emerson

THANK YOU!

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Marketing in Pakistan Updated

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