Marketing Warfare Explained in Detail

8/13/2019 Marketing Warfare Explained in Detail

1/20

Management GuruAssignment onMarketing WarfareUnder Guidance of Prof. Isaac Jacob

Submitted By :Shakti Agrawal (101)

Bhavin Doshi (107)

Sumit Gosar (115)

Bhavesh Panchal (135)

Pratik Sisodiya (156)

MMS B


2/20


3/20

Marketing Warfare

3

INTRODUCTION

Marketing Warfare is a term used to describe some of the techniques and tacticsmarketers use in their everyday language. The marketing concept states that a firm's goalshould be to identify and profitably satisfy customer needs. In Marketing Warfare the authorargues that marketing is war and that the marketing concept's customer-oriented philosophyis inadequate. Rather, firms would do better by becoming competitor-oriented. If the key tosuccess were to introduce products closest to those wanted by customers, then the marketleader simply would be the firm that performed the best market research. Clearly, much moreis required.

To illustrate their point, we will compare marketing to a football game. If a team simplyidentifies the goal line and moves the ball towards it without regard to the competing team,they most likely will be blocked in their effort. To win the game, the team must focus itsefforts on outwitting, outflanking, or over-powering the other side. This is the case infootball, war, and marketing, according to Marketing Warfare . Because of the importance ofthe competition faced by the firm, a good marketing plan should include an extensive sectionon competitors.

There is much that marketers can learn from military strategy. The author tells the story ofseveral famous battles in history that illustrate lessons of warfare. These battles range fromMarathon in 490 B.C. when the Greeks used the phalanx to defeat the more numerous Persianinvaders, to the Normandy invasion of the Second World War.

The lessons from these famous battles illustrate the concepts of planning, manoeuvring, andoverpowering the opposing side. These principles are relevant not only to warfare, but also tomarketing.

THE PRINCIPLE OF FORCE

There's a saying that it is easier to get to the top than to stay there. The author disagrees,arguing that once at the top, a company can use the power of its leadership position to staythere.

All other things equal, an army with a larger number of troops has an advantage over smallerarmies. A larger vehicle has an advantage over a smaller vehicle in a collision. When severalcompanies enter a new market, the one with the larger sales force is likely to become theleader. The larger company has the resources to outnumber smaller competitors. It canadvertise more, perform more R&D, open more sales outlets, etc.

This is not to say that smaller companies do not stand a chance. Rather, smaller companiesmust recognize the principle of force and attempt to win the battle by means of a superiorstrategy, not by brute force.


4/20

Marketing Warfare

4

Some managers may believe that they can overcome a larger competitor through superioremployees. The author maintains that while it may be possible to assemble a small group ofstar performers, on a larger scale the employee abilities will approach the mean.

Another argument is that a better product will overcome other weaknesses. Again, The author

disagree. Once consumers already have in their minds that a product is number one, it isextremely difficult for another product, even if superior, to take over that number one place inthe consumer's mind.

The way to win the battle is not to recruit superior employees or to develop a superior product. Rather, the author argues that to win the battle, a firm must successfully execute asuperior strategy.

THE SUPERIORITY OF THE DEFENCE

An entrenched defence that is expecting an attack has an advantage that can only beovercome by an overwhelmingly larger attacker. For example, a defensive position that is in atrench or foxhole will be shielded from the attackers, and the attackers will suffer many morecasualties than the defenders. For this reason, the attackers require a much larger force toovercome the defensive positions.

The same is true in marketing warfare. Many companies with insufficient resources havetried unsuccessfully to attack a leader. A study was made of 25 brands that held the numberone position. Sixty years later, 20 of those 25 brands still held the number one position. It isvery difficult to overtake the market leader.

The element of surprise helps the attacker, but when the market leader is large the attackersalso must be large, and the logistics of launching a large scale attack or a large promotionalcampaign are such that the element of surprise is difficult to maintain and the defensive

position becomes yet more difficult to upset. When the defenders are taken by surprise, itusually is because they ignored warnings or did not take them seriously.

THE NEW ERA OF COMPETITION

Increasingly, one hears marketing terms that are borrowed from the vocabulary of militarystrategy. From "launching a breakthrough campaign" to the "cola wars", the analogy betweenmarketing and warfare is evident.

As in military strategy, it is unwise for a firm to publicly state deadlines for its victory.Deadlines often are missed, and the firm loses credibility in the propaganda war if it fails tolive up to a prediction. Politicians who are wise to this rule tend to make their campaign

promises vague. Publicly stated marketing promises should be vague for the same reason.

Firms also should avoid the trap of thinking that if they work hard enough; they will succeedin their attack. The author argues that it is strategy and not hard work that determines success.In warfare, when a battle turns to hand-to-hand combat, the advantage resulting from thestrategic plan no longer exists. In marketing, a firm achieves victory through a smarterstrategy, not by spending longer hours with meetings, reports, memos, and managementreviews. When management declares that it is time to "redouble our efforts", then themarketing battle has turned to hand-to-hand combat and is likely to end in defeat.


5/20

Marketing Warfare

5

THE NATURE OF THE BATTLEGROUND

In military warfare, a battle often is named after the geographic location where it took place -for example, The Battle of Waterloo . The author argues that marketing battles do not take

place in geographic areas, or in stores. Rather, marketing battles take place in the mind of theconsumer.

Before a military battle, the battlefield usually is mapped and studied in great detail. Inmarketing, market research traditionally has served this function. However, the author

proposes that the most important information is to know which positions are held by whichcompanies in the mind of the consumer. In other words, who holds the high ground?

In military warfare, mountains and higher altitude areas represent strong positions and oftenare used to present a strong defence. In marketing warfare, the question is one of who holdsthe mountains in the consumer's mind. For example, in the U.S., Kleenex holds the facialtissue mountain since it is the number one facial tissue in the minds of most consumers andmany consumers consider the word "Kleenex" to be synonymous with facial tissue.

Mountains often are segmented and competitors may launch different brands each targeting aspecific segment. General Motors successfully attacked Ford's market leadership when itlaunched Chevrolet, Pontiac, Oldsmobile, and Buick, each targeting a specific segment of theautomobile market. Too often, the leader responds by attempting to counterattack in eachsegment, only to fail and even to lose its original leadership position.

THE STRATEGIC SQUARE

The author discusses four strategies for fighting a marketing war:

defensive offensive flanking guerrilla

A firm s market share relative to that of competitors determines which strategy is appropriate.There often is a significant market share gap between two competitors such that each hasapproximately a factor of two more market share compared to the next weaker competitor.Because of this large gap, the principle of force plays an important role in the choice of eachfirm's strategy. For this discussion, assume that there are four firms and each isapproximately twice the size of the next closest to it.


6/20

Marketing Warfare

6

In such an environment, each of the four firms has different objectives:

Number 1 firm: market domination Number 2 firm: increased market share Number 3 firm: profitable survival Number 4 firm: survival

According to The author, the main competitor of the market leader that holds the majority ofmarket share is not one of the other firms in the industry, but rather, the government. If themarket leader attempts to grow larger, then anti-trust issues will be raised. If a major marketleader wins the marketing war and causes the next largest firm to exit the market, then thegovernment may take steps to break up the firm that is dominating the market. Consequently,the best strategy for such a firm is a defensive one.

The number two firm's best strategy is an offensive attack on the market leader if there is alarge gap between the number two firm and number three. The reason is that the gaining ofmarket share from the number three firm is unlikely to make a large impact on the muchlarger number two firm. However, there are potentially significant rewards if market sharecan be gained from the dominant firm.

The number three firm is too small to sustain an offensive attack on a larger firm. Its beststrategy often is to launch a flanking attack, avoiding direct competition, for example, bylaunching a product that is positioned differently from those of the larger firms.


7/20

Marketing Warfare

7

The smallest firm probably does not have sufficient resources to launch any type of sustainedattack. If it launched a flanking product, a larger competitor likely would launch a similar oneand would have the resources to win more customers. The smallest firm would do best to

pursue a guerrilla strategy, identifying a segment that is large enough to be interesting to thesmall firm but not large enough to attract competition from any of the larger firms.

On the mountains in the mind of the consumer (see The Nature of the Battleground discussed previously), the high ground at the top of the mountain is owned by the market leader. Thenumber two firm's offensive battle would seek to gain high ground from the leader. Theleader's defensive battle involves coming down from the top to fight off offensive attacks.The number three firm's flanking attack would go around the mountain. The smallest firm'sguerrilla tactics involve its going under the mountain.

Now we would discuss the various warfare methods in marketing in brief;

OFFENSIVE MARKETING WARFARE

Frontal attack, Flanking, Encirclement, Bypass and Guerrilla warfare are someexamples of offensive strategy. When using the offensive strategy in marketing warfare,suggest three offensive principles which include:

Called for when your organization is # 2 or 3 in the market, and you have the resources tosustain a challenge to the leader.

Principles :

1. The main consideration is the strength of the leader s position. 2. Find a weakness in the leader s strength and attack at that point. 3. Launch the attack on as narrow a front as possible.

Key Points :

-What s good strategy for the leader is bad strategy for #2, and vice versa. -Where absolute superiority is not attainable, says Clausewitz, you must produce a relativeone at the decisive point by making skilled use of what you have. -There s weakness in strength, if you can find it.


8/20

Marketing Warfare

8

FRONTAL ATTACK

Frontal attack occurs when a company takes all of their forces and face them directlyopposite of the opponent. In order to be successful with this type of an attack, statistics showthat a factor of five to one is needed for a successful frontal attack. For example, in the1970's three electronic giants tried to attack IBM head on against their stronghold on themainframe computer market. Each electronic corporation failed because they used a purefrontal attack against IBM's massive stronghold.

There are many types of frontal attacks including: a pure frontal attack, a limitedfrontal attack, price based frontal attack, and research and development based frontal attack.A pure frontal attack involves matching a competitor s product in all areas of marketing. The

product is matched price versus price, promotion versus promotion, characteristic versuscharacteristic and so on. Basically, a pure frontal attack is taking a "look alike" or "me too"strategy. When using a pure frontal attack, companies should be prepared to expend largesums of money.

The next type of frontal attack is the limited frontal attack. A limited frontal attackfocuses on specific customers and tries to lure them away from competitors. One example ofa limited frontal attack may occur when a new product enters the market such as a new typeof paint. The paint company would pursue a select number of their competitor's customersand bring them in on a whole number of product dimensions simultaneously.

Another type of frontal attack is the price based frontal attack. In priced basedfrontal attack, the aggressor focuses mainly on the price of a product to gain more customers.Every product characteristic is matched; however, the competition beats his competitor on

price.

Finally, research and design is a fourth type of frontal attack. This is a more difficulttype of attack to employ. The competitor tries to reduce production costs, improve the

product, and other characteristics which would enhance product value. With this type ofattack, more creative ideas are implemented which allow for a better product.

There are three conditions that need to be met by a firm before it embarks in a frontalattack. First, the firm needs an adequate amount of resources to support the attack. Second,the firm must be able to create and sustain a competitive advantage over its competitors.Finally, the company must be able to persuade their competitor's customers to try their

product and become their loyal customer. In the frontal attack, it is important that everyonein the firm and those who purchase the product perceive a competitive advantage.


9/20

Marketing Warfare

9

FLANKING MARKETING WARFARE

A second type of offensive strategy is the flanking strategy. In a flanking strategy, acompany focuses its forces on the weaker sides of its competitor. Three principles offlanking warfare are mentioned in The author's book, Marketing Warfare. Called for whenyour organization is 4-6 in the market, and you have the resources to pursue your flankingmove, sewing up that market segment.

Principles :

1. A good flanking move must be made into an uncontested area.2. Tactical surprise ought to be an important element of the plan.3. The pursuit is as critical as the attack itself.

Key Points :

-The success of a flanking attack often hinges on your ability to create and maintain aseparate category.-Flanking skill requires exceptional foresight. The reason is that in a true flanking attack,there is no established market for the new product or service.-Reinforce success, abandon failures. What if you don t have the resources to follow up thelaunch of a successful flanking attack (the pour it on principle)? Perhaps you shouldn thave launched a flanking attack in the first place. Perhaps you should have waged guerrillawarfare.

Usually this offensive strategy is used by a company that does not have overwhelmingsuperiority, but may have an advantage in one particular area. For example, in the mid 1970'sXerox owned eighty-eight percent of the plain-paper copier market; however, almost tenyears later the Japanese based Canon Copier took over half of Xerox's market. The mainreason Canon took over such a large portion of Xerox's market was by use of the flankingstrategy. Canon focused on the small size copier market that could not afford Xerox's largercopiers. This attack was successful because it put the attacker s strength against the

defenders weakness.

There are two types of flanking strategy; Geographical and Segmented flanking.Geographical flanking occurs when a firm attacks different areas within the world or countrywhere competitors are nonexistent or not very strong. The Coca-Cola Company uses thistype of marketing strategy. When I interviewed Anna Whaley, Director of worldwidemarketing and sales, she said a majority of Coca-Cola's profits will come from theinternational areas where competition is not as fierce.

A second type of flanking involves identifying market areas or needs not being served

by competitors within a geographical area. Segmented flanking potentially can be more powerful than geographical flanking attacks because they satisfy market needs the competitor


10/20

Marketing Warfare

10

has ignored. The Japanese have used segmented flanking when entering the United Statesmarket. They brought products that were different and aimed them at neglected marketsegments. These products were smaller or stripped down versions of established products,and they had more features for the same or lower price. The overall idea of flanking strategy

is to bring a broader coverage of a markets varied needs.

MARKETING WARFARE THROUGH ENCIRCLEMENT

Encirclement is a third type of offensive strategy. When using this type of strategy acompany must have superiority in all areas. Encirclement attacks the competitor from all

sides simultaneously. A ratio of ten to one is needed to employ this type of strategy. The basic idea of encirclement is to force the competitor to protect their product from all sides.For example, Smirnoff Vodka used encirclement strategy when another product wasintroduced and positioned itself directly against Smirnoff, but at a lower price. Smirnoffcounterattacked by first raising it's prices, which preserved their quality image. After raisingtheir prices, they introduced another brand, marketed it at the same price as the competition,and introduced another brand at a lower price.

There are two types of encirclement strategy: product encirclement and marketencirclement. Product encirclement introduces products with many different qualities, styles,and features that overwhelm the competition's product line. Many Japanese firms haveencircled U.S. products such as televisions, radios, hand-held calculators, watches, and stereoequipment. Market encirclement goes beyond the end user, and focuses on the distributionchannels. Seiko is one example of market encirclement. By gaining every availabledistribution channel for watches, Seiko took over as much shelf space as possible. There aresome risks to be aware of when employing the encirclement strategy. Having the substantialresources and organizational commitment are two factors needed before using encirclementstrategy. Because it is necessary to have these two requirements; winning a battle throughencirclement takes a great deal of time.

MARKETING WARFARE THROUGH BYPASS

A fourth type of offensive strategy involves the bypass. A bypass attack wins the battle through attacking areas not defended. When Colgate-Palmolive tried to enter thenonwoven textiles and health care business, it did not have to fight Procter and Gamble'sstrengths because they used the bypass strategy.

There are basically three types of bypass strategy: develop new products, diversifyinto unrelated products, and expand into new geographical markets for existing products.


11/20

Marketing Warfare

11

Developing new products is a fairly easily understood bypass method. Rather than copyingthe leader, the competitor creates entirely new products thus gaining a larger market share ofuntapped customers.

Diversifying into unrelated products is a second type of bypass strategy. Rather thanremaining in a single-industry business the firm will venture out into product lines that aredifferent from their one single product. Sony has employed this bypass strategy throughentering the restaurant and construction business.

One reason companies may use the bypass strategy is the large amount of congestionin the competitive battleground. For example, if a company produces a new product, thecompany basically moves the new product to a new level within the same product marketarea. Moving into digital and electronic watches may bypass the mechanical watch market;however, the company is still fighting for a position within the watch industry. Conversely,movement into an entirely new geographical market usually allows a company to bypasscompetitors completely.

GUERILLA MARKETING WARFARE

A final type of offensive warfare is guerrilla warfare. Some of the principles that can be used when determining when to use guerrilla warfare are the following:

Appropriate for the other 96 organizations in a 100 org market.

Principles :

1. Find a segment of the market small enough to defend.2. No matter how successful you become, never act like the leader.3. Be prepared to bug out at a moment s notice.

Key Points :

-There s a critical difference between flanking and guerrilla warfare. A flanking attack isdeliberately launched close to the leader s position. The objecti ve of a flanking attack is to

bleed or unravel the leader s share.

-How small a market should a guerrilla set its sights on? That s where judgment comes in.Try to pick a segment small enough so that you can become the leader but never act like theleader. Successful guerrillas operate with a different organization and a different timetable.Get as high a percentage of your personnel on the firing line as possible.

Guerrilla warfare basically involves winning small victories that can over time amount to alarge gain in market share. This attack works because it is very unconventional which makes


12/20

Marketing Warfare

12

it difficult for the defender to counter-attack, and because they are aimed at small, weak, andunprotected market positions.

One example of guerrilla warfare occurred when IBM won a lawsuit against Hitachion the grounds that Hitachi stole IBM software. Because IBM won this small battle,Japanese computer manufacturers had to become defensive by investing large sums of moneyinto scarce software research and development personnel who had to re-write old programsand develop new programs which did not interfere with IBM's intellectual property rights.This type of guerrilla warfare pushed Japanese computer makers back many years.

Guerrilla strategy is usually implemented by companies who are smaller in market position and resource base than the firm they attack. This strategy has usually been used bythe Japanese on U.S. firms which have caused a large drain on the resources used by the U.S.firms.

DEFENSIVE MARKETING WARFARE

Defensive marketing strategy involves employing those tactics and strategies tomaintain the market share a company has already achieved. There are many ways a companycan maintain its market share. Some important guidelines in defensive marketing warfare

are:

Called for when your organization is the clear market leader.

Principles :

1. Only the market leader should consider playing defense.2. The best defensive strategy is the courage to attack yourself.3. Strong competitive moves should always be blocked.

Key Points :

-You strengthen your position by introducing new products or services that obsolete yourexisting ones.-It s better to take business away from yourself than have someone else do it for you. -Attacking yourself may sacrifice short-term profits, but it has one fundamental benefit. It

protects market share, the ultimate weapon in any marketing battle.-When you own the pie, you should try to increase the size of the pie, rather than of yourslice.

Fortification, counter attack, mobile defence, strategic retreat and position defence are fivetechniques a company can use in a defensive strategy.


13/20


14/20

Marketing Warfare

14

Japan they also broadened their operations to off-shore facilities in Mexico and the Far East.Because of their mobility they have found lower labour costs, and new markets.

STRATEGIC RETREAT

Strategic retreat is fourth type of defensive strategy. The best way to describestrategic retreat is through an example of what Chrysler Corporation did to defend theircompany. Chrysler had just been taken over by Lee Iacocca in 1978 went he second oil priceshock hit in the beginning of 1979. With all the problems facing Chrysler, Iacocca had to usestrategic retreat in order to save the company. Iacocca cut his salary from $360,000 to onedollar, he cut salaries of higher official ten percent, and he cut stockholdings in all areas.Rather than making deliveries on expensive freight trains, he turned to deliveries by truck,and used a simple black and white annual report. Iacocca sold off many of the plantsChrysler could not afford to operate, and within three years Chrysler had dropped the

breakeven point from $2.3 million to $1.1 million dollars.

MARKETING WARFARE THROUGH POSITION DEFENSE

A fifth and final type of defensive marketing strategy is position defence. Position

defence uses all of a company's resources to consolidate one's position within the existingmarket segment. This type of defence usually occurs under stiff competition or majorstructural changes, i.e. the drop in consumption of oil. Basically position defence meansstaying with the product or service a company knows best and avoiding the temptation ofdiversification.

CURRENT MARKETING WARFARE

Some examples of current marketing warfare include the cola wars, the beer wars andthe burger wars. In The author's book they divide marketing warfare into four principles.These four principles addressed in Marketing Warfare include: Principles of flankingmarketing warfare, Principles of guerrilla marketing warfare, and the principles of defensiveand offensive marketing warfare .In the following sections of this report each of the currentmarketing warfare battles will be analyzed through these principles.


15/20

Marketing Warfare

15

MARKETING WARFARE IN THE COLA WARS

First, in the cola wars, Coca-Cola the one-hundred year old soft drink did not haveany competition until Pepsi came out with the twelve ounce bottle that sold for the samenickel that bought 6.5 ounces of Coca-Cola. Because of the advertising scheme used byPepsi, Coca-Cola was on the spot. Coca-Cola had spent $15 million dollars on advertisingand Pepsi just $600,000. The consumer went for quantity rather than quality. If theyincreased quantity, Coca-Cola was left with a billion 6.5 ounce bottles, and hundreds ofthousands of nickel soft drink machines. Pepsi had created a successful flanking attackwhich turned into an offensive attack against the heart of Coca-Cola's strength. Pepsi hadused offensive principle number two which was: find a weakness in the leader's strength andattack at that point. A more modern day experience of marketing warfare occurred whenCoke introduced new Coke, one of the biggest marketing blunders of the century. Aftermany years of being a leader, Coca-Cola did something a leader should never do - changetheir formula to match the sweetness of Pepsi Cola. Coke had undermined their position.One key learned from Coca-Cola's mistake was that perception is reality. Because Coca-Colahad undermined "the real thing" consumers perception was that nothing could taste betterthan the "real thing"; thus, Coke threw in the towel and re-introduced Classic Coke.

MARKETING WARFARE IN THE BEER WARS

Another example of the current state of marketing warfare is occurring in the famous beer wars. Consumers are bombarded daily with commercials and advertisements about whohas the best beer. One example of marketing warfare occurred when imported beer was firstintroduced into the United States. Heineken was an imported beer and that was its strength;however, it was imported from Holland. Lowenbreau was the second imported beer and theycould have used offensive principle number three against Heinken. Offensive principlenumber three states: Launch the attack on as narrow a front as possible. Lowenbrau could

have launched an attack against Heinken. Being from Holland a country famous forwindmills, cheese, and canals, the perception of the market was stronger for Lowenbrau because it was imported from Germany. Today, as marketers, we are constantly fighting a battle within the consumer s mind which is consumer perception.

MARKETING WARFARE IN THE BURGER WARS

Guerrilla principle number one: pick a segment of the market that is small enough todefend. This is what McDonald's has done in their attack in the burger war. Up until the birthof McDonald's there had been coffee shops all across America famous for different


16/20

Marketing Warfare

16

delicacies. Rather than trying to combat each type of delicacy, McDonald's chose tospecialize in the hamburger. Because of their strict standards to cleanliness, procedures, andcontinuity, McDonald's has remained the leader of the burger war from its start.

Even though their uniformity was a major strength of McDonald's it was also aweakness. Burger King, the second fastest growing food chain took on offensive principlenumber 2: find a weakness in the leader's strength and attack at that point. Burger King did

just that, they pinpointed the seam which held McDonald's strength together and they hit ithard. Burger King focused their advertising on "Have it your way" McDonald's wassqueezed and Burger King's sales increased with this manoeuvre.

MARKETING WARFARE IN THE DETERGENT WARS

Comparative advertising can be used to great effect

The detergents business is a dirty business, if you will forgive the pun. The contestants fight bitter and often unsavoury battles to garner a few percentage points of market share and oncein a while, advertising is the means to secure the sordid end. Hindustan Unilever (HUL) has

been the leader in the detergents market for as long as one can remember but its position has been challenged by a number of regional brands that have been eagerly snapping at its heelsover the years, and recently big global players such as Procter & Gamble (P&G) too have

joined the fray.

The last named, a global major that knows a thing or two about marketing warfare andstrategy is still a late entrant into the country. It would be reasonable to say that the companyhas come to terms with India and its consumers and has made slow but steady progress inrecent times. P&G recently introduced a low-cost detergent, Tide Naturals, claiming in its ads

that it provided whiteness with special fragrance. The product was clearly positionedagainst HUL's leading brands Rin and Wheel. This claim was challenged and the Madras


17/20

Marketing Warfare

17

High Court passed an order directing P&G to modify the ad as the company was not able tosubstantiate the claim. The court has granted an injunction and directed P&G to respondwithin three weeks.

But that was just the trailer with the main movie hitting the small screen over the weekend

when the courts were closed, with a new Rin commercial (shown time after time in programme after programme) featuring two mothers with shopping baskets, waiting for theirrespective children to return from school. One of the ladies has Rin in her basket while theother has Tide Naturals. The Tide lady speaks smugly about the brand's fragrance combinedwith whiteness while the Rin lady, of the strong, silent type, waits for her son's shirt to do thewalking and talking. The much-awaited bus eventually arrives (after all, it is only a 30-second commercial) and the Tide boy appears in a dull shirt (what else?) while the Rin boy

breezes in, in a sparkling white shirt with a flabbergasted Tide Auntie' staring in wonder. Ofcourse, the well-behaved Rin boy cannot resist taking a pot-shot and i nnocently asks Auntychaunk kyun gayi?, a reference to Tide's advertising line thereby certainly providingenormous mirth to HUL's sales force at least, for it is still debatable whether this particularcampaign will make them laugh all the way to the bank.

As commercials go it certainly didn't make us stand up and cheer, but to put it mildly, all hell broke loose as the media got into it. Dark threats were uttered secretly, if not publicly; legalaction, complaints to ASCI were poured out In fact it was a ll happening and people likeus wondered what the lather was all about. While it seems obvious that the marketing bigwigsat P&G are getting hot under the collar, now that Holi has come and gone, let us objectivelylook at the situation and see what it means for advertising, the consumer and the companiesin question.

The Leader Wears an Uneasy CrownHUL has ruled the roost in detergents, toilet soaps and shampoos for as long as one canremember. It also used to be the widow's stock, the safe option that you could bequeath toyour family (people need to bathe and wash their clothes) and a day -one' company oncampus at IIMs. It continues to be one of the largest advertisers and one of the best marketingcompanies in the country. But things have changed and sadly, for the worse.

Comparison not new


18/20

Marketing Warfare

18

Comparative advertising has been used to great effect by challengers such as Pepsi andmavericks such as Apple. In India Thums Up (earlier) with Don't be a bandar' and morerecently, Sprite, have cheekily continued to make youngsters smile and cheerfully sip the softdrinks, even as they took pot-shots at the competition. In recent times Horlicks and Complainhave gone for each other's jugulars. As a general rule, comparative advertising works when

the audience is more discerning and aware of the products in question. There is research tosuggest that it works better in the case of high-involvement products. People buying cars andmotorcycles might be interested in feature-for-feature comparisons, as to which has thegreater bhp and fuel economy and so on. But will it work for detergents? In India, brandshave desisted from naming their competition but the legal position is changing with the timesand now brands can claim superiority as long as they do not disparage their competitors.Does the Rin commercial disparage Tide Naturals? Let's leave that to the courts and focus onthe brand's choice of strategic direction.

Earlier advertising in the Indian context, in startling contrast to advertising from the West,fought shy of actually naming its competition. Pepsi would say We replaced his Pepsi with acola' in India, while they would say We replaced his Pepsi with Coke' (in the MC Hammercommercial). Complan would say that they were better than brand H and e ven mentally-challenged consumers would recognise the blinding flash of the obvious and say, Oh, arethey talking about Horlicks? Today it is okay to name the competition and often that canopen up a can of worms. It is interesting to note that research suggests that when you claimthat brand X is better than brand Y, consumers actually end up being confused as to which isactually better and end up buying brand Z. Often, we forget that consumers are not waitingwith bated breath for our commercial and do not hang on to our every word the way wewould like them to.

Questions remainHUL might be patting itself on the back for hitting out at Tide which is a smaller player, butis the commercial really something to write home about? Is comparative advertising the wayto go? How credible are these independent laboratory tests on which the commercial is

based? How different is the theme of this commercial from detergent advertising of twodecades ago? In the mid-Eighties Surf Excel ran a commercial with Lalithaji, where enviousladies tell the camera that she is showing off with new clothes on Sport's Day while the truthis that she has washed her clothes with Surf.

LEARNING FROM NAPOLEON

To understand how business strategists used military strategies, we can look at theinnovations of Napoleon and apply then to business situations. Napoleon made four keyinnovations. They were 1) increase his army s marching rate, 2) organize the army into selfcontained units, 3) live off the country, and 4) attack the opponent s lines of supply. All four

provide lessons for business strategists:

1) By increasing the speed that the army marched and fought, they created a militaryadvantage. They could implement their tactics faster than the enemy. Hitler used the samestrategy with his Blitzkrieg. The enemy was overrun before they were able to organize aviable resistance. But once these innovations were used, other armies made adjustments andthe nature of warfare changed. All armies had to increase their pace of operations to beeffective. Businesses, like armies must operate at a faster pace than their competitors in order


19/20

Marketing Warfare

19

Competitive advantage. They must develop and introduce products faster, implementstrategies faster, and respond to environmental factors faster. They must be proactive.

2) Napoleon returned to the cohort organization of the Greek phalanx. These were selfcontained fighting units of citizens that knew each other in daily life, and had a wide variety

of skills and various skill levels. Under the Roman Empire the phalanx was replaced byspecialized legions containing 100 fighters (centurion). Each legion had a specialized skill(such as the archer legions from Thrace). For more than 100 years, businesses have takenAdam Smith s advice and organized by functional s pecialization, just like the Roman legionsdid. Accountants populated the finance department and technicians populated the operationsdepartment. According to Adam Smith this is the most efficient way of organizing. But as thespeed of business increases we need a more flexible system. We use cross functional teams(like the Greek phalanx) that have enough breadth of knowledge to see the big picture, areobjective enough to get accurate and unbiased perceptions of environmental factors, and areflexible enough to act quickly.

3) Napoleon s armies lived off the country instead of bringing supplies with them. Thisallowed them to march faster. The disadvantage is that stealing from the local populationcreated resentment. But this was a longer term problem. It could be dealt with when the timecame. The short term advantage outweighed the long term disadvantage. In business we nolonger stock inventory based on an EOQ model. We use a Just in Time model and thisreduces costs considerably. However it makes us vulnerable to our supply channel partners.Just as Napoleon had to manage the local people that supplied him his provisions, businessestoday have found supply chain management to be a critically important part of doing

business.

4) Striking at the opponents lines of supply is known as a flanking strategy. It is effective because it eliminates the need to fight the enemy head-on. An attack on a poorly defendedsupply line can render the whole enemy army unable to fight. In business today we attempt todo this with exclusivity agreements with suppliers (if you sell Pepsi, you can t sell Coke). IfPepsi has exclusivity agreement with Pizza Hut, Coke will effectively be eliminated from that

part of the market.

CONCLUSION

In conclusion, Marketing warfare will continue to be an integral part of the marketing world.Each principle discussed in the above paper will aid a company in ways it can become morecompetitive. It is important for companies to employ offensive and defensive tactics whennecessary. Through monitoring competition a company will know when to use theappropriate warfare techniques to be successful in the marketing arena


20/20

Marketing Warfare

20

Marketing Warfare Explained in Detail

Documents

Transcript of Marketing Warfare Explained in Detail