Surprise Expectations of Consumer Every Time

When we say we market is changing we should ask ourselves who is changing the market? If it is not you, changes done by your company will not yield significant gain.
I am going to discuss changes in market dynamics with respect to introduction of new products. If a company is not leading the product innovation in the market, company is bound to compromise on the bottom line. In such situation the new product will be new to the portfolio of the company only but not to the market. A real new product introduction means surprise to market.
In one of my earlier post I discussed the correlation between new product introduction and market share. I listed some variables like working capital of channel, rotation of working capital and pace of introduction of new products should be properly planned well before laying out the product road map. It seems theoretical but I convincingly suggest to focus on following parameters at the time of introducing a breakthrough product to make sure that the planed gains are intact:
1. Pace of introduction. It is a philosophy of a company’s strategy which defines dynamism and youthfulness. High risk with high returns. If executed properly, it will establish a product leadership image of the company. Every successful introduction will fetch a yield, during its life cycle, much more than the cost incurred in ten mediocre or failed introductions. When we say pace, it’s important to assume the competition will copy it in no time. Pace is introduction of real products in the market, consistently with a motto to surprise expectations of the customer every time. In competitive environment it will give you a first mover advantage with better sales realization and in monopolistic environment it will increase barriers on entry of competition. The pace of introduction can be decided based on the intensity of existing competition.
2. Working capital of channel. Only new product introduction may not give the desired growth. Think this in a way that if cumulative working capital of all the channel partners is constant, the retail will only replace the existing portfolio with new one. This may give better top line because of higher realization from new product but overall volume will remain constant. If a company’s thrust is to expand, the sales volume will increase only with increase of selling capacity of the channel. This can be done with penetration into untapped market. More distributors or more retailers means more working capital. If such distribution plans are in place the real volumetric growth of new products can be assessed.
3. Cycle time: Or the speed of rotation of working capital of selling channel. This is the area which any company in any industry will love to improve. This is also a measure of supply chain performance. With the proposed implementation of GST (in India) we will see a radical shift in collaborative supply chain management with better distribution at lower cost. A longer term strategy on depot and inventory planning in line with product road map and futuristic capacity planning is required.

Positioning Through Neuromarketing

Recently I was surfing for term neuromarketing on the web. After a great deal of digging, I found simplest definition from Wikipedia.org to restate here:

Neuromarketing is a new field of marketing that studies consumers’ sensorimotor, cognitive, andaffective response to marketing stimuli. Researchers use technologies such as functional magnetic resonance imaging (fMRI) to measure changes in activity in parts of the brain,electroencephalography (EEG) to measure activity in specific regional spectra of the brain response, and/or sensors to measure changes in one’s physiological state (heart rate, respiratory rate, galvanic skin response) to learn why consumers make the decisions they do, and what part of the brain is telling them to do it.

My next search was on to understand the use of neuromarketing beyond color of the packaging, the sound the box makes when shaken, lights used in the store and near display. The question in my mind was how neuromarketing sinks with positioning strategy of a brand. Or is it a merely sales conversion strategy at the moment of truth? And I found a beautiful article written by Anoothi Vishal in Business Standard on August 04, 2009; “Tweaked to please” on positioning strategy of Le Meridian Hotels in India. And I would love to restate some lines from the same article here before discussing positioning through neuromarketing:

When you step in to any of the eight Le Meridien hotels in India, indeed any in the world, you should be able to smell almost as soon as you step into the lobby — emerging through a portal, an art work usually, at the hotel entrance — a peculiar scent of old books and parchment in a library. The scent machines in the lobby, not always visible except to the most discerning of the guests, are there to get you in the “right frame of mind” in sync with the hotel chain’s positioning as a destination for “guests who seek out a new perspective and cultural discovery in their travel experience”.

This is a good example of neuromarketing activity which actually demonstrates the positioning of the brand directly to the target customer. Though this is the example of a hospitality industry, neuromarketing, if properly defined, will work in any kind of industry.