Current Issues in Marketing Strategy

PWC is working hard on attracting graduates from a wider spread of backgrounds than just accountants. Major think tanking is directed towards improving the brand awareness of arts & marketing graduates. The main problem was diagnosed recently at the graduate fairs, when most students (outside Accounting) were unable recognize the brand or recite any of their community actions.

PWC have become more and more environmentally focused in recent times, trying to endear themselves to the societally minded youth of today. Continual attraction of the best and brightest graduates is essential to the ongoing success of PWC, on top of this, ingraining brand awareness at a young age is worth thousands of dollars of advertising years latter on.

What is particularly interesting at the moment is their methods of attracting graduates attention. Current strategy involves piling them with handouts as they walk past the stall. Critically evaluated, this strategy is less than impressive. The students are more likely to throw the handouts in the bin before they actually take the information in.

One idea that I was privy to was the distribution of 'magic 8 balls' with every second option being "Apply to PWC". There are not enough words to explain how short sighted this is. Gimmicks can attract attention occasionally, however for a professional organization, I would have hoped they 'connect' with students more. A strategic approach would align online marketing and community initiatives with todays youth and form an early relationship with them.

Josh Strawczynski's Opinion
A huge multinational company like PWC should better 'connect' with todays youth. Running focus groups, hiring social leaders and working on 'new age' media types connects best with a young crowd.

The other thing to remember is that a student crowd is full of a variety of different types of students, therefore, you need a variety of mediums to communicate with them. More can be done that just running a stall with hand outs....it is common sense!

A new player has entered the Australia energy drink market, trying to out position premium drinks provider Red Bull. The New drink is called Pure Energy, it is headed up by Sheriff Taylor, former owner of London's most up market night club and his team and is being positioned as the most premium drink on the market. So is it possible to out premium the market leader and still make money?

Coka Cola and Red Bull have been cashing in on the premium pricing strategy for ages, charging the highest price when producing for the lowest cost. Their strong brand and staunch customer loyalty allows them to. That being said, growing markets like that of the energy drink market are filled with niche players, but can they be more premium?

To add intrigue to the mystery, Pure Energy will be priced around $8 per case cheaper than Red Bull and as I have been arguing with marketers everywhere, I'm not sure you can be super premium and charge a lower wholesale price than your competitors. However, it all comes down to scope & physical product placement.

Distribution Scope

Unlike every energy drink under the sun, Pure Energy are not chasing the convenience market, instead, they are leveraging their established on-premise industry contacts, to take on the product as a Red Bull alternative. Now, let me be very clear on this, publicans can not serve someone a Pure Energy when they ordered a Red Bull (people have been sued for that), but they can suggest an alternative. I saw this happen at Valve on Greville St (Melbourne) and the consumer was happy enough to trial it. In this way they are creating their own demand.

Creating Demand

I posed a question in a previous article questioning who would buy a Zu Energy 'homebrand' as opposed to a Red Bull? The point I was making at the time was that the "cool, premium" image sells Red Bull, people want to be seen drinking it. Pure Energy have no brand strength, nothing to leverage, no position at all...they need a trigger.

Their distribution strategy creates that demand. When people ask for an energy drink at their top end bar / night club and they are given a Pure Energy, it creates a brand, but more importantly it creates turnover. Do people care what they are drinking during a big night out? Possibly, but for a club owner, you can certainly see the attraction of having an exclusive 'super premium' brand of your own. Charge what you want, customers can't buy it at the supermarket or the local servo...this one is special.

Positioning / Distribution Strategy
A super premiun brand requires super premium distriution. The venues you are seen in are your brand, until one day you own that image yourself. The strategy for Pure Energy is to position themselves in only the best most premium night clubs, bars, hotels & eateries. The convenience market is not a priority in the short term.

Sherif Taylor is trying to launch his drink much like he launched his club, build a brand first and foremost, the demand will follow. I can see a long term vision of moving into the mainstream market, but not until they have an actual foothold in the market. Overall, I have to admire the stance, at least they are not another Rockstar or Grasshopper...do they have any strategy?

Josh Strawczynski's Opinion
As I said, I admire the strategy, it has game....does it have legs? Certainly Sherif Taylor and his team are leveraging their existing relationships and assuming this goes well, we could see them succeed in winning a foothold on the branding front. It is however a big "if". I can see how a bar owner would be disgruntled by Red Bull's pricing strategy and arrogance, but the bottom line is that they do sell a truck load of their stock...if it works why fix it?

Sam Berringer's Opinon
I actually like the product, it tastes good and looks fancy, but I have seen many many 'class leading' products fail. I question if they have enough financial resources to successfully brand the product against the likes of Red Bull, V & Mother.

There will be more to follow on the trials and tribulations of Pure Energy. What would you do if you were them?

Lenovo has waged a direct assault on the Australian computer market. The company has launched a multi faceted 'pull strategy' that aims at attracting as many new customers as possible. The TVC's see Libby Trickett endorsing the product, as well as additional buying incentives such as a $150 petrol voucher or alternatively a free external hard drive. So what does the strategy aim to do?



The Strategy
A full frontal attract strategy is a grab for market share. In the computer market, this is done through differentiation, by adding value to any sales proposition. The current strategy looks to do this on a number of fronts; celebrity endorsement, superior product composition / positioning strategy & an additional component 'sweetner'. So in turn, lets look at each of these.

Gorilla marketing is rife during world sporting events and the Lenovo campaign has jumped on the bank wagon. The promotion has been tied them to the Olympics with the celebrity endorsement of Libby Trickett. In the same way that the beach soccer world cup was sponsored by Nike and advertised at the soccer world cup (sponsored by Adidas. Lenovo is leveraging Libby's status to gain Olympic reputability. Is it effective?

Well, it is a hard thing to quantify, but companies that sponsor athletes like Tiger Woods swear that it adds to the bottom line, and in this case, it does add a certain level of legitimacy to their advertising between Olympic events on channel 7.

The advertisements themselves position the Lenovo product as highly reliable, water & shock proof, differentiating it from many cheaper brands. Market leaders Dell are losing ground at the moment due largely to their terribly image of unreliable and constantly breaking. Contrasting this, Apple have been making a big inroads into the market by positioning themselves as crash proof, better than a PC, just proving that it is a major consumer concern. In this way, the product composition and positioning strategy plays a huge role in convincing consumers to trial Lenovo and actively moves the brand to the front of their minds.

Finally, when consumers have entered the final stages of the buyer decision process their is a typical 'pull strategy' sales promotion. If you buy a Lenovo computer during the Olympics, you receive with a $150 fuel card or an external hard drive completely free. It is an oldie but a goodie. Adding that little bit of value through a call to action sales technique makes consumers rush the decision and buy now while they can still get the 'deal'.

Josh Strawczynski's Opinion
I'll be honest, when I saw the television ad, the first thing I though of was that I would like to find out more about the product. For my mind, the use of Libby Trickett is a waste of money, but that is only my opinion. Altogether, Lenovo has put together a well integrated campaign that targets consumers throughout the buyer decision process.

Sam Berringer's Opinion
I'm not sure what the return on invest would be like from this campaign. We are assuming that customers are going to trial the product and build up a brand loyalty are we not? Best I can tell, computers are not a real brand loyal sector, instead you tend to have a range of brand reliable choices. Consumers in my mind will always be swayed by the best deal, this is because they know technology is constantly changing and market leaders rarely have a sustainable competitive advantage.

Cash converters has launched a new online initiative and invested the smallest possible amount of capital in doing soon. The company has been crowing about the giant leap into online space, in the same way that a 'technophobe' is proud of using Microsoft paint. So what is the current strategy?

Cash converters claims that it is trying to improve its brand image, away from sleazy corner pawn store and more towards a boutique bargain bin. Firstly let me define 'boutique bargain bin' as an upmarket pawn store, that is more attractive to a mainstream audience.

The website now lists all the products held in stores across the country, as well as a bidding page & buying page. Customers can buy the products online and have it sent to them or arrange their own delivery. The system does increase reach, but that is about it.

The problem with their plan is the low level integration of their investment in their website. Sure, it is a collection of everything that the stores have to offer, but it is doing nothing for their branding. If the company is serious about changing their target demographic, they need to increase both reach and image.

Josh Strawczynski's Opinion
It frustrates me I see companies dip their toes in the water with no real strategic plan. Julian Cole always talks about strategy integration. He talks about this because it is essential, for instance, you could walk to the shops for milk, but if you only brought enough money for milk, then you can't expand your operation while you are there.

Sam Berringer's Opinion
I personally think that slowly implementing online strategy is a good idea, but I don't believe that their goals are in line with their marketing actions. Maybe next year Cash Converters.

With Cadbury splitting from schweppes, an interesting question in marketing strategy has emerged. Who is going to purchase them? There are of course several main players in the domestic market, Coke could be a potential suiter, Fosters have expressed interest & don't forget there are plenty of off shore brands that are looking for a foothold in the relatively stable Australian market.

Now unlike my usual blog, where I have time to do my research, I am posting this because I want to try something different. I would like to know what you have to think, make comments on this page and debate the topic. I aplogise that I can't complete this at this time, but there has been a death in my family and I am writing this from Melbourne Airport. I'll be back on the 5th of August, but til then I'm not sure when I will post next.

A few ideas
Coke would love to ge their hands on a little more channel power, although the ACCC would presumably block it. The only thing that may help them achieve their goal is the split between Schweppes and Red Bull (20% of the market).... could happen.

Fosters have expressed interest, mainly because if they own Schweepes Coke can't buy them, as they have been trying to do for a while.... interesting.

Sorry guys, last call. I'll see what I can do over the next few days.

Josh