Folliderm’s Strategy Assignment

1a) Breaking the consumer’s perceptual threshold Folliderm’s strategy of placing the ad on the doors of the elevator is very effective in attracting the attention of consumers. Consumers will see this ad when they take the elevator. And sine there are thousands of ads everywhere, this strategy is effective to minimize screening out. Thus, countering consumers’ selective attention. Furthermore, when the elevator doors open, the 2nd part of this implicit ad is revealed to consumers after building up the curiosity of the consumer with the picture when the doors are closed. This allows the consumer to better retain this new information, overcoming selective retention. By using a before-after imagery strategy, Folliderm’s ad targets consumers’ selective distortion. Some target audiences (e.g. Younger people with healthy hair) may not be bothered with Folliderm’s ad, as they believe that that they do not need nutritional support for hair and may not believe that this product works. The ad is trying to influence audience’s interpretation after capturing their attention. They are trying to suggest that even if you have healthy hair, you might lose your hair anytime (i.e. when the doors are closed, then opened when the elevator arrives). However, this ad might be ineffective in a few situations and will be unable to break consumers’ perceptual threshold. They might not even be able to give their audiences the information intended. Firstly, if audiences are not motivated, they might not try to fulfil any curiosity of the picture on the close doors. Hence, missing out a huge chunk of information of this ad. Secondly, if the lifts are filled with people, audiences might miss out the 2nd part of the ad (picture of bald head of the inner walls). Thirdly, this also happens if the audience just walks pass the elevators with doors closed, and not even understand the message that the ad is trying to convey. Lastly, the audience may be unable to draw the right conclusion to this implicit ad. Thus, causing the ineffectiveness of breaking perceptual threshold. 1b) Persuading consumers to consider buying the product Assuming that the ad can first capture the attention of the consumer, it also uses strategies to persuade consumers. Firstly, it tries to trigger consumers need recognition (or problem recognition). Using the ad as an external stimuli, Folliderm wants to gets consumers thinking about the possibility of hair loss. In other words, they are trying to induce the fear of hair loss upon consumers. Consumers will be likely to be interested and thus, there will be an increase in tendency to buy Folliderm. However, Folliderm’s ad might be ineffective in persuading consumers in the phase of information search in the buyer’s decision process. The ad lacks information of the product so consumers may not know what the product is about. (I.e. consumers may assume that this ad is about a service that helps in hair growth, instead of a nutritional hair strength supporting product.) This lack of information is ineffective in persuading consumers to buy the product, as some consumers may not search for more information (E.g. Those that lack drive and motivation to further understand this product.). However, due to the effectiveness in breaking consumer’s perceptual threshold, the information retention of Folliderm might be sufficient to induce an anchoring effect in consumers. Hence, when they would actually need this type of product (I.e. when they or the people around them experience hair loss), there will be a higher tendency for them to purchase or search for more information on Folliderm. 2a) Swatch’s market segmentation Swatch is a subsidiary of the Swatch Group, which has an array of products ranging from watches and jewellery to electronic systems and production that targeting a wide audience. Being the global leader of the watch industry, the Swatch Group has 19 brands of watches that addresses all market segments. Swatch is targeting the basic range of the market segments, whereas other brands like Omega and Calvin Klein targets the luxury and middle range respectively. Swatch’s geographic segmentation is the global market and its watches are available worldwide. In its demographic segmentation, swatch can be seen having a larger segment in the “younger” and more active group (i.e. 18-25, students or the working class, or the “young at heart”). Products’ designs are seen to more chic and fashionable. Next, for swatch’s psychographic segmentation – they have products that cater to two more prominent groups. I.e. The sports and adventure market and the trendy and artistic market. They offer a number of sports watches and also designer watches that even come in seasonal designs. Swatch’s behaviouristic segmentation, which is suggested by consumers’ response to its products, is segmented to people who appreciate the watch for being affordable and sturdy, yet attractive and innovative in design. It can also be part of a collection. 2b) Pepsi’s market segmentation Pepsi’s demographic segmentation targets young people and teenagers in urbanized areas globally (geographic), with disposable income and can afford Pepsi drinks. Psychographic-wise, Pepsi targets trendy, fashionable and adventurous youths. Pepsi’s behaviouristic segmentation is toward those who seek status symbols and style. These can be illustrated by the ads and ambassadors Pepsi use. I.e. Trendy and popular superstars like Britney Spears and Michael Jackson. They are trying to influence consumers and create people’s need of Pepsi to quench their thirst of ego. Pepsi targets parties and special occasions and also try to suggest that they are the preferred choice when there is a need for cola drinks. 3) “Unmasking the Chinese Consumer” The article is discussing about how companies should adapt to the Chinese consumers’ buying behaviour by customizing marketing strategies to their culture to ensure successful marketing. That will lead to profitable returns in the Chinese market. Addressed are misperceptions of the Chinese culture and mistakes that companies should not make if they want to optimize their marketing strength on the Chinese market. “China is changing, but the prospect of a fundamental cultural shift is well off the mark,” says Doctoroff during the talk. Companies should keep this as a keynote while deciding and planning on business/marketing strategies. This is important in the marketing segmentation process of a product by any company. For example, in the behaviouristic segmentation of the product, people crave for products that can be symbols of status. As mentioned by Doctoroff, “It is conspicuous consumption. It is about now, it is about me and it is about status.” (Havely, 2012) However, even as the Chinese culture is evolving, certain values that concern being conservative and having a sense of security is still deep ingrained. Thus, companies have to create different strategies for different products. In China, the shopping and specialty types of consumer products are very much capitalized by global and foreign businesses. By targeting the wants of the Chinese consumer, which are products “projecting status and deriving societal recognition”, companies are able to charge a premium price for their products. Hence, that might lead to larger profit margins. (Havely, 2012) However, companies must be cautious not to localise their products too much in their marketing strategies. This is because consumers view these products as luxury goods and they will not want to be purchasing a product that is very similar to Chinese products but at a much higher price. Next, Doctoroff also mentions that “In China benefits are never internalized and instead paying for brands is seen an investment in future advancement.” (Havely, 2012) Thus, in order to have higher brand equity and a competitive edge against competitors, companies have to brand their products such that consumers are able to see the practicality of the products in the advancement and growth in some parts of their lives (e.g. the careers of the consumers). Ultimately, enhancing the Chinese consumer’s pride and satisfaction, which will also develop their brand loyalty. Doctoroff also mentions, “Chinese consumers look to both project status – or face - while also protecting and saving their wealth.” Companies need to understand this need of the consumer and adjust their products and services in order to “reassure on both a functional level and a societal level.” (Havely, 2012) Companies have to target the consumers’ core customer value in order to be successful. I.e. In China, companies should shape their brand that when consumers own and use their brand, they have increased “status”, “security” and “potential gains” values. Sadly, local China products may lose out to their foreign a.k.a. “global” competitors in terms of competitive advantage just because “global” products tend to be related to as higher valued status symbols. This is what foreign business can capitalize on in China and thus, lead to greater market share and revenue. However, local China products have some competitive edge they can capitalize on in order to protect and increase their market share as well. For example, they have a huge advantage in terms of local recognition and cost of production. Recently, China’s television shows have become very popular in the Chinese and Chinese-speaking markets. Businesses can utilise this trend to advertise and market their products. And since China is already a humongous and highly lucrative market just by itself, Chinese companies have the advantages to really compete and protect their market share. Thus, they have ability to limit the market shares of foreign/global companies. “Rather than expecting Chinese consumers to fit into established, Western-derived approaches to marketing, brands must learn to meet and adapt to China's worldview on its own terms.” (Havely, 2012) “Many western marketing strategies fail in China simply because they do not understand the Chinese consumer. Young professionals in marketing need to experience China themselves and actively engage with their target audience starting with work, study abroad, language study, and internships in China. When designing a marketing campaign, the company will need to carefully consider their audience, keep any cultural particularities in mind, stay informed of current events affecting their consumers, and conduct thorough market research.”[1] Companies should also ensure that the 4Ps of marketing: product, price, place and promotion, fulfils the needs of the Chinese consumers. If they would want to succeed and gain market share in China, they have to firstly, take stride and have patience in learning and understanding the culture of the Chinese markets. Then, build more and higher quality interpersonal and formal relationships with their Chinese counterparts. And lastly, fully utilise and acquire valuable resources (i.e. human resources) to improve and optimise their business strategies.

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[1] https://www.internshipschina.com/community/chinainsights2/55-china-insights/634-why-western-marketing-strategies-fail-in-china#.VOyrbilLdeU

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