My Writings. My Thoughts.
Cleaning and hygiene; one of those expenses that generates no profit, no one wants to pay and everyone thinks can be reduced. No big surprise then when the corporate belt tightening comes knocking at the facilities Managers door. Reducing fixed costs has been top on the agenda for the last few years, so what’s left to cut? Increasingly the temptation is to look for cheaper products, leaving the sanctuary and comfort of the established national brands to flaunt with the darker, murkier world of smaller own label products; many of whom promise the same cleaning power as the major brands but at a fraction of the cost.
Good thinking or false economy? The question will be on the minds of many a Facilities Manager in the coming summer months. Is it possible to achieve the same results, but reduce costs; the national brands spend thousands on building brand image which is inevitably added to the price of the product, but is there a difference in quality between the own labels and national brands?
Ask any marketing manager about their brand and they’ll all tell you the same thing, the brand is more than just the product, logos, brand names and imagery; the brand reflects the personality and values of the company. That is to say there is an intangible element added to a product by the addition of the brand which reflects in the mind of the customer what the company stands for. Strong brands such as Diversey, Deb, Ecolab and Jangro create a preconception in the mind of the consumer reflected in the quality, value and service they provide. Gary Fage a Jangro Director and member of the Jangro marketing team states, “our brand acts as a guarantee to the customer; they can be assured that if the product contains the Jangro label they are guaranteed high quality and excellent value; but that’s only half the story, a strong brand allows for extra benefits such as guaranteed product consistency, a unified health and safety system and a commitment to innovation”.
The motives behind own label are less clear cut. In some cases own label is used as a method of promoting the name of the distributor, but all too often own label is being used as a method of increasing margin and reducing competition. Imagine the scenario, a manufacturer is looking to expand sales in a area where they already have a main distributer, opening a second distributor selling the same product would cause competition, disagreement and lower margins, so instead the manufacturer suggests one of the distributors takes an own branded version of the same product. Worse still, the distributer considers own branding a product in order to sell the product at an inflated margin, as the original manufacturer is not shown the customer has no form of comparison and none of us have the biological testing equipment to test a disinfectant!
Own brand can be good value, genuine and sensible economy, but customers have no way of differentiating between the chemical made in the distributors home garage simply packed with harmful acids, or the products containing high quality surfactants made by respectable reputable manufacturers.
National brands offer security and it could be argued better value; National brands invest more in research and development, use automation to reduce manufacturing costs and benefit from cheaper costs associated with larger production runs. There is also something to be said for the brand leaders, they became brand leaders because their product was the best in the category, how can everyone be wrong?
I have no doubt that many managers will tread the own label route as an easy option to short term cost cutting. Some will be happy as the distributors are honourable and the products acceptable for purpose, however equally there will be those who find the long term costs far higher. There are no steadfast rules, no way of telling cheap chemical form real quality, but if you want to try own label think carefully about the distributor you are about to purchase from, do they share your values of quality, value and service or are they out to make a fast buck?
Quick guide to creating a marketing plan..
Basic 5 questions…
Stage 1: Where are we now?
Stage 2: Where do we want to be?
Stage 3: How might we get there?
Stage 4: Which way is best?
Stage 5: How can we ensure arrival?
People don’t go to McDonalds for the best hamburgers and they don’t go to Pizza Hut for the best pizza.
Restaurants offer more than just the product, they offer an ‘experience’ and in the case of fast food it is usually the consistent experience that provides the highest purchasing motivation. Every McDonalds is the same, whether I go to Beijing or London, I get the same experience and it is this consistent experience that is the determining factor in developing the consumer behaviour towards the brand. Customers know exactly what they are going to get and this in turn reduces the risk of the unexpected reinforcing the customers motivation to purchase.
Slowly things are changing, consumers are realising how the internet allows them to take power away from the sellers. Suddenly buyers are starting to realise that their opinions can be heard and there are others who share their views. This can only mean bad news for all the companies who continue to dupe the buyer with deals and promotions but in reality fall short with the after sales service; likewise those companies who fail to recognise the damage that can be caused by bad customer service. The shocking truth is that these companies are usually the ones who claim to be customer driven, or customer orientated, however this is far from the truth, they are simply good at getting the initial sale and information about their bad customer service is not reaching potential buyers.
I would love to see companies pay for their bad service, unfortunately we all fall into the trap of convenience and price over common sense and therefore those companies will still prosper. Time and tme again i have used poor companies because their offering was convenient or cheap and each time it has caused me headaches further down the line. … shame.
The latest marketing campaign from the Royal Mail states that 40% of their customers currently select the wrong service; yes, they even want to advertise it.
The first question to ask is obviously, why? why do so many customers not understand which service they require.
The Royal Mail’s answer to the problem is simple; each time you want to use a service visit your local branch, queue for 20 minutes and ask the counter staff for advice on which service is most suitable. Dooh ! do people have 20 minutes to wait and the desire to visit the branch each time they want anything. Is the postal service that complicated?
I’d be curious to find out why people use the wrong service. Is the information on services difficult to find? Could they not provide a simple leaflet on which service is right for you?
If Royal Mail truly believes that marketing communications do not change consumer behaviour, as their marketing Director Alex Batchelor believes, then why are they not practising what they preach. If they do believe that customer communication now changes brand behaviour, should they not listen to their customers and analyse why they are selecting the wrong service.
Royal Mail needs to change, not the customer !!! - even Royal Mail cannot change the market behaviour.
I travel to London each week, each time buying the same ticket, a super off peak return, but then I am told that if I get a super advance or advance it may be cheaper and the super off peak does not allow me to travel on all off peak trains; for that I’d need an off peak ticket.
The crux of the storey is simple…. I do not understand what the marketing people are thinking.
Do they not realise that their customers don’t have a clue about the bizarre ticketing system. I wonder if it is deliberate… I can only assume that they have worked out a business model which generates more money from confusing a small amount of customers than encouraging more people to use the railways.
Here is an idea. Why not make it really simple for passengers; at the very least publish lists showing which trains are off peak and which are super off peak in accessible places, like the company website (yes, they do not have this information on their sites ! or anywhere else – how rediculous)
Or maybe simplify it further and have just one ticket, like an airline.
The truth of the matter is that the train operators do not understand what they are providing, either in terms of service or product. They do not understand the need to be customer focused to make things easy for the customers to understand.
The rail companies have a monopoly and because of this have failed to recognise or establish their competitive advantage. People use the railways because the they have to, not because they want to, I think that explains everything.
I think it comes down to Levitt’s marketing Myopia.
I can’t help but applaud the genius of Sony in driving up music sales in the run up to Christmas, but at the same time can’t help to notice how suckered the public was into what appears to be a great marketing scam.
X-factor was sure to be number one at Christmas, after all the last 3 winners had all managed Christmas number one. So why not create a viral campaign praying on the hatred of X-factor in certain sectors of society and get them to buy, via download, another track which is also indirectly owned by Sony.
I think for this type of scan to work there are several crucial ingredients.
1. The cost of purchasing must be cheap… less than £2
2. The two products must be total opposites
3. There cannot be a direct link (as in this case)
4… those suckered have no idea that they are just funding a large company… like Sony.. although maybe some people knew, but did it anyway.
Maybe i am looking at this form a cynical standpoint. But deliberate or accidental it is excellent marketing.
There are some that realise for social marketing to work they must involve the consumer. There must be a reward for the behaviour change, rather than a penalty for non compliance.
I think these people have got it right….