Marketing Lessons from Kevin Lane Keller

Yes, that Kevin Lane Keller. (Click here for article) was the article published in Business Standard online today. Some important things were said, the first of which need sharing.

Which is that aspect of branding that most underplayed or ignored as corporations continue to chase the bottom line?
To me it is probably the product. It is one of the most important things. When it comes to branding, people sometimes get so caught up in the name, the logo, the advertising, that the image that the product, which is so central, has to take a backseat. You have to give a good product and make sure the design falls into place as well. Sometimes marketers ignore that a little bit more than I like.

The other most ignored aspect is that of channels — things like distribution, retailing, where you sell. In India, it is changing rapidly. Till now, it was very fragmented. Yes, there has been some consolidation but we will see what happens going forward. It is important to get your product out there in the right way, to the right people.

In general, if there is one area that gets overplayed, it is communication. Everyone’s enamoured by advertising, digital and social media. In the process, they tend to ignore the hugely important aspects of channels, products, and even pricing.

Look, we, as marketers (especially services marketers) get into this vortex of ‘brand, brand, promote, promote’ that we tend to forget or ignore some basic tenet.

  • Why should you do it?
  • How will the promotion help?
  • How could it harm?
  • Do we have the delivery capabilities (or a concrete  promise and roadmap for delivery capabilities) to back the promotion?
  • What does the client want?
  • Does your promotion map to the want?

Please ask yourself these few questions before you start any marketing campaign. And offshoots of these questions, which you should figure out as relevant for you ….

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What is the Right Price for my product/ service?

“In spirit, pricing should ensure that you will survive”

There are multiple internal and external factors that need to be considered, and there is an important need to identify the pricing objective, before actually getting into finding the price.

Start asking yourself – What is my product/ service positioning (luxury product at low price could actually impact your image)? How will changes in price impact demand for my product/ service (do some market research)? How much are the COGS and the Fixed Overheads related to my product/ service (Gross margin should be sufficient to cover overheads)? What are other external factors that can impact my pricing (such as regulatory compliances, competition etc)?

Once the above stated questions are asked, identify the pricing objective – Short-term Profit Improvement (cash crunch situation), Short-term Revenue Improvement (expanding the market share now, and reaping the benefits in future through economies of scale and scope), Profit Margin Improvement (Low/ unpredictable Sales situation), Quantity Improvement (creating a future demand by making masses habitual to product/ service now || also, take advantage of economies of scale in future), Differentiation Creation (Low/ High Price Product/ Service), SURVIVAL (Intense competition).

As you know what exactly you want to achieve, now, choose the appropriate model (Cost-plus: Price equal to Cost plus Margin, Return Based: Price proportional to the ROI created for customer, Target Return: Price set to achieve target ROI, Perception Based: Price set at a level which is perceived as “fair price”).

“Remember, your price should always be higher than your cost, never be higher than market perception of “fair price”, and most importantly, definitely be enough higher to cover cost of normal variations in sales volume”