In late 2004, P&G announced a slew of price cuts on its major brands, causing a flutter in the FMCG landscape. HLL followed suit quickly; within a week, its entire price communication was up and running. The quick response was to the fact that any change in the equilibrium cant be left unaddressed. Its a much higher price to pay to regain market share than to protect it. The last changing equilibrium necessitates quick reaction, where the entire marketing mix product, packaging, pricing and even communication reacts in real-time. Be it price wars, opposing a new competitor or entering a new market, speed is the essence. And its not just the FMCG sector where quick reflexes are the order of the day.
Telecom, retailing, entertainment, all are witnessing rapid responses from key players. Marketers believe you can no longer draw up a plan well in advance for the year and relax. Its all about thinking on your feet and being prepared to counter any eventuality. Marketing is no longer about methodically plotting strategies and testing them over a period of time before a rollout. This is best represented by organized retail. Pricing on a day-to-day basis plays an important role to drive value in the minds of consumers in food retailing, Big Bazaar, for example, has an Offer of the Day or Offer of the Hour, based on footfalls, or even sales data available. The decision to have hourly or daily offers is at the judgment of the store manager. These judgments are based on what will sell better, and supported by sales data available on products or categories. Moreover, store managers also have targets which ought to be met, hence it is left to them to search for ways.
For retail stores, the challenge lies in ensuring they maximize the returns per footfall. Heres where real-time marketing come into play, and the challenge is to capture a greater share of the wallet of the huge crowds flocking to stores. The critical differentiator in retail is having an ear to the ground, and as today it takes two to three weeks to kick-off promotions and marketing initiatives, lead times are poised to shrink even more. Even movie business in India is learning to ensure that things are done speedily and on schedule, as delays and slip-ups could cause huge revenue losses. The belief now is that what really matters is the marketing effort in the three weeks before the release of the movie. Given the need for speed, increasingly, companies are trying to change the way they approach the marketing game. In order to be able to react at the drop of a hat, a certain orientation is needed. Nothing is overnight. If one has to react, the company has to support everyone into it. And this alignment enables companies to adapt and respond faster
In the quest to set the marketing clock in real-time, technology is playing a crucial role. Peter Fader, professor of marketing, Wharton School of Business, says that companies become real-time when they are able to understand the data, which is coming in, and based on that, create systems to improve their existing operations adequately. Marketing is about understanding supply-chain management. And today, technology enables companies to access data faster and more accurately. The differentiating factor in entertainment is the aggressive use of technology, which drives everything from operation to finance. It enables us to understand what is the off-take in one multiplex, and therefore what needs to be done. It is the daily sales feed from the retail outlets that enable Pantaloon to keep track of sales, and direct respective marketing teams to take necessary action for a certain category or brand. The manufacturer-retailer relationship maybe a difficult one, but technology is used by both parties, and the resultant data accumulated, can be put to much better use if it is attach jointly.