Streamline Training & Documentation: Training in a World of Niche Marketing

Thursday, January 11, 2007

Training in a World of Niche Marketing

As implemenation of IT-enabled relationship marketing has become more effective, companies are shifting from mass marketing toward targeting compact consumer segments, and even individual consumers.

There has been a corresponding shift in the skills most important for marketing personnel.

This is one of the key points Niraj Dawar, professor of marketing at the University of Western Ontario's business school, makes in What Are Brands Good For?, published in the Fall 2004 issue of the MIT Sloan Management Review.

Dawar's explains the rise of relationship marketing by arguing that

... the information revolution is undermining the logic of [consumer] aggregation, the very source of brand power. In fact, it is becoming evident that in an information-rich environment, consumer disaggregation is vastly more efficient and profitable than aggregation.

Dawar goes on to talk about the need to at least consider replacing brand management with segment management:

As with any radical change, disaggregation represents both opportunities and threats. The opportunities for sharpening the role of brands and redisributing some of their tasks to other tools are unprecedented. But as companies pursue such opportunities, they may end up reorganizing their marketing in a way that ultimately challenges the centrality of brands.

The strategic tasks Dawar has in mind are:

Building a relationship, which requires earning trust and credibility

Communicating a key benefit, which means staking a position

Charging a premium price

The tactical tasks are:

Driving trial and traffic and increasing sales volume

Building the likelihood of repurchase

Responding to competitive moves

In the business environment Dawar describes, "each brand becomes a tool in the toolbox of the marketer, whose job is manage consumer relationships, not brands." Along the same lines, Dawar sees brands increasingly having a derivative role in retailing. More and more, the primary requirement for manufacturers will be that they "become an essential element of the retailer's value proposition to particular consumer segments." A manufacturer's brands serve as a tool for achieving this result.

Which brings us to the implications for training.

In the world of mass marketing, brand management was central, and training focused on branding, message development, and managing relationships with marketing services agencies.

In the world of disaggregated marketing, Dawar believes the focus needs to be on deepening knowledge of:

particular consumer segments

consumer behavior

data interpretation and management

The latter skills enable marketers to effectively use a company's brands to develop a portfolio of differentiated value propositions. That portfolio, in turn, becomes the basis for building profitable customer relationships.

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Labels: Branding, Employee development

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