Marketing activities and communications

2421 words (10 pages) Essay

1st Jan 1970 Marketing Reference this

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Brands start off as products made out of certain ingredients. Over a period of time, brands are built through marketing activities and communications. They keep on acquiring attributes, core values and extended values.

Brands and business success are correlated. Brands facilitate better demand management and thus, improved profitability than commodities. Brands can be successful or unsuccessful. Only successful brands contribute to profits by adding values which attract customers to buy. This provides a sound framework to do business expansion. They also give a faceless corporation a face to identify with, to work for, and to deal with.

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Brands possess not only functional values, but also symbolic value, which are non-verbal clues to communicate with the peer group. A general manager is comfortable to drive Honda City not because of its elegant design and craftsmanship, but because it indicates his position in the organization. People choose their outfits, with great care, to manifest status, and propriety.

Brand has strategic perspective. Brand must have a unique added value sustained over a period of time. Or else. The life time of the brand will be short. Brand manager uses the concept of value chain. Different brands have different competitive advantage at different stages of the value chain.

In the market place of today, there is a virtual marketing warfare where brands fight with one another on the basis of quality, reputation and market share. Marketing strategy to a large extent is defined by brand strategy. Multi-branding approach is a measure adopted by many FMCG Companies, followed by consumer durable and service sector companies to survive in the competitive environment.

“Ducati Motor Holding”

DUCATI is an Italian motorcycle manufacturer. It is privately owned company located at Bologna, Italy. Ducati is a global brand in motorcycles industry. Ducati has been owned by a number of companies since 1926. at present it in Italian hands i.e. performance Motorcycles SpA.

Ducati has a strong brand image and value. Ducati is known for performance motorcycles characterized by large capacity four-stroke, L-twin engines featuring a desmodromic value design.

Brand Values

Brand values should be accurately defined. A BRAND MAY INTERSECT SEVERAL VALUES. IN DISCUSSING VALUE, THE UPPERMOST CONSIDERATION IS THAT OF PRICE. THERE ARE SEVERAL PRICE/VALUE COMBINATIONS. According to marketers, a lower priced product is perceived to be of lower value. But prices cannot be lowered beyond a point. Besides price war makes the brand a commodity; since commodities do not have their distinctions except price. Customers are then loyal to the price, and not the brand. Consumers pay in terms of money, time and feelings. These are the costs. Brand value is a ratio of benefits to costs.

Perceived value of a brand = benefits ÷ cost (rupees, time, feelings)

Core values define a brand’s motivations and boundaries. They encompass its competitive advantage; the benefits and other associated experiences. Core values are most particularly valued by the consumers. Consumers remain loyal to the brands as they maintain their core values, and their performance can be anticipated. A brand statement spelling out these values can be shared amongst all managers. Marketing plans are to be considered against core values.

Ducati’S Swot Analysis

SWOT analysis helps managers to craft a business model that will allow a company to gain a competitive advantage in its industry. Competitive advantage leads to increased profitability and this maximizes a company’s chances of surviving in the fast changing, global competitive environment that characterizes most industries today. The central purpose of the SWOT analysis is to identify the strategies that will create a firm specific business model that will best align, fit, or match a company’s resources and capabilities to the demands of the environment in which it operates. Strategic managers compare and contrast the various alternative possible strategies against each other with respect to their ability to achieve major goals and superior profitability. Thinking strategically requires managers to identify the set of strategies that will create and sustain a competitive advantage.

SWOT implies to Strength, weaknesses, opportunity and thread. These are explained below for the selected Brand “DUCATI”:-

1. Strengths

  •  Technical Excellence
  •  Efficient value chain ensures quality
  •  Strong brand
  •  Location advantage
  •  Effective and flexible management
  •  Strategic alliances.

2. Weaknesses

  •  Narrow target audience: the buyers of the Ducati fall between 18-35 years old age group.
  •  Polarized sales: the company data shows the company’s sales are polarized around hype-sports and naked families.
  •  Low economies of scale: Ducati produces very low volumes in comparison to its competitors. Thus does not enjoy high scale economies.
  •  Sparse dealer networks: it limits Ducati’s exposure to potential customers and the company has no presence in big emerging markets.
  •  Limited growth: during 2000 and 2003 Ducati has not shown any increase in market share.

3. Opportunities

  •  Fast growing segment: the heavyweight motorcycle segment is the fastest growing segment in the market. This means there is a potential growth.
  •  Weak competitor’s brands: the competitors do not have a strong brand which is an opportunity to the Ducati.
  •  Reduction in trade barriers: due to reduction in trade barriers Ducati may reduce its costs and reach to new customers/markets.

4. Threads

  •  Low prices of competitor’s: the competitors of the Ducati supply market at lower prices.
  •  Competitors enjoy lower cost: the competitors of Ducati such as Honda and Yamaha share certain costs like transport cost thereby making it cheaper for them to supply there.
  •  Economies of scale: the competitor’s of Ducati such as BMW, Honda, Yamaha, and Kawasaki enjoy high scale of economies.

Poter’S Value Chain – Ducati

The following shows the poter’s value chain for Ducati:-

1. Primary Activities:-

  •  Inbound logistics relies on outsourcing
  •  Operations mostly includes just assembly of components
  •  Outbound Logistics is not a key area for Ducati.
  •  Marketing & Sales: Ducati has its own seller network developing. “world of Ducati” is the famous quote of Ducati for marketing. Ducati shows racing results. It’s marketing and sales also include accessories & apparel.
  •  Service is not a key activity for the Ducati.

2. Support Activities:-

  •  Firm infrastructure: Ducati has the highest level of outsourcing in industry.
  •  HR Management: Ducati has excellent HR department which provides right person for the right job to the Ducati.
  •  Technology Development is essential of Ducati. The R&D shared expertise with racing helped with positioning bikes technologies superior.
  •  Procurement: located in great area for suppliers of engine and transportation “know how”

Product Range

In the simplest way a product could be defined as “everything the purchaser gets in exchange for his money.” From a strictly technical or manufacturing point of view, a product consists of a number of raw materials put together so that the end result serves a useful purpose of consumption. Size, taste, colour, features, weight, smell, durability, package, label are the tangible attributes of a product while style, image, brand name, quality, prestige and warranty are the intangible attributes of the product.

Any firm that markets products or services has two aims to achieve (a) consumer satisfaction and (b) profit maximization. Product policy decisions form an important basis for the firm’s competitive advantages in the market place. That is the reason why product policy becomes the central function of marketing.

DUCATI product range always offer the best performance combined with unique design. Ducati also provides products other than motorcycles such as radios, cameras and electrical products.

Ducati Brand Image

Ducati has a goal to increase and manage its brand image in this competitive world. Another goal is to demonstrate Ducati’s ability to evaluate its partner’s investments by creating communication opportunities. Ducati have also created its own official merchandising line to support our partners with co-branding and co-marketing activities.

Image building works in ripples. The source of communication ripple is the top management. The ripple spreads to the innermost circle of employees. Then comes the supplier and bankers. Later, the effect passes on to the consumer. Next, it reaches opinion makers like press, the elite, the intelligentsia, the government and its steel frame – the bureaucracy and finally the ripple dissolves into the public at large. In corporate image building, we cannot talk directly to the general public bypassing the intermediate groups. The effect of communication is felt much more by those closer to the sources.

Images are built on the functional values of the brand and intangible elements which emerge from these. But as most of the products are functionally similar, we have to resort to non-functional discriminators of emotion and symbolism. How far such non-functional differentiators are persuasive enough is a moot print. With proliferation of brands, it is becoming increasingly difficult to create differentiators. Emotional appeals are slippery area. True differentiation should be real and deep enough, rather than superficial packaging changes and communication modifications. Brand values are a continuum for a certain set of brands; at one extreme end we have image-driven brands and at the other end functional brands.

As image of the brand is a matter of perception, it can change if the perception of the consumers changes. There should be concept marketing on introducing a brand. The frequency of usage can be increased, and there should be more number of occasions for its use. As life style changes, the target market changes its profile. As a result, image also changes. An organization can make a brand contemporary by suitably changing the content of communication. A product may have to change its image taking into account the competitive positioning. Some brands start as niche brands and find it difficult to broaden their image later.

Brand Building

Brands are developed over a period of time- they are not made in a day. The process of brand building is continuous. At the new product development stage, the unique selling proposition is built into brand’s concept. However, brands take most values when they enter the market. Positioning at the development stage is important but the real test of the brand is after it is launched. The destiny of the brand is mostly shaped by the actual users. Brands should be constantly improved upon during the consolidation phase. Brands are consolidated sometimes by extensions either to re-inforce the existing values represented by the brand or to introduce new values to give it a new lease of life. The extensions could become “new generation” for a brand. In short, brand building has the following stages:

i) Product Development

ii) Positioning and Launch

iii) Brand Development

iv) Brand Consolidation

v) Brand Extension/improvement.

Ducati’s Target Market

ALL FIRMS MUST formulate a strategy for meeting their potential buyers in markets. There are two possible alternatives. The firm may choose to provide one product to all its customers or it may decide to divide the market into sub-markets having homogeneous features and develop a separate marketing mix for each sub market. The former is known as undifferentiated approach, while the latter is called market segmentation.

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A market segment is a group of individuals or organizations within a market that shares one or more common characteristics. Market segmentation is done on the basis of geographic segments, demographic i.e. age group, famility life cycle, sex, socio-economic segment, product segment, benefit segment, volume segment, marketing factor segmentation.

Ducati has a wide range of accessories, life style products and co-branded merchandise bearing their logos and designs. The company has licensing agreement with Tumi Inc., launching a collection of eight co-branded luggage pieces sold through both of the brands retail outlets. Ducati has a big market for its motorcycles.

In order to satisfy needs of the customers, a business firm must determine a marketing mix. The idea of mix of marketing functions was conceived by prof. Niel H. Borden of the Harvard business school. Marketing mix represents the total marketing programme of a firm. It involves decisions with regard to product, price, place and promotion. Marketing mix is a blending of decisions in the four P’s. Marketing mix is a dynamic concept as it keeps on changing with changes in the market conditions and the environment. The concept of marketing mix is useful in designing a marketing strategy.

References

1. http://www.ducati.com/racing/00_home_racing/corse/index.jhtml

2. http://en.wikipedia.org/wiki/Ducati

3. http://www.ringsurf.com/ring/ducati/

4. Stephenson, C.P.: “what is a product,” marketing form, April 1968

5. http://www.selectism.com/news/2009/01/12/ducati-opens-first-cafe-in-rome/

6. http://www.utalkmarketing.com/Pages/Article.aspx?ArticleID=11776&Title=How_Xerox%E2%80%99s_sponsorship_of_Ducati_reinvented_its_brand_values

7. S.A. Chunawalla: Compendium of BRAND MANAGEMENT, 2006

8. http://www.ducati.com/company/pud/popup/DucatiCaffe_eng.jhtml

9. http://www.dnaindia.com/money/interview_ducati-plans-to-sell-100-bikes-by-dec-next-year_1305942

10. Marketing, Charles W. Lamb, Joseph F. Hair, Carl McDaniel – Business & Economics – 2007 –

Brands start off as products made out of certain ingredients. Over a period of time, brands are built through marketing activities and communications. They keep on acquiring attributes, core values and extended values.

Brands and business success are correlated. Brands facilitate better demand management and thus, improved profitability than commodities. Brands can be successful or unsuccessful. Only successful brands contribute to profits by adding values which attract customers to buy. This provides a sound framework to do business expansion. They also give a faceless corporation a face to identify with, to work for, and to deal with.

Brands possess not only functional values, but also symbolic value, which are non-verbal clues to communicate with the peer group. A general manager is comfortable to drive Honda City not because of its elegant design and craftsmanship, but because it indicates his position in the organization. People choose their outfits, with great care, to manifest status, and propriety.

Brand has strategic perspective. Brand must have a unique added value sustained over a period of time. Or else. The life time of the brand will be short. Brand manager uses the concept of value chain. Different brands have different competitive advantage at different stages of the value chain.

In the market place of today, there is a virtual marketing warfare where brands fight with one another on the basis of quality, reputation and market share. Marketing strategy to a large extent is defined by brand strategy. Multi-branding approach is a measure adopted by many FMCG Companies, followed by consumer durable and service sector companies to survive in the competitive environment.

“Ducati Motor Holding”

DUCATI is an Italian motorcycle manufacturer. It is privately owned company located at Bologna, Italy. Ducati is a global brand in motorcycles industry. Ducati has been owned by a number of companies since 1926. at present it in Italian hands i.e. performance Motorcycles SpA.

Ducati has a strong brand image and value. Ducati is known for performance motorcycles characterized by large capacity four-stroke, L-twin engines featuring a desmodromic value design.

Brand Values

Brand values should be accurately defined. A BRAND MAY INTERSECT SEVERAL VALUES. IN DISCUSSING VALUE, THE UPPERMOST CONSIDERATION IS THAT OF PRICE. THERE ARE SEVERAL PRICE/VALUE COMBINATIONS. According to marketers, a lower priced product is perceived to be of lower value. But prices cannot be lowered beyond a point. Besides price war makes the brand a commodity; since commodities do not have their distinctions except price. Customers are then loyal to the price, and not the brand. Consumers pay in terms of money, time and feelings. These are the costs. Brand value is a ratio of benefits to costs.

Perceived value of a brand = benefits ÷ cost (rupees, time, feelings)

Core values define a brand’s motivations and boundaries. They encompass its competitive advantage; the benefits and other associated experiences. Core values are most particularly valued by the consumers. Consumers remain loyal to the brands as they maintain their core values, and their performance can be anticipated. A brand statement spelling out these values can be shared amongst all managers. Marketing plans are to be considered against core values.

Ducati’S Swot Analysis

SWOT analysis helps managers to craft a business model that will allow a company to gain a competitive advantage in its industry. Competitive advantage leads to increased profitability and this maximizes a company’s chances of surviving in the fast changing, global competitive environment that characterizes most industries today. The central purpose of the SWOT analysis is to identify the strategies that will create a firm specific business model that will best align, fit, or match a company’s resources and capabilities to the demands of the environment in which it operates. Strategic managers compare and contrast the various alternative possible strategies against each other with respect to their ability to achieve major goals and superior profitability. Thinking strategically requires managers to identify the set of strategies that will create and sustain a competitive advantage.

SWOT implies to Strength, weaknesses, opportunity and thread. These are explained below for the selected Brand “DUCATI”:-

1. Strengths

  •  Technical Excellence
  •  Efficient value chain ensures quality
  •  Strong brand
  •  Location advantage
  •  Effective and flexible management
  •  Strategic alliances.

2. Weaknesses

  •  Narrow target audience: the buyers of the Ducati fall between 18-35 years old age group.
  •  Polarized sales: the company data shows the company’s sales are polarized around hype-sports and naked families.
  •  Low economies of scale: Ducati produces very low volumes in comparison to its competitors. Thus does not enjoy high scale economies.
  •  Sparse dealer networks: it limits Ducati’s exposure to potential customers and the company has no presence in big emerging markets.
  •  Limited growth: during 2000 and 2003 Ducati has not shown any increase in market share.

3. Opportunities

  •  Fast growing segment: the heavyweight motorcycle segment is the fastest growing segment in the market. This means there is a potential growth.
  •  Weak competitor’s brands: the competitors do not have a strong brand which is an opportunity to the Ducati.
  •  Reduction in trade barriers: due to reduction in trade barriers Ducati may reduce its costs and reach to new customers/markets.

4. Threads

  •  Low prices of competitor’s: the competitors of the Ducati supply market at lower prices.
  •  Competitors enjoy lower cost: the competitors of Ducati such as Honda and Yamaha share certain costs like transport cost thereby making it cheaper for them to supply there.
  •  Economies of scale: the competitor’s of Ducati such as BMW, Honda, Yamaha, and Kawasaki enjoy high scale of economies.

Poter’S Value Chain – Ducati

The following shows the poter’s value chain for Ducati:-

1. Primary Activities:-

  •  Inbound logistics relies on outsourcing
  •  Operations mostly includes just assembly of components
  •  Outbound Logistics is not a key area for Ducati.
  •  Marketing & Sales: Ducati has its own seller network developing. “world of Ducati” is the famous quote of Ducati for marketing. Ducati shows racing results. It’s marketing and sales also include accessories & apparel.
  •  Service is not a key activity for the Ducati.

2. Support Activities:-

  •  Firm infrastructure: Ducati has the highest level of outsourcing in industry.
  •  HR Management: Ducati has excellent HR department which provides right person for the right job to the Ducati.
  •  Technology Development is essential of Ducati. The R&D shared expertise with racing helped with positioning bikes technologies superior.
  •  Procurement: located in great area for suppliers of engine and transportation “know how”

Product Range

In the simplest way a product could be defined as “everything the purchaser gets in exchange for his money.” From a strictly technical or manufacturing point of view, a product consists of a number of raw materials put together so that the end result serves a useful purpose of consumption. Size, taste, colour, features, weight, smell, durability, package, label are the tangible attributes of a product while style, image, brand name, quality, prestige and warranty are the intangible attributes of the product.

Any firm that markets products or services has two aims to achieve (a) consumer satisfaction and (b) profit maximization. Product policy decisions form an important basis for the firm’s competitive advantages in the market place. That is the reason why product policy becomes the central function of marketing.

DUCATI product range always offer the best performance combined with unique design. Ducati also provides products other than motorcycles such as radios, cameras and electrical products.

Ducati Brand Image

Ducati has a goal to increase and manage its brand image in this competitive world. Another goal is to demonstrate Ducati’s ability to evaluate its partner’s investments by creating communication opportunities. Ducati have also created its own official merchandising line to support our partners with co-branding and co-marketing activities.

Image building works in ripples. The source of communication ripple is the top management. The ripple spreads to the innermost circle of employees. Then comes the supplier and bankers. Later, the effect passes on to the consumer. Next, it reaches opinion makers like press, the elite, the intelligentsia, the government and its steel frame – the bureaucracy and finally the ripple dissolves into the public at large. In corporate image building, we cannot talk directly to the general public bypassing the intermediate groups. The effect of communication is felt much more by those closer to the sources.

Images are built on the functional values of the brand and intangible elements which emerge from these. But as most of the products are functionally similar, we have to resort to non-functional discriminators of emotion and symbolism. How far such non-functional differentiators are persuasive enough is a moot print. With proliferation of brands, it is becoming increasingly difficult to create differentiators. Emotional appeals are slippery area. True differentiation should be real and deep enough, rather than superficial packaging changes and communication modifications. Brand values are a continuum for a certain set of brands; at one extreme end we have image-driven brands and at the other end functional brands.

As image of the brand is a matter of perception, it can change if the perception of the consumers changes. There should be concept marketing on introducing a brand. The frequency of usage can be increased, and there should be more number of occasions for its use. As life style changes, the target market changes its profile. As a result, image also changes. An organization can make a brand contemporary by suitably changing the content of communication. A product may have to change its image taking into account the competitive positioning. Some brands start as niche brands and find it difficult to broaden their image later.

Brand Building

Brands are developed over a period of time- they are not made in a day. The process of brand building is continuous. At the new product development stage, the unique selling proposition is built into brand’s concept. However, brands take most values when they enter the market. Positioning at the development stage is important but the real test of the brand is after it is launched. The destiny of the brand is mostly shaped by the actual users. Brands should be constantly improved upon during the consolidation phase. Brands are consolidated sometimes by extensions either to re-inforce the existing values represented by the brand or to introduce new values to give it a new lease of life. The extensions could become “new generation” for a brand. In short, brand building has the following stages:

i) Product Development

ii) Positioning and Launch

iii) Brand Development

iv) Brand Consolidation

v) Brand Extension/improvement.

Ducati’s Target Market

ALL FIRMS MUST formulate a strategy for meeting their potential buyers in markets. There are two possible alternatives. The firm may choose to provide one product to all its customers or it may decide to divide the market into sub-markets having homogeneous features and develop a separate marketing mix for each sub market. The former is known as undifferentiated approach, while the latter is called market segmentation.

A market segment is a group of individuals or organizations within a market that shares one or more common characteristics. Market segmentation is done on the basis of geographic segments, demographic i.e. age group, famility life cycle, sex, socio-economic segment, product segment, benefit segment, volume segment, marketing factor segmentation.

Ducati has a wide range of accessories, life style products and co-branded merchandise bearing their logos and designs. The company has licensing agreement with Tumi Inc., launching a collection of eight co-branded luggage pieces sold through both of the brands retail outlets. Ducati has a big market for its motorcycles.

In order to satisfy needs of the customers, a business firm must determine a marketing mix. The idea of mix of marketing functions was conceived by prof. Niel H. Borden of the Harvard business school. Marketing mix represents the total marketing programme of a firm. It involves decisions with regard to product, price, place and promotion. Marketing mix is a blending of decisions in the four P’s. Marketing mix is a dynamic concept as it keeps on changing with changes in the market conditions and the environment. The concept of marketing mix is useful in designing a marketing strategy.

References

1. http://www.ducati.com/racing/00_home_racing/corse/index.jhtml

2. http://en.wikipedia.org/wiki/Ducati

3. http://www.ringsurf.com/ring/ducati/

4. Stephenson, C.P.: “what is a product,” marketing form, April 1968

5. http://www.selectism.com/news/2009/01/12/ducati-opens-first-cafe-in-rome/

6. http://www.utalkmarketing.com/Pages/Article.aspx?ArticleID=11776&Title=How_Xerox%E2%80%99s_sponsorship_of_Ducati_reinvented_its_brand_values

7. S.A. Chunawalla: Compendium of BRAND MANAGEMENT, 2006

8. http://www.ducati.com/company/pud/popup/DucatiCaffe_eng.jhtml

9. http://www.dnaindia.com/money/interview_ducati-plans-to-sell-100-bikes-by-dec-next-year_1305942

10. Marketing, Charles W. Lamb, Joseph F. Hair, Carl McDaniel – Business & Economics – 2007 –

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