Sustainable marketing

Sustainable marketing is the process of promoting products that are environmentally safe at the retail level and touting a company's commitment to sustainable practices at the public relation level. It applies traditional marketing techniques but in a specific context. This category of marketing seeks to capitalize on the increased value consumers place on eco-friendly products and companies that have a perceived commitment to sustainability in its production and supply Chains

Marketing that promotes a company's sustainable initiatives serves as a bridge between. Corporate responsibility and profitability. These initiatives often require a significant capital investment to change the way a company does business or to innovate its products and services so they have a more positive impact on the environment. Investments in sustainability are only worthwhile to a corporation if they result in increased profitability. While social goals are admirable, a corporation has a fiduciary duty to maximize profits for its stockholders. Sustainable marketing assumes this investment is viable by crafting messages that tap into this consumer concern with the expectation that it can be translated into purchasing decisions.

The Corporation for Battery Recycling (CBR), a non-profit organization comprised of the four largest battery makers, issued a request for proposal that seeks a business partner to steward the collection and recycling of household batteries.

The national program will focus on the collection of all consumer batteries and recycling of alkaline manganese, zinc carbon, zinc air, silver oxide and lithium batteries.

The battery group’s work began in 2011 with a full life cycle analysis by MIT of consumer batteries, which indicated that, under the right circumstances, collection and recycling could be net environmentally positive (measured against a baseline of environmental impact of land filling batteries under current assumptions). This new finding led to the formation of CBR, the governing entity that has begun the process for a national battery recycling effort.

CBR members have been working together to review the implications from the life cycle analysis and create a framework for voluntary recycling where the use of recovered materials such as zinc, manganese and steel offsets the extraction impact of virgin materials. 

The execution of a communication and education program is an integral component of the stewardship organization’s responsibility. An awareness campaign is under development to inspire, educate and motivate consumers of primary household batteries to voluntarily participate in the program.

 Environmental impact due to batteries

- Studies have showed that for both primary and rechargeable portable

batteries, the mining and refining phase has the highest environmental

impact

- For rechargeable batteries, the use phase also plays an important role:

- Number of charge cycles

- Energy efficiency of chargers

- Electricity mix

1997 – 2007: Market trends(*)

-Average weight of primary batteries fell by 24%

Environmental gains from reduced use of natural resources

The current roadmap for sustainable market for this industry requires to assess and reduce the environmental impacts of the existing recycling processes and repercussions of battery collection system. The Raw materials extraction from mining should not impact the environment.

The objectives followed for a sustainable market are

1. To develop sustainable mining and refining codes of practices

2. To establish a set of sustainability guidelines for suppliers3. To obtain life cycle inventory data on some key-ingredients

Analysing Market

The global market forecast the steady growth for alkaline batteries through 2017. global economy would favour the growth and demand for primary and secondary consumer batteries. Growing demand for consumer electronic goods such as cameras, electronics toys, portable computing device and other battery operated electronic products drives the demand for consumer batteries, especially in Asia. China is expected to emerge as largest and fastest growing market for these batteries. the same factors should drive the market in India as well.  where growth is expected to be particularly robust, and also in South Korea, Indonesia, Iran, Poland, and Argentina, where growth is likely to exceed the global averages. The US, Europe, and Japan are relatively mature markets, and are forecast to grow moderately through 2017. Though mature, these markets would continue to be of major interest to battery manufacturers, as they together would account for a lion’s share of the global consumer batteries market by 2017

The secondary/rechargeable batteries segment would see lithium-ion rechargeable batteries display the maximum growth opportunities, driven by the widespread popularity of consumer electronic devices, including mobile phones. The strong demand for electronic devices would also support the demand for Nickel-Metal Hydride (NiMH) batteries to a certain extent, but only in the developing countries of Latin America and the Middle East. Nickel Metal Hydride (NiMH) is a maturing market worldwide, accommodating less room for further innovation in terms of technology. Newer technologies, such Lithium batteries, have posed substantial threat to the market share of NiMH over the recent years. Not withstanding this pressure, NiMH batteries remain a price-efficient solution across many applications, owing to its performance characteristics and lower price/kWh. Li-ion is the latest and the first adoption of the promising Lithium chemistry. Similar to NiMH, the new battery technology is again a response to the demand for greater power by the current generation of portable devices, especially cellular phones and laptops. Despite the high premium, constraints regarding the availability and the additional control circuitry involved, Li-ion has surged like no other battery technology in the primary and secondary segments. The rapid acceptance of Li-ion reflects the immense potentiality for a truly competent rechargeable technology, which extends the operating time of the device and conforms to the space constraint

Key challenges faced by the alkaline battery manufacturers include:

• Competition from alternate chemistries
• Increasing cost of raw materials
• presence of counterfeit batteries

Key drivers impacting the growth of the market

• The ability to power day-to-day gadgets such as alarm clocks electric shavers, remote controls andradios among others.
• Alkaline batteries are available in various sizes according to the applications (such as AAA, AA, C, D, 9 V and others)
• Alkaline batteries are environment-friendly, which are anticipated to be disposed as trash and do not require active collection and recycling. Moreover, those made currently by almost all the major manufactures are mercury-free and hence, do not pose any environmental pollution or hazard on disposal

Branding

In simple terms, “brand equity” is a construct that is designed to reflect the real value that a brand name holds for the products and services that it accompanies.  Brand equity is considered important because brands are believed to be strong influencers of critical business outcomes, such as sales and market share.  For example, Inc. Magazine notes that “branded products invariably command a higher price than so-called "generic" or "store brands"—even when the product is itself a commodity like sugar. In such cases the higher price is due almost entirely to the power of the brand. ”Professor Kevin Keller, of Dartmouth College, lists the following seven benefits of brand equity

1)       Be perceived differently and produce different interpretations of product performance;

2)       Enjoy greater loyalty and be less vulnerable to competitive marketing actions;

3)       Command larger margins and have more inelastic responses to price increases and elastic responses to price decreases;

4)       Receive greater trade cooperation and support;

5)       Increase marketing communication effectiveness;

6)       Yield licensing opportunities;

7)       Support brand extensions

Brand equity, like most constructs, has been defined and measured in numerous ways.  It is sometimes understood from the perspective of tangible financial assets of a firm.  However, from a marketing research perspective, brand equity is often viewed conceptually- as a framework for understanding the power of the intellectual and emotional associations consumers have with particular named products and services.  In contrast to the absolute dollar valuations that underscores the direct financial perspective; marketing researchers seek to measure and understand brand equity for strategic positioning and planning. 

Modeling & Measuring Brand Equity

Brand equity has been defined and measured by experts from both academia as well as for-profit companies. In fact, many research agencies have developed their own brand equity models that are executed in partnership with end-user researchers.  As Professor Kevin Keller, of Dartmouth College, observes “although the details of different approaches to conceptualize brand equity differ, they tend to share a common core: All definitions typically either implicitly or explicitly rely on brand knowledge structures in the minds of consumers- individuals or organizations- as the source or foundation of brand equity.”

Opinion researchers define and measure brand equity in terms of the knowledge consumers have of a brand.  To this end, numerous published models and measurements of brand equity are available.  The chart below details several of these constructs.  Notably, measuring brand equity may be only a single piece of a more comprehensive brand research program.  Likewise, an organization’s brand research program may be only a single facet of the larger research and insights program.  Review MRA’s other resources for a better understanding of how a comprehensive research and insights program fits together

Segmentation, Targeting and Positioning(STP) and Marketing Strategies

Segmentation, Targeting and Positioning(STP) and Marketing Strategies

Segmentation, targeting, and positioning together comprise a three stage process.  

We first 

(1) determine which kinds of customers exist, then

(2) select which ones we are best off trying to serve and, finally, 

(3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

                                                

For Duracell, the marketing issue is what market coverage strategy should they use in the consumer battery market. To answer this question a company can construct a "segmentation circle" that represents the possible ways that a market can be segmented such that each possible segment is or can be a product that meets separate needs and wants. (Note: if not separate, cannibalization can and probably will occur.)

Consumer segmentation variables include demographics (e.g., age, gender and family life cycle), psychographics (e.g., self concept and lifestyle), usage rate (e.g., heavy and light users) and benefits sought. In this case benefits sought may be batteries for normal vs. high-drain devices.

A company has three basic choices for market coverage strategy:

• Undifferentiated – ignore segmentation variables and go after the whole market with one brand.
• Differentiated – operate in all or several segments of the market and design separate brands for each.
• Concentrated – operate in one or only a few segments of the larger market following a niche strategy with one brand.

For years Duracell and its competitors in the consumer battery market followed undifferentiated market coverage strategies. There was only the Duracell brand name and the company wanted to sell those batteries to everyone in the market. However, Duracell switched to a differentiated market coverage strategy by bringing out a new product line called Duracell Ultra (for high-drain devices). The success of this strategy depends on how well Duracell did their segmentation analysis—the segmentation circle—since that is what defines how different the two markets really are. If they are not different, the new product could cannibalize the existing product or, worse, dilute the meaning of the brand in the minds of consumers.

Promotion IMC/ATL/BTL

Promotion IMC/ATL/BTL

Promotion of a brand

A promotional plan for a brand can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image,there are three basic objectives of promotion- to present information to consumers as well as others, to increase demand, to differentiate a product.

Promotion of a brand are divided into two parts ATL and BTL promotions

ATL Promotion: ATL advertising uses media such as television, cinema, radio, print, and Out-of-home to promote brands or convey a specific offer.It differs from BTL advertising, which uses unconventional brand-building and promotional strategies.  

BTL (Below The Line) Promotion:  BTL sales promotion is an immediate or delayed incentive to purchase, expressed in cash or in kind, and having short duration. It is efficient and cost-effective for targeting a limited and specific group. It uses less conventional methods than the usual ATL channels of advertising, typically focusing on direct means of communication, most commonly direct mail and e-mail, often using highly targeted lists of names to maximize response rates.

Integrated Marketing Communications (IMC) 

Integrated marketing communications (IMC) is an approach to brand communications where the different modes work together to create a seamless experience for the customer and are presented with a similar tone and style that reinforces the brand’s core message. Its goal is to make all aspects of marketing communication such as advertising, sales promotion, public relations direct marketing, online communications and social media work together as a unified force, rather than permitting each to work in isolation, which maximizes their cost effectiveness

 Integrated Marketing Communications for duracell

• The promotional activities for the secondary market follows the lead of the primary market

• The same "Powered by Prismatics" campaign is used and new gaming systems carries the Prismatics logo on the product and the product's packaging 

• Since the target audience is much younger Duracell uses different channels to reach them including television (MTV's Total Request Live, etc.), print media advertising ( Game Pro and Game Informer), and online advertising is concentrated on Yahoo! and popular game manufacturer's Web sites

DISTRIBUTION

Distribution is the process of making a product or service available for use or consumption by a consumer using direct or indirect means of intermediaries.

Levels of distribution are of 4 types:

1.Zero level distribution : direct marketing

2.First level distribution  : retailers

3.Second level distribution:wholesalers and retailers

4.Third level distribution: broker, wholesalers, retailers

Distribution channels of Duracell

Duracell adopts first level and second level distribution channels. 

The depot of the company sells its products directly to the retailers and then from retailers it goes to the consumers.This happens only in places where depot of the company is located.

In small towns wholesalers are established by the company.Wholesalers get product from depot of the company and they sell to retailers. From retailers it goes to consumers.

Duracell mainly focuses on retailers as its distribution channel.

PRICING

Pricing is the process of determining what a company will receive in exchange for its product or service. pricing decisions are clearly complex and difficult, and holistic marketers must take into account many factors in making pricing decisions - the company, the customers, the competitions, and the marketing environment. pricing decision must be consistent with the firm's marketing strategy and its target market and brand positioning.

The product range of Duracell Batteries in India includes Duracell and Duracell Ultra. Duracell is available in sizes AAA, AA, C, D, and 9-volt while Duracell Ultra is available in sizes AA and AAA sizes.

Duracell Copper Top batteries are priced competitively at Rs.100 for 4ps pouch (AA) and 180 for 6ps pouch (AAA)

while Duracell ultra has a premium charge of Rs 75 for 2 ps pouch.

PRODUCT HIERARCHY

Product hierarchy is a spectrum that stretches from basic needs to the product that satisfy those needs. 

Product Hierarchy:

Each product is related to certain other products. The product hierarchy stretches from basic needs to particular items that satisfy those needs. There are 7 levels of the product hierarchy:

1. Need family:

The core need that underlines the existence of a product family. The need family for batteries is need for electric source

2. Product family:

All the product classes that can satisfy a core need with reasonable effectiveness. For example, all of the products such as batteries, dynamo, generator are power source.

3. Product class:

A group of products within the product family recognised as having a certain functional coherence. For instance, alkaline batteries in one product class

4. Product line:

A group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channels or fall within given price range. Here Rechargeable batteries is a product line

5. Product type:

A group of items within a product line that share one of several possible forms of the product. For instance, AA pencil  batteries is one product type.

6. Item/stock-keeping unit/product variant:

A distinct unit within a brand or product line distinguishable by size, price, appearance or some other attributes. for example AA pencil alkaline batteries is a single item

Product Mix:

An organisations product line is a group of closely related products that are considered a unit because of marketing, technical or end-use considerations. In order to analyse each product line, product- line managers need to know two factors. These are.

i. Sales and profits

ii. Market profile

A product mix or assortment is the set of all products and items that a particular seller offers for sale. A company’s product-mix has some attributes such as.

1. Width:

This refers to how many different product lines the company carries.

2. Depth:

This refers to how many variants, shades, models, pack sizes etc. are offered of each product in the line

3. Length:

This refers to the total number of items in the mix.

4. Consistency:

This refers to how closely the various product lines are related in end use, production requirements, distribution channels or some other way.

Setting Product Strategy

Anything which companies produce to satisfy particular needs and demands is referred to as a product. A product can be classified as to be made of following five levels.

The core benefit is the underlying segment product is offering. For example, customer  buying batteries has basic need of substitute power supply or portable charging option. this is the core value that is being offered by the product. A product engineered to satisfy this basic need becomes basic product. further to this companies add product value to there offering. At the expected level a battery should be long lasting and should have high reliability factor. certain basic expectations when added to the the basic product makes it an expected product. An augmented product provides more than customer expectation like having ability to hold charge for a very long time and others features that gives added benefits to the product.. However, augmentation increases the price of the product and customers have to pay extra. An augmented product gets converted into an expected. At potential level companies provides products considering all the possible augmentation.

Marketing Mix

Marketing Mix basically consists of the following 4 parameters that a marketer can control,
subject to internal and external constraints of the marketing environment. The goal is to focus on these parameters to create perceived value and generate positive response.  

Product Decisions

The term "product" refers to tangible, physical products as well as services. Here are

some examples of the product decisions to be made:

Brand name - Duracell brand name itself signifies that the product is focused on the duarbility of the product.

Functionality- The batteries are able to hold charge for a longer period of time compared to other brands offerings

Quality - From its long history of innovation and its focus on best serving the needs of the consumer, Duracell continues to set the standard for portable power.

Price Decisions

Some examples of pricing decisions to be made include:

Pricing strategy -skim, penetration, etc. 

Suggested retail price - Duracell Battery AA pack of 2 - Rs 51, Alkaline Battery 1.5v pack of 4 Rs. 120, Duracell ultra power Duralock AA pack of 4 Rs 350

Bundling - The batteries often comes in varied number of packaging and the price per battery is less is purchased in bulk.

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of

distribution decisions include:

Distribution channels - Duracell batteries are available through number of places including shopping marts, retail grocery stores, electronics shops, camera shops, online retailing shops

Market coverage (inclusive, selective, or exclusive distribution)

Specific channel members

Inventory management

Warehousing

Order processing

Transportation

Promotion Decisions

Advertising-  Promotion of the brand was done using several ad-campaigns including Duracell two helicopter campaign, Duracell trusted everywhere campaign and about Air-life Denver.

Personal selling & sales force - The infamous "Duracell Bunny" has promoted 85% recall among the customers who immediately link the character to the brand.

Sales promotions - Duracell did annual survey of top ten toys which gave the brand a valuable association with the toys.

Public relations & publicity - It promoted itself as a long lasting battery brand now it simply states Duracell Power, more life. Duracell sponsored 2002 Fifa world cup by offering new merchandising material and ad campaigns.

Product Life Cycle

Every product has a life span, which is divided into above five stages. The product lifecycle describes the sales pattern of a product over the time.The five stages are R&D, Introduction, Growth, Maturity, Decline.

Product life cycle of Duracell Batteries.

1) R&D stage- Duracell originated via the partnership of scientist Samuel Ruben and businessman Philip Rogers Mallory, who met during the 1920s. The P.R. Mallory Company of Burlington, Massachusetts, United States, produced mercury batteries for military equipment, trumping the carbon-zinc batteries used then in virtually all applications. During the 1950s, Kodak introduced cameras with a flash: the design required a new cell size, and size AAA was developed

2)Introduction stage- It was not until 1964 that “Duracell” was introduced as a brand, the name a portmanteau–a combination of multiple words–for “durable cell.” Then in 1978, Dark acquired the P.R. Mallory Company, which then merged with Kraft just two years later. In 1988 Kohlberg Kravis Roberts, the American multinational private equity firm, bought Duracell making the company public by the next year. It was then acquired in 1996 by Gilette, which was ultimately attained by Procter & Gamble.

3)Growth stage - Since the introduction Duracell has made innovative strides in developing new battery design with prismatic batteries, introducing NiOx technology, and advancing environmentally sound wireless power. Leading the way in the evolution of battery power, it’s no wonder Duracell has remained on top for so long.

4)Maturity stage- Duracell, the “Trusted Everywhere” battery brand, has been meeting global battery needs for decades, dating back to the first alkaline batteries. The Procter & Gamble-owned brand owns 25 percent of the global battery market share and is regarded as one of P&G’s “Leadership Brands.”

5)Decline stage-  The brand faces a big challenge maintaining the leadership position that it has acquired , however. Smartphones, tablets, MP3 players, and other consumer electronics tend to run on their own rechargeable batteries, causing the battery market to decline in recent years. To stem declines, the iconic Copper Top battery maker expanded its product mix with products like the Duracell Power mat, a convenient tool to recharge any gadget. The company recently launched Quantum, a premium sub-brand that it’s calling its most powerful battery to date. Innovation in complementary categories has enabled Duracell to maintain its marketplace presence and remain relevant, including OEM global sales and consulting services. Trust in the brand remains high thanks to key marketing partnerships, including serving as the official battery of the NFL. On social media, Duracell’s community growth exceeds that of its competitors with 4.1 million Facebook likes. Duracell strengthened its emotional connection with consumers through ad campaigns featuring fire-fighters and other first responders. 

Competition And Industry

Competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market share growth. Companies strive to increase sales volume by utilizing the 4 components of marketing mix, also referred to as the 4 P's: Product, Place, Promotion, Place.All organizations must consider their competition, whether it is direct or indirect competition vying for the consumer’s dollar. Both nonprofit and for-profit organizations compete for customers’ resources. Coke and Pepsi are direct competitors in the soft drink industry, Apple and Samsung are competitors in the Cellphone manufacturing. A group of competitors that provide similar products or services form an industry. Michael Porter, a professor at Harvard University and a leading authority on competitive strategy, developed an approach for analyzing industries. Called the five forces model and shown in the figure below. The framework helps organizations understand their current competitors as well as organizations that could become competitors in the future. As such, firms can find the best way to defend their position in the industry.

Bargaining powers of suppliers and buyers have less say than the threats posed by the potential entrants of new product and substitutes offered in the market.

Chief Global Competition for Duracell Include companies like

1) Energizer

2) Sanyo

3) Panasonic

4) Sony

5) Toshiba

6) Ultralite

7) Matsushita

Customer Decision Making (CDM) Process

Customer Decision Making Process comprises of 5 stages that a customer goes through to make his final purchasing decision. The stages of the buyer decision process are the recognition of the problem, the information searching, evaluation of all alternatives, the purchase decision and then finally  the post-purchase behavior. 

Problem Recognition - This is the first stage of the Customer decision making process where a customer realizes a particular problem that needs to be solved or he has a need to satisfy. this can be triggered either by a internal or external stimulus

Information Searching - Stage two is where we begin to search for information about the product or service. Buyers here begin to look around to find out what’s out there in terms of choice and they start to work out what might be the best product or service for solving the problem or satisfying any need.

Evaluation of alternatives - Stage three sees the evaluation of the available alternatives whereby the buyer decides upon a set of criteria by which to assess each alternative.

The Purchase decision - This stage is where a customer finally makes the decision of what to buy and where to buy it from.

Post Purchase Behavior - Once the product is purchased and used, the consumer will evaluate the adequacy with his original needs (those who caused the buying behavior). And whether he has made ​​the right choice in buying this product or not. He will feel either a sense of satisfaction for the product (and the choice). Or, on the contrary, a disappointment if the product has fallen far short of expectations.

We shall now look upon some questions with regard to the product which is Duracell batteries

1. Who buys this item?

The household batteries market has declined as most of the mobile devices including mobile phones cameras mp3 players are now using dedicated built in rechargeable batteries. Still household batteries maintains a ubiquitous presence in home in variety of  household applications from remote controls to fire alarms. while they once provided portable power to most household items, their role is shifting to one of security and preparedness. Duracell is the first choice of customers looking for a reliable and long lasting battery to power their devices including camera, remote controls, radios, power cases for cell phones, portable chargers and many others. 

2. What problem will this product solve?

Portability is what makes batteries so important. The convenience brought by batteries have led to invention of more gadgets that make use of wireless power. Thanks to which we have wireless mouse, flash lights, portable fans, lamps and televisions that previously used to be wired to a power source. We can fully appreciate the use of batteries when electricity goes out. They allow us to operate our devices where ever we are, no matter what the situation is. Cellphones which have now increased in their size and performance are struggling to maintain their portability. In such situation phone cases with built in power bank can supply extra power to them when their batteries gets discharged.

3. Which attributes are important and why?

The key attributes customers look for while buying batteries are
- Reliability of the product.  
- Durability, how long will it last.
- In case of rechargeable batteries, the number of charging cycles and its charging time.
- Its capacity to size ratio, portability.
- Ability to hold charge for longer period of time.

4. If this decision is the first time, how will it go? If it is repeat, how will it go? 
The first time customer goes for a product that offers them the best deal. people buying batteries would not do research on what brand to buy. they would just go for a well known brand that is already well established. and which is easily available to them. Branding and advertisements also play important role in influencing their purchasing decision.
For those customers who are already associated with the brand will usually not switch to another brand. Duracell customers are loyal to the brand since it has strong brand positioning. However some customers are indifferent to brands and if they find a better offering from a competition, they would buy it. Eveready is the second largest battery manufacturer and major competitor to Duracell. Therefore to retain its customers, Duracell comes up with more innovative product line and better quality products than its competitors.