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.