Flanking Marketing

Flanking Marketing

“Pursuit is a second act of the victory, in many cases more important than the first” ---- Carl Von Clausewitz

The term ‘Flanker’ is used in military terms to describe a soldier positioned to protect the flank of troops in the march. In 1940 German stunned France by going around its vaunted Maginot line and attacking the country through Belgium. After six weeks the battle was over. In 1991 US encamped their forces in Kuwait and eastern Saudi Arabia. General H. Norman Schwarzkopf shifted its forces 100 miles west and launched the attack from the south surprising the enemy. After 100 hours Iraqi defense collapsed and US declared the war was over.

In the product lifecycle stage many companies want to expand their product and service offerings to reach a number of customers by adding product attributes and features. The marketers fully dependent on core marketing sector to earn profit. Here comes the Flanking Marketing. Flanking is the most innovative way to fight the competitor’s strategy.

Flank Marketing is the indirect marketing strategy to capture the competitors market segments which are not established by the well served marketing players. Flanking threatens the competitors either to allocate the resources to the segments that are attacked or to step down. Generally, the flank marketing strategy can be seen between large firms which have multiple number of product and services with product and service lines. However, a larger established firm takes less risk by inviting a confrontation in its own core market. The small and medium scale enterprises can take the risk and act quickly and secretly and makes profit. As a strategy flanking operation is a bold move.

Some features of flank marketing are as follows:

v  This marketing strategy doesn’t confront the two teams openly.

v  The surprise part of this marketing strategy the winning player gain access in the market before its competitors realize that.

v  Follow through once the leading position established.

v  This strategy works for differentiated product not for the new product.

There are two possible ways of flank attack:-

Glocal Flank Marketing Strategy: This occurs when a company or a firm attack different areas of accompany locally, regionally and globally where the competitor’s resources are not very strong. Mercedes Benz, Pepsi, Coca-Cola uses this type of marketing strategy to gain access in the market.

Segmented Flanking Strategy: The marketer’s attacks the competitor’s targeted and niches customers and win over their resources.

The concept of flanker brand in late 80s also known as fighter brand is used to offer a new product to the market in order to capture larger portion of the market. The benefits of flanker brand are multiple. A flanker brand allows the brand owner to capitalize on the reputation of its main brand and on all the messages about quality and source which are espoused in the existing brand. This allows for potential capturing of new clients, including those who are unhappy with competitors’ products in the same space, or those who are looking for a more economic choice.

 

Example of Flank Attack:

 The Japanese company Canon uses flank marketing strategy and took over the half of the market share from Xerox in 1978. The Canon Company target the niche segment of smaller size copier market which cannot be affordable to large size copier market of Xerox. This flank strategy showed up the poor defensive strategy by Xerox and better aggressive strategy by Canon as it successfully implement the flank strategy.

The success of flanking strategy depends on marketer’s ability on creation and differentiation. This has to be carefully handles by the marketer or competitor as its competitor takes the defensive strategy and try to blunt the flank attack. To launch a true flank attack the marketer must go segment by segment of the competitor’s product and services offerings and should clear the objectives among its clients and to manage their expectations.  As there is no established or skill players in the market for the product and services flanking skill require good foresight. The traditional marketer may found difficult to launch a new category of products in a new market as their there are many competitors but with the flank strategy launching of the products can be fruitful.

Another example of flank attack is the flank attack used by Mercedes Benz on Cadillac by selling more expensive cars. But Mercedes continues its high end position by selling cheaper version of its luxurious cars like A-Class and C-Class vehicles. The introduction of high-price Seville helped Cadillac recover somewhat.

Great flanking moves are often undermined by the competitors and test marketing researchers which exposes the strategy in front of its competitors. Test marketing is a proposed flanking technique if successfully implemented it alerts the market leader to take necessary steps to ensure failure when the test marketing is expanding its base locally or nationally.

Many companies after achieving the initial target move their resources to other sectors. This is wrong especially in a flanking move. Ancient military maxim: Reinforce success, abandon failure. Success breeds success. It is very important to use the marketing weight to get the new product in a hurry before the marketing leader can cover. The marketing history is filled with flank attack stories which were initially successful but quit due to lack of resources.

Low Price Flanking: It is the the strategic move to save money by cutting prices. Day Inns beat Holiday Inns by flanking technique to become the most profitable lodging chain in US market.

High Price Flanking: There are many products where high price is beneficial for the marketers. Example:- the price of Barbie doll is the benefit. The opportunity showed up by Barbie in price segment using flanking strategy in the modification stage of product life cycle is excellent.

There are 2 reasons why high price is better than low price. One is the product features and quality with the price. Second is the opportunity by making high profit margins by high price.

Flanking with size: Steve Jobs of Apple have great marketing vision. With small and integrated circuits he introduced miniature products like iPod which at once was taken by the customers. The best example of flanking strategy is Volkswagen’s Beetle with General Motor’s big cars. Volkswagen outplayed General Motors by introducing Beetle by flanking technique.

Distribution Flanking: New distribution channel strategy can be supported by flanking strategy. Watches used to sold in departmental stores until Timex watches came and capture the market using flanking strategy by using the drugstores.

Flanking is very difficult strategy. It is note for research oriented marketers but hard-core market leaders who have the ability of strong marketing vision and foresight. A flanker always get support from industrial leaders who are struggling for success with flanking moves. Creativity is the flanker’s currency of success. Smart flanker can able to steal the competitive share with his or her smart ability. The marketer should always remember the basic principle of flanking: “Rather than competitor head on look for competitor’s weak point.”

Sources:

Marketing Warfare by Al Ries and Jack Trout

marketingschools.org

scribd.com

http://www.yuswohady.com/2013/07/13/smart-flanker/

The power of Flanking by Al Ries

businessdictionary.com

Financial Funding

"Start Up India Plan" by our Prime Minister Narendra Modi was initially taken by the investors and entrepreneurs in an aggressive mode but as the process continues the Follow On Venture Funding seems to slowdown the global economy. Actually the entrepreneurs perceived the perception of panic as the corrections made in the Venture capital policy combined with the valuation by international financial institutions made the situation more worse.

Global financial institutions expects the powerful financial growth in the next coming years surpassing China Na US due to the powerful young demographics in India with the support of internet technology and mobile technology. Many Financial businesses take wants to take this advantage and leverage their technological power in front of their competitors by attracting more entrepreneurs and investors with promising convenience and delivery. 

  

Funding for these financial businesses is very easy. The global financial institutions comes forward with a good amount of capital to grow their businesses. After the initial capital global hedge funds and corporate investment showed up by providing greater sum of capital to fuel excess spending on market shares and customer acquisition with expensive media, excessive hiring and cash back discounts. The perception of getting easy way of capital increases higher valuation ignoring the profits of the company. 

The global financial institution found that these businesses grow at a very slow pace and as a result there is a fear of global slowdown in the economy due to cash backed discount and advertising war. However, the CEOs and upper management authorities of these financial businesses have a marketing foresight by making the financial strategies work for their organization by conserving the capital or how they can spend the equity value for the overall development. The proper financial correction in the policies and proper financial long term course strategy improve their profitability of the company and can be successful in Follow On Funding in this competitive market and help them to grow.

Approaches to Mass Marketing

Understanding Targeting Approaches: Differentiated, Undifferentiated, Niche & Micromarketing 

There are many approaches to segment the market but few firms are there who do not go for segmentation but prefers aggregate marketing. These firms have their unique way to reach their target customers. The few approaches to mass marketing are as follows:

Ø  Spending more in inappropriate place

Companies have seen the mass marketing strategy isn’t working well as used to be while reaching the target customers. These audiences spend less time on different media so marketers find less clutter among this audiences and target this customers by vigorous market research where interruption advertising will be less and effective. Ex: Kellogg’s spent billions on money to position their product and increase their brand presence on the internet----- a fascinating way to sell cereal.

Ø  Undifferentiated marketing

It refers to an approach where marketers produces only one product or product line with a single marketing mix. The idea of this marketing approach is to more exposure of the product or product line to the target customers. Ex: Colgate or pepsodent  where marketers target to a certain group of customers to sell these products in large quantities.

Ø  To make advertising and entertaining more controversial

There are many advertising agencies who make odd and controversial advertising among the mind of the customers that differentiate the advertising from its competitors and people go for that advertising. Many marketers hires different ad agencies to promote their product or services very hard in spite of advertisement clutter. They find it very hard to get a place in the top of the advertisement space. Now if we consider entertainment in advertising the marketers again finds it very difficult to place their product as the gap between two commercials have very less time, customers have a very few seconds to think about the commercial. The marketers have to extensive research on interruption marketing and take it as a challenge from their competitors. They have to spend vigorously on advertising to gain tha attention of te customers, even if they can gain some percentage from it there would be a certain exception.

Ø  Differentiated Marketing

This approach is applicable on wide array of products and product line with multiple marketing and promotional mix. In tis segment the targeted customers are divided into small groups and the products are customized for each group. According to law of division by jack trout in his book “22 Immutable Laws of Marketing” he said the marketers have to differentiate to attain the required benchmark.

Ø  To keep the advertising more interesting and fresh

Marketers or marketing companies create their own brand equity by using unique ways of marketing strategies which worth billions of dollars. Action shoes ran one of the most effective ad on foot safety as their brand image in an interesting and unique way that catches the audience at once.  Dell computers change their ad tagline occasionally to remain attentive in the minds of their customers. Star Buck coffee shop used different marketing strategies with their own unique selling proposition to attract their customers. So the marketer’s task is to always engage their targeted customers by any means and to get their attention towards their product.

Ø  Concentrated Marketing

Also known as focused marketing is a subset of the market on which a specific product is focusing. Each Niche market have its own product features such as product design, price range, production quality and demographics that intend to impact on the niche. Marketers chooses the niche or very small segment which can be profitable for them with lesser resources.

Ø  Marketers abandons advertising and prefers direct mail and promotion

When marketers determine their advertising budget and plan they account for 56 percent of their budget ignoring the advertisement. This percentage was spent specially on discount coupons, in-store promotions and other non-traditional measurement. The marketers enter instant sweeptakes and get the results of increasing trend and marketing efforts. This approach is quite effective than advertisement. This helps the marketers in advertisement clutter and can lead to a dramatic upturn in sales.

Ø  Micromarketing

This approach is the narrowest method of marketing. It is very good for the product or product line who enters into the market, sustain and grow their brand in the market.

Source: Seth Godin, Gk Today