On 13th of December 2012 I launched this Marketing Thought blog. Over 50 articles later I hope it has proved useful to students and colleagues alike. The greatest success has been “Behavioral Economics For Kids“. Thanks to Phil Chen’s cartoons many found it a helpful way to understand decision-making. A year of marketing thought has been great.
Celebrating A Year of Marketing Thought
Last year I kicked off discussing the marketing concept. It seems appropriate to return to understanding consumers. Today’s featured idea is from a colleague from my Ivey days, Niraj Dawar. [Edited in 2021]. His Tilt is a highly readable book, packed with fascinating examples of why being strong in customer-facing activities, “downstream activities”, matters. He discusses how upstream capabilities, e.g. production abilities, aren’t enough. Having the best technology and waiting for the customers to come is not a great idea. Better to have a relationship with the customers, after all brands that consumers trust often control all aspects of their product. While emphasizing that upstream capabilities aren’t only found in the marketing department, Tilt passionately advocates for a consumer-focused strategy.
Selling Wine
He argues that many successful firms are this precisely because they understand consumers’ needs. He gives a personally relevant example. Sainsbury’s the major UK supermarket sells wine. (Apparently supermarkets can sell wine without the world ending. Some people in Ontario in 2013 didn’t know this). Wine is intimidating, we wine novices have no idea what to buy. Potential customers face a social risk. Bringing a bad wine to an event is a concern. This fear hurts Sainsbury’s sales. Some of us don’t want to spend time learning to understand wine. Even when I bring wine somewhere I’ll be drinking beer if available. When I bring wine, it just needs to look credible. In needs to seem like I care about wine even when I 100% don’t.
Making Private Label Wines Acceptable
To solve consumers’ fears Sainsbury’s brought in a range of private label wines. They then added the obligatory flowery words about bouquets. (I usually assume that is nonsense but I guess wine drinkers might find it meaningful). More crucially for someone like me the point of purchase provides helpful tips for “the best uses and accompanying food… On the bottle itself Sainsbury’s wine labels are colour coded to simplify the consumer’s choice…” (Dawar 2013, page 48). Sainsbury’s got to understood the consumer’s problem — the confusion and fear of buying a bad wine — and provided a simple, yet effective solution.
Maybe one day Sainsbury’s will find a way to make bringing beer socially acceptable instead. That would be a real public service. I’m happy to pay more for socially acceptable beer.
For more on marketing strategy see here.
Read: Niraj Dawar (2103) Tilt: Shifting Your Strategy From Products To Customers, Harvard Business Press