Marketing Articles Analysis, Article Review Example

Harvard Business Review’s (HBR) latest issue has an article on Heinz and how the company developed a strategy to target the fast-growing emerging economies. Heinz developed a marketing philosophy it calls 3As which was later expanded to become 4As (applicability, availability, affordability, and affinity)(Johnson). A closer study of 4As reveals a striking similarity to the marketing concept of 4Ps covered in the course. The marketing concept of 4Ps which stands for product, price, promotion, and place puts customer at the center of the organization’s overall marketing strategy. The idea behind 4Ps is that the organizations should identify the wants and/or needs of a potential market to determine whether the organization has a product or service that can be profitably targeted at the market. Once a market potential has been identified, the organization has to determine whether a product or service can be profitably sold at a price within the reach of the targeted market. The organization also has to identify promotional avenues as well as distribution channels preferred by the targeted market.

Similarly, applicability in 4As means that Heinz marketing team investigates whether a product has an appeal in a targeted market. Heinz’s signature product is ketchup which it does sell in China but soy sauce is more popular locally. Heinz responded to this discovery by including soy sauce in its product offerings for the Chinese market. Availability in 4As determines whether the product is available where most of targeted customers shop. Heinz discovered that the distribution channels preferred by its customers in developing economies are often very different from those in the U.S. Thus, Heinz took steps to ensure its products are available at mom-and-pop shops in markets like India, Russia, and China etc. even though such distribution channels are less efficient than chain grocers. Affordability was included in 4As after Heinz discovered the vast income differences among its customers in different markets. Heinz tackled the issue by experimenting with different packaging and sizes to ensure their products become more affordable. For e.g. in Indonesia, the company sells billions of small packets of soy sauce for 3 cents apiece because Indonesia customers do not often have refrigerators or storage places to store large sizes. The last component of 4As is affinity which is the result of the company’s realization that customers and employees’ loyalty to the company has long term benefits. The company emphasizes hiring local managers who are more knowledgeable about the local tastes and preferences and similarly, the company also looks for local acquisitions with a capable management.

As I read the article I realized how similar the 4As concept is to 4Ps. Applicability, availability, and affordability are almost the same as product, place, and price, respectively. One wonders why Heinz developed another philosophy when there is already one which is known to every marketer. It is possible that the company developed its philosophy on the basis of its experiences and it just happened to turned out to be quite similar to the 4Ps. It is also possible that the management felt that 4As will be more intuitive than 4Ps. The 4As concept seems logical and the article presents company specific examples to demonstrate how Heinz is successfully employing the 4As philosophy in emerging economies. I mostly agree with the article’s implications for other businesses and this article is another confirmation of the strength of 4Ps marketing concept. The overall lesson of 4As is that customer really matters in successful marketing and the companies should adapt to their targeted markets instead of expecting the targeted markets to adapt to the companies’ products/services. Heinz is succeeding because it has taken the efforts to study its customers and didn’t hesitate to introduce new products that it has not traditionally offered as part of its product line.

Forbes recently published an article regarding marketing lessons that could be learnt from the success of Apple (Mourdoukoutas). The article specifically mentions Steve Jobs becausehe was responsible for turning Apple into one of the most effective marketers in the world. Even though Apple is more famous for its innovative products, Jobs ensured that the marketing of the products is equally effective. In the course, we have studied issues such as how companies can effectively communicate with their customers, build brand loyalty, and leverage the power of brand loyalty into new products and this article touches many of the same issues. The article says that one way the company distinguishes itself is by offering a different product than the competitors which is the same as the differentiation concept. It makes sense because only through differentiation does a company gains pricing power and marketing share provided the differentiated features are valued by the customers more than the competitors’ offerings.

The article also rightfully points out that differentiation is not very helpful unless the customers know about it and this is where an effective marketing communication comes in. It fits in with the marketing concept that what is important is not the product but the customers’ perception of it. Jobs often compared Apple’s products to the competitors and highlighted the superior features of Apple’s products as compared with the competition. Similarly, the article also focuses upon the importance of targeting the right customer group and keeping them interested in the future products. This doesn’t only generate hype and buzz but also helps build up demand even before the product has been released. The upside of this method is that it creates lot of word-of-mouth promotion and publicity in the media. But it also raises the expectations of the customers from the company. Thus, companies should be careful while employing this suggestion because not everyone is capable of exceeding customers’ expectations like Apple time again and again. Thus, companies should ensure that they can meet the expectations before attempting to create buzz among the customers otherwise the disappointment may alienate even loyal customers in the long run.

The lessons from this article worked for Apple due to Apple’s unique organizational culture and extremely loyal customer base. Sometimes raising expectations not too high is a better strategy because customers often compare their experience with their expectations. If the expectations were moderate, a great experience will have a higher impact than if a great experience followed high expectations. In the later case, the customers already had high expectations, thus, the product would not excite them the same way it would have otherwise.

References

Johnson, Bill. “The CEO of Heinz on Powering Growth in Emerging Markets.” Harvard Business Review October 2011: 47-50.

Mourdoukoutas, Panos. Steve Jobs’ Six Rules of WOM and Buzz Marketing. 8 October 2011. 16 October 2011 <http://www.forbes.com/sites/panosmourdoukoutas/2011/10/08/steve-jobs-six-rules-of-wom-and-buzz-marketing/>.