Categories
Strategy

Shotgun Approach in Marketing

If we look at the marketing techniques to target users, we can classify them into two basic techniques. First one is “Shotgun Approach” and the second one is “Rifle Approach”. Both are used by companies to get the attention of customers and make their business stand out from other competitors. While making a brand, it is very essential for an organization to effectively get attention and awareness of their customers & target them in a way that they(organization) get maximum benefits out of it.

What does Shotgun Approach means in marketing?

Shotgun approach, is a principle where advertiser aims to cover a large population of users as possible and hope that organization will get maximum amount of sales.The main focus in this approach is on the product rather than on the audience that we are targeting. The product features that we display in the advertisement will be generic and appealing to the generic audience.

Shotgun approach is a mass marketing approach it will target a large audience wherever possible. I would take two Examples each for online & offline. In online, advertisers used to buy the ads over youtube trending videos & high traffic websites and for offline marketing advertisers used to buy spaces on the crowded areas billboards.

Features of Shotgun Approach:

  1. There is more focus on reaching out to the maximum audience rather than ROI 
  2. As Target Audience is broad, there is an improvement in the brand visibility on multi-channels.
  3. The product features and advertisements will be generic.
  4. Huge Marketing Budget is needed

Examples of Shotgun Approach:

  1. Netflix
  2. Paypal
  3. Coca Cola
  4. Colgate
  5. Walmart
  6. IKEA
  7. UBER Eats
  8. Patreon

What does Rifle Approach means in marketing?

In context of rifle approach, organizations will segment its audience in the specific groups and make efficient use of marketing resources in order to achieve a specific objective. It is also known as one to one approach. In this organization believe that there is a different wants and needs for each user, they need to be treated like individuals. So that is why according to rifle approach organization will cater to the needs of the customer at an individual level.  

Features of Rifle Approach:

  1. The rifle approach generates more loyal customers.
  2. Sufficient data is needed of the targeted audience.
  3. Very helpful for the organizations which has very less resources.
  4. Organizations can make use of their resources appropriately.
  5. It involves direct marketing strategies.
Categories
Strategy

Concentrated Marketing

In this process of marketing strategy the company make efforts to design a product for a specific set of consumers. Concentrated marketing works effectively for companies with limited resources. It enables them to define a small group of target audience and make the most effective and competitive product, which will cater the need of that small group of segment. It will target a smaller group of people because they have a similar wants.

Features of Concentrated marketing:

  1. This strategy helps small businesses to focus on a smaller group of segment and catering the needs of that segment by making specialized products for them only.

  2. Mostly the strategy is implemented in small firms

    The marketing strategy will be on a target group of customers and not any traditional marketing strategy such as mass advertising and mass distribution will not be used to market the product.

    The optimal use of resources would be there, as the activities which we are doing are concentrated on one target segment.

  3. Due to the narrow targeting there are very less chances to lose a customer. In turn they can build a loyal customer base by developing a product that the customer needs.

  4. The company need to be the market expert to get into the niche market:

    As company will target the narrow audience so they have to be specialized in the core of the product.

    As the customer will want the more extra features to be added in the product so the company has to be good at adding benefits to the product.
      
  5. There is no difficulty to find these kind of segments because these are ignored by most of the larger firm and you can take a competitive advantage of it and can make a targeted brand to satisfy the needs of the customers.
  6. There is very less opportunity to scale the business and acquire larger customer bas. It would be difficult to increase the size of the business.
  7. Per unit profit can be maximized by providing the additional benefits to the customers. 

Example of concentrated marketing:

A company might market a product to target a specific age group of kids audience, or a set of fitness lovers who are living in a metropolitan city, or a specific girl teenagers. These all are the examples of the smaller targeted groups who can be targeted in the future for selling a product. 

Categories
Strategy

What is Competitive Parity and its Key Advantages in Marketing

There are various types of strategies companies use to determine their budgeting for marketing and promotional activities. Today we will study about the definition of the Competitive parity after that we dive into the difference between competitive parity and competitive advantage then atlast we will discuss key advantages of competitive parity.

What is Competitive Parity?

It is a concept of strategy, where a company spend all the budget of marketing activities at par with our competitors or industry average. It doesn’t use competitive budgeting strategy to beat competitors. The allocation of funds on advertising and promotional activities will be totally similar to the competitors budgets. It is just done to defend the competitive position and to maintain the reputation of a brand by not spending much. That is why it is known as defensive budgeting. 

This is done to achieve a decent position as compared to your competitors in the market. For example, Samsung and Apple If one brand establish itself in a particular technology, others will try to emulate the same strategy and try to allocate the budgets accordingly to make their presence in the same space.

COMPETITIVE PARITY V/S COMPETITIVE ADVANTAGE?​

Competitive Parity refers to spending at par with your competitors, whereas in competitive advantage we spend to outperform our competitors. In competitive parity the products offered by the competitors are similar in nature and the product can be easily substituted. Many FMCG products are to be considered as the competitive parity products. It is very difficult to change the pricing in the market.

What is Competitive Parity Budgeting Method?

In competitive parity method, we determine the advertising budget by analysing the spending done by our competitors. The main disadvantage of this method is that it may not be necessary that our objectives/goals are the same as our competitors.

Key Advantages of Competitive Parity:

The main advantage of this strategy is to calculate the advertising and branding expenditure because it will be similar to our competitors. The spending on promotion and brand presence will be at par as planned by our competitors. The Promotion outcome and customer reach will match as of our competitor. That means there will be less overspending of budget. 

Various companies are using demand forecasting method and sales forecasting methods to predict sales in the near future. Instead of using the forecasting methods, which is quite expensive and consume lots of funds, using competitive parity method is easy and less expensive. In that we have to predict the major expenditure  by our competitors which is fairly easy to calculate. 

Brand can be benefited from the decision taken by its competitors over pricing. If a brand has increased the price of its product, then it will get substituted by the similar product of the other brand and thus increasing the sale of brand with price advantage. 

The above listed advantages are not true in each and every company case, It may be advantageous for one but not at all useful for another company. It also depends on the financial conditions and the competitive positioning of a brand. Company with less advertising budget this strategy will not suit well.

Disadvantages of Competitive Parity:

The main disadvantage of the competitive parity method, when you’re defining your product goal it will not be similar to the competitors goal. His goal may be to increase the brand awareness. Yours may be to increase the number of units sold in a period of time. So while implementing competitive parity budgeting method we may take wrong decision to emulate the budgets of competitors.

For new entrants in the market, it is very difficult to implement the strategy because it wants huge budget to be implemented. They have to bear exorbitant opportunity cost, they will not be able to match up the competitor they will get perished in the process.So it is not advised to the new players in the market to implement competitive parity budgeting method until and unless market is at a nascent stage and the market is very new in existence. Instead, they can focus on competitive advantage so as to increase the chances of survival.

If we look at the brands, they tend to spend a huge amount of money on promotion of the products which are not at all competitive and different in nature. But while competing, companies tend to forget the basic concept and keep raising their budgets on promotions.

If we look at the Uber and Lyft they are competing in the huge competitive market and raising their promotion budgets, so as to get as much advertising space as they can buy either it can be online or billboards or on Television. If we look at the advertising space online, both are competing for the same audience and flood their ads to the customers so as to overtake one another but in this process they are spending a huge chunk of money. The online spaces are filled with the marketing strategy and tactics to lure customers.