A Study of Strategic Marketing in FMCG Sector in the United Kingdom: Case Study of PZ Cussons
1. Research Context
This paper presents a proposal to research and explore strategic marketing including planning and marketing program in FMCG sector in the UK where information will be drawn from the case of PZ Cussons, a leading manufacturer of a wide variety of healthcare products. PZ Cussons is one good example of business operating within the fast moving consumer good or FMCG sector because the core business includes frequently purchased consumer goods. In brief, PZ Cussons operate in Africa, Asia and Europe with strategies built on its four core principles: selected markets, leading brands, first class distribution and great team of people. How PZ Cussons achieves sustainability through its marketing scheme is central to this research.
Marketing purports to build a lasting customer relationship. As such, marketing evolves from a process-centered towards becoming influence-driven which complicate marketing designs and concepts in effect. The rationale behind this is that the strategic role of marketing is reasonably different from a typical marketing design. A number of alternative actions available for marketing executives and directors/managers are diverse yet substantial. There are two main challenges that are faced by the marketing department the first being how to allocate and concentrate available resources. While the second focuses on the position it occupies among senior management, other functional areas and ever-changing external forces. On the one hand, the top management has its own diverse motives and responsibilities and on the other customers, competitors, complementers and regulators have their own requirements, demands and expectations.
As such, strategic marketing necessitates that firms must be equipped with marketing plans and strategies that are data-driven, analytically-based and comprehensive to achieve competitive advantage. Apart from the requirement that marketing planning should be supported by the senior management, plan(s) should be also actionable, realistic and flexible enough to be implemented in accordance with the strategic context of the organization. Because of these varied requirements, achieving objectives of well-visualized marketing programme is a must for firms. Marketing plans and strategies are developed on business and product levels. For this study, how strategic marketing differs on FMCG sector from other sector will be explored.
1.1 Relevance of the Study
This study will be of significant importance to the marketing literature as it will present an in-depth understanding of how marketing strategies move along with the FMCG product requirements as well as those requirements of the users of such products. The evaluation of strategic marketing internal to PZ Cussons will be relevant to identify with the challenges, risks and threats faced by companies selling FMCG. The FMCG sector has not been also explored on the basis of the integration of marketing, audience, product and communications but the four construct is independently investigated. As such, the completion of this dissertation will provide understanding of the concepts presented so as to generate data and information that every organization could use in order to come up with plans and designs that will strategically position them in the highly competitive, diverse, and complex business environment that is experienced at present.
1.2 Research Aim and Objectives
The main aim of this dissertation is to understand how the fit between marketing strategies, target audiences, and marketing communications differ according to product type. In lieu with this, specific objectives are outline as follows.
- Analyze how strategic marketing plan is developed on the basis of product type
- Explore marketing programme development within the FMCG sector
- Investigate marketing communication focus and goals in the FCMG sector
1.3 Research Question
The key question that the dissertation will answer is – How does product type affect the fit between marketing strategies, target audiences, and marketing communications? Other specific questions will be also given answer to including:
1) How do companies in the FMCG sector develop marketing plan? What are the crucial steps and requirements?
2) How do companies in the FMCG sector develop marketing mix?
3) How do companies in the FMCG sector design marketing communication plan? What are the common marketing communication mediums?
2. Overview of the Literature
For this study, a conceptual framework will be designed which will encompass four elements: product, marketing, audience and communications. To illustrate:
Figure 1 Product-Marketing-Audience-Communication Strategies in FMCG Sector
Product concept is a marketing concept. Kotler and Armstrong (2004, pp. 56-58) contend that the importance of making customers the focus of the business is known as the marketing concept. It is the key in achieving organizational goals by means of determining the needs and wants and satisfying such through activities that could deliver the desired satisfaction more effectively and efficiently than rivals. Product concept is one of the five alternative concepts under which organizations conduct marketing strategies. The ideology is that consumers will favor those products that offer the most quality, performance and features. Companies embracing the product concept deal greatly with making continuous improvements in order that they could provide value for money.
Zairi (1995, p. 36) argued that organizations still wrestle with new product development, quality, speed and timeliness as well as consumer impact in FMCG sector. This is especially true due to the fact that FMCG requires continuity in basic product development, explaining the product focus of FMCG companies. On the other hand, FMCG companies could also resort in brand extensions rather than new product development. Ambler and Styles (1996, p. 16-17) discover that brand equity considerations are very important aspect in the FMCG business and it basically impacts the extension decision process. We should understand that depending on the types of products requiring scale economics is imperative further. According to Battezzati and Magnani (2000, p. 421), FMCG and other durable goods conform to points of considerable development, a practice which is increasingly implemented across the sector to better meet the need to manage the complexity of the growing variety of products in hand.
The FMCG sector also channels the efficient consumer response practices and so there is a necessity for category management, a practice where groups of products were broken down into various related categories. Such practices are adapted by either suppliers or by the partner retailer. Dupre and Gruen (2004, p. 449) determine barriers of effective category management including arrangement of the entire organization around the customer, building a functional level of trust, ability to measure success of category plan and sustaining competitive advantage through balanced ECR.
Marketing has four distinctive components: concept, segmentation, positioning and targeting. The FMCG has primarily a product concept as seen above. Market segmentation is the division of the market into various homogenous groups. This is the very reason why marketing mix needs to be tailored on specific target markets for better satisfying their needs. A market segment should be measurable, accessible through communication and distribution channels and should be substantial enough to be profitable. There are two ways in which effective market segmentation is could be achieved: business market and consumer market. The focus of this study is consumer market segmentation that is further subdivided into geographic, demographic, psychographic and behavioral (Weitz and Wensley, 2002, p. 76). All of these four will be integrated on studying the fit of marketing strategies of FMCG companies to reach its target audience.
Going back to marketing mix, FMCG sector has products that is often standardized, less technical and often requires less servicing. Prices are more important, rarely negotiated and with few tenders and bids. Value for money is particularly important and dominant in customer choice. Availability of credit and payment could be important facets of pricing. Places are less direct but logistics are very important. Distribution for FMCG will often need to be intensive and will normally takes place through intermediaries. Promotion of FMCG has emphasis on non-personal like advertising than personal selling. Advertising also generally aimed at mass market and will stress brand image and persuasive messaging (Lancaster and Whitney, 2006, p. 256).
Above the line and below the line promotion strategies are important for FMCG marketing, although the greater emphasis is placed on the former than the latter. Above the line promotion makes use of the traditional media while below the line are non-traditional promotional activities such as short-term incentives. Peattie and Peattie (1995, p. 28) recognize the change in FMCG marketing whereby below the line techniques are increasingly becoming extensive, credible and sophisticated. These promotional techniques have now reached a point where they deserve a consideration of each below the lines technique’s individuality in relation to other areas of FMCG marketing.
Another marketing technique within FMCG business is the adoption and integration of technology. Information technology (IT), as Chung et al (2007, p. 124) put it, acts as an enabler to improve order and delivery processes as well as the overall cost effectiveness and efficiency. Digital marketing strategies are thus becoming more important in FMCG environment, which is basically characterized by powerful retailers, tier-1 suppliers, of industrial end products and further-upstream ingredient/raw material producers. Webster et al (2006, p. 355) assert that enthusiasm is important for FMCG companies when adopting e-marketing strategies and internet-mediated e-marketing solutions in particular.
Audience, the third element, is tied with target marketing or to which segment the products will be marketed. There are three ways a company can achieve effective targeting: undifferentiated marketing, differentiated marketing and concentrated marketing. In the first strategy, there is only one product that is promoted and sold in the entire market while in the second the aim is to target products for varying groups. Concentrated marketing happens when a company focuses marketing plans and strategies on one particular segment (Wilson and Gilligan, 2005, p. 319).
With this said, Aldrige and Betts (1995, p. 17) distinguish that in the FMCG environment, products are manufactured based on sales forecast. Customer demands 100% service levels lead time and the basis is hours and not days. It is fundamental therefore to understand attitudes, behaviors and perceptions of the target audience to reflect a situation and inhibit the capability of responsiveness. Apart from responsiveness on the mass market demands, loyalty programmes are basic in the FMCG sector as this is an important intrinsic motivation in the buying decision considering the consumer buying behavior of the target market (Wright, 2002, p. 313).
Communications is central to marketing function as these are product- or service-related messages that a company convey to the public using communication mediums and coupled with distribution channels. Marketing communications make use of strategic elements such as the brand or corporate social responsibility of companies (McDonald, 2007, p. 586). Product branding, for instance, had shaped the way business will approach their marketing aside from challenging the feasibility of traditional marketing methods. As such, the differences between products and branding require that the FMCG marketing approach should be adjusted for each product.
McDonald, Chernatony and Harris (2001, p. 341) particular emphasis must be given on intangible nature of products and branding and how consumers play a role in the delivery and strengthening of branding. In relation to branding, there is an essential relation between the marketing and sales departments of FMCG as the actions of one will definitely affect the outcomes and performance of the other. Dewsnap and Jobber (2002) identify social psychological perceptions of causes and effect of marketing is because of intergroup relations in FMCG marketing (pp. 888-889).
In the UK, corporate public relations have seen to be an effective communication strategy for FMCG companies. Kitchen (1996, p. 58) also signaled that significant changes are happening within the promotional mix in UK FMCG companies. Public relations emerged as a dynamic tool in relation to the more well-known promotion tools. The trend shifted from more traditional promotional activities into integration between marketing and corporate public relations. Kitchen (1993, p. 71) mentions that public relations are a complementary way or in place of traditional marketing because of its inherent diversity. Public relation could be and has a fit with corporate context.
3. Research Design
3.1 Research Philosophy and Approach
The research philosophy adopted for this dissertation is interpretive epistemology which simply refers to the philosophical underpinning of the research. Interpretive epistemology has a basic assumption that knowledge can only be created and understood from the point of view of the individuals who live and work in a particular culture or organization. Therefore, every individual acts in situation and makes sense of what is happening based on experiences of the situation and the expectations people bring into it. This means that there maybe different understandings and interpretations of reality and interpretive epistemology leads to accessing meanings made by others and describe how they come to make those meanings (Hatch and Cunliffe, 2006, p, 14). The choice of this philosophy is important because it guides the research design, the research approach, choice of methods, analysis of the findings, and even the presentation.
Further, an instrumental case study approach would be used since this enables the researcher to make generalizations based on the findings although only one case study organization would be drawn upon the toiletries products as a single FMCG company. In an instrumental case study, the particular case is less important than the insight it can provide into a specific issue of theory. Thereby, the goal of this case study is to understand something more general than the case but nothing generalisable to other contexts (Colwell, 2006, p. 331). Denzin and Lincoln (2005), however, contend that the case, although it is of secondary interest, plays a supportive role and facilitates the understanding of important concepts. Investigating the case in-depth has a purpose of pursuing an external interest (p. 445).
3.2 Research Methods and Strategies
A multi-method approach would be adopted, drawing on primary and secondary research. The reason for this is to be able to provide adequate discussion for the readers that will help them understand more about the issue under investigation as well as the different variables involve with it, the primary data for the study will be represented by the survey results that will be acquired from the respondents. The primary research would be involved both qualitative and quantitative methods. The qualitative methods would be included interviews with marketing director and/or managers at the FMCG company, which is identified as the PZ Cussons, to understand the rationale and perceived fit behind its existing product-marketing-audience-communications activities.
This study will also employ qualitative research method because it will try to find and build theories that will explain the relationship of one variable with another variable through qualitative elements in research. Through this method, qualitative elements that do not have standard measures such as behavior, attitudes, opinions, and beliefs within the organizational domain will be analyzed.
Further, an interview schedule will be prepared and will be asked during focus group interview. Focus groups would be conducted with customers of these toiletries products to examine how well this fit was taking place. Focus group interviews to provide in-depth qualitative insights to the discussion. Focus group interviews will comprise of 8-9 participants who are randomly selected, 2 among these should be workers in the shop where PZ Cussons toiletry products are sold and who will come from diverse backgrounds. It is through them that information on the four activities will be collected. A survey, followed by quantitative analysis, would be used to examine how the marketing-audience-communications activities differed according to product type within the toiletries range.
On the other hand, the literature reviews to be presented in the second chapter of the study will represent the secondary data of the study. The secondary sources of data will come from published articles from marketing journals, theses and related studies, books, company reports and official statistics. Sometimes, secondary research is required in the preliminary stages of research to determine what is known already and what new data are required, or to inform research design. Acquiring secondary data are more convenient to use because they are already condensed and organized. Moreover, analysis and interpretation are done more easily.
3.3 Data Analysis and Presentation
The interviews and focus group data would be presented, with emphasis on the discourse that took place to illustrate the main points being made by research participants. To build on this and provide a structured qualitative approach, the use of discourse analysis would be employed. Discourse analysis generally refers to a number of approaches to analyze written, spoken or sign language use. The survey data would be presented using descriptive and inferential statistics, based around a number of propositions that the study identified. With this said, this dissertation will be presented in written format with the addition of data charts, representing study results. Some of the analyzed data will be illustrating using pie charts and network charts but this may not be confirmed until survey data had been analyzed.
3.4 Limitations of the Research Design
The study is limited on the elements of product type and marketing-audience-communications activities as applied within an FMCG company (PZ Cussons). The utilization of a company as the basis of the case study is another limitation because of the fact that it cannot make generalizations. The study is also limited only the pieces of information that the respondents are willing to disclose. It is limited to the respondents’ capability to answer such questions.
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