Some big brands pay a lot of attention to profitable customers but tend to ignore the needs of others.
Therein lies the chance of disruptors, who need to target the overlooked segments, a marketing guru told a workshop on Saturday.
“Incumbents (bigger and more established brands) keep improving products for most profitable customers with sustaining innovations exceeding the needs of one segment and ignoring the needs of others,” said Rajeev Batra, Sebastian S Kresge Professor of Marketing at the Ross School of Business at the University of Michigan.
“Disruptors target those overlooked segments, with more suitable functionality and a better price, often using new business models,” he told an audience comprising CEOs, marketers and entrepreneurs.
The IIM Calcutta Alumni Association Guruspeak 2023, in association with The Telegraph, saw Batra conducting a day-long workshop on Disrupting Markets and Building Brands.
“Identify the weak spots of dominant but sleepy incumbents and attack them. Create a lower and more variable cost structure,” said Batra, whose research interests include the creation and management of brand equity, emotional advertising, global branding, marketing in emerging economies and Asian consumer behaviour.
His audio-visual presentation was replete with real-life case studies. One of them — around a decade ago — was about Dollar Shave Club (DSC), a subscription-based razor company in the US.
It targeted the high prices of razor blades, an “unaddressed” consumer problem. By outsourcing supply to South Korea, DSC offered blades at a significantly cheaper price.
Their campaign was also fitting. A short video on YouTube targeted millennials with value and a general tone of irreverence.
Within 48 hours of the video, they received 12,000 online orders. By 2016, the DSC had three million subscribers, which translated to an eight per cent market share. The company was bought by Unilever for $1bn.
“Targetting millennials, who are usually not brand loyals and love to buy online and are open to trying new things, is a useful tool for disruptors,” Batra said.
The workshop was divided into three sessions. In the first, he talked about how to build strong brands. In the second, he analysed disruptions — how under-resourced brands have successfully challenged market leaders.
In the final session, Batra discussed building brand loyalty by creating brand love.
“In the ever-evolving landscape of business and management, staying updated with the latest trends, strategies and insights is paramount. The IIM Calcutta Alumni Association recognises this significance of continuous learning in the field of management and has established the Guruspeak workshop series,” said G.M. Kapur, chairman of the Calcutta Chapter of the association.
This was the 16th edition of the popular Guruspeak that draws its audience from budding managers, veteran managers, teachers and professionals.