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Jo u r n a l o f t h e Ca n a d i an I n s t i t u t e o f M a r k e t i n gL e Jo u r n a l d e l ’ I n s t i t u t Ca n a d i en d u M a r k e t i n g

Competition within theglobal heavy equipment in-dustry is intense with com-petitors such as Volvo, Dae-woo, Fiat Hitachi, JCB, Bell,John Deer, Bomag, Dyna-pac, Case, O & K Lieberrand Caterpillar—all target-ing the same road construc-tion customer base.

In Ghana, Caterpillar is thedominant product brand inthe heavy equipment cate-gory. This product is mar-keted by Tractor & Equip-ment Ghana which alsoprovides after sales supportfor all Caterpillar equipmentoperating within Ghana.

Tractor & EquipmentGhana competes with itscompetitors for the 540 reg-istered Road Contractors inGhana.

The ability of a firm to sur-vive depends on how the

firm takes advantage of theopportunities in the marketplace to satisfy its custom-ers. T & E has demon-strated its capability of beingbeen sensitive to its custom-ers by trying to understandtheir needs, understandingthem, and planning long-range marketing programsto meet those needs.

T & E also institutes meas-ures to understand theircompetitors’ activities totake advantage of theirweaknesses while continuingto consolidate its ownstrengths. Through continu-ous innovation and invest-ments in customer service,T & E has maintained itslead place of 60% market

share in the road construction industry, despite in-tense competition from foof the seven expanded maketing mix of services—price, place, promotion anprocesses.

The main strategy used bythe competitors in this in-dustry is a frontal price attack. Caterpillar is consis-tently about 20% higher oprice than its competitors

The reasons that accountfor the premium pricing oCaterpillar include a heavyinvestment in research anpeople development, infra

structure improvements,and innovation that goesinto producing and main-taining brand quality. TheCaterpillar equipment is aways manufactured with tcustomer in mind. Thisheavy equipment is mostlused in the developing

continued on page

Volume 7, Issue 1

w w w . c i n s t m a r k e t i n g . c a

Analysis of the competitive pressures

of a global brand in a developing

country— A Case Study of Caterpillar in GhanBy Robert Hinson, MCInst.M, MCIM and Adelaide Nartey

Winter 2004

I ns ide th i s

issue:

The MarketingCollectibles

4

Key Elements of World Class Marketing

5

Marketing Challenges

in Africa

7

Marketers MakingTheir Mark—NormBurns

8

Tinkering 9

Creating and D eliver-ing Memorable Toasts

12

Plan to Attend 2004Annual GeneralMeeting

13

Smart Riders Pick Their Rewards InAsian Markets

14

To Increase CustomerLoyalty, Focus on theCauses of Dissatisfaction

16

New Member Profiles 18

New Members 19

Robert Hinson

Saluting Canadians serving oversees



Editor A. Grant Lee,B.A., M.A., M.C.I.P.,R.P.P., F.C.Inst.M.

Publications AdvisoryCommittee

Leonard E. Weeks,M.C.Inst.M.

Bruce Hoggard,F.C.Inst.M., C.M.C.,M.M.I.S./O.S.

James Schauer, F.C.Inst.M.

Suzen Fromstein,

M.C.Inst.M.

The Marketing Challenge is pub-lished three times a year by theCanadian Institute of Marketingand distributed to members freeof charge. The views and opin-ions expressed herein are notnecessarily those of the CanadianInstitute of Marketing. Copyrightis reserved. No part of this pub-lication may be reproduced byany means without permissionfrom the editor, telephone

(905) 877-5369.

All advertising requests and copyshould be sent to: Canadian In-stitute of Marketing, 205 MillerDrive, Halton Hills(Georgetown), Ontario, Canada,L7G 6G4. Tel: (905) 877-5369,Fax: (905) 702-0819,[email protected]

Canadian Institute ofMarketing

L’Institut Canadien duMarketing

205 Miller DriveHalton Hills (Georgetown)Ontario, Canada L7G 6G4

Tel: (905) 877-5369Fax: (905) 702-0819

www.cinstmarketing.ca

nations under harsh working conditions.Equipment needs to be built to withstandadverse environmental conditions and en-

sure that the operator works in absolutecomfort and ease. Much engineering inno-vation goes into the design aspect. Caterpil-lar equipment is therefore premium pricedworldwide.

The competition takes advantage of thepremium charged by T & E to convincepotential customers and customers of T &E to accept their products at a much lowerprice. Sometimes as low as 40% below T &E’s list price. This becomes extremely

tempting to some customers especially theroad contractors in developing nations.

Price differential is a strong competitiveforce within this industry. Most road pro-

jects are submitted with a recommended listof equipment. Thus, all new projects comewith a new list each time they are called tobid. The contractor is very tempted to ac-cept the competitor’s brand although thequality may not be as robust as Caterpillarquality, and no proper after sales support

may be offered. Down time is high in mostcases with these low quality brands.

Some competitors also offer very attractivecredit terms to customers. Payment isscheduled in an extremely flexible mannerwith heavy discounts when a contractorpurchases all their equipment from onecompetitor, becoming fleet customers.

These are issues T & E most often cannotcompete with. T & E has invested heavily

on its people, infrastructure, facilities andprocesses, to ensure that there is minimumdown time by keeping in stock 80% of fastmoving parts, and bringing in whatever isrequired within 48 hours of order. Due tocompetition, T & E has had to build a newfacility at the doorstep of the customers inTarkwa (a city in the western region of Ghana). The branch is fully staffed by engi-neers from the university. All facilitiescountrywide have been upgraded to Cater-

pillar standards.

Competition is often housed in container

on customer sites with no real investmenin structures, offering the same field serviat lower man-hour cost, and offering attrtive payment schedules that T & E cannomatch in any way.

In an economy such as the developing nations, one has to be very prudent in offering very liberal credit-terms, as the defaulrate could be very high. Thus T & E findvery difficult to compete on terms, dis-counts and price flexibility, which is of

prime concern to customers within this industry.

Another strategy used by competition is tuse of government influence to win biggovernmental tenders and business. This an ethical issue. T & E, as a company anddealer for Caterpillar, cannot participate dto Caterpillar’s corporate identity world-wide.

The main objective of the major competi

tors such as Komatsu, Volvo, Dynapac,JCB, Case, and Hitachi is to gain marketshare at the expense of Caterpillar, and thwill help them build enough capacity to jutify a bigger investment in product suppowhere T & E has excelled. In spite of theincreased number of competitors with thvarious strategies in the market, T & E hamanaged to stay as the market leader forthe past 60 years.

Competition affects the development of

international marketing plans. In developing international marketing plans, the firmneeds to have a clear international competive focus, and develop effective relation-ship strategies with customers, employeesand suppliers ensuring that strategies are place to manage the organization well wia culture of learning.

continued on page

analysis of competitive pressures of a global brand cont’d from pag

The Market ing Chal len



With this in mind, the marketing planfor T&E includes strategies to increaseand maintain after-sales service capabili-

ties, customer service, warranties andguarantees, advertising and special pro-motions, and dealer networks. At T & E,for example, staff organizes a yearly tripfor selected customers and governmentofficials within the road constructionsector to visit the impressive Caterpillardemonstration ground in Malaga, Spain.This facility is also an operator-trainingcenter for Caterpillar worldwide, whereall equipment is tested before going ontothe global market.

These strategies are included in the in-ternational marketing plan to exploit orrespond to opportunities in the market.T & E is now developing its marketingplans both internally and externally withdirect marketing programs and specialsales promotions targeted at certain sec-tors such as forestry. Its plans includeparticipating in trade shows—especiallythe West African Mining and ElectricalExhibition held every two years, and

sponsorship of tournaments also tar-geted at the mining sector. In addition,its marketing plans include customerdays, or open days at the variousbranches country wide, for customers tosee for themselves the impressive invest-ments in place just for the Caterpillarequipment that they own. These activi-ties are to build trust and commitmentin the brand.

Some major customers of the heavy

equipment industry are internationalcustomers with headquarters in SouthAfrica, Britain, Egypt or U.S.A.

The marketing department of T & E iscentered in Egypt from where such mar-keting plans for all territories are com-piled with the total contribution of themarketing co-coordinator in each coun-try in West and East Africa. The market-ing plans are implemented and con-

trolled by the marketing co-coordinator. The overall marketingstrategy is “One Voice,” hence wher-

ever a customer is; it would see similarbillboards, adverts point of sale pro-motions, sales force dressed similarly,and exhibitions stands similar in allterritories.

Due to competition, a huge portion of the marketing communication budgetis used in relationship marketing ef-forts to ensure customer loyalty, com-mitment, and retention. The salesforce plays a very active role here with

investment in delivery vans brandedwith company logo, infrastructure, anda marketing database link to all territo-ries to ensure effective database man-agement. This is key to Caterpillar op-erations worldwide.

Within the heavy equipment industry,there are five different competitiveforces illustrated in Figure 1. Theseare known as Porter’s five forces.

1. The rise of new entry by po-tential competitors.2. The degree of rivalry amongst

established companies withinthe industry.

3. The bargaining power of buyer.

4. The bargaining power of sup-pliers.

5. The closeness of substitutesto the company’s product.

Vo lume 7, Issue 1 Page

analysis of competitive pressures of a global brand cont’d from page 2 The threat of new entrants is realwithin this industry, since Ghana is open market with no significant barers to entry. Thus, the industry haseleven competitors of which six areconsidered primary. Since most com

petitors are multinational organiza-tions, they are capable of investing itechnology. The requirement for catal is extremely high and they have acess to distribution channels througfranchising or mergers with compa-nies in various nations.

Competition within the industry is itense on price, dealer expertise, prouct innovation, and customer servicHere T & E has immense competen

and capability with respect to produinnovation, customer service anddealer network. T & E is currently tmarket leader followed by its maincompetitors—Volvo and Komatsuwith 20% and 10% of market sharerespectively.

The buyers of these products aremostly mining and construction customers. These customers would inca huge cost if they were to switch,

since they would have to retrain thein-house mechanics, and stock fastmoving parts in house since their flewould consist of different equipmenbrands. Although they do have flexibility to purchase from several sellerin the industry, they tend to stay loyto those with whom they have established stable relationships.

continued on pag

Figure 1: Porter’s Five Forces

Model

Threat of New

Entrants

CompetitiveRivalry

Threat ofSubstitutes

BargainingPower ofBuyers

BargainingPower ofSuppliers



The Market ing Cha l len

There are no real threats of substitutesin this industry since all players arewell known, but to cash in on price,most competitors do not producetheir products to the quality of Cater-pillar worldwide. Almost all heavyequipment is referred to as Caterpillar,since competitor products break downeasily and are not often seen on thefield working. This is not an uncom-mon phenomenon in Ghana. For avery long time every brand of tooth-paste could be referred to as Pepso-dent, and every detergent called Omo.Brand dominance in a category couldalmost lead inevitably to all productsin that category being referenced bythat brand name. Omo and Pepsodentare both Unilever brands, and it is lit-tle wonder that they are probably themost successful FMCG company inGhana.

Finally, the bargaining power of sup-pliers within this industry is signifi-cant. It is costly for dealerships toswitch because of investment costs ineach territory. Suppliers or manufac-turers of the products have tremen-dous power to cancel a contract if adealer is not performing to manufac-turers standards. Caterpillar PLC en-sures that the necessary investmentsand business infrastructure are inplace.

At T&E the Engine SpecializationCentre has been developed to be thebest in the West African Territory.Therefore, competitors in the WestAfrican Territory see this as a majorthreat as engine components are nolonger sent to Caterpillar at a hugecost to the dealership, but across bor-ders on a low bed to Ghana to berectified—thereby cutting down oncost and time.

Caterpillar therefore stands poised torepulse competitive marketing pres-sures at the dawn of 2004.

R obert H inson is an E M BA L ecturer in Mar-

k eting at the School of A dministration, U niver-

sity of Ghana. A delaide N artey is an E MBAstudent in I nternational Mark eting at the

School of A dministration.

Robert can be reached at robert.

hinson@ origin8ghana.com

The publishing of this book required cordination that spanned across New Zeland, Malaysia and Sri Lanka. The bookwas published in New Zealand in De-cember 2003 and the second print wasdone in Malaysia.

The book was officially launched durinceremony in the presence of guests froNew Zealand, Singapore, Taiwan, Chin

Malaysia and Indonesia in the capital ciof Malaysia, Kuala Lumpur by His RoyHighness Tengku Azlan Ibni Sultan AbBakar, The Deputy Minister in the PrimMinister’s Department of Malaysia.

It signifies the beginning of a series of marketing related books to be publishein the near future.

Authors of the book are Anthony Ram( New Zealand-based ), Ranjan Madana

ake ( Sri Lanka-based) and CGN Raghunath (Malaysia-based).

Both Anthony and Ranjan are memberof the Canadian Institute of Marketing

Complimentary copies of the book areavailable for members of the CanadianInstitute of Marketing by contacting Anthony Raman [email protected].

analysis of competitive

pressures of a global brand continued from page 3

T he Marketing

Collectibles(A Collection of Marketing Articles)by Raman, Madanayake, andRaghunath

This breezy book hosts a compen-dium of articles that had been pub-lished in countries such as New Zea-land, Malaysia, Sri Lanka and Canada.

The entire contents are essentially apotpourri that touches several areasas well as issues that are of concernto professional marketers. The arti-cles seek to expose readers to rele-vant issues that confront the day-to-day life of marketing professionalsand in addition, offer quick-fix solu-tions on specific strategic areas.

The authors who teamed up to offerthis compilation have brought theirexperience as well as exposure tobear upon the contents.




The ability to satisfy and retain cus-tomers remains the most crucial activ-ity of a business organization. Thisdepends, however, largely on the skillspossessed by an organization in theexciting but challenging discipline of marketing.

World class marketing, requires certainspecial elements which companiessuch as Proctor & Gamble and Marks& Spencer have demonstrated. These

are elements which are fundamentalbut often forgotten and neglected.

What are these elements which con-tribute to marketing excellence on aglobal scale?

1.) Profound understanding of themarket placeThe market place is the driving forceof all marketing practice. To be worldclass, a thorough understanding of the

dynamics of the market place is re-quired on a continuous basis.

Organizations would therefore be re-quired to develop first-rate marketinginformation systems that are capableof delivering accurate, pertinent andtimely information from the market.These information systems should en-compass at least marketing intelli-gence/ sensing and marketing research.

2.) Creative segmentation andtargeting

Segmentation is the task of groupingcustomers into homogeneous sub-sets(i.e. groups of customers with similarneeds are identified and targeted witha specific product/ service offering). Ithas to be based on customer needs/ benefits sought, if this strategic mar-keting management activity is to becarried out effectively.

To be world class in marketing,"creative" segmentation is a must. Tra-ditional segmentation bases, such asgeographic and demographic, will notsuffice. The more customer focussedthe segmentation, behaviour andpsychographics have to be creativelyused to segment markets. For exam-ple, in the automobile industry seg-mentation is based on behavioural andpsychographic bases (life style, per-sonality, user status). Automobilebrands, such as BMW and Mercedeshave been segmenting markets foryears on behaviour and .psychographics.

3.) Powerful differentiation, position-ing and brandingBranding is indeed a very powerfultool for effective marketing. It pro-vides a distinct identity for a productor service, which helps the target con-sumer differentiate and distinguish theofferings of one marketer from an-other. Consider Coca Cola, Nike, Ro-lex, Heinz, Nescafe, Mercedes, andKodak. These brands are truly globalgiants which have facilitated the prac-tice of world class marketing.

Positioning is the act of designing thecompany's offer and image so that itoccupies a distinct and valued place inthe target customer's minds. Meaning-ful and sustainable positioning strate-gies provide a very significant contri-

bution to world class marketing. Thefollowing are two examples to highlig

the power of clever positioning. Avis No. 2 in the rent-a-car business to themarket leader Hertz, and uses the fol-lowing positioning statement: "We areNo 2. We try harder." To the Avis customers, this is a clear message that theare guaranteed with a superior offeringTo the Hertz customers, a simple message, "why don't you try us out?” Thesecond example is Heinz. Heinz is potioned simply by “Heinz meanz beanzTherefore, the target consumer is givea simple and clear message. "when youthink beanz, think Heinz always."

Finally, differentiation is the cornerstone through which positioning andbranding can be developed. Differenttion simply means the act of designingset of meaningful differences to distinguish the company’s offer from thoseoffered by competitors. Positioning anbranding are no doubt the two mostpowerful and meaningful differences.

4.) Effective marketing planningprocessesThe need for effective marketing planhas been highlighted by numerous au-thors to achieve world class marketingThe key processes of marketing plan-ning, namely flow of information, analsis, objective setting, and developing

continued on pag

Key elements of world class marketingBy Prasanna Perera, F.C.I.M. (UK), M.C.Inst.M., M.S.L.I.M., Chartered Marketer (CIM-UK)

Prasanna Perera



rasanna Perera

able, provided it facilitates serving thneeds of the market place/ consume

8.) Careful recruitment, training andcareer managementMarketing is an "art" which has to b

delivered through internal people toexternal, market place-based peopleTo interface with consumers and tomeet their needs, an organizationneeds individuals who are comfortaband committed to other people.

Careful recruitment is the most imptant step in achieving world class mketing. Talented and motivated em-ployees are no doubt a key competi-tive advantage to an organization.

Careful recruitment alone will not sfice. People must be trained and de-veloped to deliver results constantlyand also to retain them.

The success stories of organizationstoo numerous to mention, clearlydemonstrate that it is the people whhave a passion for what they are doithat lead to success.

ConclusionTo be world class in marketing is a

very significant achievement for anorganization which in turn providesopportunities on a global scale. To bworld class is one thing: to sustain aconsolidate the enterprise is another

Only organizations that can achievethe later can be acknowledged as trugreat and world class in marketing.

continued on pag

creativity and innovation.

For example, Sony employs the fol-

lowing company statements:"Dreaming is the most importantwork at Sony.” "Other companieshave market research institutes. Sonyhas dreamers. Their dreams turn intodesigns which then turn into prod-ucts".

"We believe that the products our em-ployees really want to create are theproducts that people will want to own.And so far, we've been right. The

Walkman, the Discman, the Handy-cam—and many more."

That’s why when Sony designers say,"We want our new product to be thefirst, the most compact, the best," theanswer is "Do whatever it takes toachieve it—follow your dream."

These statements from a truly globalleader says it all. There is no doubtthat Sony is a benchmark for institu-

tionalised creativity and innovation.

7.) Market-driven organizationalstructures.Organizational structures must be de-veloped based on the market place inwhich the organization operates."Structure must follow strategy, andnot the other way about."

In a dynamic and complex marketplace, which is often global, organiza-

tions have to keep their structures un-der constant review. An organizationalstructure which is clearly aligned toand facilities the needs of the marketwill provide the spring board toachieve world class marketing success.

There are different types of organiza-tional structures including functional,product based, market-based, and ma-trices. Any type of structure is accept-

strategies must be integrated and co-ordinated so that winning marketingplans can be developed. These in turn

facilitate world class marketing.

The ability to develop marketing plansfor the long term (10 years), as well asthe short term (1-3 yrs), are both veryimportant. Finally, winning marketingplans are developed with the target con-sumer being the undivided focus of at-tention.

5.) Long-term integrated marketingstrategies.

Marketing strategies are simply coursesof action designed and formulated toachieve the long and short-term market-ing objectives or goals, of an organiza-tion.

Winning marketing strategies, exhibit thefollowing traits:

• They must provide results in boththe short and long-term.

• They must be sustainable in the

longer term.• They must be integrated to achieve

above average levels of success.

For example, short-term marketingstrategies must facilitate and be inte-grated with long-term marketing strate-gies. New product development (NDP)is an important product related strategy.For best results, NPD activities must beintegrated between the short and thelong term.

6.) Institutionalised creativity andinnovationCreativity and innovation are undoubt-edly the hallmarks of world class mar-keting. Institutionalised creativity andinnovation means that an organizationhas embraced and internalised these twoelements. Organisational culture andmanagerial leadership are the two mostpowerful dimensions that can facilitate


elements of world class mark eting continued from page 5



Page

elements of world class

mark eting continued from page 6

Among the greatest are Proctor &Gamble, Sony Corporation of Japan,

General Electric Corp of U.S.A, WaltDisney Corp of U.S.A and others toonumerous to mention. All these worldclass companies have two things incommon; a profound understandingof their markets and the ability to de-liver superior value to their customerson a consistent basis.

Philip Kotler, the world renownedmarketing guru states the followingmemorable phrases in the millenniumedition of Marketing Management;“The future isn't ahead of us. It hasalready happened”. (Marketing in the21st Century). “It is no longer enoughto satisfy customers. You must delightthem.” (Building customer satisfac-tion, value and retention). “Today youhave to run faster, to stay in the sameplace.” (Scanning the Marketing Envi-ronment). “Your company does notbelong in markets, where it can't bethe best.” (Designing Global Marketofferings).

These statements are timeless beaconsfor organizations that want to beknown for world class marketing.These and the eight key elements willtake any organization a long way onthe world stage of business.

Prasanna Perera is a marketing and Man-agement Consultant and Senior Lecturerin Marketing Mnagement. He is a char-tered Marketer with the CIM (UK), andrecently elevated to Fellow of the CIM(UK). He can be contacted at :[email protected]

Today, the world is treated as one

global village. Markets are more com-plex and competitive than ever. Thepost WWII industrial boom hasdriven through multiple stages such asproduction, sales, marketing and cus-tomer orientation. Marketers are busyin developing their strategies on incre-mental innovation in this highly com-petitive market place. But all of thesestrategies are grounded on the customer.

Africa is a continent with 53 countries

and over 730 million people. It isworth to analyze what’s happening inthis market. What are the opportuni-ties for marketers. Where is the cus-tomer located? Are the so-called tradi-tional marketing terms applicable inAfrica?

During my early days in West Africa, Irealized there is something missingfrom what I remember of days past.One day, I went to a grocery shop to

buy some items. I saw the shopkeeper’s legs on the cash counter lis-tening to the radio on his shoulder.He didn’t bother to acknowledge meand ask what it was I needed. He co n-tinued to ignore me as he listened tohis radio. I thought he may be suffer-ing from an attention deficit! As I be-came accustomed to this new environ-ment, I realized that this apathy isprevalent. It carries throughout or-

ganizations from top to bottom—from small shop keepers to blue chi

companies, the “don’t care about the cutomer ” attitude is commonplace.

The customer appears to be nowherin this market. The customer is nottreated a king or queen as in othermarket places. The attitude seems tobe that it is the customers who servethe company by patronizing the prouct—not the company serving thecustomer. Customers do not demanthe service that should be affordedthem as they have never experiencegood service. Surprisingly, most companies do have marketing depart-ments, and posses the required marketing tools. Sadly, customer orientation is absent.

Marketers do have a major role to pin these highly bureaucratic marketplaces. The marketing revolutionshould take place from FMCG to sevice industry, from private sector tothe government sector. It was a greachallenge for me to introduce theproper marketing system to the or-ganization where I was employed. Flow employees were same as thevender in the grocery market with nclear understanding who the customis, and the meaning of customer service. It took years to instill the fundmentals of marketing and customerorientation in their daily interaction

continued on pag

Vo lume 7, Issue 1

Marketing challenges in AfricaByAnura Kaluarachchii, DipM,MCIM, MCInst.M, Chartered Marketer

Anura Kaluarachchii



with customers. Employees werebacked by several programs on mar-

keting orientation, mind storming ses-sions, mock and actual sales presenta-tions, and customer service training.

The new marketing strategies workedout very well. They were rewardedwith very encouraging sales growth,market capitalization, higher profit-ability, and moreover the establish-ment of a very sharp competitiveedge.

It’s time marketers shifted the existingparadigm and optimized the advan-tages in this market place. There aregreat opportunities to be had. The de-velopments in marketing segmenta-tion, customer focus, creating and sat-isfying customer needs, customer loy-alty and getting closer to customersare critical for African marketers.

The sum of all these changes is a chal-lenging environment for marketers inAfrica. One that can be described astransformational. I am very positive if marketers work hard to change thecurrent “attitude” that there will bechange in the markets, a productionboom in the industrial sector, and eco-nomic growth in their countries. It canbe done. What is needed is the properleadership, guidance, and the dedica-tion of principal marketers and theirstaffs.

Note:This reportage is based on my few yearsexperience in West and Central Africa as aprofessional marketer. This situation iscommon in many African markets, butthere are some exceptional market placesas well which do not resemble the apathythat I first experienced.

Anura can be contacted at:[email protected]

The Marketing Challenge has reportedpreviously on the award-winning busi-

ness—Cypher International—established by Norm Burns, F.C.Inst.M.Norm continues to move his businessand products into new territories, all thewhile carrying the banner of the Cana-dian Institute of Marketing.

Our last report on Norm’s activities an-nounced Cypher as the official supplierof environmental enhancement tech-nologies for the Galapagos Islands. Hisenvironmental products are now beingapplied as an unpaved roads dust sup-pressant.

The December 2003 Issue of Environ-mental Health Perspectives reports thatthere are more than 3.9 million miles of roadway in the Unites States, and that asmuch as 70% of the road mileage is un-paved. These roads are responsible formore than 10 million tons of particulate

matter emissions each year. The California Institute of Technology identi

fied at least 20 different human allergens, including molds and pollen indust stirred up from paved roads. Cypher’s products may prove bothhealthier and more effective than trational suppressants.

The need for a new type of dust suppressant was explored by Cypher re-sulting in the discovery that starch drivatives as a tackifier for hydroseedioperations—mixing mulch, seed, ferizer, and water into a slurry that issprayed over the top of a surface coustay there for a designed period. Burpremise was, if the starch could bonto the soil, it should be able to do soon a road surface as well.

The product developed by Cypher iscalled Dust Stop. Promotional materals say the product has been designedfor high, moderate, and low-temperature applications, and that itavailable in a citronella scent, whichthe company claims repels rodents,small animals, and insects, significanlowering roadkill incidents and deterring disease-carrying insects arounduntreated roads.

Dust Stop has been tested on unpavroadways in many countries, and iscurrently being tested outside of Precott Arizona. Time will tell if DustStop is indeed a viable alternative totraditional dust suppressants.

Cypher International Ltd. is dedicateto the development of global enviromental solutions.

See www.cypherltd.com/ duststop.php oContact Norm Burns at:[email protected]


Marketers m aking their mark!Featuring: Cypher International - N orm Burns, FCInst.M

mark eting challenges in

A frica continued from page 7

Norm Burns, FCInst.M



Page

In his book The New Positioning(McGraw Hill, 1996) Jack Trout

writes, “The road to chaos is pavedwith improvements. In all my years inthe business, I’ve never seen a market-ing person come into a new assign-ment, look around, and say, thingslook pretty good lets not touch athing. To the contrary. All red-blooded marketing people want to getin there and start improving things.They want to make their mark. Justsitting there wouldn’t feel different”.

He calls this the tinkering factor. Thisarticle outlines an international caseand a couple of my own experiencesso that these cases will give sufficientevidence why marketers, as well as en-trepreneurs, should avoid such pitfallswhich will eventually lead to the detri-ment of their organizations. Foolslearn by their mistakes and the wisefrom others (Anonymous).

The Story Of Coca-Cola

The Coca-Cola Company wasfounded in 1886 and celebrated 100years in 1986. In 1980 Roberto C. Go-izeuta a former Cuban was namedChairman and CEO of Coca-Cola(John B. Clark, Marketing Today,Prentice-Hall, Inc., 1987). He is ac-claimed as a bold agent of change re-sponsible for a large number of newproducts, diversifications and divesti-tures. In 1980, Coke’s revenue was

$ 5.9 million and net income $ 447

million while in 1985 its revenue was$ 7.9 million and net income of $ 678million, a growth of almost 34% inrevenue and 52% in net income(Standard & Poor’s NYSE Stock re-ports, 11 March 1986), but they had aproblem.

Coca-Cola’s and its arch rival Pepsi-Cola’s brand share in the US market(in the soft drink category in 1971),was Coca-Cola 25% and Pepsi-Cola

15% while in 1984 it was Coca-Cola22% and Pepsi-Cola 19% (Fortune, 1June 1981). Coca-Cola recognised thered lights.

Pepsi found in their blind taste teststhat Americans preferred its sweetnessto the crisp taste of Coca-Cola, anddecided to target them with a newcampaign ‘Pepsi Challenge’. Despitemore marketing and more spending,Coke found it difficult to rebuff the

‘Pepsi Challenge’.

In 1982 Coca-Cola marketed DietCoke, targeting those who preferredproducts without sugar and while thiswas being done, they also developed asweeter formula. They embarked onthe most extensive market researchprogramme in history where over200,000 people were influenced toparticipate at a cost of some 2 billiondollars. Blind tests carried out indi-

cated that 55% of the respondentspreferred the new formula while 45%the traditional. When both drinks wereidentified, 53% preferred the new and47% the old. Based on this data themanagement decided to market thenew formula as ‘New Coke’ and termi-nate the Old, despite the researchshowing a following of 47% for theOld.

In April 1985, the new formula waslaunched with a big bang. However,the months of May, June and July thCoca-Cola Company was inundatedwith phone calls and letters rebellingagainst the change, and dropping th

traditional Coke. Consumerism wasunprecedented. It is reported that inSeattle, loyalists formed an associatinamed the “Old Coke Drinkers of America”. They even threatened tosue the company if they didn’t bringback Old Coke. Coca-Cola’s 500 botlers in the US faced the brunt of cutomers’ wrath. As customer-rebelliowas snowballing Coca-Cola Compadiscovered, through ongoing researcthat 70% preferred the Old. Resul-

tantly, on 11 July 1985, after threemonths, Coca-Cola brought back OCoke as Coke Classic.

L essons Learned...

It was later revealed that a major flawas in the research where customerweren’t told that choosing the NewCoke meant saying good-bye to theitraditional Coke. We also saw the research figures of the blind test, 55%for New Coke and 45% for the trad

tional, and when revealed 53% forNew Coke and 47% for the tradi-tional. After launch we saw it furthedeteriorating, and in fact reversing t70% for the traditional and 30% fornew.

When nearly 50% of customers prefa particular product it shows that this a substantial market being satisfieby that product and that it has a defnite set of customers whose needs a

wants must be satisfied, which is thcore principle of marketing. Denyinthat opportunity and attempting toforce down a different product isn’tclever option to choose, and contrarto basic marketing principles. Markedriving is not always successful wheit comes to issues such as this, whicis not an Akio Morita or 3M type.

continued on page

TinkeringBy Dr. Ranjan Madanayake,DBA, CPM, FSPMgt., FSBP, FInst. SMM, MCMI, MCInst.M, MIM (SL), MSLIM

Vo lume 7, Issue 1

Ranjan Madanayake



Consequently, what Coca-Cola Com-pany did was tinker with the existingproduct to meet the new perception

of some, the shift from a crisp versionto a sweeter version. This cannot beseen as the solution to prevent migra-tion of Coke customers to the sweeterenemy territory.

In fact, what I would have proposedwould have been to segment the mar-ket according to need, and just likeintroducing Diet Coke for the ‘nosugar’ segment, launch Sweet Cokewith the graphics inclined towards a

Pepsi look. This way it would havesustained those wanting to shift to thesweeter version and even win back those who shifted to consuming Pepsi.Thus, they would have developedthree different product options in theform of three different sub-categoriesto three specific market segments,those who don’t like Sugar (Diet),those who don’t mind Sugar (Coke)and those who like Sugar (SweetCoke). This strategy could have given

the option to the Coca-Cola Company(perhaps later on), to terminate itsSweet Coke brand and sub-category,and pull down the similar productPepsi with such hara-kiri.

Another lesson we need to learn fromthis case is the genius of Pepsi forhaving knowingly, or unknowingly,creating a new sub-category withoutbeing a ‘me too’ in the same category.This is differentiating the product of-

fer form that of the leader and creat-ing for itself a new sub-category andleadership in that sub-category. ThusPepsi is the leader of the Sweet Colasub-category. Those who like theirCola to be sweet have an option.

Rani Sandalwood SoapRani was 50 years old and had a steadyfollowing of customers. Its woody fra-grance of Sandalwood in particular

ethnic segments of the toilet soap mar-ket in Sri Lanka. Some erroneously be-lieved that it had sandalwood oil.

Givadan Roure supplied the Sandal-wood perfume, the heart of the prod-

uct and known to linger on for quite awhile. The target market also acceptedits lathering properties. Rani was posi-tioned as beauty soap with Sandal-wood, a sub-category in the market fortoilet soap category. Its line was “Soapof beauty queens, queen of beautysoaps”. The pack graphics was verytraditional; it had a portrait of a beautyqueen with the crown and the soapwas in a carton, which was vertical. Itenjoyed steady monthly revenue.

A new marketing manager who joinedthe company believed that if Rani wasre-launched with appropriate sophisti-cation it could gain a share from Lux,the supreme leader of the toilet soapcategory at that time. Lux associatesitself with film stars; their famous linewas “nine out of ten film stars useLux”.

He proposed to re-launch Rani andtake Lux head-on. Thus the marketingstrategy was changed to pursue a newsegment while hoping to retain the ex-

isting segment by changing its posi-tioning as a new and sophisticatedproduct. The tactics used were drastic;they changed the product by changingthe perfume (the heart of the product).They changed the pack graphics whichportrayed a beauty queen with a crownused for 50 years and replaced themwith a sophisticated girl without acrown in an attempt to emulate Lux.The pack was made horizontal from

vertical, and further, instead of its trditional orange colour it adorned for50 years, changed to a woody and vneered look. The price was also in-creased. The only things the new pahad were the brand name Rani and

name of the manufacturer.

When sales personnel went on theirsubsequent journey cycles, after re-launch they observed that the off takwas disastrously low. Some customerefused to buy the new version andmany others who did, never re-turned—so did the marketing man-ager who initiated the change. I jointhe company at this stage and the firthing the managing director request

me to do was to regain Rani. Shop-shop and house-to-house I went wimy national sales manager with anopen mind on a qualitative researchascertain the reasons for this dreadfdecline, and when we returned we hdocumented the reasons. In a nut-shell – the new version alienated theexisting user and never attracted theLux user. Naturally, the solution wato bring back the original and regainthe lost custom. This was skilfully

done.

The original segment was retargetedproduct was repositioned to the former positioning. Original fragrancewas brought back and pack graphicswith beauty queen and vertical oranpack were restored. New Rani was rbranded as Super Rani. The resultparadise regained.

L essons Learned...

Professor Michael Porter offers threalternatives; focus, cost leadership adifferentiate (Malcolm McDonald,Marketing Plans, Butterworth-Heinemann Ltd., 1989).

Rani was a focus product and theleader of the Sandalwood category ithe beauty soap sub-category hence

continued on page

tinkering continued from page 9




cannot be tinkered to fulfil the needsof users using other categories andbrands. If the objective was to gain a

share of the Lux user they should havesegmented and targeted Lux users anddeveloped a new product with a newbrand to provide superior value andposition it appropriately to that tar-geted segment and thus win a sharefrom the users of that category. Cus-tomer retention is most important andchanges can alienate existing users andnecessarily need not attract new users.

Brand Extension: — Enough is not

enough; after restoring Rani I movedout to pursue another opportunityelsewhere and soon after that theyonce again tried tinkering. This timethey spent a lot of money on foreignmodels, TV commercials etc., andwent for a brand extension – Rani Jas-mine and Rani Rose. The validity of that decision can be judged by the factthat they don’t exist anymore. A brandis a perception of value in the mind of a customer or consumer. Rani has

been associated with Sandalwood foryears, and it has no room in the mindto accommodate another and another,because minds are supposed to be lim-ited (Jack Trout, New Positioning,McGraw Hill, 1996). Therefore brandextension is suicidal. Instead of allthis, they could have launched twonew brands to different market seg-ments and position them appropri-ately.

The New Flip — I noticed that Rani isthe main sponsoring brand of theSarasaviya film festival, which was pre-viously done by Lux. Out, went Luxand in rushed Rani. Has Rani forgot-ten the beauty queens they associatedfor 50 years? Likewise has Lux kickedthe stars out? I hope they don’t, be-cause if they do, and loose identity andfocus, they will certainly soon seestars.

Munchee Hawaiian CookiesMarket-leader Munchee had a similarexperience some years ago. They had acoconut-based brand of biscuit whichcame in a strong yellow pack and sup-ported by a very appropriate TV com-

mercial. It enjoyed a substantial marketshare in the biscuits category. For anunknown reason they changed the pack graphics and made it white and re-placed the old TV commercial with anew one. Sales declined dramatically.

It was at this time that I joinedMunchee and in my research estab-lished the pack change as the reason forthe drop. The correction was done at agreat cost of artwork, plates and pack-

ing material, and TV commercials.Once again paradise regained.

Lessons Learned...Colours used in pack graphics are asso-ciated with product perceptions; yellowmeant Munchee Hawaiian Cookies formany years for many users, and whitewas alien. Changing colours is critical.One must use colours to one’s com-petitive advantage like B & H withGold – smokers know this. So does

Carlsberg with Green. The smoker andthe beer drinker get a gentle reminderwhen these colours appear. Today thereis a TV commercial that shows lions intheir natural habitat. To an extent, thiscommercial is subliminal, but today,beer drinkers when they see the lionknow the brand. Well-done Lion.

DHL – DanzasLast year the owners of Danzas, thenumber one integrated logistics sup-plier in the world, bought the remain-ing shares of DHL the express com-

pany, or the world-renowned courieWhat did they do first? The usual, –tinkering!

They changed Danzas, or re-brandeas DHL-Danzas, why? Express is o

product category and freight forwaring another. Danzas has a well-segmented market for its freight – texporters and importers. Even thouthey may use courier, most of the tithe markets in which they operate adifferent. So where is the synergy, except to consolidate marketing and ccosts? Why can’t they sell two brandDHL and Danzas. What we have sefrom many international and local eamples are that this type of tinkerin

can dilute the brand Danzas and leato lack of focus.A brand must have a personality of own, a character of its own. Like fellow mortals respect human beingswith a good personality and charactcustomers will respect and value thebrands that have a good personalityand character. Ultimately identifyinggaining, sustaining and growing markets depend on the portfolio of brands of the company and their pe

sonality, and character in the minds their target markets.

Tinkering must not be done, but thidoes not mean that kaizen should beavoided. Small improvements are important to a product, and the best eample is Munchee Lemon Puff. Theimproved the quality most signifi-cantly without visibly changing theproduct altogether. To comment,please email [email protected].

Ranjan M adanayak e is author of .

Strategic Mark eting Plan – T he 12 ‘P’ Mo

Sri L anka and

Co-author of T he Mark eting Collectibles, N

Z ealand and Malaysia. H e is a member of

International A cademic Board, Phoenix Inte

tional University.

tinkering continued from page 10




Adam and Eve made the first toast.They each raised a handful of grapes

and said, "to fig leaves!" Since then,Toasting has come a long way. It's apart of almost of every special occa-sion you will be going to (even if youweren't invited).

Whether it's a wedding, a promotionor just getting that first McJob, youmay be asked to make a toast. Youmay not know how to make a toast,even if you drink a lot. But, you willwant to appear witty and sophisticated

because you are in the company of others who may be in a position tooffer you friendship, employment andinsider trading information. Thismeans that all speechwriting rules ap-ply. Here are some additional tips tohelp you create an intelligent toast.

The Rule of ThreeThe rules for toasting come in threes,like Musketeers (not the chocolatebar.) If you can count to three, you

can write a great toast. If you can't,you probably burn your toast everytime you make it.

People rarely retain any more thanthree pieces of new information.There are three structural elements inevery toast (Open, Body, Close), threedelivery mechanisms (Mind, Body &Voice), and three prerequisites forsuccess (Research, Preparation &Practice).

Know how long to talk (three minutesfor a professional toast is adequate).

Open, Body, CloseThe opening statement tells the audi-ence what you want them to think about. For example, if you are askedto make a toast to the Groom, youcould open with a statement abouthow long you have known him.

"I have k nown Bob about as long as I've

k nown my father and I like Bob (the Groom)

better!"

This naturally leads to a simple compli-ment or two, or to a continuation of the humorous comparison betweenyour friend, Bob (the Groom), andyour father in the body of your toast.The body of the toast logically buildsupon the themes introduced in youropening statement.

"Don't get me wrong, although my father un-

derstands dollar cost averaging better than

anyone I k now, Bob can leverage him under

the table. A nd, even if my dad can swallow

smaller corporations in a single gulp, put Bob

at a bar with a few competitors and it's an

immediate hostile takeover. Y et, when I look at (name of Bob's fiancé) and (name of Dad's

wife), I realize that they both have one quality

in common: an eye for beauty!"

Notice that you are ending with a com-pliment to Bob, the Bride, your fatherand your mother, a perfect 'win win,win, win' approach!

Regardless of who you are toasting,your closing statement is the same.

Simply raise your glass and say "pleaseraise your glass and join me in a toast to..."

and then say the one word that sumsup your message (e.g. new partner-ships, the Groom, soybean futuresetc.)

Keep in mind that you need to projectyour voice for a large gathering andremember that body language will ei-ther add interest or dismay to your de-

livery. Research your material, W-RT-E I-T O-U-T, don't ad-lib on the

spot (you're not that clever), and pratice, practice, practice! Finally, threeminutes is long enough to toast anybody, unless your divorce just camethrough, in which case no amount otime is enough.

The Taste TestAsk yourself if you would be proudhave your remarks quoted on thefront page of your local newspaper, if your mother would wash your

mouth out with soap if she was sittiin the audience. Rewrite all materialthat doesn't meet the "Taste Test."

Turning to a slightly different subjecof taste, let's talk about what bever-ages to serve for a toast. Champagneor wine are traditional for proposingtoasts and add a special note to theoccasion. Fruit punch (alcoholic ornon-alcoholic), ginger ale, or whitegrape juice are acceptable substitute

Never mistake Scope or Listerine fofine wine. Tea, coffee or water shounever be used for toasting.

Size (or in this case Length) mattersThe length of time you should bespeaking depends on whether you adelivering a business/ professionaltoast, or a personal toast. A three-minute professional toast is perfectlacceptable; people will be uncomfoable standing for any longer than th

Before you begin speaking, ask audience members to "please rise." Waitquietly until everyone is standing, thdeliver your toast.

For a personal toast, your remarks cbe longer (not more than 7 minutesplease). Remember not to ask the audience to rise too soon. Just before

continued on page

Creating and delivering memorable toastsBy Suzen Fromstein, M.C.Inst.M., and Michael Nemiroff




you finish your toast, ask the audience

to rise. Hope they are still awake. Waitquietly while they get to their feet. Sayyour closing statement. Then, ask theaudience to raise their glass for theone word that sums up your toast (thenew partnership, the Bride, a lengthyprison term for the soybean futuressalesperson).

Holy Speechcraft, Batman!Strictly Christian references are nolonger politically correct, and should

be avoided (unless you are confidenteveryone in the audience is Christian,it is not appropriate to make a refer-ence to Jesus Christ). Use moreoblique references to avoid offendingany audience members. For example,"that nice Jewish boy from N azareth" willwork well with B'nai Brith audiences.

Literary Stuff Quotations, poetry and lyrics can beused for impact providing they relate

to your message. It is not recom-mended that you read out a full quota-tion or poem. A lengthy reading boresthe audience. Reading silently to themis even worse.

The Big LaughsHumor is appropriate in a personaltoast, for example, a toast to the Brideor to the Groom. But remember, it's awedding, not a funeral or the TonightShow with Jay Leno. If you feel the

impulse to try out your office humor,here's a word of caution: "Don't." An-ecdotes about college panty raids orfeats of sexual agility or epic toilettales are not funny, even when makinga personal toast — and are totally in-appropriate in a professional setting.

Other Helpful HintsYour toast should be unique, originaland tailor-made for the occasion.

When mentioning names of people orplaces make sure they are correct andpronounced properly (Don't busharound the beat on these).

Do not eat or drink too much before it

is time to give your toast. Even if youroverindulgence is not apparent, it willmake you feel uncomfortable and willultimately affect your delivery.

ConclusionStatistics show that most people wouldrather die than speak publicly. Yet,there is no other skill that will elevateyour effectiveness as a communicatorand develop leadership skills as much

as being able to present yourself andyour ideas with confidence, clarity andcredibility, not to mention wittily.

Join a Toastmasters club in your area,sign up for a public speaking course, orhire a professional to help you writeyour material if your confidence is alittle shaky. Then, the next time some-one asks you to give a toast, a eulogyor a speech, you will be able to do jus-tice to the occasion and yourself.

Remember Adam and Eve's toast andhow great things turned out after that!

A bout the A uthors:

Suzen Fromstein is a published humourist and

President of T he W rite Connections, Inc., a corpo-

rate communications firm. M ichael N emiroff be-

gan life as a Professor of E nglish L iterature in

M ontréal. Soon realizing that humour , irony, and

sarcasm went entirely over the heads of students

and faculty alik e, Michael left teaching to become a

stand-up comic. H e has written material for sev-eral Canadian stand-up comics and has contrib-

uted comedy material to T he Tonight S how with

Jay L eno. Together, first cousins Suz en and M i-

chael created “Relatively Speaking” to bring hu-

mour, wit and entertainment value to corporate

speeches and sales presentat ions. Click on the hu-

mour icon on the www.writeconnections.to home

page to find out more information or call 1-877-

842-6663.

Plan to attend

the 2004 Annua

General

Meeting in

TorontoThe 2004 Annual General Meetin

of the Canadian Institute of Mar

keting is set for Saturday, June 26

at the Old Mill Conference Centr

in Toronto.

This is an opportunity to meet withcolleagues and get involved in theworkings of the Institute to effectchange and develop initiatives.

For a small Canadian-based organiztion of professional marketers, driveby its members with programs andfunctions carried out by volunteers,there is much to do.

The Institute is building its credibiliwith universities and colleges, and clegial organizations around the worlOur relationship with the CharteredInstitute of Marketing in the UK hanever been stronger, as we receivetheir support in our education andprofessional development efforts.

We have standing committees andtask forces to get things done. Members are getting more involved.

Major initiatives are focused on indutry and government recognition of credentials held by members; develoment of the Institute as a self-governing body for professional maketers; development of its communcations capabilities for web-based interaction with all members; financiahealth to be able to start and finishprojects, and its leadership role inCanada. Plan now to attend!

creating and

delivering toastscontinued from page 12




Management education providersmust realize that now is the time to

act. The September 11 tragedy in theUS has had a huge impact on educa-tion, projecting certain countries suchas New Zealand as a safe and cost ef-fective student destination. This op-portunity should not be left to chancebut pursued aggressively! Many inter-national education providers, such asMalaysia, are projected as being fairerwith regards to treatment of peoplefrom diverse cultures, religions, andcountries.

Exploiting the South East Asian edu-cation and training market is lucrativefor education providers, even as Chinaattracts global attention. However, wemust realize that an effective market-ing campaign along with combinedefforts is imperative for success.

Some institutions from countries, suchas New Zealand are working hard tomake inroads into South East Asian

nations, but success can only be as-sured by aggressive marketing. Suchaggressiveness should enable thoseconcerned to feel the market pulsewithout affecting academic standardsor quality of education.

Some institutions have tried to break into these markets and encounteredvarying degrees of success and failure.However, paying careful attention to

the intricacies presented by certain fac-tors, and working alongside such facili-

tators, will contribute much to thevarying degrees of success for theseinstitutions.

Education provider markets are verycompetitive, with providers fromcountries such as United Kingdom,USA, Canada, and Australia. Thesecountries have been successful in viewof their long-standing association.

Certainly, from the marketing perspec-

tive, paying careful consideration tothe activities of your competition andworking towards undertaking yourown activities, will ensure that an insti-tution is not unfairly ‘outclassed’ bycompetitors.

It is not wise to be uninformed aboutwhat works for the competition; un-dertaking activities from a point of self perception, or by taking an insular ap-proach to marketing.

Being a top institution in the homecountry is no guarantee of success, and

may be immaterial without appropriatemarketing.

It is common to find some, who aretop-notch institutions in their homecountries, failing to make any reason-able ‘dent’ in a target foreign market,while some who are not considered so‘top-notch’, making a bigger dent inthe same market.

Obviously, there could be a range ofactors such as marketing tactics, pr

ing, and flexibility in adapting to maket needs at play.

Never go into a foreign market withthe pre-conceived idea that since yohave made it in your home country,now the other markets are just rightfor your picking!

There is no success if your offeringdoes not provide satisfaction in a paticular target market, or if you expec

the market to pick up only what youhave to offer.

It is vital to have access to networksand the right local partner, if desiredresults are to be delivered. In mostcases, a single person is the best bet

Market research in practice is neverthe total answer, or even the avenuefor obtaining total information for dcision making related to a particular

market. Nothing can be better thanhaving access to someone who hastheir finger on the pulse of the markIn other words, a person who hasbeen undertaking similar activities thyou are intending in your target market(s). This will cut costs, time andefforts on your part, while providingthe immediate connections to ele-ments in that market.

I have seen institutions bungling the

marketing activities, due to their seeingly high level of confidence withtheir own internal marketing capabilties that are insular in the first placeAt times, tensions can exist betweenyour networks and your own staff dto the problem of not seeing thingsfrom the same perspective.

continued on page

Smart riders pick their rewards in Asian m arketsBy Anthony Raman, M.C.Inst.M.


Anthony Raman



Most market segments are price sensi-tive. Every market has a differentprice threshold. If you can’t match theprice that the market is willing to pay,then it is best to go elsewhere.

The market wants a total package of value at the right price. It provides awide range of alternatives, with theobjective to making your offering oneof the top choices.

At times, being the best does notmean that success will follow. Themarket seeks the most viable alterna-tive, given the circumstances. For ex-ample, the United Kingdom providersenjoy the position of being top

choices in most Commonwealth coun-tries, although this is not the case inthe Philippines where the UnitedStates providers have a distinct edge.

It is a matter of knowing the alterna-tives, making your institution one of them, and then ensuring you becomethe better or top choice.

It is wise to provide tailor-made offer-ings to your target market, so as to

represent total value. Otherwise, don’tbother going in!

Take time to know the competitionbecause the chances are they knoweverything about you!

Market intelligence is vital for everystep of decision making with regardsto a foreign market. Knowing thestrengths and weaknesses of your

competition is vital for your successand survival.

Never underestimate those involved inlocal education and training. Somehave more contacts worldwide than

anyone else! In fact, many studentsknow more about the market than theinstitutions themselves.

Being a foreign institution in a foreignmarket does not come with the privi-lege to discount local knowledge. Localinstitutions have covered the sameground long before you, and may beable to provide a lesson or two thatcan prove to be invaluable.

The following are some of the mis-takes that overseas education providerstend to make in South East Asia, espe-cially in Malaysia and Singapore:

• Emphasizing home success as aunique selling point.

• Being ‘big’ is not enough; in fact inmost cases, small is beautiful.

• Undertaking marketing activitiesthat are academic rather than mar-ket oriented.

• Not being flexible enough to takemarket conditions into considera-tion in their marketing and aca-demic activities.

• Insufficient market research.• Teaming with the wrong partners.• Not practicing market entry in

stages.• Belief that students are ignorant of

market conditions.• Lack of tailor-made programs.• Complacency, once success has

been tasted.• Hard-selling that their programs

are the best rather than focusingon what they can provide best to

certain market segments.• Lack of brand building.• Lack of personal relationships

with locals.• Low incentives to local partners• Focusing on the whole market

rather than specific segments.• Using ‘paper-based’ strategies.• Looking only at short term gain

Knocking competitors is not a wisestrategy. No market belongs to anyone institution, and no one is stealinmarket share.

Management education providersmust perceive countries such as Malaysia as a market, and as a launchin

pad to reach across to the rest of Aswithout necessarily establishing aphysical presence elsewhere, like inChina, Indonesia, India, Pakistan, athe Middle East. They must come uwith a pragmatic marketing campaigwith sustained efforts in relationshipto implementation of the marketingcampaign in partnership with othereducation providers.

Currently, institutions such as MonaUniversity ( Australia ), NottinghamUniversity ( United Kingdom ) and

Swinburne University of Technolog(Australia) have established off-shorcampuses in Malaysia to tap the intenational students market.

M r. Raman is the International L iaison Dire

(A sia Pacific) Te W ânanga o A otearoa

(T W OA ) — T he University of N ew Zealan

and lectures in mark eting. H e can be contacted

at anthony.raman@ twoa.ac.nz .

sm art riderscontinued from page 14




The traditional departmental or frag-mented approach to solving customercomplaints has been to address past orcurrent problems, and the quicker thebetter. “Satisfaction or your moneyback, no questions asked,” goes thepopular cry in most major departmentstores. This thinking may be adequatefor having customers ‘satisfied’ withtheir purchases in the short term. Butwe also know that, on average, two

satisfied customers in three are notalso ‘loyal customers’. The most suc-cessful organizations already under-stand that their best customers arealso their most valuable assets in thelong-term, and that customer loyaltyrequires a very different, dedicated,active approach to dealing with cus-tomer dissatisfaction - long beforethese become visible problems.

Most mid- and large-sized businesses

are now engaged in systematic cus-tomer satisfaction measurement pro-grams, regarded as “quite simply themost important type of marketing re-search” a firm can conduct. Paradoxi-cally, 80% of all such programs aresuperficial, because issues are too nar-rowly defined, and thus virtuallyworthless for developing the busi-nesses’ share of loyal customers. Tobe really valuable, especially in an en-

vironment of growing competition andshrinking markets, customer satisfac-tion programs must be improved toflow from and be embedded in thewhole organization’s culture if its long-term viability is to benefit holisticallyfrom its very best and loyal customers.

The unsatisfactory outcome from noteffectively managing past customer re-lationships is likely to deteriorate fur-

ther when outdated practices are em-ployed to meet future challenges frommore demanding customers, whoseexpectations reflect a changing com-petitive business environment wheretraditional mass markets are giving wayto a need for more personalized ser-vices. In the long-term more is re-quired to develop better and lastingrelationships with customers in a worldwhere their individual value expecta-tions are already beginning to domi-

nate.

An illustration can be found in thetravel industry, where it is common-place to provide dissatisfied travellerswith credit notes for a future trip “as asign of good will,” often without re-solving the complaint to the cus-tomer’s satisfaction or taking action toprevent its recurrence. Offering creditnotes for future travel services (atminimum cost to the operator) is

unlikely to pacify most customerswhose faith in the organizations’ futureservices is shattered when their pastproblems have not been adequatelyresolved. Customer loyalty cannot be“bought”– it has to be earned; buthow?

The true value of an effective com-plaint handling system that also fo-cuses on eliminating the earliest indica-tors of customer dissatisfaction has yet


T o increase customer loyalty, focus on the causes of

dissatisfactionBy James A. Schauer, F.C.Inst.M.Easton Marketing Services Ltd.

to be understood by many of even tmost progressive business organiza-

tions. These organizations havelearned that customers do not expeceverything to be perfect all the timeAir travellers today are more aware times when delays are inevitable, suicases do go astray and hotels do ovebook. None of these service failuresneed become serious problems if thsituation is resolved quickly, and witgenuine concern for the customer: Ipractice they actually strengthen thebusinesses’ market image. While occ

sional service failure may be thus unavoidable, the big test is what you dwhen things do go wrong. But moreimportant, the earliest indications ocauses of customer dissatisfaction cprovide a wealth of information toprevent most problems happening tbegin with.

In practice, complaints don’t ‘just hapen. A ‘complaint’ is the ultimate oucome of customer or end-user dissa

isfaction. Like a car or flying accidena complaint usually escalates fromvery small beginnings. Experience hshown that complaints develop theiown momentum, with dissatisfactiolevels - and the costs to resolve themincreasing almost exponentially fromone stage to the next, with their owngrowing ‘life cycle’ often culminatinin litigation. Conversely, visionary oganisations appreciate that, ‘when amember of the public has plucked u

the courage to complain, he or she iunlikely to want to argue about thesemantics or definitions.’

Equally astute, these visionary busi-nesses, also know that – akin to theIceberg syndrome – barely 5% of alcomplaints ever surface formally anthat access to the remaining 95% ofless-than-satisfied customers

continued on page

James A. Schauer



represents valuable information –which costs virtually nothing! In this

way it is possible to prevent - ratherthan resolve - most complaints to be-gin with, and build healthy customerrelationships, with a growing positiveimpact on increasing the share of loyalcustomers, as a major cost-effectivebenefit to the business overall per-formance.

The competitive business environ-ment is constantly changing, as it hasfor centuries; but the pace of thesechanges is now also increasing at afaster rate. That is no secret; but it’sless well known that organizationallearning to deal with the resulting im-pact of these changes actually beginswith understanding your customers,their problems, needs, value percep-tions, and expectations. Their expecta-tions are the first to adapt to any mar-ketplace changes, based on compari-son shopping, an awareness of actionsby your competitors, and economic or

political forces. The need for under-standing your customers’ changingexpectations and value perceptionsmust thus be reflected in your owndaily actions as critical success factors.Constructive management of the rela-tionship with your customers will thenalert you to the fact that not all cus-tomers are good for your business.Conversely, an optimum loyal cus-tomer base requires a relationship withcustomers where the benefits also sat-

isfy mutual needs.No business can exist without custom-ers. This means that the successful or-ganization will learn to become cus-tomer-centered – where the customersare actively valued as a central part of the business – as distinct from beingmerely ‘customer-focused.’ Customer-centered companies quickly learn toappreciate the real benefits of infor-mation feedback involving their cus-

loyal support, then traditional cus-tomer satisfaction measures effectivefocus somewhere below that point,with an emphasis on what’s good fothe business, rather than the customIt is also akin to playing cards with

only half a deck. The effect of thuslimiting yourself to merely satisfying cutomers is to limit yourself to less thahalf your real market potential. Con-versely, understanding this full potential allows you to target the approxi-mately 30% of known truly loyal customers and their almost exponentialimpact on growing business revenuewith time. This growth is further inflenced by loyal customers’ positiveword-of-mouth influence on their

friends, relatives and workplace, to efectively generate new business –without additional advertising expenture.

The well-known axiom tells us that “costs five times more to acquire a necustomer than to retain an existingone.” Unfortunately this ‘wisdom’turns out to be overly simplistic, somwhat negative and therefore, by impcation, counter-productive. It reflect

outdated thinking of focusing on cutomer satisfaction, which essentially the pursuit of mediocre results andoutputs, rather than higher possibleoutcomes and effectiveness. Analysiof customer or end user-derived feeback into the likely causes of dissatisfaction can lead to far better under-standing of your customers’ expectations and value perceptions. Beyondincreasing customer loyalty, the financial benefits can be considerable.

In my own experience in the international travel and hospitality industry30% to 35% of our annual repeat buness came from existing customers,who in turn influenced another 10%new customers to purchase. The strtegic effect of this growth is a corre-sponding increase in market share, areduction in advertising, promotion

continued on page

tomers and end-users, becoming lesscontent with merely measuring satis-faction levels. Feedback and questionsfocusing on customer loyalty arelargely perceptual and motivational,and thus quite different from accepted

‘satisfaction’ measures.’

High customer satisfaction levels arerelatively easy to attain; yet most satis-fied customers are not also loyal. Trueloyalty begins with a loyal staff andovercoming resistance to changeamong employees, suppliers and theirrespective supervisors. Most customersatisfaction programs are essentiallypassive undertakings, focusing on lim-ited aspects of feedback without prob-

ing the likely causes of their dissatis-faction, which requires a differentlevel of questioning from that used todetermine satisfaction levels. In pro-gressive organizations a major benefitfrom involving customers, as well asemployees, suppliers and managementin the loyalty-oriented feedback proc-ess is that employees are far morelikely to react positively to proposedchanges than to internally generatedinitiatives.

This comprehensive approach alsobenefits from identifying and harmo-nizing the different individual perspec-tives and perceptions of so-called“superior” service, as a cause of inter-nal stress which limits optimum or-ganization-wide performance and cus-tomer loyalty levels. Only through har-monizing their different perceptionsas part of an organization-wide effortwill the ultimate outcome become op-timum gratifying, just as the players in

a ball game can only win by playingtogether. Any visionary business willinevitably discover the practical strate-gic benefits from concentrating onincreasing its share of loyal customers,the positive impact on internal opera-tions – and revenues.

If we wish to retain an optimum shareof our present best customers andconsider this level as potentially 100%


customer loyaltycontinued from page 16



Olatunde S. Oloko, ACInst.M

Having studied and graduated with an

honours degree from the Department of Agricultural Extension and Rural Sociol-ogy at the O bafemi Awolowo University,Ile—Ife, Osun State, Nigeria in 1999, Ifurthered my educational career to obtaina Post Graduate Diploma in Managementfrom the University of Calabar, Calabar ,Cross River State, Nigeria in year 2001.

I wrote all my qualifying exams with thethen The Chartered Institute of Marketingof Nigeria and qualified in year 2001, as anAssociate Member. The Institute has nowamalgamated and is called the NationalInstitute of Marketing of Nigeria (ANIM).

I am also an Associate Member of the Ni-geria Institute of Management since2003.

I applied to the Canadian Institute of Mar-keting in accordance with the requirementof the Institute in 2003 and was finallyadmitted as an Associate Member in Janu -ary 2004.

I started my professional career with Dun-

sco Nigeria Limited, a private company, asAsstant Manager, Sales &Marketing in June 2001, where I was incharge of marketing the products and ser-vices of the company.

I later joined TNT International Express ,one of the leading courier companiesworldwide in one of its associate countries(Nigeria), as Client Service Supervisor.Within a year, I was promoted to ClientService Executive through dedication andhard work.

Football, travelling, indoor games, andmeeting people are my passions.

Rasika Dinesh Wickramatunga,

MCInst.M

Rasika D. Wickramatunga of Sri Lankaobtained his membership from the Cana-dian Institute of Marketing in October2003. Rasika is a Chartered Marketer and amember of CIM (UK). He volunteers in

and operating costs, to increase corpo-rate profits overall. Contrary to thepopular axiom, this outcome points to‘loyal customers being four to fivetimes as valuable as a one-time satis-fied customer.”

In conclusion, management can bene-fit considerably from unique, cus-tomer-derived information feedback system. In turn this information allowsfor better integration of service proc-esses and continuing service qualityimprovements, compatible with cus-tomer expectations. Better understand-ing of these expectations then providesa more meaningful basis for the devel-opment of corporate vision, futuregoals, targets and business strategies.Most of all, a customer-centered mar-keting organization has a better under-standing of the true value of its cus-tomers, to strengthen its own futureviability as a growing enterprise withpositive outcomes of increased cus-tomer loyalty, as well as growing opti-

mum profitability.

James A . Schauer, a Fellow and Director of

the Canadian Institute of Mark eting, is presi-

dent of E aston Marketing Services L td., pr o-

viding project management, business perform-

ance analysis, service quality improvement and

strategic planning services.

© 2004 James A . Schauer. T his paper was origi-

nally published as “Focus on the causes of dissatis-

faction to increase customer loyalty” in the W inter

1999 issue of the “T he M A RKE T IN G

C H A L L E N G E ,” and in the March 2003

issue of "EFFE CTIV E E X E CUTIV E ", by

ICFA I U niversity, H yderabad, India. Copyright

© 2003 E aston Marketing Services L td. Re-

printed with permission.

the CIM Sri Lanka Branch and currentlfunction as the Membership DevelopmOfficer. He handled PR for the branchsince 1999 – 2003. By profession he is tHead of Sales & Marketing at Bogawanlawa Plantations Ltd., Sri Lanka’s (Ceylpremier tea plantation company, and is

responsible for the domestic and regionmarkets.

Rasika obtained his MBA from the PIMUniversity of Sri Jayewardenepura, SriLanka. He obtained the Postgraduate Dploma in Marketing from CIM (UK) anis a Certified Professional Marketer of APMF. He obtained a merit pass in theNational Diploma in Personnel Management and holds memberships at Sri LanInstitute of Marketing, Institute of Per-sonnel Management and the Institute o

Management of Sri Lanka. Rasika is a viting faculty for CIM (UK) examinationcoaching, conducted in Sri Lanka.

Rasika started his career in the travel trand moved to brand management at Hemas Marketing, a leading FMCG Markein Sri Lanka and handled the key sectorsuch as Baby Care & Hair Care. He themoved on to Richard Pieris & Co., an-other blue-chip conglomerate as ProduManager for Consumer Durables, befotaking up the current position at Boga-wantalawa Plantations. He counts over

years of experience in marketing of ser-vices, consumer durables and FMCGbrands.

Rasika won the award for best performance by a Sri Lankan in CIM’s part 1 examinations and also had an illustrious creer at college where he won the awardthe Most Outstanding Student, was theCollege Head Prefect and also the HocCaptain—and won Colours for Hockey


customer loyaltycontinued from page 17

N ew Mem ber Profiles



Canadian Institute of Mark eting Directors & OfficersBruce Hoggard Chair Hoggard InternationalTossnarain (Shiv ) Seechurn Vice Chair/Registrar Canada Customs and Revenue Agency

Oswald Emmanuel Treasurer Trillium Health CareSusan Hughes The Palace CasinoRalib Fakim Grade Expectations Learning Centres,Suzen Fromstein The Write Connections Inc.Caroline Grimont ParadataRon Halliday Marketing DynamicsGeorge Jacob Kingston CollegePrasanna Perera Tetra Pak Asian Emerging MarketsJames Schauer Easton Marketing Services Ltd.Leonard Weeks Manager, Knowledge Industry Development, Business New

Brunswick

Full Member No. 702 Chula Wijesundara Toronto ONFull Member No. 706 Aimee Igloliorte Ottawa ON

Full Member No. 707 Jason Houle Lively ONFull Member* No. 679 Freddy Chetty Baharain

Associate Member No. 704 Olatunde Saheed Oloko NigeriaAssociate Member No. 708 Charles Adegboyega St. Catharines ON

Student No. 703 Kevin Smith Barrie ONStudent No. 705 Kelly Harle Regina SK

Page

N ew members and membership upgrades* (to March, 2004)

Full Member:A) Has held an acceptable marketingposition for 5 years, the last 2 at seniormanagement.B) Hold a recognized qua lification in anyof the following, or mature entry instead.• A diploma of an Institute of Marketing;• BA, MA or doctorate degree withmarketing specialization;

• Diploma or university Post-graduateDiploma in Management Studies orBusiness Administration with

marketing specialization;• Other educational or professional qualification of equivalent or higher standardwith marketing input – approved by theCanadian Institute of Marketing or oneof its affiliated marketing institutes.

Associate Member: A candidate must meet the following re-quirements:A) Has held an approved marketing posi-tion for 3 years, the last in marketingmanagement at a lower level than for fullmembership.B) With one of the following academicqualifications:• A Certificate of an Institute of marketingor, subject to its marketing componentbeing approved by the C.Inst.M., a BAor MA in a business-related subject;

• Diploma or University Post graduateDiploma in business Administration or inManagement Studies;

• Other educational or professional quali-fications of equivalent or higher stan-dard approved by C.Inst.M.

Graduate Member: A candidate must meet the following requirements:A) Have successfully completed an approved Marketing Certificate or Diplomprogramme from a recognized learninginstitution, or posses a business-relateBachelor degree.B) Be elected by the Institute.

Student Member:A candidate must meet the following requirements:A) Be registered in a Marketing Certifi-

cate or Diploma programme;B) Be registered in the final year of a dgree programme with Marketing specization. The Marketing component musbe approved by, and the learning instittion accredited with, the C.Inst.M.

Membership

Requirements

Vo lume 7, Issue 1



Code of Ethics

The professional marketing person has responsibilities t

their employer, to customers — both ultimate and

intermediate — to their colleagues and to the public. Th

Institute requires its members, as a condition of membe

ship, to recognize these responsibilities in the conduct o

their business, and to adhere to the Code of Ethics. Al

members shall be answerable to the National Council o

the Institute for any conduct which in the opinion of th

Council is in breach of this Code and the Council may ta

disciplinary action against any

member found to be in breach thereof.

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