Rajagopal. Marketing Dynamics: Theory and Practice
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Marketing Dynamics: Theory and Practice
• 4 Directors
• 12 Managers
• 24 Sales Representatives
Local Sales, has a team of about 30 persons, which are divided into five regions:
• North
• Center
• South-Pacific
• South
• Mexico City
Their regional clients
are usually small companies
with a reduced budget for
advertising that don’t have
enough money to advertise
nationwide. Unfortunately,
the Sales Force is dedicated
to attend more than 700
clients which advertise in
Mexico’s TV media,
therefore there isn’t much time and compensation for them to dedicate part of their time to attend US
sales goals. Moreover, to the fact that US Sales Force is unlimited to fulfill US Industry market that
could be a prospect to advertise their products in Azteca America makes it really hard to achieve
Azteca America’s goal of sales and growth.
PERFORMANCE IN HISPANIC AMERICAN MARKET
TV AZTECA spends around $250 million dollars in production per year and over 8,000 hours of
original programming with 8 new popular stories/soaps (over 1,000 hours of original stories/soaps
programs) per annum. Programming is distributed in Mexico, Central and South America and throughout
Europe. Working hand in hand with TV Azteca to bring U.S. Hispanics the best entertainment, news,
and sports programming in the language they prefer:
• Reaching an upscale audience and growing.
• Providing creative advertising and marketing platforms for advertisers.
• Serving the Hispanic community.
• By the Hispanics and for the Hispanics, Azteca America… (Es Tu Casa
14
)
14 It is your home
Figure 3: Organization of sales force of Azteca America
Director Director Director Director
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• Innovative and Passionate Popular stories/soaps
- Created for a family audience
- Real-life, contemporary scenarios
- Urban settings
- Contemporary issues
- Oriented to youth as well as adults
In the beginning of 1999, to get established in the USA Hispanic market, TV Azteca had 3
possible strategies to choose from:
• Keep selling individually produced shows to the USA television companies.
• Look for an strategic alliance with Telemundo to obtain the value added programming for
the programs it produced.
• Create the third Spanish Television Network in US throughout signing long term contracts
with small independent groups of local TV stations owners, and/or acquiring TV stations
with a financial partner.
Entertainment programs of Azteca America has emerged as bouquet of variety and carrying the
original ideas that had successful telecast in the Mexican TV network. The programs carried the
psychological tint of acceptance as they were woven around the Hispanic talks, comedy, leisure and
gender issues. The core concepts of the entertainment programs of Azteca America may be delineated
as under:
• Talk, comedy, game, women’s magazines, reality
• Newest emerging Spanish-language network
• 100% owned by TV Azteca, premier Mexican TV network
• TV Azteca… a brand associated with high quality programming throughout the Spanish-
speaking world
- Owns and operates two networks and over 540 stations in Mexico
• Effective advertising solutions
- Only US Spanish-language network to fully own its content
- Allows for creative marketing strategies and platforms
• Community-driven
- Providing a voice for the Hispanic community
Programs were aimed at a high quality entertainment for the Hispanic population as the TV
Azteca owns and operates two networks and over 540 stations in Mexico. The Azteca America, as
a media company has been positioned as a community driven organization and operates through the
creative marketing strategies. The company has identified four segments of the viewers- households,
youth, children and executives. The programs for the youth viewers include informed commentary
on the athletic events that the Hispanics are thrilled of, has been brought to viewers with cutting-
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Marketing Dynamics: Theory and Practice
edge technology and production capabilities. The programs for company to develop some social
programs that create social benefits to the Hispanic society. The volume and variety of the programs
produced by the principal company TV Azteca in Mexico is exhibited in Figure 3.
Vive Sin Drogas (Drugs Free Life)
This program is made throughout
public service announcements warning
teens of the dangers of illegal drugs. This
program coveys with the help of
community leaders, drug de-addiction
experts and those with first hand
experience, through live coverage of
schools and communities envisaging the
message to stay off from drugs. This
program was launched in Los Angeles in
November 2002.
El Juguetón
During the holiday season, Azteca America’s talent urges viewers to donate toys to needy children
and families. In 2001, El Juguetón’s 6th anniversary in Mexico, TV Azteca presented 1,600,000 toys
to children who would otherwise have no gifts. By 2003, it accounted for more than 3 million toys.
This program was also launched in Los Angeles in Christmas 2002.
STRATEGY PERSPECTIVES FOR FUTURE
To survive, a company must no longer trust existing trends or “strong signals;” instead, it needs to
identify “weak signals” - those which announce future changes in their strategic landscape. Shifts
occur at the point where an industry or an environment is about to change dramatically and where
the rules for playing the game are being transformed into drastically different ones. This needs to be
analysed from the point of view of competing media companies, cable networks and DVD marketers
in the Hispanic customer segment in America. A key success factor in screening trends is to develop
a solid filter to be used to sifter through the immense mass of information available. This filter can be
much broader than just observing competitors or technology trends. It usually includes the notion of
ideas and competencies. The process of screening trends is especially developed in companies which
have understood that, often the answers about the future are already here, but need to be uncovered.
Further, benchmarking consists in comparing your company or industry to the “Best-in-class” to
understand which areas to develop or competencies to acquire.
“…….Customers want more of everything they value. If they value low cost they want it lower.
If they value convenience they want it easier and faster. If they look for state of the art they want it
first and want to push the envelope. If they need expert advice they want more time and dedicated
effort and investment”.
15
Under such circumstances what should the entertainment company do to
15 Rajagopal : Marketing Governance: A Conceptual Analysis, Working Paper, ASCI, India, 2000
Figure 3: Production of programs by TV Azteca
(until October 2002)
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281
be the market leader in the given segment? One of the approaches gaining the competitive advantage
may be to improve the position of the business within the industry by way of acquisitions and augmenting
the market share enhancing the scale of operations and competitive positioning. The media companies
have to be innovative and create new opportunities - new products, services, and markets.
Developments in information technology, affect the performance of marketing decision-makers
through different routes. Advances in information technology enhance the possibilities to collect data
and to generate information for supporting marketing decision-making. Potentially, this will have a
positive impact on decision-making performance. Managerial expertise will favour the transformation
of data into market insights. However, as the cognitive capabilities of marketing managers are limited,
increasing amounts of data may also increase the complexity of the decision-making context. In turn,
increased complexity enhances the probability of biased decision processes (e.g., the inappropriate
use of heuristics) thereby negatively affecting the decision-making performance. Marketing
management support systems, also being the result of advances in information technology, are the
tools that can help marketers to benefit from the data explosion. These systems are able to increase
the value of data and, at the same time, make decision-makers less vulnerable to biased decision
processes. One of the research analysis leads to the expectation that the combination of marketing
data, managerial judgment, and marketing management support systems will be a powerful factor for
improving marketing management.
16
Among many other strategies built around the competitive and survival situations in the media
business for overpowering the market, Adrian J. Slywotzky
17
said that “Think about it a bit. Let it
stew. Play with the ideas and continually refocus on the implications for your organization.
Make notes. Discuss with colleagues and customers…..”
16 G.H. van Bruggen, A. Smidts and B. Wierenga : The Powerful Triangle of Marketing Data, Managerial
Judgment, and Marketing Management Support Systems, Erasmus Research Institute of Management
(ERIM), Erasmus University Rotterdam, Discussion Paper 35, 2000
17 Adrian J. Slywotzky : The Art of Profitablity, Warren Books Inc, September 2002
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Marketing Dynamics: Theory and Practice
REFERENCES
Bass, Frank M. Pessemier E. A. Tigert, D J.: A Taxonomy of Magazine Readership Applied to
Problems in Marketing Strategy and Media Selection, Journal of Business, 42 (3), 1969, 337-63
Häckner, Jonas & Nyberg, Sten, 2000 : Price Competition, Advertising and Media Market
Concentration, Research Papers in Economics 2000:3, Stockholm University, Department of
Economics
Masih, Rumi : An Empirical Analysis of the Demand for Commercial Television Advertising, Applied
Economics, 31 (2), 1999, pp 149-163
Shachar, Ron, Anand, Bharat N. : The Effectiveness and Targeting of Television Advertising, Journal
of Economics & Management Strategy, 7 (3), 1998, pp 363-396
Spence, A. Michael & Owen, Bruce, 1977. Television Programming, Monopolistic Competition, and
Welfare, The Quarterly Journal of Economics, Vol. 91 (1) pp. 103-26.
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APPENDIX ‘A’
Coverage of Television Network in the Hispanic Market in USA by the Aize of Households
Hispanic Hispanic
Hips. TV HH TV HH TV HH
Market Rank Market Coverage (000)
1 Los Angeles 16.30% 1,585
4 Houston 4.10% 399
8 SF–Oakland–SJ 3.26% 317
15 Sacram-Stock-Modesto 1.87% 182
55 Reno 0.25% 25
33 Salt Lake City 0.56% 55
19 Orlando 1.20% 117
25 Las Vegas 0.93% 91
11 Ablbuquerque 2.13% 207
21 Austin 1.07% 104
52 Wichita 0.30% 29
43 Palm Springs (
19 Cable
) 0.38% 37
3 Miami 5.66% 550
2 New York 11.31% 1,100
31 West Palm Beach–Ft. Pierce 0.58% 56
30 Bakersfield 0.62% 60
38 Santa Barbara 0.43% 42
14 Fresno–Visalia 1.94% 189
84 Victoria 0.10% 10
6 Dallas 3.33% 324
7 San Antonio 3.27% 318
9 Phoenix 2.53% 246
24 Tucson 0.98% 95
12 San Diego 1.98% 192
13 El Diego 1.96% 191
5 Chicago 3.95% 384
26 Altanta 0.89% 86
10 Harlingen–Wsclo–Brnsvl–McA 2.39% 232
Total 74.25% 7,223
Source: Nielsen Estimates on Television Industry, 2002
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T
oday, there is increasing competition in the markets. It has therefore become necessary to
understand the internal and external dynamics that consist of an inter-product and inter-organization
marketing-mix strategy in optimizing profit and the volume of sales. The consumer oriented factors
constitute the external dynamics of marketing. A marketing manager has to explore all possibilities of
developing an effective plan for launching and sustaining the product in the market and in doing, so he
needs a clear perspective based on the information analyzed. This necessary step of information
collection for important decision-making variables and an explorative analysis forms the core of
marketing research. It is a tool used in formulating marketing strategies and for reforming plans
based on the extensive feedbacks. Marketing research, hence, may be defined a as systematic
gathering, recording and analyzing of data on the variables of marketing goods and services.
SCOPE OF MARKETING RESEARCH
Marketing research is concerned with the factors, that are directly involved in marketing of goods
and services, and it includes the study of the effectiveness of the marketing-mix, advertising strategies,
competition and consumer behavior. It not only helps in formulating strategies suitable for market
intervention but also guides in perspective planning by analyzing formation for future projections.
Chapter
MARKETING RESEARCH
7
CHAPTER FOCUS
• To understand the tools and techniques of marketing research and their
application in assessing the marketing functions in a competitive
environment,
• To develop skills on qualitative marketing research and developing the
market research proposals, focus group analysis, questionnaires and
analysis of observation, and
• To learn designing marketing research projects, data collection,
quantitative analysis techniques and reporting.
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Marketing Dynamics: Theory and Practice
Marketing research is largely carried out on the basis of a consumer market survey, that is, conducted
by administering structured schedules or questionnaires in person or mailing them to sample
respondents, organizing syndicate discussions, pilot tests, etc. All medium and large scale companies
engaged in consumer products marketing invariably allocate 0.5% to 2% of their net sales resources
for conducting marketing research for future planning. Most capital goods oriented companies invest
a larger share in conducting marketing research. There are many decisions that are based on marketing
research (analyzed via quantified data collected on vital market indicators). These are:
Product - Market Decisions
1. Identifying market characteristics
2. Product-mix research
3. Determining product sustainability
4. Innovative product range
5. Preferential and profitable positioning of products
6. Distribution analysis
7. Pricing strategies impact analysis
8. Product testing - pilot studies
9. Market share analysis
10. Short and long range forecasting for price and demand of the product
11. Sales trend analysis
12. Competition pattern
13. Consumer-behavior analysis in reference to price, product-mix and comparative advantages
over other products
14. Assessment of impact advertising and
15. Analysis of gender preferences of products, etc.
Country Decision (For international marketing)
1. Entry Decision
2. Financial Risk
3. Legal risk
4. Opportunities
5. Production and marketing costs
Marketing research is conducted scientifically using effective statistical techniques, today.
An effective information system would make the marketing research a more analytical, fact
finding and prolific decision-making exercise. The scope for marketing research is very wide
and experimented with identifying potential markets as well as determining the marketing-mix.
There are many typologies, argued upon the marketing research scholars. However, the generally
Marketing Research
287
accepted framework details the scope of marketing research on both markets and the marketing-
mix. However, marketing research orientation shifts according to different typologies. Motivational
research is very significant, and it studies the psychographics or qualitative perspectives of
customer life style. This is a continuum of new skills and ideas that are accredited to marketing
research concepts and practices. Marketing research thus makes important contributions to the
management by supporting decision-making to set objectives, developing an action plan, executing
the plan and controlling its performance.
MARKETING RESEARCH PROCESS
Marketing research has two distinct dimensions that are governed by the exploratory, descriptive and
casual approaches. Exploratory studies are based on primary data pertaining to identified samples
focusing on a set of objectives. Such studies are generally woven around a hypothesis and attempt to
generate new ideas to serve the objectives of the research. Descriptive marketing research tries to
describe the magnitude and direction of the problem and brings out the output for a logical debate on
the marketing managers’ floor. A research plan determining data sources, methodology, tools, and
sample design and data collection methods needs to be formulated after setting objectives. The data
collection process has to be initiated from primary or secondary or both sources administering a
checklist and questionnaire. The data should then be subjected to an appropriate analysis in view of
the set objectives and its findings are to be presented in a draft report. International marketing
research is processed in the following steps:
Step 1 Step 6
Determine Management Level Collect Data
Corporate Personal interviews
Regional Mail questionnaires
Local Focul groups
Step 2 Step 7
Determine Type of Marketing Research Update Data Bank
Decision Revalidate data
Strategic Collect most recent data
Tartical Prune obsolete information
Step 3 Step 8
Determine Information Requirements Analyze Data
Primary Use statistical analysis
Secondary Test results
Paricipatory Adjust to models