Project report on reverse marketing trend

SUBMITTED TO:DR. SHALINI NATH TRIPATHI (COURSE INSTRUCTOR)

SUBMITTED BY:Neha singh(PGDM-11-0-94) Nikita Gupta(PGDM-11-098) Jyoti Singh(FS-11-027) Karishma Gupta(FS-11-029) Priya Sharma(RM-11-010)

Acknowledgement
I owe a great many thanks to a great many people who helped and supported me during the writing of this project. My deepest thanks to DR.SHALINI NATH TRIPATHI the guide of the project for guiding and correcting various documents of mine with attention and care. She has taken pain to go through the project and make necessary correction as when needed. I would also thank my institution and my faculty members without whom the project would have been a distant reality. I also extend my heartfelt thanks to my family and well wishers.

INTRODUCTION
Reverse marketing is the concept of making the customer seek the firm rather than marketers seeking the customer. Usually, this is done through traditional means of advertising, such as television advertisements, print magazine advertisements and online media. Reverse marketing works mainly on the basis of the Law of Attraction. While marketing mainly deals with finding the right set of customers and targeting them, Reverse marketing deals with strategies that would make the customer find the company offering the product. Leenders and Blenkhorn define Reverse Marketing as "an aggressive and imaginative approach to achieving supply objectives. The purchaser makes the initiative in making the proposal. Reverse marketing is comprised of strategies for a brand to create a relationship with potential customers, compelling them to seek out the brand, as opposed to the other way around. For many companies this means less marketing dollars spent on attracting potential customers and more time spent fostering strong, long-term relationships. The main benefit of reverse marketing is its consistent attraction rate of high quality customers: Someone that feels the need to seek out a brand and learn more about the services has a higher likelihood of becoming a customer than someone who is advertised to. When the customer feels like it was their idea, they will sell themselves on the brand. Additionally, the strategies for attracting these clients simultaneously establish or re-enforce the perception of the brands expertise in their industry, which can be instrumental for winning

GENESIS:Firms increasingly realize that dramatically changing market conditions require significant changes in their purchasing function. In more and more firms, purchasing is becoming pro-active and of strategic importance. This phenomenon has been referred to as REVERSE MARKETING. During few decades many technology- and salesoriented companies have transformed themselves into competitive customer-driven organizations. Fast technological developments, growing globalization of markets and higher customer requirements have resulted in cut-throat competition in many consumer and industrial markets: Integration of the European market, tumbling trade barriers in countries such as Mexico and China, and democratization of eastern European countries and the former Soviet Union result in increasing investments by Japanese and American firms.

For years now, American giants such as IBM, Gillette, Dow Chemical, HewlettPackard and Xerox get the major part of their sales from outside the U.S. In industries like telecommunications, new technologies and deregulation eliminate traditional monopolies and create global markets. In the 1980s many recommended the use of SINGLE SOURCING(e.g. Morgan 1987, Segal 1989), whereas others went on to point the long term dangers of relying on just one supplier (Newman 1989, Ramsay 1990). Leenders and Blenkhom (1988) introduced the term REVERSE MARKETING for an aggressive kind of purchasing that they had encountered in the U.S. and JAPAN. Reverse marketing describes how Purchasing actively identifies potential suppliers and offers suitable partners a proposal for long term collaboration. Burt(1989a) noted a similar phenomenon, that he called PROACTIVE PROCUREMENT, while Oumlil and Williams(1989) used the term MARKETDRIVEN PROCUREMENT.

New trend in reverse marketing:For those in business selling your product or service is vitally important in terms of earning money. However, with the current economic downturn and customers being more conservative about where they spend their hard earned cash, the old ways of marketing simply are not affective anymore. Reverse marketing is a new technique that when used properly can build your client base simply and easily. However, in order to use reverse marketing effectively you have to have a clear understanding of the concepts behind it. This article is designed to help you understand reverse marketing and how it works.

The Old Way of Advertising:The old way of advertising was based on companies actively trying to convince people that they needed their product. To do this companies would use what is known as the hard sale method which simply means they would go out of their way to tell people that their product or service would in some way improve or enrich their lives. Many times in order to sell their product the hidden message in these advertisements were that somehow the consumer was less attractive, less successful, or they were getting less enjoyment out of life than they should be and the only way they could reach their full potential was to purchase a certain product or service. Companies did not worry that this technique was turning many consumers off since their was plenty of marketing dollars going around and they new that they would convince at least a small group of consumers to try their product by these hard sale tactics. However, when more became scarcer and consumers started shopping more carefully these companies found the hard sales tactics simply no longer worked.

How Reverse Marketing Works

Reverse marketing works by not using hard sale tactics. In some cases reverse marketing means no salesmanship at all. Instead, reverse marketing allows consumers needing your product to come to you by showing them that you are concerned about what they need and that you are savvy enough to help them meet their needs. Instead of advertising your business and trying to convince people that your product or service is better than the competitors you offer them helpful information in solving their problem or need. This way you are giving the consume practical advice they are looking for at no price. Then at the end of your advice you include a little information about yourself including your website. Since you have talked about their specific issue and using an answer to their query, the consumer does not feel as though you are trying to sell them anything. Those that decide your product or service is for them will then click on your link to see what you have to offer and since you were the one that offered them helpful advise they will be more tempted to buy from you. For exWell we would love to start with an example, so this article on reverse marketing is going to be pretty much a 'reverse article' with the examples coming first and the theory coming in a bit later. The most commonly talked about example must be of the cosmetics company 'Dove'. Now cosmetics companies usually talk about how their products will add to your flawed looks. If you're dark, they'll make you fair. If you're pimply, they'll clear it up. If your skin is dry, they'll moisten it. And so on. Cosmetic companies tend to pick and criticize your looks and create this impression that you're quite ugly overall, and the only way to make yourself more desirable is to use their products. As if their products actually make a beauty of a beast. But Dove chose a different path altogether. Instead of pointing at the little flaws which our skin might have, Dove asked women to come together and celebrate their beauty. You will now notice, how very less coercive Dove ads seem as compared to the ads of other cosmetics brands. It's a completely different, novel approach to marketing altogether. Dove rarely uses models, who are viewed as plastic and artificial. Dove uses 'real women', beautiful, but not extremely so, to add a touch of realism to the ad. And it is this appeal, the seeming genuineness of women, the lack of coercion, and the lack of this artificially created sense of inferiority of women to the models in terms of looks, that drew more and more women towards using the products of Dove. And yes, it has been successful.

The example probably told us a bit about what reverse marketing strategies are. It is a sort of assertion to the people that they don't really need to use the products of a particular company. It is sort of like reverse psychology-which loosely means that we get people to do something by asking them not to. Of course, reverse marketing doesn't forbid the people from using their products or any such thing, but reverse marketing tells people that they're awesome overall even without using any of the artificial add-ons which they sell

It seems illogical that this approach should work. On one hand companies practicing reverse marketing seem to be telling us not to use their products, and on the other hand, we see people going out and buying them. So what is reverse marketing's whole appeal? Reverse marketing works simply because you are helping the consumer achieve a goal they themselves have without trying to force them to buy anything. The consumer comes to you, not you to them. The traditional purchaser and the reverse marketing oriented one can be regarded as two extremes, each with its own characteristics as shown below:-

Traditional purchaser

Reverse marketing oriented purchaser

Implications for industrial marketers.

Responsive

Proactive

Uni- dimensional thought Multidimensional thought.

Acknowledge active role of purchaser, listen carefully and react on initiatives. Demonstrate the effect of offered solutions on other operations, decisions and issues within the organization. Focus on long term relationship, sacrifice short term profit for

 Accepts status quo Highly motivated

Passive negotiation approach Assertive negotiation approach

long term profitability, relationship marketing. Prepare for negotiations meticulously, thorough presentations, be sensitive and adaptable to the buyers requirement and objectives. Reciprocate the enthusiasm encountered, demonstrate willingness to go the extra mile. Combine solutions to immediate problems with long term planning and execution, look at the future developments, needs and problems; attention to after sales service; willingness to adapt.

Literature:In 1988 Leenders and Blenkhorn published Reverse Marketing - The New BuyerSupplier Relationship, in which they state that the buyer-supplier relationship has changed considerably. The traditional relationship, where the seller takes the initiative by offering a product, is increasingly being replaced by one where the buyer actively searches for a supplier who is able to fulfil its exact needs. Blenkhorn and Banting (1991) consider the industrial marketers' inadequate performance to be the major cause for this changed attitude: 'If those b-t-b marketers really were paying attention to customer's needs, procurement people would not have to develop aggressive materials acquirement strategies'. The supplier is subsequently urged to deliver the product with the required specifications, where the buyer participates in identifying the best solution. This phenomenon is called reverse marketing. Reverse marketing is not a technique, but a changed perspective on purchasing and supply management, and is found to lead to cost reductions of 5 to 30 percent . In addition, reverse marketing may result in improved product quality, delivery performance and service support. The traditional purchaser and the reverse marketing oriented one can be regarded as two extremes, each with its own characteristics . The characteristics of the reverse marketing oriented purchaser have far-reaching implications for suppliers. A supplier needs to assess the purchasers with whom its wants to do business and translate this into strategy and action. One direct consequence for the supplier is an increasing attention to the use of relationship management, which may lead to the implementation of account management. Developments such as these are also found in retailing and caused e.g. Black & Decker Corp. to set up divisions with a dozen or so staffers from logistics to finance dedicated to serving such power retailers as Home Source:Based on Blenkhon and banting (1991) Such a strategic approach to purchasing obviously requires other capabilities than traiditional purchasing does . As with every significant organization change the successful implementation of reverse marketing strategy requires 1: personnel with the right education and attitude 2: sufficient commitment and support from the organization 3: pratical guidelines that show reverse marketing oriented purchaser how to implement such a strategy. Existing personnel and present attitude may prove to be an important obstacle for instance Cammish and Keough (1991) provided the rather grim estimation that the

implementation of strategic purchasing frequently means that more than half of the purchasing manager need to be replaced .organizational commitment and support should be fostered by top management and can be demonstrated by elevating purchasings position in the organization and involving it formally in various critical strategic decision making processes finally the practical guidelines for implementation of reverse marketing are the subject of the balance of this article

Marketing principles for purchasing

Leenders and blenkhom identified eleven phases in the reverse marketing process ,starting With fundamental research and ending with an evaluation of reverse marketing option . However these eleven phases can be grouped into four general stages which show great resemblance to the familiar stages of the marketing planning process we will present these four stages and demonstrate how marketing principles can gudie purchasing by describing a fictitious case the case revolves around pat Jordan at present purchasing manager at Broadbent industries ,but who used to hold a marketing position at another firm in the same industry .jordan was specifically hired to make Broadbent purchasing function more market driven .the case describes hoe Jordan uses her knowledge of basic marketing principles to initiate ,design and assist in the implementation of reverse marketing in her company

Marketing principles

Translation to purchasing

Stage 1: Analysis and purchasing strategy selection SWOT analysis Strategic marketing plan Analysis of general developments and the organization's position on supply markets Strategic purchasing plan that describes the firm's desired supply position and the strategy to realize it Classification of purchased products according to their strategic importance

Pareto analysis

Market research

Analysis of both existing and potential suppliers Supplier development strategies that include present and potential suppliers, as well as current and desired activities Grouping of suppliers into categories with similar characteristics Determination of the group of suppliers that most closely fit the profile of the ideal supplier Determing the right mix of arm's transaction length and partner relationships with suppliers

Growth vectors

Market segmentation

Target segment

Relationship marketing

vs

Stage 2: Planning the reverse marketing effort

Tactical marketing plan

Plan with reverse marketing objectives and the short term actions needed to realize them Defining decision points and the accompanying criteria to evaluate the reverse marketing effort and decide on future actions Building internal support by emphasizing cross-functional communication

Go/no go decisions

Integration of functional areas

Stage 3: Implementation of plan of action Analysis buying centre/DMU Identifying and analysing the relevant decision makers and the decision making process 'Selling' the supplier on the reverse marketing proposal through a personal tailormade approach. Stressing the various (internal and external) benefits to the supplier during negotiations and in drawing up the contract Mobilising a project champion within the supplier who stimulates the project, creates commitment and ensures continuation

Focused selling effort

Emphasizing customer benefits

Mobilising product champion

Stage 4: Control and evaluation After sales service Assisting the supplier after signing the contract; e.g. through a financial contribution or solving technical problems Building the relationship with the supplier through good communication, supported by careful evaluation of performance on the basis of mutually agreed upon criteria Evaluating the tentative reverse marketing results on the basis of the objectives in the strategic purchasing plan

Relationship marketing

Evaluation of marketing results

Research design:Research design used in our project is basically descriptive design as we have used secondary data and several researchers views which they have given about reverse marketing. Several links are as follows which really helped us in giving a right direction to our project. Links and references are as follows: Wim G. biemens Maryse j brand Joseph P. Aleo, Jr.Redefining the manufacturer suppliers relationship.journal of business strategies,volume.13, no.5. David L. Blenkhom and Peter M. Banting, How reverse Marketing changes buyer supplier role, Industrial Marketing Managemnt, vol.20.
www.buzzle.com/articles/what-is-reverse-marketing.html www.arraydev.com/commerce/jim/9802-02.htm

Conclusion:Yes, reverse marketing has seen quite a few success stories, even with its fairly unusual approach. Why so? In my opinion, this is because reverse marketing is a breath of fresh air from the otherwise fear-inducing advertising techniques. How many times have you gone and purchased something because its advertising campaign had some thinly veiled gory eventuality, should you not use the product? It's happened almost too many times. Lets continue the example of cosmetics. How many of those wrinkle-reducing products ads show women frowned upon just because age is catching up with them. The ad runs as, "see what happened to this lady who didn't use the wrinkle reducing cream when she should have? Now she's old, ugly and no one likes her. You want to be this way?". People started seeing this approach as an open threat and didn't like it. No one wants to be told what to do. And this is where reverse marketing has been successful. Don't tell people what to do. Reverse marketing appeals to the people's sensibilities, the result of this is that people warm up to these products. They want to use a product that doesn't poke fun at them, or threatens them. They want one which makes them feel good about themselves, doesn't brag and yes, is effective. But there are some important caveats to using the reverse marketing tips. Of course, a new entrant in a market ought not to try this. Dove and other reverse marketers have been successful because they are already established brands and people know how good they are. Secondly, the products have to be so good that they speak for themselves!.