You make profits in marketing when you sell your larger sized SKUs (Stock Keeping Units). So say a 400ml Clinic Plus bottle is likely to make more profit than a Re.1 Clinic Plus pouch. But yet both these SKUs play extremely different and yet extremely important roles in the marketing portfolio.
Ideally you want all your consumers to buy the 400 ml pack and be wed to your brand for a longer period of time and along the way make a higher profit. But therein lies the catch - not everyone can afford the 400 ml pack, not everyone uses shampoo at all and for a non-user - fat chance of ever jumping into the category with a 400ml buy, Not everyone even buys your brand and perhaps for them to try it out for the first time - the 400 ml might be overkill.
So thats where the 1 Re SKU comes into the picture. It plays the role of expanding the category itself by recruiting new users to the category - people who never used shampoos. It also allows people using other brands to take a peek at your brand and maybe convert. Finally it also allows people to get what they want in lesser quantity and at an affordable put down price.
So in a nutshell if profitability and loyalty is the task for the large SKU, expansion is the thing to do for the smaller SKU and thats how they both co-exist peacefully.
Wait! FOUR full paragraphs and not a single mention or reference to cricket? Wondering if you are on the right blog? Oh yes you are!
Time now to pan to cricket and look at its SKUs - The Large SKU - Test Cricket. The Middle Sized SKU -ODI cricket and finally The Small SKU - T20 cricket.
Lets start with the simple one - T20. Very clearly the format of the game which will add more viewers to the game. People uninterested in sports will not mind spending some time watching a T20 game because of the basic nature of the format - quick and exciting!
But a moment here to step back and check the glaring difference hitting one in the face. While typically the small SKU is low profitability, this format of the game is the highest profit garnering version.
So while the ultimate aim should have been to recruit new fans through the T20 mode and then gradually upgrade them to Test Cricket - from an economic perspective it may not hold much water. From a pure economic perspective, it makes sense to promote and maintain T20 and hold the attention of viewers there.
So what is it that the oldest and longest and biggest form of the game have to offer? For starters - it IS the REAL version without doubt. It is the truest test of temperament and skill for T20 reduces the gap between skill and result and Tests tests it over 5 days. It allows you to appreciate strategy in the game and see a duel build up between bat and ball without the constraint of field placements or over limits. The thrill of seeing people going for it without inhibition. The field where a player well and truly proves himself.
But thats for the hardcore fan. Cricket's marketing dilemma lies in the fact that without Test Cricket - subtlety and skill will desert the game and convert itself into a more 'wham bam' power / hand-eye coordination game.
And it will mean turning around conventional economics or marketing and have the small SKU generate funds to invest in the larger SKU for long term sustenance. Because if we are to see player temperament being tested and for players to be able to triumph over conditions - Test Cricket is the only way to go.
But till the time pure and shortsighted economics continues to rule - this will be a pipedream!
Thursday, February 04, 2010
Marketing & Cricket
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