Article on Convergence Marketing

What is Convergence Marketing?

Convergence is the strategy of putting together disparate or separate products and services to
come up with a new value offer to meet the needs of the target market. It is a process that entails
a lot of innovation and new ways of thinking out of the box.

Need for Convergence Marketing?

We live in a world that revolves around the individual. We celebrate self - expression at every
turn, within the personalization of every product we buy.

These days, individuals decide not only how marketers and advertisers can reach them, but also
if and when we can reach them at all. The individual controls his or her relationship with the
brand. We need to gain the individual’s trust so he or she will trust the brand. The best way to
achieve this is by combining the best tools from the two major marketing disciplines, brand
building and direct marketing.

Convergence is the happy union of the best of brand and direct. It also includes tools from sales.
All of these tools are fused to build loyalty, through a respectful and empathetic dialogue with
the freethinking, experiential individual known as our customer. Convergence retains the
powerful imagery and messaging of brand advertising, while leveraging the motivational
techniques of direct marketing, and focusing all of it on the goals set by sales. It is powered by a
financial model that statistically determines the expected worth of the individual, and it all
happens in real time. This all adds up to making money faster than ever before, and it has the
unique advantage of being a process we can repeat over and over again.

Convergence marketing is the logical next leap for advertisers and marketers looking to deliver
greater results and profits in today’s increasingly competitive global economy.
The 5 C’s of Convergence Marketing

These "five C's" are areas in which some of the most interesting new "fusion" concepts can be
developed:

• Customerization—Convergence of customized and standardized offerings and messages

• Community—Convergence of virtual and physical communities

• Channels—Seamless convergence of call, click, and visit

• Competitive value—Convergence of new and traditional competitive value equations

and pricing models

• Choice tools—Convergence of new search engines and decision tools for consumers and
company-provided advice

In these areas the new technologies and systems create opportunities for customers to do things
they could never do before, but they are also areas in which customers are creatively combining
the old with the new to create a fusion.
 Five Steps to a New Age: Convergence Marketing

Know your market; identify an emerging market. A target market can be any segment of the
population. Today, there are several emerging markets in the world. Emerging markets pertain to
market segments that have not yet been fully explored but show a lot of promise. Two of the
emerging markets are the OFWs and the Muslim market.

The Filipino OFW market is the third largest in the world next to Mexico and India accounting
for an estimated US$ 7.6B in remittances in 2003 from roughly 8M Filipinos. The second
emerging market is the Muslim market. The four largest Muslim populations are in Asia. Among
these countries are India, Bangladesh, Egypt and Iran. In the Philippines, the Muslim population
is estimated at 5% or an estimated 4.2M.

Make consumers co-creators of the value offer by discovering unarticulated or latent needs.
Globe in the third quarter of 2004 introduced Globe Kababayan and G-Cash tapping into the
segment of 8M Filipinos working overseas by providing mobile telephony services that permits
access to communications, financial services, consumer purchases and remittances all in one
cellular phone.

Another is Korean brand Ilkone i800 marketed specifically to address the needs of the Muslims
while addressing their culture, tradition and lifestyle. Ilkone i800 is a cellular phone that has
standard features plus it provides stored religious text messages, reminders on prayer times and a
compass to point the user to the right direction for prayers.

Maximize people creativity. The human capital era or knowledge economy demands forward
thinking, highly intuitive, reflective and creative thinkers while making obsolete mainstream
thinking. Today’s marketers are challenged to develop new, disruptive products and services
responsive to market needs. New age marketers are capable of imagining products and services,
new markets and entire industries that do not yet exist and give them birth and life.

One example is in education. The De La Salle Graduate School of Business MBA-JD program is
the first dual-degree program in the Philippines that is an answer to a latent need among student
learners for an appropriate, relevant curriculum that combines business and political science thus,
making graduates of the program better suited to a future career as a corporate lawyer.

Even retailing is not exempt from the phenomenon of convergence. Shoemart began as a
shoe store more than three decades ago then metamorphosed into a department store while
maintaining a section selling shoes. In 1994, Shoe Mart made a giant leap to the convergent
concept with a super mall designed to bring together shopping, entertainment, leisure and
amusement, quick service and casual dining restaurants as well as convention and trade
exhibition centers under a one stop shopping experience for its targeted customers. This
convergence was by design and not by accident as reflected in SM’s corporate vision and
mission that states, “SM Prime will provide one-stop shopping, dining, amusement and
entertainment convenience to meet the needs of a broad range of consumers in the Philippines.”

Technology as an enabler. The Internet has allowed marketers to bring their brand to anywhere
around the world. Godiva, a local skin care manufacturer uses an online storefront and e-
commerce to reach global consumers. Among its market are Caucasians and African-Americans
who swear by the efficiency of the product’s key ingredient called licorice that whitens skin.

Even media is capitalizing on technology and co-creation with television consumers. TV

networks, for one have taken advantage of text messaging in shaping the plot of their shows
much like the creative approach of Sana’y Wala Nang Wakas that paved the way for an
interactive soap opera with its loyal viewers.

Sustain co-creation by anticipating the market’s evolving needs. In Malaysia, C-stores are
not only selling FMCG products and fast food menus but have bundled other value-added
services like postal and courier services, box office booking, utility payments and dry cleaning.

This kind of sustained forward thinking is one of the key factors that propel a company towards
success. Convergence allows marketers to stretch their minds farther resulting in revolutionary
products and services that answer present and future needs of the market. Marketing practitioners
are never too old to innovate.
 Strategies involved in Convergence Marketing

Above the line(ATL) - Above the line is a type of advertising through media such as TV,
cinema, radio, print, banners and search engines to promote brands. Major uses include
television and radio advertising, web and Internet banner ads. This type of communication is
conventional in nature and is considered impersonal to customers. Above the line is much more
effective when the target group is very large and difficult to define.

Below the line(BTL) - Below the line sales promotions are short-term incentives, largely aimed
at consumers.

Below the Line uses less conventional methods than the usual specific channels of advertising to
promote products, services, etc. than Above the Line strategies. These may include activities
such as direct mail, public relations and sales promotions for which a fee is agreed upon and
charged up front. Below the line advertising typically focuses on direct means of
communication, most commonly direct mail and e-mail, often using highly targeted lists of
names to maximize response rates.

Another interesting and very effective BTL is Ssop Intercept. Trained sales personnel, often
young women, are deployed at Retail Stores, near the shelves of targeted products. They
convince customers visiting these shelves about the better aspects of their brand compared with
others.

If the target group is limited and specific, it is always advisable to use BTL promotions for
efficiency and cost-effectiveness.

BTL is a common technique used for "touch and feel" products. BTL techniques ensures recall
of the brand while at the same time highlighting the features of the product.

Through the line(TTL) - The TTL approach is where a mix of the two (ATL+BTL) are used to
integrate a marketers efforts and optimize returns from these separate investments.

Green Marketing - Green Marketing is the process of selling products and/or services based on
their environmental benefits. Such a product or service may be environmentally friendly in itself
or produced and/or packaged in an environmentally friendly way.

The obvious assumption of green marketing is that potential consumers will view a product or
service's "greenness" as a benefit and base their buying decision accordingly. The not-so-obvious
assumption of green marketing is that consumers will be willing to pay more for green products
than they would for a less-green comparable alternative product.
Cross Cultural Marketing - Cross-cultural marketing is defined as the strategic process of
marketing among consumers whose culture differs from that of the marketer's own culture at
least in one of the fundamental cultural aspects, such as language, religion, social norms and
values, education, and the living style. Cross-cultural marketing demands marketers to be aware
of and sensitive to the cultural differences; to respect the right to culture by the consumers in
various cultures and marketplaces, marketers should understand that they deserved the right to
their cultures. If the marketers want to be the winners in the cross-cultural marketing they must
create the marketing mix that meets the consumer's values on a right to their culture.

Accordingly, not only does culture influence marketing; but marketing also influences culture.
Marketers can act as agents of changes within a culture. The interactions between marketing and
culture can be examined from three perspectives. First, culture defines acceptable purchasing and
product-use behavior for both consumers and business. Secondly, each element of culture
influences each component of the marketing mix. Promotion, for instance, is strongly influenced
by the language. Thirdly, marketing also influences culture, especially by contributing to cultural
borrowing and change. In the long run, as more markets become global and standardization of
marketing mix increases, the rate of cultural changes will also increase.

Luxury Marketing - Luxury Marketing is the art of pampering customer’s senses and ego –
overtly, so the world notices. Price is no real objective, as for many the greatest luxury is
showing the world prices don’t matter to them. Luxury fundamentally revolves around
experience and service.
Leading Brands of the World aims to effectively communicate the unique essence that is
embodied in every brand to those in the brands target audience. A prominent shift that is taking
place in luxury markets today from 'Old world luxury charm' to that of 'New world luxury charm'
reflects the challenges that luxury brand marketers could face if each luxury target segment is not
correctly addressed. Each market differs in cultural, rationale, sociological & emotional values
and understanding these emotional value ties to that of a sentimental purchase is vital for
successful brand penetration.

Old world luxury charm is deep rooted in the attributes, qualities and features of the product
whilst 'New world luxury charm' is defined by the consumer who focuses on the experience of
luxury deep rooted in the goods and services they purchase and not in the ownership or
possession of the product itself. So 'New luxury' is about the experience of luxury while 'Old
luxury' is about the product itself.
Surrogate Marketing - This is a sort of advertising where a cover product is promoted in order
to promote
the actual product that is banned. Surrogate marketing refers to intentionally utilizing a company,
person or object to help convey the message of another party. The term has both positive and
negative connotations. On the positive side, surrogate marketing is somewhat akin to grassroots
or viral marketing in which a marketing organization may actively recruit others to help spread
the message or can also be likened to hiring a manufacturer’s representative to sell your product.

However, it is the negative side that seems to have drawn the most attention. A surrogate
advertising campaign can be used to indirectly promote products or services deemed by some
groups as being unhealthy, unethical, and immoral or, possibly, illegal through activities that are
viewed as acceptable forms of promotion.

In India, ministry of health has banned the advertising of liquor and tobacco. But many liquor
brands (like McDowell's whisky) initiated other products like sodas in the same name which are
then advertised. Another instance of surrogate advertising is 'Four Square Bravery Awards' in the
name of Four Square cigarettes.

Societal Marketing - The societal marketing concept is an enlightened marketing concept that
holds that a company should make good marketing decisions by considering consumers' wants,
the company's requirements, and society's long-term interests. It is closely linked with the
principles of corporate social responsibility and of sustainable development.

The concept has an emphasis on social responsibility and suggests that for a company to only
focus on exchange relationship with customers might not be suitable in order to sustain long term
success. Rather, marketing strategy should deliver value to customers in a way that maintains or
improves both the consumer's and the society's well-being.

Most companies recognize that socially responsible activities improve their image among
customers, stockholders, the financial community, and other relevant publics. Ethical and
socially responsible practices are simply good business, resulting not only in favorable image,
but ultimately in increased sales.