Tuesday, March 25, 2008

The Decision Maker

The famous economist Adam Smith once noted “having money gives one the ability to ‘command’ other’s labour”. This is a succinct way of explaining purchasing power and is very relevant for anyone who is trying to chart a career in marketing. Why? The answer is simple; marketing works best when those who you are marketing to, have the purchasing power, i.e. the ability to command your labour in exchange for their money.
But for marketers, is it sufficient to target those that have the money, to make a sale? Again, the ‘invisible hand’ theoretician had wise words for us. He warned us not to ignore the thrifty housewife’s contribution to the economy as she compares prices at a local store. For instance in India and most other countries of the world, men are the income earning members of the family and have the control over the expenditure of this income. But it is not difficult to observe that the majority of what the household spends on is decided by the women. So, as a marketer it makes more sense to catch the attention of the women and thereby influence those who have the control over the strings of the purse, rather than the men who may be the purse bearers. This need to capture the decision maker’s attention is a refinement over the traditional target audience definition which marketers identify while developing their strategy. If the traditional market segmentation is done based on demographic variables like age, gender, income bracket etc, the emphasis on targeting decision makers requires the marketer to create a special value proposition to those who may not be the end users, but rather the key influencers in the buying process.
Examples of this can be seen in the advertising schedules of many products and services. Advertisements for Star Cruise vacations are actually broadcast on channels like Cartoon Network and Pogo to catch the attention of children who then influence their parents to go on these vacations. The creative for a medicinal product which aids in the reduction of male pattern baldness actually addresses the woman, negotiating with her to purchase the medicine for her husband!
This emphasis on the decision maker also necessitates a different approach to the metrics of media plan. From a traditional Opportunity to See (OTS) measure of exposure to the target market segment, marketers are now moving towards more experiential marketing platforms. The experience which the decision maker has of the product or service becomes of paramount importance and media planners now look for Opportunity to Experience (OTE) components before deciding on the marketing plans.
For example, when Financial Times (FT), position themselves as a paper read by the CEOs, by organizing symposiums of global leaders, they are essentially conveying to their advertisers that the ‘Decision Makers’ are reading their paper and endorsing it; and hence add more value to their product. Gone are the days when the circulation and readership numbers of the newspaper, among target demographic audience could have helped attract more advertisers. If ICICI bank uses the catch line that they are ‘the most preferred bank’ among younger corporate decision makers, it is because they want other such people with high disposable incomes to bank with them.
And thus the value of the ‘Decision Maker’ is the critical variable in a marketer’s formula. Market research firms like AC-Nielsen ORG MARG now provide companies (like ICICI bank) with a Decision Maker’s Survey (DMS) to aid them in identifying the ideal channels for communicating to the ‘Decision Makers’ directly!

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