Reverse marketing

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Reverse marketing is the concept of marketing in which the customer seeks the firm rather than marketers seeking the customer. [1] Usually, this is done through traditional means of advertising, such as television advertisements, print magazine advertisements and online media. While traditional marketing mainly deals with the seller finding the right set of customers and targeting them, reverse marketing focuses on the customer approaching potential sellers who may be able to offer product.

Contents

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." [2]

Components

Aside from traditional methods of reverse marketing, this technique is also used in B2B markets. In this instance the buyer (business) will take the initiative to approach the supplier (manufacturer) with its needs. [3] This tactic is often used by large companies in order to decrease redundancies in their supply chain and decrease costs. The concept of reverse marketing also corresponds with Supply Chain Management. [4] The strategy of reversing roles in some cases, has been very successful. In 2001 Richard Plank and Deborah Francis published an article studying the impact reverse marketing has on the buyer-seller relationship. They pinpointed what the motivation was behind the reversal of roles:

The relationship of conflict and reverse marketing activity is of interest to researchers and practicing managers alike as it suggests that by taking a reverse marketing stance affective conflict can be reduced and cognitive conflict may be enhanced. This is important in the emerging strategic orientation of supply chain management, which suggests that the focus of competitive advantage should be the supply chain rather than the individual organization. In order to forge strategic advantage, the purchasing function must develop relationships with suppliers that have limited affective conflict. [4]

What they found was that when the buyer actively sought out the supplier it reduced conflict between the relationship manager and the potential buyer. [4] In a random sample of 1600 they took from buyers and suppliers, they also found that the majority of businesses actually had a policy for reverse marketing. [4]

Basically, reverse marketing campaigns can apply to two different targets: Consumer based campaigns, and supplier based campaigns. Consumer based campaigns typically involve companies implementing reverse strategies so the end user of their products will seek them out. Supplier based campaigns revolved around the idea of suppliers altering their cost and market strategies so distributors of their product will actively seek them out.

Examples

Orabrush launched a series of comedic video advertisements on YouTube that featured a man dressed in a tongue costume. Rather than promoting product, they chose to reinforce Brand Loyalty. The campaign was a massive success with more than 38 Million YouTube hits and led to Walmart purchasing roughly 700,000 Orabrush units. [5]

Walmart is one of the most notable examples of using this tactic. Rather than suppliers approaching Walmart with their product, Walmart will actively seek out suppliers who are able to produce a specified product at a lower cost than their competitors. This tactic in some cases has caused Criticism of Walmart from the public and their suppliers. [6]

In 2004 Dove launched the Dove Campaign for Real Beauty focusing on the natural beauty of women rather than advertising their product. This campaign caused their sales to soar above $1 Billion and caused Dove to re-create their brand around this strategy. [7] Although successful, this campaign caused a lot of controversy and discussion due to what people saw as an advertisement with a contradictory message. [8]

Weight Watcher's 2008 brand altering campaign, Stop Dieting, Start Living, fundamentally changed their image among their target market. [7] Their advertisements gave tips on how to live healthy rather than promoting new dieting programs. It enhanced their goal to reinforce brand loyalty.

Related Research Articles

<span class="mw-page-title-main">Supply chain management</span> Management of the flow of goods and services

In commerce, supply chain management (SCM) is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. This can include the movement and storage of raw materials, work-in-process inventory, finished goods, and end to end order fulfilment from the point of origin to the point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain.

<span class="mw-page-title-main">Marketing</span> Study and process of exploring, creating, and delivering value to customers

Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of advertising campaigns; attendance at trade shows and public events; design of products and packaging attractive to buyers; defining the terms of sale, such as price, discounts, warranty, and return policy; product placement in media or with people believed to influence the buying habits of others; agreements with retailers, wholesale distributors, or resellers; and attempts to create awareness of, loyalty to, and positive feelings about a brand. Marketing is typically done by the seller, typically a retailer or manufacturer. Sometimes tasks are contracted to a dedicated marketing firm or advertising agency. More rarely, a trade association or government agency advertises on behalf of an entire industry or locality, often a specific type of food, food from a specific area, or a city or region as a tourism destination.

<span class="mw-page-title-main">Sales</span> Activities related to the exchange of goods

Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale.

<span class="mw-page-title-main">Supply chain</span> System involved in supplying a product or service to a consumer

In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activities, information, and resources involved in delivering a product or service to a consumer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product and delivering the same to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains. Suppliers in a supply chain are often ranked by "tier", with first-tier suppliers supplying directly to the client, second-tier suppliers supplying to the first tier, and so on.

<span class="mw-page-title-main">Distribution (marketing)</span> Making products available to customers

Distribution is one of the four elements of the marketing mix. Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. This can be done directly by the producer or service provider or using indirect channels with distributors or intermediaries. The other three elements of the marketing mix are product, pricing, and promotion.

<span class="mw-page-title-main">Pricing</span> Process of determining what a company will receive in exchange for its products

Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of product.

<span class="mw-page-title-main">Disintermediation</span> Eliminating middlemen from a supply chain

Disintermediation is the removal of intermediaries in economics from a supply chain, or "cutting out the middlemen" in connection with a transaction or a series of transactions. Instead of going through traditional distribution channels, which had some type of intermediary, companies may now deal with customers directly, for example via the Internet.

<span class="mw-page-title-main">Strategic partnership</span>

A strategic partnership is a relationship between two commercial enterprises, usually formalized by one or more business contracts. A strategic partnership will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship. Strategic partnerships can take on various forms from shake hand agreements, contractual cooperation's all the way to equity alliances, either the formation of a joint venture or cross-holdings in each other.

<span class="mw-page-title-main">Business-to-business</span> Commercial transaction between businesses

Business-to-business is a situation where one business makes a commercial transaction with another. This typically occurs when:

Green brands are those brands that consumers associate with environmental conservation and sustainable business practices.

<span class="mw-page-title-main">Category management</span> Concept in retailing

Category management is a retailing and purchasing concept in which the range of products purchased by a business organization or sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories. It is a systematic, disciplined approach to managing a product category as a strategic business unit. The phrase "category management" was coined by Brian F. Harris.

<span class="mw-page-title-main">Retail marketing</span>

Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation. The retail mix is loosely based on the marketing mix, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, Personnel and Presentation since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the Retail Format should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing.

Channel conflict occurs when manufacturers (brands) disintermediate their channel partners, such as distributors, retailers, dealers, and sales representatives, by selling their products directly to consumers through general marketing methods and/or over the Internet.

Industrial market segmentation is a scheme for categorizing industrial and business customers to guide strategic and tactical decision-making. Government agencies and industry associations use standardized segmentation schemes for statistical surveys. Most businesses create their own segmentation scheme to meet their particular needs. Industrial market segmentation is important in sales and marketing.

Value-based price is a pricing strategy which sets prices primarily, but not exclusively, according to the perceived or estimated value of a product or service to the customer rather than according to the cost of the product or historical prices. Where it is successfully used, it will improve profitability through generating higher prices without impacting greatly on sales volumes.

The following outline is provided as an overview of and topical guide to marketing:

<span class="mw-page-title-main">Digital marketing</span> Marketing of products or services using digital technologies or digital tools

Digital marketing is the component of marketing that uses the Internet and online based digital technologies such as desktop computers, mobile phones and other digital media and platforms to promote products and services. Its development during the 1990s and 2000s changed the way brands and businesses use technology for marketing. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly use digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e–books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callback, and on-hold mobile ring tones. The extension to non-Internet channels differentiates digital marketing from online marketing.

In advertising, a hard sell is an advertisement or campaign that uses a more direct, forceful, and overt sales message, as opposed to a soft sell.

A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also known as a distribution channel. A marketing channel is a useful tool for management, and is crucial to creating an effective and well-planned marketing strategy.

<span class="mw-page-title-main">Reverse auction</span>

A reverse auction is a type of auction in which the traditional roles of buyer and seller are reversed. Thus, there is one buyer and many potential sellers. In an ordinary auction also known as a forward auction, buyers compete to obtain goods or services by offering increasingly higher prices. In contrast, in a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid each other.

References

  1. ↑ Wim G. Biemans; Maryse J. Brand. "Reverse Marketing: Synergy of Purchasing and Relationship Marketing". CRM Today. University of Groningen, The Netherlands.
  2. ↑ Michiel R. Leenders; David L. Blenkhorn (April 1989). "Reverse Marketing: The New Buyer-Supplier Relationship". Journal of Marketing. 53 (2): 129–131. doi:10.2307/1251420. JSTOR   1251420.
  3. ↑ David L. Blenkhorn; Peter M. Banting (1991). "How Reverse Marketing Changes Buyer-Seller Roles". Industrial Marketing Management. 20 (3): 185–191. doi:10.1016/0019-8501(91)90016-9.
  4. 1 2 3 4 Plank, Richard E; Francis, Deborah (January 2001). "Does reverse marketing reduce conflict in buyer-seller relations?". American Business Review. 19 (1): 76–83. ProQuest   216294586.
  5. ↑ "Reverse Marketing | What is Reverse Marketing?." Marketing Schools | All things Marketing at Marketing-Schools.org. N.p., n.d. Web. 12 Aug. 2013. <http://www.marketing-schools.org/types-of-marketing/reverse-marketing.html>
  6. ↑ Wal*Mart. Dir. Robert Greenwald. Perf. Lee Scott. Retail Project L.L.C., 2005. DVD.
  7. 1 2 Why health and beauty companies are telling us we'd be just fine without buying a thing, The Daily Beast , 23 March 2008. Retrieved on 13 August 2013.
  8. ↑ Hampson, Sarah. Dove’s new campaign: Real beauty or sentimental manipulation?, The Globe and Mail , Toronto, 11 May 2013. Retrieved on 11 May 2013.
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