Multi-channel marketing combines a number of promotional

Question 1

Multi-channel marketing combines a number of promotional and distribution avenues into a unified and singular strategy as a way of attracting customers. A multi-channel approach effectively and efficiently communicates a service or product’s value by applying the unique strengths of individual marketing channels (Grewal, Levy, Mathews, Harrigan, Bucic, and Kopanidis 2020). Some of the main channels may include social media, retail storefront, display adverts, websites, and email. In the case study, Waterdrop’s moving into the multi-channel marketing strategy is beneficial in that it expands the reach of the business. The company would be able to increase its reach among its potential audience. Expanding its campaign to include more channels will allow Waterdrop to locate customers with purchasing potential that has yet to be tapped. Moving into the multi-channel market space also means that Waterdrop will see an increased engagement due to higher numbers of potential touchpoints for customers. This provides consumers with more chances of engaging with the brand and opens up new communication channels between the customer and the company (Banerjee and Bhardwaj 2019). Another main benefit is that moving into the multi-channel market space will allow Waterdrop to reach customers on their preferred marketing channel (Niessing, Baumer, and Carrick 2019). For example, some consumers interact on social media on a daily basis, and the presence of Waterdrop in such a channel will increase the chances of an interaction. It therefore follows that multi-channels are more effective for marketers because of how they create a hybrid strategy tying together campaigns from several channels. Combined channels create an opportunity for more impactful message mindful of customer journey. Lastly, the main benefit that Waterdrop can expect to rip from moving into the multi-channel market space is increasing its customer base while lowering the customer acquisition costs because targeting consumers effectively increases the chance of customer conversion.

Despite the benefits mentioned, Waterdrop must remain aware of potential pitfalls in using a multi-channel approach. First, it is likely that Waterdrop may add marketing costs because more marketing channels translate to more required resources. Additionally, communication, sales, distribution, and advertising over multiple channels instead of a single entity requires complex logistics and increased control effort. The drawback is that if these multiple channels are not homogenously presented, then potential customers may end up being confused (Gensler, Dekimpe, and Skiera 2007). Another potential pitfall is that individual sales channels exist together but are not connected regarding technology and the organization (Grewal et al. 2020). The inability to switch back and forth between the channels in the same transaction can be repulsive for some consumers and may lead to switching to a competitor with a more holistic buying experience. Finally, it would be difficult to transfer information across channels, a phenomenon that could frustrate potential customers.

The pursuit of multi-channel presence may affect marketing strategies and the consumer decision journey for Waterdrop in a number of ways. First, it would provide Waterdrop with brand consistency. For example, the presence of the brand on social media, on television, and print media, and on website ads means that consumers are able to see and interact with the brand. The effect on marketing strategies is that Waterdrop would identify which channel to focus more on due to the conversion rates and other metrics important for decision making. Another effect on the marketing strategies is the flexibility to create and make adjustments. For example, it is easier for Waterdrop to adjust from one channel to the other or to add an extra one to its mix on the basis of what works best for marketing.

Question 2

If I was Martin, I would enter the competitive market using a concentrated (niche) targeting strategy. Waterdrop has identified several segments, yet it would be impossible to serve all of them. Some of the segments are unattractive and out of line with the business strengths of Waterdrop. For example, carbonated and unhealthy beverages, though very popular with consumers, are not attractive and may be outside of Waterdrop’s strength. Other organizations such as PepsiCo and CocaCola have already occupied a significant portion of these markets (Niessing, Baumer, and Carrick 2019). Therefore, Waterdrop should target one segment, pure and healthy drinking water, using a single marketing mix. Waterdrop understands the motives and needs of the consumers in this category and has designed a specialized marketing mix to cater for these needs. Concentrating resources and catering for the needs of a narrower market segment would be more profitable for a startup organization compared to spreading its resources over a number of segments. The key points differentiation would be a healthy water-based beverage that is a close substitute to pure water and one that is tailor-made for individual customers. The packaging, sustainability of the product, different flavoring, ingredients and a lack of chemicals also apply to the key differentiation points (Niessing, Baumer, and Carrick 2019).

I would position the brand based on product characteristics. By showing the benefits or characteristics of the product as a positioning strategy, I would link the brand with special features to that resonate with the consumers. For example, the current need for a healthy drink that is a close substitute to water opens up a world of opportunities for the company to market itself as the best healthy drink. The benefit of being a healthy drink would mean more to consumers than trying to present the brand as being more important. By focusing on the product, consumers would ultimately link the befits to the brand as opposed to forcing a brand in the market (Grewal et al. 2020). Showing a product to be more important is a marketing strategy aligned to a pull promotional/marketing approach. I would use a pull strategy to create an ongoing connection with both the product and the brand. A pull strategy would be more effective in building up customer demand for a product (Katsikari, Hatzithomas, Fotiadis, and Folinas 2020). For example, advertising the water-based beverage on sports channels would increase the demand for the product amongst health-conscious consumers thus creating demand through other channels.

Question 3

This is a good product. Despite the incredibly competitive environment, it is scalable, hard to copy, uses real fruit extracts, has great user experience, and is a lifestyle brand (Niessing 2019). The single most significant barrier to Waterdrop’s diffusion will be the competition’s response to new market entrants. Waterdrop faces a problem of industry giants with large spending and endless R&D that could easily replicate their product and allocate an even larger budget for marketing activities. Organizations such as Coca Cola and PepsiCo are likely to present a problem to the welfare of Waterdrop through influencing barriers of entry such as tax and patent protections. The competition already enjoys strong brand identity and customer loyalty. It would be difficult to make an entire industry switch to the new product because the competition has already ensured that switching costs are costly. These barriers may be directly influenced by the competition or already placed in the industry to discourage new market entrants.

To overcome these barriers to entry, Waterdrop must start with minimum viable product and later iterate in response to consumer feedback. It is important for the brand to use a very disruptive pricing model and to highlight the benefits of the product in order to focus the attention of the consumers on the benefits of price and product versus the competition. By creating a focus on the product, quality, and its benefits, the consumers will be less price sensitive. Additionally, clever and viral marketing to cut marketing costs and attract new sales will be required. The company already faces a mammoth task going against PepsiCo and Coca Cola as well as other established brands. Therefore, simply out-innovating existing firms will not be enough to institute a killing of the barriers of entry. For the product to diffuse in its market, Waterdrop will have to employ a number of strategies relevant to the immediate problem. Marketing and price decisions will play a very important role in ensuring that the target market is able to realize the benefits of the new product and to embrace it.

Question 4

A customer is always willing to pay more whenever the value of a product is visibly high. Value is the perception of a product and what it is worth to them versus the possible alternatives. Worth means the feeling of getting benefits over the price paid. Value can be functional, monetary, social, and psychological (Payne, Frow, and Eggert 2017). People pay more for some products on the basis of this value. The product that is overpaid for, even where it is available for free, is essentially valued because it is easier to buy, arrives more quickly, provides convenience, contains must have features, has low cost of ownership, better customer service, and the overall value placed by the customer is very high. The definition of value must be accompanied by the way a product is presented to a market. Overall, the product and its pricing are ethical. It presents a pricing and a product that has an active market share and profits. The actions of the branding do not affect others adversely. The company only uses a superior packaging strategy to bottle its product and sell it at a premium market price. The pricing and packaging are not different from the strategy applied by luxury brands in other markets such as the perfume industry and jewelry (Grewal et al. 2020). A lot of these products are available elsewhere for virtually free. However, the pricing and packaging chosen is superior. The company invests a lot of resources in its marketing and proposition. It is justified to sell the product using a premium price.

Reference List

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