H. Kursad Devecioglu,M.Sc.

http://tr.linkedin.com/in/kursadd

Version 1.0

Success is not final, failure is not fatal: it is the

courage to continue that counts.

-Winston Churchill

An American educated marketing professional with published marketing and

direct marketing books. A public speaker and presenter in the field of marketing

as well.

* You may watch his presentations on Youtube Channel;

http://www.youtube.com/user/hasankursad

Linkedin : http://tr.linkedin.com/in/kursadd/

Website : www.hasankursad.com

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Facebook : www.facebook.com/hdevecioglu

Skype : kursad.devecioglu

Email : kursadd@yahoo.com

As a seasoned marketing professional and a member of pulp, paper and cardboard community, I know how hard you work every day to serve customers in your market with exceptional products in the form of fine printing paper, coated paper, newspaper, office paper, packaging paper, cardboards, corrugated paper, stationary paper, special paper, pulp and so on. Paper is an important part of everyday life and so is marketing for our industry. Peter Drucker is a father of marketing other than being the father of management. Peter F. Drucker once said “The two functions that counts in a business are marketing and innovation. All the other functions are costs” and he also said “the purpose of a company is to create a customer not a product”. According to Drucker, the aim of marketing is making selling unnecessary.

In this perspective, my goal for this writing is to help you gain more practical marketing knowledge you need in the increasingly competitive marketplace. I designed this in question and answer style since I have been receiving so many marketing related questions over the years from different parts of the world. I kept my answers simple.

I hope you enjoy reading this as I enjoyed writing it. If you have any questions, please feel free to contact me directly.

H.Kursad Devecioglu, M.Sc. – April 2014

kursadd@yahoo.com

I. Marketing Management

II. Marketing Planning & Strategy

III. Direct Marketing Management

IV. Brand Management

MARKETING MANAGEMENT

American Marketing Association offers the following formal definition: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. ”

Marketing is a war of ideas, not products. The more focused your marketing approach, the greater your chance to dominate in the marketplace. There are many definitions of marketing. Basically, marketing can be described as “finding out what your target customer wants/needs and just give it to them.”

For the Pulp, Paper and Cardboard Industry (PPCI), I would like to share my favorite definition as the one from Prof. Philip Kotler; “Marketing is creating, communicating and delivering value to target market at a profit.” From this definition, marketing clearly involves product management, brand management and customer management.

This concept of giving versions to marketing is an idea of father of modern marketing Philip Kotler and here it is the definition:

Marketing 1.0 is appealing to the customers‘ mind wherever customers are,

Marketing 2.0 is appealing to the customers‘ heart by knowing a lot about customers and trying to get close to serve to the customers,

Marketing 3.0 is knowing that customers have other concerns and Company says "we care too to make a better world". it is about caring about the earth.

After reading the definition, take a moment to think about your company and see in what version you are operating with.

Marketing is a part of our lives for sure. Here is a list

of some marketing types:

Commercial Marketing,

Place Marketing,

Person Marketing,

Political Marketing,

Social Marketing,

Fundraising.

The marketing mix consists of product, price, place and promotion.

Product is the pulp we deliver to paper mills for paper production or office paper we produce for people to communicate or environmentally friendly cardboards we use for packaging. Although we do supply tangible products in PPCI, the service always comes with the product.

Price is an important element of the marketing mix. A pricing policy needs to be based on the current situation in the marketplace. If you are offering a type of special paper, and you have little or no competition for that product, you might have the luxury to set a high price. If you are selling a common product such as office paper, you might need to keep an eye on your competitors and price your product close to the going rate for those products.

Place stands for your distribution channel. The typical distribution channel for a manufacturer is Wholesaler > Retailer > Consumer. The distribution channel includes all parties who facilitate the flow of goods and services from producers to final consumers. Other channel partners could include distributors, agents and brokers.

Promotion is communication between your company and your customers. Promotion includes personal selling (face-to-face selling), direct marketing (direct mail, e-mail, catalogs, etc.), general advertising (radio, TV, newspaper, etc.), social media marketing and sales promotions (free shipping for a certain amount ordered, free samples, etc.) The primary objectives of promotion are informing, persuading and reminding. Informing is necessary for potential customers to become aware of your products. Persuading is used to create or reinforce a positive set of attributes associated with the brand and to stimulate interest in and to try the product. Reminding includes communicating with customers to create and/or sustain brand loyalty by reinforcing positive brand association.

Within the marketing mix (product, price, place and promotion) only price brings revenue to company. Being the only element within the marketing mix to bring revenue, price is the most important element to focus on. That is true that we as business professionals do not want to reach target customer with price alone so it is marketer’s job to work on other marketing activities such as market research, word-of-mouth-marketing, branding and advertising in order to support the price position.

The price ceiling is the highest price that a

consumer is willing to pay for your product.

The price floor is the lowest price at which you can

sell your product without losing money.

It is the first price you establish in order to

introduce a new product into the market.

Customers take this price as a mental reference.

Pricing a product based on a previously released

similar product.

If you do not set the price high enough for the company’s profitability for the long term, it is difficult to sell the product later at its true (higher) price because the customer will still be thinking of the low “reference price.” it is important to start with a fair market price so that you make a profit and your customer can still buy from you. You can test your pricing tactics in designated pilot areas before applying in entire marketplace

Price skimming: Setting the price high initially,

then lowering it.

Penetration Pricing: Offering the product with a

low price to capture market share.

The actual product: Physical product, design, features, quality, brand and packaging.

Augmented product: Extra features and benefits that improve the actual product. For instance, selling 80 gram/m2 offset printing paper to a printing house with a satisfaction guarantee.

Core benefit: This stands for what you are really selling, for example when you receive corrugated paper with high stiffness from your supplier for box making, your boxes will have high stiffness as well.

Just like everything else in the world, each product

has a life cycle defined by the following stages:

market introduction, market growth, market

maturity, market decline and market decline. Do

you have any paper products in your product line

that used to sell well but is now selling slowly due

to low demand? Think about this as product life

cycle.

Marketing process starts with market research.

In any market you are entering whether local or

International, you need to make sure that you have

Enough, meaning market knowledge for

Segmentation, targeting and positioning purposes.

There are two types of market research available for PPCI professionals:

Primary Research

Secondary Research

Primary research is research that you conduct such as: surveys, questionnaires, and focus groups. You gather the information, sort it and analyze it yourself. You do not use any other source to get information.

Secondary research is using research information that was gathered and analyzed by other researchers. In this case you are using someone else’s research results for your company.

If you talk to your customers to get feedback regarding your A4 office paper product then sort and analyze their comments, that is an example of primary research.

Primary research can give you more in-depth information about the marketplace, but you should be careful when you are implementing it in terms of quantity and quality of the research details. On the other hand, secondary research can help you save time while you are using previously made research information but you need to understand the conditions of that research before using it.

Segmentation is dividing the market into groups

based on similar needs relevant to your product.

The primary objective of segmentation is to identify

unique sub-Markets of customers with like

attributes, and to find segments that are attractive

from a profit perspective. You can segment your

market based on your criteria.

Targeting means identifying attractive

market segments and tailoring the marketing mix to

match the needs of target customers. In this sense,

segmenting your market helps natural stone

companies identify their target markets.

You need market research results (primary or

secondary market research results )first to analyze the

market situation. While analyzing, you need to be as

realistic as possible. There are some tools to use such

as SWOT analysis, and Porter’s 5 Forces. While

doing a SWOT analysis, you need to asses your

company’s strength and weaknesses. Also

opportunities and threats in the marketplace. Strength

and weakness part is usually the most difficult part as

it is about the company itself and this requires an

utmost objectivity.

Micro environment and macro environment.

Micro environment consists of company, suppliers, competitors, publics, marketing intermediaries.

Macro environment consists of demographic forces, economic forces, natural forces, technological forces, political forces, and cultural forces.

As a member of pulp, paper and cardboard industry, you can affect microenvironment. You can affect macro environment but you can be proactive.

Competition brings higher quality products, lower

price products and innovation to marketplace.

Millions of people are moving. It is important to

know where they are moving in order to modify

marketing plans based on changing geographic

and demographic conditions. It is also especially

important for paper industry to follow trends in

terms of industrial parks and industrializing

regions. The rule of thumb is wherever there is

production, there is a need for paper and

cardboard.

Demographics are the population or consumer

statistics regarding socioeconomic factors such as

age, gender, income, occupation, education,

family size and so on. Demographics are

important to use as a basis for creating target

markets (market segmentation). It also helps

natural stone companies match advertising media

with target market groups

Buying power and spending habits. It is essential

to know about the buying power of customers in

your target market. Based on their buying power,

you can modify your offers.

Spending habits show us how your customers

spend their income.

Recognize the need

Research information

Evaluate

Purchase

Post purchase

Problem recognition

Produce specification

Supplier search

Proposals (RFQ, RFP)

Select supplier

Specify order routine

Review

1- Monetary Risk,

2- Functional Risk,

3- Physical Risk,

4- Social Risk,

5- Psychological Risk

Price

Quality

Delivery

Support

Financing

Quality of suppliers

There are fewer business buyers than consumers

Business buyers are often concentrated in certain

geographic areas

Business buyers make larger purchases in volume

Business buyers buy what they need not what

they want

Business buyers buy exactly what they need

Business buying decisions are group decisions

Quality

Features

Style and design

Branding

Packaging

Support services

They are both important, however, focusing on the

benefits is usually more helpful for any paper

company to close the sale.

For instance, an A4 office paper might have high

bulk. This is a feature. If high bulks lowers the risk

of paper jam then paper user can save on time.

Saving time is a benefit.

All marketing strategy is built on STP – Segmentation, Targeting and Positioning.

Kotler defines Positioning as “the act of designing the company’s offering and

image to occupy a distinctive place in mind of the target market.

Let’s say you work for a paper distribution company and due to market conditions,

you may position yourself as cut to size cardboard distributor so that you can cater

your target market’s needs in a specialized manner, which is a service.

Another example for corrugated paper manufacturers. Let’s say you position your

company to provide the highest quality low gram-high density corrugated paper

with highest know-how possible. In this sense, you provide the product and

educate box makers to have the highest productivity while working on the paper

you provided, which is providing a service along with the product of yours.

The idea is to be as different as possible from competition. Leadership, heritage,

market specialty, production process, being the best in a category or the latest in a

category can be great differentiation ideas.

The answer is “ it depends”. It depends on what

kind of paper product we are talking about. Let’s

divide paper products into two groups as cultural

paper products (A4, offset printing paper, design

paper and so on) and industrial paper products

(packaging paper, cardboard and so on).

In general wants are more profitable than needs.

Marketing myopia is being short-sighted in the

Marketplace. While operating, you do not pay

attention to changing environment, you can not

keep up with changing customer preferences and

fierce competition. Marketing myopia causes

Company to fall behind in dynamic environment. For

Instance; Kodak fell behind in digital camera market

place while it was dominant in regular film camera

Industry. Marketing myopia is not being able to see

further ahead and no adapting to change.

Customer lifetime value is how much a customer

worth over the years doing business with our

Company. While some products can be purchased

again and again by customers, some products can

be purchased for certain number of years. The idea

is to acquire customers and retain them as long as

possible to have more revenues from them and

increase their lifetime value. A customer’s life time

value can be high for A4 office paper product since

A4 office paper consumption is continuous.

Buying habits and purchasing behavior

As saying goes, you can not manage what you can not measure. First and foremost, each marketing activity has to have a goal

such as generating leads, creating awareness, increasing market share and so on. After testing and making sure, the marketing activity is ready to launch, marketing metrics needs to be shaped as well to monitor and control the developments.

Marketing metrics are supposed to find out how much of the goal has been reached or exceeded. The most popular metric is return on marketing investment (ROMI).

Let’s say a cardboard company launches a marketing campaign towards cardboard packaging companies and goal is to generate leads for sales team to finalize the order. In this case marketing department needs to measure how many leads they generate, and then how many of them ended up with orders.

A product line is group of products that are

connected to the same brand.

Cannibalization is a negative consequence

resulting from the line extension of a product. The

potential negative impacts of line extension are as

follows:

If the line extension does not fit with the current

branding (image, function, appeal to target market,

etc.) a mental disconnect can occur for the

customers,

Customers might be confused about product and

the brand.

When a company offers another variety or version

of a product, which is already part of an

established brand line of products. For example,

adding a diet or sugar free version of a line of

soda products.

MARKETING PLANNING & STRATEGY

As long as it takes

Intensive Growth

( Market Penetration, Market Development,

Alternative Channel Development, Product

development, New product for new customers),

Integrative strategies(Forward, Backward,

Horizontal Growth),

Diversification

Marketing is about differentiation. If you do not

have any differentiation point, you better have a

better price,

Quality, Creativity, Price and customer orientation

are rarely differentiation ideas. Being first,

leadership, heritage, market specialty, preference,

being the latest, hotness can be differentiation

ideas.

Competition (know your competitor. stay away

from competitors' strength and exploit the

weakness), differentiation idea, credentials to

support the point of difference, communicate the

difference

Every aspect of your communication should reflect

your difference.

Advertising can dramatize the difference. you do

need the drama to present differentiation

In general 10 % is recommended.

Customers

Brands

Distributors

Patents

People

According to strategy guru Michael Porter, there are two ways for a company to have competitive advantage:

Cost leadership,

Differentiation.

If you have cardboard products, that are different from the competition, that is a competitive advantage. If you have no differentiation point, you better have low cost. In some paper and cardboard markets, we have seen companies that are creating differentiated service instead of product itself such as custom order service, fast delivery, free delivery, customer satisfaction guarantee and so on.

Products lacks a meaningful value proposition,

Price is too high

Market did not understand the product

Represent the voice of the customer,

Monitor the evolving business landscape and gather customer insights,

Be the steward of the corporate brand,

Upgrade marketing technology and skills in the company,

Bring insight into the corporate strategies,

Measure and account for marketing financial performance.

DIRECT MARKETING MANAGEMENT

Direct marketing is the interactive use of

advertising media, to stimulate an immediate

behavior modification in such a way that this

behavior can be tracked, recorded, analyzed, and

stored on a database for future retrieval and use.*

* Bob Stone, Ron Jacobs, “Successful Direct

Marketing Methods”, 7th edition, McGraw-Hill

2001, Page:5

Direct marketing can help pulp, paper and

cardboard companies get new customers and

retain current customers.

Elements of Direct Marketing

Media and

customer list

Offer

Copy

Graphic

A direct marketing campaign has the following elements:

Media and customer list – 40%

Offer – 30%

Copy – 15%

Graphic – 15%

* Bob Stone, Ron Jacobs, “Successful Direct Marketing Methods”, 7th edition, McGraw-Hill 2001, Page: 8

Based on these percentages, we can say that when organizing your direct marketing campaign, the most important element to consider is your customer list and your media. You need to identify your customers and choose ideal media channels (internet, newspaper, industrial magazine, catalog, etc.) to reach them.

The next element is what you will offer to your customers to respond to your direct marketing campaign. You need to give them a reason to respond. That reason might be discount, premium, free-shipping and so on.

Copy is the text of your direct marketing piece. It stands for the language and tone that you will use in your campaign.

The last element is the visual part of your campaign. It stand for the pictures, graphic and photos you will use in your campaign.

Direct marketing’s starting point is the

customer

The chosen media must have a consistent

message

Since direct marketing operations are on-

going, communications must be well-planned

Listen to your sales team in order to improve

your direct marketing efforts

Customer retention is less costly than customer

acquisition,

The offer (proposition) is the terms under which a

specific product, service, or brand is promoted. It

includes a mix of factors that motivate individuals

within the target group to respond.

* Bob Stone, Ron Jacobs, “Successful Direct

Marketing Methods”, 7th edition, McGraw-Hill

2001, Page:9

Hard offer: Asking for the payment up front when

the customer places the order

Soft offer: Asking for the payment after the order

is delivered

Negative offer: Keep sending the products until

customer asks you to stop shipping.

It is essential to give customers reasons to call

you. It might be a discount, free gift, introductory

price or free shipping to move the customer to

take action and accept the offer.

Direct email, direct mail, telephone, catalog, radio,

TV, newspapers, magazine, social media and

alternative media.

RFM stands for: Recency (the last time the

customer made a purchase from your company),

Frequency (how often the customer buys from

your company) and Monetary (the customer’s

average dollar amount spent per purchase).

Based on this information, each customer’s

activities with your company can be analyzed.

Before launching the full scale direct marketing campaign, the marketing materials should be tested on a small portion of your customers in order to understand how effective your campaign will be. Based on the test results, the campaign materials or approach can be modified and tested again or, if successful, the campaign can be launched after the test.

BRAND MANAGEMENT

Brand is an identifying mark, symbol, word or

combination of the same that separates one

company’s product or services from another firm’s.

Brand is a powerful asset to your paper company.

Brand creates a connection with your customers.

Brand is what you are all about. It is a character

that needs to be built.

Branding is how a product is identified via name,

logo, symbol, tagline, etc. The goals of branding

are: to help differentiate your product among

competing products and to help people remember

your product when they consider their choices.

Some brands go beyond loyalty and become icons

like Harvey Davidson, Disney, Nike, etc.

Gets customer preference,

Gets customer loyalty,

Provides Leverage,

Provides Awareness.

The brand should:

Suggest a benefit or quality of the product

Be easy to pronounce and remember

Be distinctive, especially among competing brands

Be easy to translate into other languages and

cultures

Manufacturer brands,

Private label brands. Usually retailers create their

own private labels.

Brand loyalty is the degree to which a consumer

repeatedly purchases a brand. There are many

factors that influence brand loyalty such as:

consumer attitudes, family pressure and friendship

with the sales person.

Brand Pyramid is the foundation to establish a brand

with a discipline. In each part of the pyramid, you can

define what the product is all about, especially in an

emotional point of view. Brands make an emotional

connection with the customer and it is essential to

pinpoint those emotions. From bottom to top; brand

pyramid consists of product/service features,

functional benefits, emotional rewards, user values

and brand personality. After viewing the example for

brand pyramid on next page, try to build your pyramid

for your paper/cardboard or pulp brands.

References

Previous works

Ideas for the business

CRM stands for customer relationship

management. Its main objective is to establish a

long-term, reliable relationship with customers.

That is an important point for paper companies. A

customer centric approach can help you organize

your operations where your customer and your

company can win at the same time.