- Food: it’s booming shortly before Ramadan & during and after Ramadan, celebrating Eid, performing “Zakat Al Fitr” (the equivalent of Thanksgiving in the US) and the end of fasting by buying all kinds of delicious foods and sweets enough to cater for collective social gatherings designed around “enjoyment of food” and often characterized by excess (thus excessive purchase) to convey generosity and avoid “shortcoming”.
- Cloths & apparel: Only towards the end of Ramadan: mostly the very last few days, because of a general “last-minute mentality” & to enjoy possible retail discounts.
- The advertisement industry: through a thriving TV industry tailored around advertisement, with all kinds of religious & entertaining programs including hosted shows by big brands and more frequent commercial-break interruptions.
- Transportation and airways: Ramadan & Eid are social events encouraging social togetherness by nature. You could also argue that people during day-time in Ramadan reduce their transportation time as a result of preferring to stay home and avoid heat and compensate for this greatly by having a longer (transportation-heavy) social night life.
- Electronics: especially smart-phones and smartphone gadgets. Sales of smart-phone may show rise only towards the end of Ramadan, as a way of “changing old with new”, following the very (religiously taught) tradition of Eid that underlies the habit of the massive buying of new cloths. Or as a result of traditional buying gifts to dear ones.
- Electrical appliances: these are said to be booming too shortly before & during Ramadan, especially refrigerators to provide cooling for saved-up-for-later food, by those who need a new better one and air conditioners to provide comfort in times of abstain from eating food and drinking water (cooling effect) in mostly warm regions.
None of the two yet, as the definitive answer depends mainly on the phase of business life cycle the company finds itself in and as a derivative thereof, the customer life cycle. In any event, it is a rule of thumb, that you should not be a business that loses clients “carelessly”.
Determining whether “acquisition” or “retention” is better at any given phase, depends on many factors that need to be calculated carefully, like:
- The phase of business life cycle the company is in. A start-up will have a different strategy than a mature business geared towards more acquisition.
- Is it B2C or B2B?
- Are you selling products or services?
- Service or product life time: once per month or once per 5 years?
- Market competition: how fiercely do you have to fight for customers?
- Necessity of acquisition; do you actually have to acquire customers intensively or do they choose you willingly?
- Necessity of retention; Do you have to retain customers or do they come back every time “voluntarily”?
- The type of product or service you’re selling in terms of high-loyalty products, luxury products, basic products, FMCG etc.
- Market micro-economics: like purchase-power & competition.
- Business sector: a B2C translation agency for only certified translations of official papers (diploma’s and ID’s) may choose to concentrate on acquisition and word-of-mouth marketing, since repeat purchase is unchangeably low for this specific service.
Most experts would put retention higher on the importance-list than acquisition, taking all pro’s and con’s into consideration, for reasons related to the researched fact that the cost of acquisition is 2,5 times the cost of client retention in relation to ROI. Although this percentage fluctuates regularly, sometimes claiming that retention’s ROI is 3 times that of acquisition, it has always had a non-variable & consistent advantage in favour of retention.
It basically means that it costs much more to attract new customers (without necessarily converting them into buyers) than to actually invest in current customers who already performed a first purchase. Furthermore, your existent client base is the livelihood of your business at less cost, while acquisition is like taking a wild guess in terms of expected ROI, but a certain loss in terms expenditure.
Others would argue that no retention is possible without acquisition preceding it, in the first place. How could you retain a “client” that you haven’t acquired yet? That client is non-existent and you should acquire him/her first.
It’s your say based on a more detailed and subjective approach, that leaved little space to philosophy and more to factual data and market research findings.
Long enough, cause China itself and its increasingly dominating economy, do not seem to mind it at all.
In September 2013 China officially took over the place of US as the largest industrial producer in the world. That’s quality in itself, facilitated by clever utilization of the economic and societal demographics of China as whole that are different from other nations.
It’s a “Chinese industrial revolution” paradigm, and such paradigm takes time to be changed. Besides, competition from only-high-quality-products traditionally industrial countries (UK, US, Germany, Japan, France, Italy etc.) is still there. There was a time when one would go for Taiwanese products when compared to Chinese ones, let alone ones that are made elsewhere like in Europe of the US. This is now history, cause the choice for “better Chinese” is there, too.
Now, the Chinese manufacturing culture is showing a non-contradictory, quite transparent distinction (in my opinion) between low, average, high, extremely high quality (luxury) production. This discussion dates from at least 15 years ago, when it became clear to the world that big international brands deliberately choose China for their re-locating production plants, benefiting from low labour-cost and serving the profit motive without jeopardizing their brand equity in their “native markets” as a result of change in quality perception. Selling to “high-affluence” critical markets like the US and Europe, quality had to be maintained to abide by quality measures like the famous CE mark used in Europe.
China makes high quality products, from cloths and apparel to electrical appliance and electronics and heavy materials and the list goes on. The only reason why the old “bad quality” label/stigma is still stuck to China, is the fact it is also a flourishing big market for cheap low-quality re-make products too. Who cares? Well, nobody. Because, it works!
I will ask the following non-rhetorical question first: what is the need for re-branding in the first place if the “brand equity” is immense?
Vital information may be missing here that can be collected via the following sub-questions:
- Are we dealing with a new product by the brand OR new customers OR new markets?
- Your brand equity is immense and superior, but is it “negative” or positive” for your new positioning?
- Is it needed for the repositioning to a new customer segment that is willing to pay for “cheaper” more generic products than “branded ones”?
I believe the core of your question lies in the word “simultaneously”. And I think that in doing both simultaneously, the risk is higher and indeed closer to a suicide (if it fails). Why? That is too much change at once! Besides, to which one will you attribute a possible failure and how much time, effort and cost will such inquiry entail before you can reverse damage?
You may want to re-position first, benefiting form the superior brand name you have and the value derived thereof and see the result. Second, if you want to offer a different price-category, you may want to re-brand and see the effects of such action, better to pilot it and research it thoroughly first.
In many cases, considering an “endorsed identity” is much safer, one that derives trustworthiness, value, quality and recognition from the mother brand but offers “almost-the-same-for-less”. One that you can “easily” (=with minimal damage incurred) withdraw from without “self-killing” your mother brand.
Well, if this is said by the great Henry Ford, who will I be if I dare disagree?
I agree for the most part. But I’d, also, say in a very low voice (to avoid public scrutiny from the “majority vote”), that this is a saying by a great industrialist who changed car/automobile production into innovative mass production (the first conveyor belt-based assembly line in a car factory), benefiting from being only the second manufacturer in the US after Ransome Eli Olds, soon the biggest in the US and the one with lowest competition and biggest market share by 1913, already.
The likes of Ford and big companies can afford ongoing advertisements efforts and expenditure without turning an eye to ROI vs cost.
I don’t think this saying applies to all businesses all the time! You can’t “stop the time”, but you can pause your advertisement efforts according to situations. Why? Some advertisement simply entail more cost than any gain or ROI and sometime no gain and no ROI whatsoever. Your advertising strategy may need some tweaking and reconsidering. Would you still follow such saying blindly because Ford said it about his company, product, market and TIME?
What makes a great ad differs according to the type of advertisement. You didn’t specify what type of ad, so I will choose TV-ad.
A great TV AD should be interesting to watch and re-watch, enjoyable to listen to from the kitchen, hard to zap away during commercial breaks and easily remembered and associated with the advertised product.
It can be anything from funny to lame and from informative to vague as long as it does not humiliate the intelligence of the viewer with too many clichés.
Yes, I feel the same.
Why? Well, without pretence of management genius, because I simply read one of the greatest books of all times which demonstrates the astonishingly close relationship between “business” and “warfare”: The Art of War by Sun Tzu, the famed Chinese military general/philosopher.
It’s no wonder that modern management theory willingly embraces the book as a “must read” and in many cases “a must teach” and “a must follow”.
On a more philosophical note, off course, it remains a disturbing, paradoxical & thoughts-stirring idea to compare a daily activity & an inextricable element of our modern lives such as “business” to war. Cause who is the enemy and who’s the good guy in business? Who is the loser and who is the victor?
Quotes from “The Art of War”:
- “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” Isn’t this the same as SWOT Internal vs External Analysis?
- “Engage people with what they expect; it is what they are able to discern and confirms their projections. It settles them into predictable patterns of response, occupying their minds while you wait for the extraordinary moment — that which they cannot anticipate.” Isn’t this the same foundation marketing and PR were built upon two thousand years later?