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Assignment

Innovation and Product Management

Below-the-line-marketing
What are the opportunities and challenges in below-the-line-marketing? Gebrder Stitch

Course: Techn. Produktentwicklung in lokalen Betrieben Term: Summer 2013 Adviser: Dr. Christiane Rau Team: Johanna Schauerhofer, Manish Abraham, Stefan Ortmair, Darya Zuyeva, Klaus Allerstorfer

Schauerhofer | Abraham | Ortmair | Zuyeva | Allerstorfer BTL Marketing | Gebrder Stitch

Content
1. 2. 3. Introduction ..................................................................................................................................... 3 Definition and Research .................................................................................................................. 3 How does Gebrder Stitch use below-the-line marketing? ............................................................ 5 Summary of the relevant presentation ............................................................................................... 5 How did the presenter answer the question provided above? .......................................................... 6 4. 5. Group opinion.................................................................................................................................. 7 References ....................................................................................................................................... 8

Schauerhofer | Abraham | Ortmair | Zuyeva | Allerstorfer BTL Marketing | Gebrder Stitch

1. Introduction
This paper assesses the opportunities and challenges of below-the-line-marketing activities with special reflection on the handmade jeans production firm Gebrder Stitch in Vienna, Austria. The students of the IPM-Master program 12 of FH Wels visited the company in the course of an excursion to Vienna.

2. Definition and Research


Below-the-line (BTL) Marketing Below-the-line marketing activities generally refer to those marketing practices which use such measures for promotion of products and services that do not involve use of mass media.1 Other definitions describe below-the-line marketing activities as those that are based on direct and often personal communication to the target audience. 2 Below-the-line advertising can involve the use of any form of non-mass media promotions including sales promotions (e.g. premiums, price reductions, displays, and related point-of-sale activity), direct marketing, public relations activity, sponsorship, etc. Below-the-line marketing activities are often used to encounter a less cluttered communications environment to communicate directly with the target audience.3 The characteristics of below-the-line marketing activities are also the advantages:

INTELLIGENT

DIRECT

QUICK

FLEXIBLE

TRACKABLE

COST EFFECTIVE

1 2

cf. Kalpana et. al (2012), p. 60 cf. Kingpin Intelligence (2009) 3 cf. Kalpana et. al (2012), p.61-62

Schauerhofer | Abraham | Ortmair | Zuyeva | Allerstorfer BTL Marketing | Gebrder Stitch

Organizations may use below-the-line marketing activities for a variety of reasons. Marketers are required to understand their competitive and regulatory environments in addition to consumer buying behavior so as to be in a position to evaluate the potential benefits and costs of BTL marketing approaches. In a marketplace filled with advertising clutter, BTL marketing efforts may be potentially more cost effective and provide marketers with opportunities to use more sophisticated approaches in comparison to mass media-based ones. Here takes place ambient advertising, a close relative of experientioal marketing, in which adverts are placed in everyday spaces rather than conventional advertising media. Thus, although proponents of the experience economy tend to rationalize their emphasison providing experiences in terms of a particular understanding of consumers from a critical point of view it is more useful to see it as emerging from new understanding (and new structures) of media. Of course, such spatial and experiential interventions must be carefully planned and to ensure that the right people get the right kind of experience. This is turn means knowing where to find them. Here the spatial knowledge (which is intimately bound up with social and symbolic capital) of those involved in the planning and implementation of the marketing strategy becomes central.4 Below-the-line marketing strategies are used when the target audience for the particular products and services is limited and a direct reach of the customers is particularly beneficial. BTL marketing activities give the customers the firsthand experience of a product/service and actively create brand value. BTL marketing is one of the most appropriate tools for small business enterprises and start-ups because of the following reasons:

Moor, E. (2003), p. 45

Schauerhofer | Abraham | Ortmair | Zuyeva | Allerstorfer BTL Marketing | Gebrder Stitch

The impact of BTL marketing is more measurable as compared to other modes of marketing as the emphasis is more on selling units rather than building brand value.

As BTL promotions are targeted at groups having unique needs, they create a bigger impact in terms of customer satisfaction, and ultimately, in terms of revenue. 5

In an era where competition is tough and customer loyalty is essential, being able to directly address existing or potential customers is key. Benefits include prospect profiling, in-depth explanations of product solution, ability to capture information and enabling follow-up communications. 6

3. How does Gebrder Stitch use below-the-line marketing?


Summary of the relevant presentation
We were given a presentation about the company by Moritz, one of the founders and owners of Gebrder Stitch. He told the story of how Gebrder Stitch came into being. Actually, he said, it was some sort of coincidence, that he and his founding partner had a coffee together at a bar. By talking about how they wanted to do something new and different they came to the idea of starting their own business in the market of local custom made jeans. After completing a sewing course, they started thinking about their idea of starting up a new business in more detail. They put up a business plan and all the other necessary paperwork for a startup. Additionally, in the first month, they tried to find customers for their custom made jeans, just to know if there was sufficient demand for such products in the market. Just then, when they had acquired more than 150 orders for such jeans in those first four weeks of trial, they
5 6

cf. Kalpana et. al (2012), p.61-62 cf. Kingpin Intelligence (2009)

Schauerhofer | Abraham | Ortmair | Zuyeva | Allerstorfer BTL Marketing | Gebrder Stitch

had enough confidence to really start up the business. In May 2010, they rented the space of a gallery, rented machinery, and started production. We could see the high effort and dedication put in by having a look at the marketing campaign that they had made. They held an opening party and several other events, and they even took part in the Vienna fashion week to gain some public attention.

We had a glimpse of the importance and opportunities of niche market positioning during the visit. We were able to see the different kind of marketing the company was using in order to get and retain happy customers who would be willing to pay 350 or more per one pair of Jeans.

How did the presenter answer the question provided above?


Gebrder Stitch take great benefit of word of mouth promotion. Through their good relationships to their customers they enforce this BTL tool. Furthermore they always ask for direct contact also on their homepage. If you want a pair of jeans from Gebrder Stitch you have to go and meet them first. The company employs a lot of direct personal contact with its customers throughout the purchase of one pair of jeans. They first get to know the customer and learn about what exactly he or she wants in a pair of jeans and then try to meet their needs as best as possible. Thus, vivid dialogue between the customers and the company is established, instead of the usual oneway communication in marketing. This approach can likely be marked as experiential marketing7. Additionally they utilize a homepage and their own YouTube channel and do PR via local television and newspapers.

Moor, E. (2003)

Schauerhofer | Abraham | Ortmair | Zuyeva | Allerstorfer BTL Marketing | Gebrder Stitch

4. Group opinion
BTL marketing covers appropriate tools for creating awareness of a niche product like the custom made jeans of Gebrder Stitch. When Gebrder Stitch have to decline orders for capacity reasons (they are working to 100% capacity), this raises the customers perception of exclusiveness of the product. The brand value here is very individual and exclusive. The personal and intimate approach of the company and their exclusiveness give the impression of them being an insiders tip. However, Gebrder Stitch have great expansion potential and plans for growing the business. There they plan a mix of ATL and BTL marketing, which would be suggested by the group also.

Schauerhofer | Abraham | Ortmair | Zuyeva | Allerstorfer BTL Marketing | Gebrder Stitch

5. References
Kalpana, Samata, Ravindra, Urmilla (2012), TECHNICAL EDUCATION INSTITUTIONS AND BTL MARKETING STRATEGIES, in Arth Prabhand: A Journal of Economics and Management Vol.1 Issue 9, December 2012, ISSN 2278 0629, p. 59 - 66 Kingpin Intelligence (2009), BELOW THE LINE MARKETING DIRECT & PERSONAL, in Kingpin technology online research panel, http://www.kingpinintelligence.com/researchpanel_casestudy.html, p. 1 4 Moor, Elizabeth (2003), BRANDED SPACES: THE SCOPE OF NEW MARKETING,in Journal of Consumer Culture 2003; 3; 39; DOI: 10.1177/1469540503003001929