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Posts tagged ‘Marketing Fundamentalist’

20
Dec

Unboxing: Omega Constellation

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1
Dec

Marketing Karma

Most of us marketers spend our working lives attempting to get
consumers to do something – usually to actually buy our products. 
But there is a whole (often overlooked) category of marketing 
where the intention is to get someone to stop doing something. 
Or perhaps even more dauntingly, getting someone to do 
something, which is not only onerous but has no direct benefit 
to themselves.
Intrigued?  ‘Social marketing’ (not to be confused with the currently much more trendy ‘social media’) is, according to Wikipedia “the systematic application of marketing, along with other concepts and techniques, to achieve specific behavioural goals for a social good”. Think ‘LoveLife’ – stop having unsafe sex; National Blood Services -donate blood; Don’t drink and drive.
This marketing specialisation was highlighted by my good friend John Arnesen (LinkedIn profile:http://goo.gl/F3Wqe), Director of Advocacy at SAQA – who is writing his doctorial thesis on the subject. As he points out, in many instances, social marketing promotes the ultimate intangible. Take SARS increasingly successful campaign to encourage tax compliance: there is no physical product, just a concept of ‘doing the right thing’. There is no specific benefit to the taxpayer; after all complying is likely to cost more than tax dodging (until they get caught!) 
The fundamental question is – what can marketers in a more commercial realm learn from our Social Marketing colleagues?
First off, do we perhaps believe our consumers are rather more cynically self serving and parochial than they really are? Are we missing opportunities to influence behaviour based on the social good? Certain banks’ ‘affinity cards’ appear to be a successful case study. Donating a small amount to a suitable charity / affinity group is likely to have greater impact than passing such a (small) reward back to the consumer. That is because they feel good no matter how small the donation, whereas, they may feel a little under rewarded if they received it themselves.
Secondly, let’s not forget the power of peer pressure. There is, in my opinion, increasing pressure (especially among younger consumers,) to ‘do the right thing’ with regards to environmental protection and ethical business practices such as those espoused by Fairtrade. Not only can brands no longer be seen doing the “wrong thing”, but there is distinct competitive advantage in doing more of ‘the right thing’. More importantly for marketers, friends don’t let friends buy ‘wrong’.
Thirdly, have we as marketers, in our desire to finely segment markets, lost the importance of the greater community? Pepper and Rogers’ seminal 90’s book ‘One to One Future’ (SBN-13: 978-0385485661) espoused the idea of market segments of one. Groupon (www.groupon.com) and of course Facebook (you really do have to see ‘Social Network’ it’s a case study on reputation management!), prove the greater power of the collective.
So the fundamental point is that Social Marketing again highlights the fact that we as marketers really do operate in consumers’ heads. And that gives us far greater influence than we may realise: A recent Scientific America report found that women who thought they were wearing fake designer items (they weren’t – both control groups were wearing identical original brands!) were more likely to cheat, lie and generally despise humanity.  Fundamentally there is marketing Karma.
The Marketing Fundamentalist

12
Nov

Do we like our ads too much?

I like ads, I really do. They’re art. Sometimes the best even end up on display in museums. Adverts are attractive, often amusing, informative, a snapshot of our contemporary history. They are a source of pride for their creators. They look good in our portfolios, make great conversation around the braai and allow us to show our kids what we do for a living.

The fundamental question is: Do we like our ads too much?

Liberty Health Billboard

First off, I suspect that the answer to too many questions in marketing is “an advert”. It seems that too often creating an ad is the culmination of the marketing process. And there is of course the whole (sexy) ad industry waiting for the call. It’s trite, but let’s remember advertising is just a subset of one of the (apparently now indeterminable number of) marketing P’s Do we spend a similar amount of time and resource on the other fundamentals of marketing? How much time have you spent over at the “pricing agency” this month?

As a result of this focus on ads, are we as marketers overlooking less sexy but possibly more effective ways of building our brands? As the Chile mine crisis reached its emotional climax (with claims of higher viewership than the world cup), my marketing friends and colleagues were unanimous “You just can’t buy positive exposure like that”, they lamented, as they headed off to the ad agency. Not the PR Company mind you! Yes, non-paid-for commercial communication can be hugely powerful, yet remains (with apologies to my enormously professional colleagues within the PR and communication specialisations) the unpopular stepchild of our profession. Fundamentally are we being objective with how we allocate our marketing resource and effort?

Secondly, to the specifics of the ad itself: Seems we marketers think that a really good ad can fix any product, positioning or marketing weakness. It’s what I refer to as putting lipstick on the bulldog. It might fool a few, but fundamentally it remains a bulldog. How many times do we see brands or products where the only differentiation is the advertising? The weakness of such a “lipstick strategy” is that lipstick is freely available to our competitor’s at the nearest beauty retailer (read agency), even if the shade is slightly different.

I always liked the definition of an advert in law – namely: “an invitation to do business”. Which leads me to an illustrative (if cruel) analogy in this regard. Think back to school. When the pimply-faced, socially-awkward classmate handed out their mother’s beautifully crafted party invites, enthusiasm remained thin and attendance of the event was inevitably embarrassingly low. When the sexy number we were all secretly in love with, merely mentioned the time and location of a trendy sounding bash, there was an unseemly scrabble to attend.

My point is that it’s not always the elaborateness of the invitation (read advert) that is the answer. Perhaps the differentiated attractiveness of the party (read product) itself is more important. So fundamentally let’s make sure we as marketers invest sufficient time and resource on the party and not just the invite.

5
Nov

What a cr@p campaign!

We all know the one I’m talking about. That rubbish campaign,
which clearly hasn’t been thought through. Look, I gave it a
bit of thought slumped in my couch when I was flicking through
channels I don’t normally watch. I just don’t like it. It really doesn’t “talk to me”. I feel no connection. The production values are good, of course – we can all see that, but frankly I doubt anyone in the target market will like it either, it just too… you know. And it won’t achieve either the comms or marketing objectives either.
You do know which campaign I am referring to, right? No, not that one – the other one, the one before that one.

With Professor Nick Binedell at the opening of the Video Studio at the Gordon Institute of Business Science

Criticism. There is a lot of it about. We have all faced it as marketers. And no doubt we have all participated in the guilty pleasure of criticising others’ work. The fundamental question is: As professional marketers how critical should we be of other professionals work?

My strong contention is that to properly crit the work of other marketers we need as a minimum: access to their strategic intent, definition of target market and preferably more than a little research and insight from that market. But the lack of such background doesn’t seem to prevent a wide range of marketers from commenting about the suitability of another’s campaign. In my opening paragraph – if I personally don’t connect with the ad, it is highly possible it’s not aimed at my psychographic profile. Marketers are frankly a fairly rare species in the greater South African consumer population and clearly they should not be the intended target for most broad based campaigns. If I rarely see ads in a campaign – is that poor media planning or tight targeting of a demographic profile (with consequent media consumption habits) other than my own? And the personal preference thing – based on a sample of one (or two if you include the wife who decides what I like) are we to extrapolate the overall preference of the target market?

Perhaps more importantly, what gives us the right to assume that (in light of our of necessity superficial analysis of the foundations of the campaign given we are outsiders) we know better than a team of client, strategy and agency professionals who have no doubt been working on the campaign for months?

Let’s consider the example of the medical profession. You will not in my experience find a doctor criticising the diagnosis or surgery of another. And you will certainly not receive a second opinion around the braai, criticising a fellow professional’s original diagnosis, which was originally based on an MRI scan, blood tests et al.

While we undoubtedly add to the state of the art of marketing though objectively evaluating contemporary campaigns, let’s not forget that ill-considered criticism costs the profession dear. An element of marketing communication will always remain subjective. It is that exciting creative edge which attracted us to the profession in the first place. Marketing is both “Art” and “Science”. But when we are seen to be stating categorically that another marketing professional’s subjective decisions are definitively wrong, based on an ill-informed or equally subjective opinion of our own, we diminish the statue of our entire profession. That is the fundamental issue.

2
Nov

Competing on price – aggressive growth strategy or a competition to see who can stay the poorest, longest?

Price. Possibly the most critical marketing “P”, and yet often the most overlooked. The fundamental question is, how often do we as marketers abdicate the responsibility for pricing to our accounting colleagues? Or ignore market (and marketing) imperatives and simply base pricing on cost and an expected return to the company? We are all familiar with the ‘Cost Accountant’ [def: An accountant who keeps records of the costs of production and distribution]. Perhaps we need a few more ‘Price Marketers’.

Possible strategies.
Remember Porter’s generic strategies: 1) Market focus (based on segmentation), 2) differentiation and 3) cost leadership? If not you can gen up at wikipedia – [:http://en.wikipedia.org/wiki/Porter_generic_strategies%5D For this discussion, we are focusing (pardon the pun) on cost / price leadership.

My first point is that there really is no specific link between price and cost. There is certainly no strategic imperative to link the two. There might be some gross limits: if price is lower than variable production cost, it only makes sense to continue selling if there is some strategic advantage to increased sales. This has appeared to remain a popular strategy for Internet companies at start-up. Amazon is cited as popularising this “grow-big-fast” strategy, accepting early losses to become market dominant and enjoy exceptional profits later. These are gutsy strategies. But sanity must still prevail. In the longer term if the price doesn’t cover the fully adsorbed cost of production, the shareholders get more than a little anxious. I worked in an Internet start-up during the “dot.com boom” in 2000 where we glibly referred to our monthly “burn rate” – how quickly we were burning through our cash reserves as we desperately tried to get sales volumes up. Our shareholder’s support burned up even faster than our reserves!

Howard Fox with Moky Makura on the occasion of the launch of “Going Global” published in conjunction with GIBS and MME Media

A critical issue is whether the seller can set the price or has to accept being a price taker. Producers of commodities are price takers. Let’s look at gold as an example. The price is set twice a day in London. Gold producers can set their prices at a premium, but are unlikely to move much bullion. The only way to increase profitability under these conditions is cost reduction, which eventually becomes limited. The answer for marketers is differentiation. Now while Porter warned against the dangers of being strategically “stuck in the middle”, i.e. failing to fully commit to one of his generic strategies and attempting to leverage advantages from more than one – thinking has moved on. A combination of lowest cost producer, together with differentiation is a potent strategy. Back to our gold example -remember “proof Krugerrands”? I am not sure what premium they sell for at present, but I recall some very significant premiums in the 80’s. Physically a proof Kruggerrand differs only very slightly from its commodity bullion counterpart: the coin blanks are polished, they are stamped twice and the number of serration around the edge differs. But they still contain the same quantity of gold, and must cost virtually the same to produce. Convince the market that they are “collectors items” with “strictly limited numbers” (which cost nothing) and a substantial premium can be enjoyed. How many of our products could benefit from similar thinking?

The fundamental point is that pricing is a very powerful lever to profitability and is a potent strategic marketing value-add. In online businesses, it often defines the entire business model. Look at Groupon (the name is a play on ‘coupon’) [Ref: http://www.groupon.com]. They offer ridiculous discounts for their partners’ goods and service (up to 90% off) but the discounts only activate when a predetermined minimum number of consumers have taken up the offer. Thus everyone who has bought-in become ardent sales reps trying to get their friends and colleagues in on the deal. Here is a business whose entire strategy is about price. Yet in our day-to-day marketing, price is often overlooked for the flashier and less numerical portion of our jobs. It shouldn’t be.

1
Nov

Competitors – how well do we really know them?

I once worked with an organisation that employed a Chief Competitor Officer. Seemed very glamorous, very “James Bond”. It was his team’s job to source intelligence about competitors’ activities and future intentions. All strictly within the law, of course. Given that it was before the Internet became nascent, his activities actually included long, unglamorous hours counting the number of rail cars of product coming off production facilities around the world.

In my experience, it is left up to marketers to tackle this issue rather than ‘Competitive Intelligence Professionals’ (see http://www.institute-for-competitive-intelligence.com) as part of the external analysis component of marketing strategy. The fundamental question is in this age of information 2.0, how much do we as marketers use the information publically available to understand our competitors?

Lets keep it simple with the four “C’s” competitive intelligence model:
Collect the data
Convert the data into usable information (or to impress call it ‘intelligence’)
Communicate the information
Counter the competitor activities identified

Collecting the data:
The web has certainly made this easier. Here are just some of the easily accessible data sources to consider:
The competitors’ websites (obviously), but also http://www.alexa.com will give the site’s ranking compared to your own and other competitors, changes in web traffic, in which country web traffic originates and how many inward links the site has. As with most data it is the trend that is more informative than absolute numbers. It has to be said that these comparisons can be affected by companies’ SEO (search engine optimisation) efforts.
The “Wayback Machine” at http://www.archive.org will show you all the changes to your competitor’s website since 1996.

Google search has so much data that volume is the biggest problem. Use the advanced search and “unwanted words” function to cut the responses down to just the useful stuff. You are unlikely to find much you don’t already know in the first few pages of results, but lower down more obscure and often interesting data emerges. Don’t forget to search images and video. Then set up Google alerts to email you as soon new data is identified. The wikipedia entry for many companies often gives away more about strategic intent than it should.

Information about the management themselves abounds online– ‘Who’s Who’, ‘Linked In’ and Facebook are treasure troves, if somewhat time consuming. They’re particularly useful for understanding relationships between individuals. Online recruitment sites sometimes give away the name of company recruiting. Statutory information is useful, e.g. Companies House in the UK (see http://tinyurl.com/5knto ). I am sure the CIPRO website could be useful for South African companies, but it was inoperable when I tried.

Back in the real world, annual reports are a mine of information on public companies (be honest now, when did you last read your competitors’ annual report cover-to-cover?) as well as the JSE’s ‘SENS’ – stock exchange news service (see http://www.jse.co.za ). Industry reports from consulting houses and industry bodies can be particularly insightful – make sure you are familiar with what is available.

Converting the data:
It’s often not access to data that is the issue so much distilling it down to competitor’s strategic intent and probably actions. Data on its own is almost valueless without well considered interpretation. Industry specific experience really counts here. While competitors’ previous actions are not necessarily indicative of future strategy, they are certainly informative.

Communicate the information:
Knowledge is only valuable once it has been shared within an organisation. Ideally there should be processes in place to both share longer-term analysis based competitor intelligence on a regular basis as well as a more tactical response to immediate issues.

Counter competitor activities:
Clearly acting on the information gathered is vital. Without a vigorous response, the drive to know one’s competitors soon wanes.

Fundamentally, in this era of virtually free information we as marketers have no excuse for not knowing our competitors intimately, and building comprehensive strategies to negate their activities – to our organisations’ strategic advantage.

31
Oct

In spite of all our differences, are we all virtually the same?

Meet Lacy Muircastle – long flowing dark hair, piercing blue eyes, curvaceous, virtual journalist and Miss Costa Rica Sims 2011 finalist. See photo:
http://tinyurl.com/398soqk

A fundamental question in marketing is: how different and / or similar are consumers in different markets? Consumers have hugely different cultures, religions, mores and norms, experiences, economic circumstances and access to information. In spite of this, there are I believe, a number of core human and market traits, which are virtually universal.

To test this theory I interviewed (via instant messaging- subsequently edited) Lacy Muircastle an avatar on Second Life™. Second Life (“SL™”) is a virtual community of over 2 million avatars (read consumers to us marketers), who live and work in a completely virtual world. http://en.wikipedia.org/wiki/Second_Life

It makes a great case study because in this virtual world, you can be anyone you want to be, so cultural mores and all the other influences are presumably suppressed.

MF: Are all Second Life avatars as attractive as you?
LM: No. Everyone has a different perception of what they think is attractive and here in SL you can be anything you like.
MF: So not all avatars are in human form?
LM: No, you also get “tinies” which are mainly small animals such as little dragons, and “furries” mostly dogs and wolves, you get the picture…
MF: But behind every avatar, there is a real human somewhere in the world?
LM: Absolutely!.
MF: I write a marketing column, as you may know. I’d like to ask about marketing on SL – what sort of marketing takes place?
LM: There are magazines (in world publications which are usually free) distributed through ‘kiosks” at venues and stores around the high traffic areas. Direct marketing through “note cards” to avatars, is big – this is done via groups e.g. press groups or general information groups. Billboards have been reduced significantly because they were cluttering up the landscape and subsequently moved to “advertising farms”.
MF And radio and TV?
LM: There are radio stations on SL just like the “real world” and they have adverts like everywhere else. “TV” is also present but they don’t run conventional ads yet – undoubtedly and area worth exploring though.
MF: Dare I ask – is there social networking for avatars?
LM: LOL, undoubtedly, what a question, several actually dedicated to SL avatars specifically and a big presence on Facebook, twitter, flickr and the other mainstream social networking sites.

The fundamental point here is that just like any market, the first hurdle is finding a communication medium, which is actually consumed by the target market. In the virtual SL world, while it might theoretically be easier to create a new medium at relatively low cost, it still needs to gain significant support from the market for it to be a viable marketing channel. And media fragmentation seems to be an issue here as in all markets. Some things never change.

MF: I’d like to understand SL consumer behaviour. What sort of products gets marketed to avatars?
LM: The SL fashion industry is huge and it’s the most prolific and visible market that is advertised, followed by real estate and housing/interior decorating (furniture etc.)
MF: So it’s important to keep up with the virtual Jones?
LM: That depends on the circles you move in. But generally speaking even though avatars may be a fantasy depiction of the person controlling them the same human truths prevail. Egos are just as big in SL as in the real world. Avatars are competitive and seek power and influence within the community just as you would expect in RL (real life). They want the latest fashions and a nice virtual living space.

So the fundamental point is that while different markets all have their own idiosyncrasies, of which we as marketers should take careful cognisance, there are also more fundamental drivers of human and consumer behaviour. These fundamentals are powerful because they impact everyone at their human core. The original Maslow’s Hierarchy of needs is instructive, because it is easy to get distracted by the uniqueness within a market and forget that we all still need love; affection and a sense of belonging (for instance) no matter which “market” marketers might believe we fall within.

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