Aug 30, 2013 | Change, Marketing, Social Media
As a boy, I used to go to the local grocer with a few bob in a knotted handkerchief, get a standard bag of goodies, bread, butter, and a few chops in return. The grocer knew what my Mum had sent me to get, and she knew about how much it would cost, and any discrepencies were fixed up later.
Those days are gone, the days when there was a personal relationship, when people were the centre of business, and trust was not something we thought about, it just was there.
In today’s terminology, business was social.
What replaced it was an industrial model where scale and machines dominated. It does not matter much weather you are thinking about cars, supermarkets, or farming, the analogy holds, just the timing changes a bit.
Impersonal, disconnected, and trust has disappeared, which is perhaps the greatest loss.
Now however, the people seem to be making a comeback.
The advent of social media was at first just another “mechanical” thing, it offered scale and access with little humanity, but as it has evolved, and the platforms developed, so have our behavior patterns and expectations.
Social media is becoming a “humanity enabler” that offers the benefits of scale and automation, but that is enabling the reconnection of people. Trust is also making a comeback, just think about the value you put into the reviews on Amazon or Ebay, whilst you do not know anybody who has done the reviews personally, they are way better than a paid advertisement.
I do not see the pendulam swinging back again, as we are becoming so re-engaged with people, but I guess it will, and those that see the inflexion points first will be, as usual, those that have the opportunity to make the most of them.
Aug 27, 2013 | Communication, Lean, Marketing, Social Media
Lean thinking is well established in manufacturing and office operations, but social media?
Hardly?
Lean thinking is all about the removal of anything that does not add value to the customer. So, if we extend this a bit to potential customers as well, given that Social media is now being extensively used in marketing programs, and ask ourselves weather that post, tweet, or message of some sort is adding value, or just clogging up the recipients feed.
For most of us, time is our most valuable resource. Therefore, it should be incumbent on us as responsible marketers, setting out to gain the interest, and trust of customers, not to waste their time with trivia, irrelevance, and what amounts to directed SPAM.
Most people reading this blog are still working out their menu of Social media usage. Each platform has differing characteristics of usage and ecosystem of users, and like most software, most users leverage a small percentage of the capability. Once you spend a bit of time and recognise which platform suits the way you want to interact, be ruthless about removing the “waste” by saying goodbye to those that are not worth the investment of your time.
However, the advent of automated marketing is adding another dimension. Once a marketer has your email address and christian name, it can be hard to recognise a robot from a real person, and often the “Unsubscribe” button is hard to find.
Not a good way to engage a potential customer.
We should be asking ourselves a few questions before we send out anything:
- How does this communication add to the sum of knowledge “recipient” has?
- What value is that knowledge to “recipient” , or are we just filling a quota?
- Where is the humanity of the message communicated?
Tough questions, which will both increase the response rate, because to answer them takes time, research, and sensitivity, and annoy less recipients, simply because the message will add value by addressing their needs.
Aug 26, 2013 | Branding, Change, Demand chains, Marketing
Lean thinking, evolving from the Toyota Production System is changing manufacturing world, but agriculture has a long way to go.
Just as building cars used to be a production oriented operation until Toyota turned it on its head, so too is agriculture production led. Grow it, then try and find a market.
Well the world has changed, and demand is as big a pull factor in the world of agricultural produce as it is in cars, so the challenge is to leverage it. Just grow it and they will not necessarily come.
This does not mean that you have to find a way to manipulate the genes of an apple tree to give peak production in 2 or 3 years instead of seven, remove the impact of the seasons, or grow product out of its natural environment, which we can do for some products in greenhouses, but it does mean that change is urgent.
There are some things we can do much better that will help:
- Collect inventory data, and make it transparent and available. Agricultural inventory is not just what is ready for sale, but what is in the ground and likely available in the future days, weeks, months and years. Understanding the dynamics of agricultural inventory is even more important than manufacturing inventory because the cycle times are often so long, and the shelf life is limited, in some cases to days.
- Remove price as the purchase determinant. Sellers of produce have lost sight of the value that fresh produce delivers, and have lost any semblance of control of the chain, and the opportunity to brand. As a result, price is the overriding determinant of a sale, it is a race to the bottom, a race that does not have a happy ending for anyone. Having lost the initiative, it will not be easy to get it back, and any progress will take years, but it is a crucial challenge.
- Energise marketing. Easy to say, but extraordinarily hard to do. The agricultural “marketing” bodies that exist via levies have demonstrably failed in the marketing part of their charter. All that is left is for producers to take back some responsibility for marketing, and start to build their own branding and business models. Logically this can happen at the fringes, in the corners, rather than in the mainstream. The emergence of Farmers Markets is to my mind an precursor of this activity.
- Create new business models to accommodate the points above. Existing structures have led to the current poor situation, so it is unreasonable to expect them to be able to change into something radically different. These new business models have great challenges, great opportunities, and the cost of failure will significantly impact on our food security, and cultural roots.
Without the evolution of an agricultural version of a lean value/demand chain, the volume and value of our agricultural output will decline over the long term. Increasingly we are becoming uncompetitive in global markets, we currently import more than half our packaged food and groceries, our capability base built up over generations is leaving, and once gone, will not return.
We appear to be at some sort of inflexion point, getting it wrong over the next decade will leave our grandchildren poorer than we have been, reversing 250 years of improvement.
Aug 22, 2013 | Customers, Marketing
It used to be that marketing power was held in the hands of those with the most money to spend, so could block buy TV, magazines and radio.
News flash!
Those days are gone.
Marketing power is now held by three groups:
- Those with imagination,
- Those with bravery.
Imagination to see something others do not, an opportunity, media, expression of an idea, or just seeing a connection nobody else has seen, and then the bravery to use it. Anthony Weiner, the idiotic serial “sexter” who keeps on running for public office in the US provided such an opportunity to a hot dog seller who painted up his van. People shook their heads when he got “done” a second time, and laughed in derision at Weiner, last they bought a ‘dog, and had another laugh at his expense, and a marketing coup was created.
C. There is one other group with newly found marketing power, consumers. Never before have consumers been able to exercise the power derived from the simple fact that they are the ones who spend the money, the rest of the game is simply a scramble to see how the dollar is split up, as aggressively as they can now.
Forget that power at your peril, and court it with imagination and bravery.
Aug 21, 2013 | Governance, Marketing
Spending marketing resources to build a brand all about you when nobody will really care, is about the ultimate in narcissistic behavior.
Narcissism “noun. Excessive interest in, or admiration of oneself and ones physical appearance” Oxford.
Branding professional know that brands are built by behavior, how a product performs, solves problems and delivers value, not by the way it looks. Good looks and advertising weight may get you one initial purchase, after that, you are on the tick to perform.
Our current election campaign, if it can be dignified by such a label, is the ultimate exercise in building the “personal brand” of the two protagonists, and that is all. Lots of photos with babies, attractive people looking interested, carefully staged and edited shopping mall and factory floor walks, the whole sham.
If after all this effort we still think they are both wankers, and only vote for one of them (despite really voting for the local member, not the leader, but lets not be too fussy) because it is compulsory, how much resource has been wasted?.
What they seem not to understand is that self branding is an oxymoron (perhaps appropriate in the circumstances). Branding only evolves as a result of behavior, your brand comes to reflect what you do, and the manner in which you do it, and has little to do with what you say unless it is absolutely consistent with what you do . In effect, those that watch you, bestow on you the characteristics of a brand based on what they see you do.
In the case of our pollies, we see a couple of ponies flitting through shopping centers kissing babies and telling blatant porkies and throwing mud at the other one.
And they wonder why we all are sick and tired of the whole lot of them,.
Aug 20, 2013 | Collaboration, Demand chains, Marketing, retail, Strategy
This is a far longer post than normal, motivated by some very sensible feedback from the previous post. Bear with me.
The “tools” that add value to management of any supply chain, playing a role in the transformation into a demand chain are relatively simple to list, but extremely difficult to implement.
I have seen, and worked with many over the years, largely based in agriculture, but the lessons are widely applicable.
The difficulty of implementation is why there are so few successful agricultural demand chains, but those that are in place, at least the ones I am aware of, deliver enormous long term value.
In addition, the classification of something as a “tool” usually creates debate, as it can also be an “outcome” of a successful initiative.
For example, is the “Shakedowns” brand of baby carrots from Bolthouse Farms in the US a marketing tool, or an outcome of a successful marketing and demand chain initiative? Truth is, that it is both, but the debate can become excited.
Following are what I see as the six key components that are the characteristic foundations of successful initiatives, but having them in place is not a panacea, as like any tool, the use remains in the hands of people of varying skill, motivation, and outlook.
- Appropriate scale, and the supporting processes to manage that scale. The scale and supporting processes needed to be successful in the local growers market are very different to those necessary to be successful in Woolworths, Tesco, or a major food service distributor. It is not just a matter of size, it is largely a matter of alignment. At one extreme we have growers market customers, who value product provenance to the point of wanting to communicate with the grower personally, and to know all about a particular piece of produce, and price is not all that relevant, so long as it delivers value. At the other end by contrast, a supermarket customer is way more focused on price, availability and convenience. To be successful with a supermarket chain, you need:
- Working capital reserves, as the margins are thin and payment terms long.
- Data capability. Supermarkets are run by data, and category management, and not having the capability is as good as going to a shootout with a penknife.
- Low cost. A necessity if you are to survive the pressure on operating margin, and marketing investment necessary to combat increasing penetration of housebranded substitutes.
- Operational scale to be able to service a chain nationally, or at least throughout a state.
None of these factors matter a whit in the local farmers market.
- Chain Transparency. Transparency drives accountability, surfaces market and improvement opportunities to every point in the chain. Of increasing importance, transparency also delivers product provenance. This is critical in a farmers market, and branding initiative, and rapidly becoming a marketing tool in supermarkets, but more importantly, is a critical component of controlling a chain. Without transparency, you cannot have control beyond your immediate domain, and thanks to the net there are now fine tools available to suit every situation, the standard setter being an Australian home grown product offered by GFA .
- Collaborative structures and processes. Arbitrage margins are made possible in a supply chain by a combination of lack of transparency and a culture resulting from the old way of “information is power”. This dying a difficult death, but dying it is as the communication tools now available provide the opportunity to collaborate as never before, and as a result the nature of organizations is evolving rapidly. A great example is the wool supply chain, 2 years from sheeps back to a consumer article, a production process that involves at least 7 product transformations which are typically highly competitive, and involve inventory, risk, and time, all of which add substantial cost. A collaborative structure that creates a forum of all the chain players can cut that time, risk, and cash tied up by a factor of 2/3. The poster boy in Australia is Woolconnect, a collaboration all the way through the chain that delivers product from farm to the consumer in 4 months. This did not come about easily, or quickly, but as a result of the vision and determination of a few people over 15 years.
- Contract capable. Customers need certainty, they need to be able to rely on undertakings given, and part of that is a single contract capable party with whom you do business. In simpler times, a handshake was sufficient, and as relationships evolve, it sometimes evolves back to that level, but for the most part, certainty involves a contract. Weather that is with an individual, Pty Ltd company, a co-operative or public company is not relevant, it is simply an agreement with consequences.
- Business model. Success requires the combination of a sustainable commercial business model with an attractive value proposition to the end user, and all points in the value chain. The “business model” represents the combination of all the points where costs and revenues are generated through the chain, mixed with where and how “value” is created. “Value” is the key component in a business model, often missed with traditional thinking. The business model also incorporates a capability to balance supply and demand transparently through the whole chain, not just at any individual point in the chain. Amazon creates value not only by selling books cheaply, but by having an inventory hundreds of times bigger than any bookstore, and offering a crowd sourced rating system. What they cannot offer is the personal and often emotional experience some have with browsing in a good bookstore. The supply chain models and resulting business models are very different quantitatively, and they create value in a different manner. I suspect there are enough bibliophiles for bookshops to survive and prosper against Amazon, but they will no longer be in every shopping location as we have been used to, and will not be a shop-front for recent releases and best sellers, but will be something entirely different.
- Marketing. There are as many definitions of marketing as there are consultants and academics. Mostly they talk about the “4 P’s” the mediums for communication, the need to focus, but my take is both simpler, and more strategic. To me, marketing is all about the definition, building, leveraging and protection of competitive advantage. The way enterprises go about this task is almost infinitely varied, and over the last few years has become increasingly fragmented and confused. However, really good marketing always has a simple, clear articulation of a value proposition that motivates action.
You got this far, well done.
Perhaps it should be an e-book, as there is plenty more to say.
