Jun 21, 2013 | Branding, Marketing, Small business
We pay a fortune for lobster, it is a delicacy, but it is not long ago that lobster was poor peoples food. If you had nothing else to eat in New England in the 18th or 19th centuries, you would go to the beach and scrounge some lobster, and rules were in place to limit the amount of lobster masters could feed their indentured servants.
I remember as a kid that chicken was a delicacy, an occasional festive meal, Mum fed the Roberts tribe rabbit in a variety of ways as a cheap staple, bought from a bloke who went door to door down the street selling the previous nights haul.
How things have changed. Chicken is a commodity, flogged in supermarket specials, and rabbit is on the menus of the top end of town restaurants, attracting very high prices.
Marketing is all about managing the context and expectations a customer has of the value that can be delivered by your product offering. Preparing and consuming rabbit at home is now uncommon, but change the context to a restaurant, and suddenly the expectation changes, and rabbit is a sexy, modern dish that has attracted the chefs attention and skill, so is something very different to the skinned offering at the backdoor of my childhood.
Setting out to change expectations, often by changing the context as well, is at the core of the marketing challenge. Changing nothing, and competing on the existing commercial battlefield is just flogging stuff, and becomes a contest of price, not value.
Update: March 2015. This article from Entrepreneur magazine tells a similar story about lobster, and the way context and time changes perception, plus a very useful infographic.
Jun 19, 2013 | Communication, Customers, Marketing, Strategy
Marketers have a whole range of new tools to use to tap the opportunities emerging from the digital age, but most appear to approach the challenge in an ad hoc manner.
It seems to me that there are 4 trends that are driving marketing behavior:
- The shift from offline marketing to digital. Whilst this is generally seems as a “catch all trend” it is really just a part of the marketing strategy mix that needs to be considered on its own merits. In this situation, how should I use TV Vs YouTube or facebook, what is the best mix of media to achieve a outcome?.
- The shift from paid to earned media. This can easily be seen as a subset of the first point, and from a marketing resource perspective it is, but from a consumer perspective, it is entirely different. The sudden availability of a digital version of word of mouth endorsement has changed the dynamics, consumers put far more faith in earned than purchased messages. It is also a bit more complex than that, as consumers no longer consume advertising, in any medium, they watch what interests them. If an ad is interesting, irrespective of the medium, it will get watched, and you have only a moment to gain the interest before you get deleted.
- The increasing importance of data in marketing. In the “old days” the best that you could do was measure theoretical impacts on an audience, about as inexact as throwing a stone at a bird flying past. That has changed, we can now measure with great accuracy a host of data that reveals preferences and behavior that have nothing to do with the generalities of the past.
- Fragmentation of just about everything, and because there is just so much data, it tends to be siloed, or ignored. Therein lies the huge marketing opportunity of the future, those who can cut across the silos, and extract the actionable insights will own the markets. Automation is taking over (perhaps has taken over) with the integration of CRM with social media and automated marketing programming that is occurring online.
It is in the fourth trend that lies the secret sauce. Finding ways to increase the productivity of the marketing investment you make, not just in the expenditure to reach the marketplace, and achieve an outcome, but in the overhead costs of running an effective marketing function.
Jun 17, 2013 | Customers, Marketing, Sales, Social Media
Look at all the verbiage on the net about content marketing, having a personal brand, being a substantial presence on social media, and all the rest of the stuff. Really it is all about one simple idea, making yourself easy to find, then engaging the finder in a conversation that leads to a relationship. With good marketing comes the opportunity to turn that relationship from a casual one into a commercial one.
The days of putting a few advertisements out there, and making yourself available, are over. Everything has been commoditised, supply chains disintermediated, information ubiquitous, and terms and prices transparent.
Those in the market for something now do their research on line, sometimes “road-test” the product (weather it be a car of pair of jeans) in a bricks and mortar retailer, come to a decision and purchase, all in a set of discrete actions over which the seller has no control, and often is totally unaware of it going on. It is this loss of control of the process that makes the huge difference between now and just 15 years ago, when the retailer had the control of the information, and the location.
The initiative is in the hands of the buyer, so the game as a seller is not to have the product the buyer wants available when they want it, in the specifications required, but firstly to be found, all the rest comes later.
Buyers move through a cycle, from recognising the need, setting themselves a budget, doing research, creating a short list, and making the final choice. The earlier in the process a seller can be a part of the consideration, the greater the chance they will be there at the end.
It is in this new process of “engagement” with potential as well as current customers that is the value of content.
Jun 14, 2013 | Branding, Marketing, retail, Sales, Social Media
What will happen when facial recognition is good enough to recognise a person walking into a retail shop, and convey to a device that persons purchase history, returns, sizes, social media mentions and links, and all the rich data that can be collected. The opportunities to use this sort of marketing data integration are limited only by your imagination.
This is just a step away, probably closer even than that, the speed of development of software applications has been amazing.
Next time you walk into a shop, the assistant just may greet you with asking how the function you bought the blue dress for 2 months ago went, or inform you that they have just one left of a belt that would be a great match to the shoes you bought in February, and on it can go……
The real human challenge will be engaging your customers using all this information without being stilted or “creepy”, not a good outcome.
George Orwell is alive and well.
P.S. August 20, 2013.
Tom Fishburne, a favourite commentator on marketing who uses incisive cartoons to make his point posted this cartoon this morning, with the link to the Minority report clip that makes my point above way better than I did. Great stuff Tom.
Jun 10, 2013 | Branding, Customers, Marketing, Small business
Most customers could not give a rats arse about your vision, values, your customer value proposition, and all the other stuff highly paid consultants rant on about (obviously not me).
What they do care about are the little things, the ones that affect them.
I bank with the same bank I have since they were the only ones who would lend me money for a house 35 years ago, and have just not bothered to change, I usually buy the one brand or petrol, not because it makes the car run any better, but because they are around the corner, and the restaurant I go to most is a little suburban French place that does seasonal vegetables in an ever changing vinaigrette as a side. I love it.
I used to always buy my books (yes, I still buy real books) at the same bookshop where one of the staff seemed to be able to read everything that came through the door, and was able to steer me towards stuff I might like with considerable accuracy. Now however, the store owner is cutting costs, staff has been reduced, and the recommendations of the 15 year old casuals are just not up to the mark.
So, before you spend all that money on the marketing consultants with the new bag of clichés, and web enabled tricks, exercise a bit of common sense and consider the small things, why people come to you, why they choose you instead of the place down the road or over the web, how do you deliver value to them, and what keeps them coming back.
It helps to ask, most people are happy to answer honestly, and the simple fact that you care enough to ask is valued.
Jun 6, 2013 | Branding, Demand chains, Innovation, Marketing, Small business
Coles limited engagement in an “anti factory farming” campaign is indicative of the strategic and marketing tightrope the food industry in this country is walking.
On the one hand we have an effective duopoly of FMCG retailing exercising their power to increase their returns to shareholders, and service their customers by both maximising margin and minimising costs. A core part of this strategy is to absorb the proprietary brand margin by aggressively allocating shelf space to housebrand products that are just globally sourced copies of the proprietary Australian products.
On the other hand we have an Australian dollar that has effectively given a 50% price subsidy to the international competitors to the Australian supply chain, at a time when all other domestically sourced input and overhead costs from labour, power, various rates and taxes, freight, and risk costs have all increased substantially. Double whammy!
An added complication is often that the (usually young) buyers in the retailers take the “fast moving” part of the FMCG literally, and fail to recognise the time and investment often required to reflect even a minor change in their product specifications through the supply chain. The consumer end may be fast moving, but when it takes 7 years to mature a fruit tree, and many generations of animals to reflect spec change in the end product, it can be anything but fast moving.
Now Coles have, quite legitimately, moved to build a sort of “animal provenance” into their produce supply chains, as a competitive positioning strategy against Woolworths, increasing the costs of their suppliers, as well as requiring added investment by suppliers for which they need a reasonable chance of a competitive return. This is at the same time they have reduced consumer prices substantially (consumers have been very grateful) in some markets like milk. Whilst Coles, and Woolworths who followed them, may have sacrificed a bit of margin, the supply chain has borne the brunt of it, despite some spin to the contrary.
The small guy has little chance of succeeding against these odds unless he is very smart, and does not have all his eggs in the chain basket, as just competing on the grounds dictated by the chains is a no-win choice.
There are however, strategies that can be deployed to succeed, but they require a re-engineering of the supply chain into a new beast, a Demand Chain that is driven by consumer demand, not supply, and is managed through a chain “community” where information is shared, and is agnostic in some way of the power of the big chains.
Having been a bit gloomy so far, it is however encouraging that the big two retailers are now differentiating themselves competitively, as consumer niches that can be accessed by agile and innovative suppliers. will evolve.
PS. Just after posting, it was announced that Simplot had put its Bathurst and Devenport plants into a wind-down for closure, and McCains had cancelled potato contracts with three big growers. if we needed more evidence of the parlous state of food processing, it just arrived.
