Productive Marketing: Don’t “Just Do It”

“Should we advertise?… increase our twitter presence?…launch an e-mail campaign?… or execute the hot marketing tactic du jour?  These are important questions that you should eventually consider, but in most cases these tactical questions are premature.  Often, they are an early warning sigh that you are on a dangerous path to a disappointing marketing campaign – – and a waste of your precious money.  If most of your recent conversations have been “should you?” save yourself from marketing peril right now. Instead, focus on why.  Set clear, specific business goals first to direct all of your marketing efforts.  It’s infinitely easier to hit a target when you aim.

The most important first question is: “What is your business objective?” Only after you have answered this do you have a sufficient foundation to develop, execute, and invest in a successful marketing program. Use this simple, but effective thought process to guide your marketing decision-making “Objective, Strategy, Tactics.” Here’s how it works:

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Step 1: Clarify your Objective

“What is your business objective?” The clearer and more precise this is, the more productive and cost-effective your marketing will be.

This is the level of clarity you should have for your annual business goals:
– WHAT: Increase a specific business measure (typically sales or market share) from X to Y
– WHO: Among specific target customers (e.g. new customers? existing customers? new channels?)
– WHEN: By what date will you accomplish and measure the business goals?
Now that you have a specific goal, you can develop marketing strategies and programs that link directly to your objective. Your business objective must link directly to your long term goals (typically a five year horizon) as documented in your Strategic Plan.

Step 2: Select Marketing Strategies to Achieve the Objective

Develop appropriate marketing strategies – which are ways you will accomplish the goal. Marketing strategies are not individual marketing programs.  They are the ‘hows’ not the ‘whats.’ The most successful companies and brands stay focused on three to five marketing strategies. This forces discipline and focus on doing fewer important things exceptionally well. Examples of specific marketing objectives are:
– Secure three new “A” accounts
– Increase retail distribution by 10 percent
– Increase awareness among target consumers by 8 percentage points
– Increase sales per transaction by 9 percent
Marketing strategies are the paths you choose to reach your goal. Setting and adhering to marketing strategies is a powerful tool to narrow your focus to only pursue “on strategy” ideas. Most companies have more than 15 percent of their marketing budget invested in programs that are not tied to one of their marketing strategies.  Does yours?

Step 3: Develop Marketing Tactics with Laser Precision

With your business objective and marketing strategies in place, you are now ready to build the marketing plan and evaluate marketing tactics.  Choose your tactics wisely. Make sure they achieve the marketing objective and are a sound choice, based on projected return-on-investment. Even though projecting sales is an imperfect science, marketing budgets must be critically evaluated, just like any other potential business investment.

When you choose among potential marketing tactics, 1) select the right marketing tool to accomplish your desired outcome (e.g. building consumer awareness and increasing customer loyalty are very different marketing challenges that require different marketing tools) and 2) choose the most productive, appropriate, and efficient option (i.e. compare alternative media or programs), different levels of investment in the program, and different creative resources to do the job.  Don’t make a sizable marketing investment in any program until you have evaluated its impact per dollar spent versus alternatives.  This does not recommend ‘analysis paralysis.’ Rather, it’s a plea for you to get the best possible marketing program you deserve

Step 4: Measure and Monitor Performance

Effective marketing, contrary to popular belief, yields measurable results.  Before you start a program, commit to measure the actual performance of the program versus the projected results. Evaluate performance at specific program intervals, typically incremental sales for the duration of the program, and at three- and six- month intervals after its completion, to measure sustained impact.  This keeps you and your organization focused on desired results, rather than activity.

Measuring program impact also gives you quantifiable return-on-investment information to determine whether you should repeat or expand the program in the future. The marketplace is littered with victims of doing marketing tactics without setting business goals. You are bombarded with these potential marketing tragedies every day. Avoid this common plight by applying the same amount of rigor that you use on your other strategic investments. Get more out of every precious marketing program – and dollar!-by using this simple but effective formula: “Objective, Strategy and Tactics.”

by Tammy Katz

 

 

 

 

 

 

4 Ways to Raise Pricing and Delight Customers

Most companies loathe or mismanage the harsh reality that pricing increases are often necessary to offset inflation, even with the most diligent cost control.     Often, this is a painful across the board price percentage increase on all units, on largely unchanged products and services.     Here are five great ways to drive price increases that consumers will willingly accept, and, even enhance loyalty to your company.tide_pods
1.   Innovate to improve the customer’s user experienceTide Pods is a brilliant innovation that makes washing clothes more convenient, portable, and less messy.    The idea is grounded in solving problems and consumer irritants in the category    Tide virtually reinvented laundry detergent from the customer’s perspective of easily, and properly doing a load of laundry.    Pricing impact:   +10-15% increase per load, plus a more space efficient configuration, which reduces distribution expenses.

2.  Resize to meet changing consumer preferences –   As consumers are trying to reduce their consumption of soft drinks and/or improve their portion control, Coke has come to their rescue with their new, appealing 7 1/2 ounce cans, ostensibly for consumers to choose versus 12 ounce cans.   150114_EM_PayMoreLessSoda And consumers are delighted; sales volume is up 9% according to the Wall Street Journal, while paying nearly double – yes double – the price per ounce for these cute cans.     Yes, this is an exaggerated, albeit successful example, but the bigger point is that Coke is re-evaluating serving sizes from a consumer perspective and looking at pricing on a price per ounce vs. price per unit basis.
3.   Innovate for new usage occasions –  Similarly, Crystal Light did this brilliantly by adding smaller On-The-Go packages, specifically designed to enhance the staple 8 oz.Crystal Light brand water bottle, again at a +100% price premium versus their traditional make a gallon at home package.    Lest you forget to buy these in the supermarket, they are brilliantly merchandised in convenience stores and gyms, right at your (now enhanced) water bottle point of purchase.

4.  Adjust product mix and package sizes –  Cereal and snack companies master the ability to change their product size mix and selectively reduce the amount of product in certain packages.     This can often mask direct comparisons versus the previous product line up and  pricing.    Further, you can strategically promote your more profitable package sizes more frequently, again, driving an effective price increase that is often invisible, and/or preferred by the consumer.

Lessons Learned:
1.   Think of pricing in broader terms than price per unit.     Price per ounce, price per pound, price per consumer usage occasion give you far more latitude for consumer-accepted price increases.
2.   Solve consumers’ most nagging problems in a product improvement or innovation and they’ll pay for that privilege.   Increasing convenience or reducing waste are among two widespread benefits that consumers will pay for.
3.   Build an expectation of gross margin enhancement into your innovation program and project selection criteria.

Food Mergers and Acquisitions that will shape 2014

Brilliant overview by Paul Conley/FoodDive: three expected trends in the food industry.

1.  Buying market share
2.  Dumping the non-core (refocusing on core)
3.  Buying younger (and more innovative) companies

“This week saw two more giant deals for the food industry in a year that has been filled with mergers, acquisitions and divestments. Sysco announced it would spend $3.5 billion to buy competitor U.S. Foods; meanwhile, WhiteWave announced it would spend $600 million to acquire Earthbound Farm.

Those deals, as different as they were, pointed to a series of business trends in food and beverages that dominated the headlines in 2013. These are hardly new concepts in the mergers and acquisitions world, but they did seem to take on a new urgency this year. And we see no reason why those trends won’t continue into 2014.

BUYING MARKET SHARE
There’s a change-management and business theory known as “corporate lifecycles” that we adore. Without spending a lot of time explaining what is a fairly complex approach, suffice it to say that the theory tracks the growth of companies at various stages of their existence.​

(Image credit: Flickr user karen_2873) One of those stages is called “aristocracy,” when a company tends to struggle to find growth, shies away from new markets, and focuses on short-term financial gains. Aristocratic companies often take to merging with other aristocratic companies in an effort to control market share.

The Sysco-U.S. Foods merger is a classic example of such a royal wedding. But it’s not the only one we’ve seen this year.

Dairy Farmers of America, although structured as a cooperative, has been acting the part of the aristocratic corporation in its mergers with Dairy Maid and other similar companies. Another approach common among aristocratic companies is to buy up smaller competitors in smaller markets. That’s the approach J&J Snack Foods seems to be taking as it buys up every other pretzel maker in North America.

DUMPING THE NON-CORE
When aristocrats age they often enter the stage called “early bureaucracy,” a time marked by corporate restructuring and blame placing. It’s also a time when a corporation will announce with great fanfare that it is shedding non-core assets, returning to its roots, and “doing what we do best.”

(Image credit: Wikimedia Commons

No company has better illustrated this trend in 2013 than Nestle. The world’s largest food company has suddenly taken to selling anything that doesn’t seem Nestle enough. Jenny Craig? Dump it. Givaudan? Who needs it?

Other companies in a similar position include Chiquita — which hired a new CEO in 2012 who plans to focus on the core” and “eliminate distractions ​— and Del Monte Foods, which has decided its core is actually pet food.

BUYING YOUNGER COMPANIES
Aging corporations often look to regain their youth by buying a much younger company that is presumed to have expertise in new markets. Examples this year include Coca-Cola, which is seeking shelter from the anti-soda movement and completed its takeover of coconut-water bottler Zico Beverages; Campbell Soup, which is seeking shelter from the declining market for canned soups by buying Silicon Valley darling Plum Organics; and Post Holdings, which is seeking shelter from the collapsing market for cold cereal by buying every company it can find that doesn’t make cold cereal.

(Image credit: Flickr user sfllaw)The corporate lifecycle approach to understanding businesses isn’t flawless, but it can be illuminating. And nearly every transaction we’ve seen this year fits into the model. (WhiteWave’s purchase of Earthbound Farm is a particularly wacky one. WhiteWave was spun off as non-core by Dean Foods just 14 months ago, and is buying Earthbound as it exits the “adolescent” stage, when company founders step aside.)

And if nothing else, corporate lifecycle theory is pretty good at predicting what a company is likely to do as growth slows. Which is a sort of long-winded way of saying we expect A-B InBev and SABMillerto merge in 2014 in one of the largest aristocratic marriages in food and beverage history.”

 

Samsung’s Strategic Apple Smackdown

Samsung continues to brilliantly challenge, and deposition, the Apple brand in its newest Galaxy S4 advertising campaign. Reminiscent of Apple‘s classic “I’m a Mac. I’m a PC” strategy, in which Apple strategically portrays IBM as inferior, old, and tired, Samsung contemporizes that idea by showing itself as the superior, younger, and cooler option. This continues Samsung’s successful strategy of demonstrating wins on brand performance and image vs. Apple that it has employed for several years.

It’s working beautifully, particularly at a time when Apple has finally shown some vulnerability. In fact, according to Interbrand‘s recent Best Global Brands report, Samsung was the biggest rising star in brand valuation – up 40% versus the prior year, now placing it as the world’s 9th most valuable brand. In addition, Samsung has grabbed the #1 market share position in smartphones, jumping ahead of Apple and Nokia. According to Ad Age, Samsung’s market share jumped to 30%, up 9 percentage points vs. the prior year, partly at Apple’s expense, who lost 2 share points. Beyond portraying Samsung’s users as far more savvy, bright, and aspirational, the campaign also persuasively communicates several of Samsung’s feature and performance advantages.

Samsung’s innovation and communication strategy beautifully position themselves as a leader, while strategically redefining the competitive brand as an inferior option.

Lessons learned:
1. Brand challengers can effectively surpass the leader by building brand performance and image superiority. The strategy works particularly well when you win on the primary benefits that drive brand selection and loyalty.
2. Exploit your competitors’ weaknesses and vulnerabilities. Even the most dominant brands have ‘chinks in the armor’ that you can exploit.
3. Innovate quickly and often. Market leaders often innovate and execute more slowly, deliberately, and have higher volume hurdles.

10 Obscenely Easy Ways to do Better Marketing

Brand marketing and strategy can be very complicated, analysis driven, or even intimidating.    But much of the time, it just isn’t.     Here are 10 obscenely easy ways to do better marketing.    And this isn’t about one particular company, rather, all too many.

1.     Focus –  If you haven’t already, figure out what business you really are in (it’s not what you make, it’s whose problems you solve), what drives your business model, and what you need to attack first.    Less is always more, and more profitable.
2.     Develop your Business Strategy – This needn’t be the all-consuming five-year plan that is both painful and rarely used.    Just figure out what direction you want to head, make sure you know why you want to head that way (versus other alternatives), and make sure that direction is financially sound.      This is CEO and Board stuff, and it’s critical.    But it’s all too frequently not done. Continue reading

General Motors’ Demise: Losing Brand Relevance

Could General Motors have managed once-great brands much worse?  With or without a bailout, nearly all of dinosaur21GM’s brands are classic examples of brands that lost their relevance with consumers.   How did the market share leader, with a portfolio of brands that delivered exceptional performance (Pontiac) and aspirational image (Cadillac) fall so far?    As always, consumers’ lifestyles and preferences changed over time; General Motors did very little to respond.  Continue reading