May 25, 2012 | Change, Management, Marketing, Operations, Personal Rant
Last week speaking to a gathering, I told the group that Australia was now a net importer of food with a $2.7 billion deficit in 2010-2011, according to the AFGC State of the Nation report . Utter disbelief was the primary reaction, “how could that be” being a typical response.
The Australian food industry is dying at a rapid rate, the pressures on local suppliers are heavy, and increasing all through the supply chain. Retail oligopoly, high $A, regulatory impositions that make no sense, costs of supporting local government social initiatives, and all the rest of the stuff that clogs up the wheels of competitiveness and productivity.
Heinz moved to NZ last year, SP exports, Australia’s largest tomato grower in liquidation, a second major grower hitting the wall in April, and this week, fresh tomatoes hit $10/kg in supermarkets. A sign of things to come in many categories.
We are watching the death by a thousand cuts of an industry, small businesses that garner little exposure are hitting the wall all over the place, Golden Circle gone, Goodman Fielder on the skids, growers are going broke across the board, dairy processing almost all owned overseas, about all that is left is meat, because we are amongst the biggest producers, and horticulture, because most fresh produce does not travel well.
Now, if we continue to go the way it seems we are destined to go, housebrand NPD will eventually overtake proprietary NPD as it has now done in the UK, and you need to ask where that NPD will occur. Certainly not here, because not only have we seen off the manufacturing businesses, we have substantially depreciated the technical capabilities necessary for innovation. Even the CSIRO is a shadow of its former self in the food industry, having removed much of the intellectual infrastructure as its masters re-aligned the priorities to other areas, and progressively trimmed the resources.
The recent drop in the $A will help, just a pity there are few businesses left to take up the slack.
May 23, 2012 | Branding, Communication, Customers, Marketing
The holy grail, the prime objective of billions of dollars of advertising, the wall behind which many campaigns that have failed to generate incremental sales have hidden, Brand Loyalty.
I cannot help but wonder if the label “Brand Loyalty” is sometimes just a metaphor for making the purchase choice easier. The environment we inhabit is now so absolutely over-run with messages information, and tactics to build “customer engagement”, that we all must have a serious case of cogitative overload, weather we know it or not, so we need a mechanism to sort the options.
In this context I am reminded of the old “KISS” principal, Keep It Simple Stupid.
Apple is often cited as the greatest marketing machine we have ever seen, an accolade I am comfortable with, but perhaps there is another dimension. Rather than building brand loyalty, perhaps they have just so simplified the purchase decision in an environment that is psychologically threatening by the number of alternatives, and the techno-speak that most use as communication , that they grab the sales almost by default.
Apple has successfully made buying a piece of tech few buyers understand simple, and attached a cache to that simplicity. This spoof makes the point, but mind the language.
May 22, 2012 | Customers, Sales
For years with my sales consulting hat on I have pushed the notion that when selling a product or service that requires the B2B buyer to exercise some level of consideration, so it excludes the everyday, commodity purchase, there are only three ways to get the sale:
- Demonstrate how your product can assist them to increase their sales
- Demonstrate how your product can assist them to reduce their costs
- Demonstrate how your product can increase their productivity.
This has worked well over a long period, in a wide range of situations, but recently the socilaisation of business driven by the web has added a fourth headline sales driver that to date I have always included in the first:
Assisting a potential or current customer to grab an opportunity.
The world is changing so rapidly that a successful sales operation needs to understand very well the competitive and strategic environment in which their customers compete. In gaining and renewing that understanding, you will see opportunities for your customers that they may not necessarily see themselves. Whilst this is part of helping them increase their sales, the new tools of communication and collaboration that enable the development and leveraging of IP/IC are such that few can stay on top of them all. Therefore being a part of their business development process, by providing valuable insight, and perhaps a view informed by a different perspective, will deliver a stronger relationship, and contribute value to the process that will translate into sales.
May 21, 2012 | Collaboration, Innovation, Strategy
Another paradox surfaced by the emerging business networked models is that of ownership of IP.
In the old days, just a few years ago, ownership of IP was top of mind in many if not most development situations, but then along came digital collaboration.
Linux is now the dominant operating system installed on large servers, a loose collaboration of nerds has significantly outperformed Microsoft, one of the smartest companies of all time, with access to the most and best resources, and a dominant starting position. How can this be?
Nobody owns the Linux IP, it is a common license,
Toyota for years has encouraged, perhaps demanded, innovation from its tier 1 suppliers, often using non quantified descriptions of outcome as a substitute for detailed specifications, and Boeing, in the design and construction of the 787, set out to “co-innovate” with its suppliers, as they recognised the development task was simply too complicated to do alone. Despite huge problems, the exercise has yielded technology advances that Boeing believes will give them a big advantage for many years.
The key in building a network business model is the recognition that IP is no longer the end game, simply a means to an end. Businesses are now prepared to own some, share it, give it away, and have others generate it, just to ensure that the benefit from the knowledge flows through to the product.
I recently completed a business plan for a client which called for a high degree of collaboration with other complementary institutions, all of whom have at their core, a reverence for IP. In considering the drivers of success, and writing a plan to harness them, ownership of IP was always going to be a big stumbling block, it turned out to be a terminal one. However, the plan did get a few people thinking, so perhaps down the track a bit the benefits of a networked model may be seen to outweigh the C20 preoccupation with IP ownership, after all, it is how the IP is leveraged, not who owns it, that counts.
May 18, 2012 | Customers, Marketing, Strategy
Marketing groups usually set about segmenting markets by one of two basic ways:
- By demographics, age, sex, education, income, with/without children, and so on, or,
- By product category, for example meat is usually segmented by breed, cut, pack size, price.
However, there is a third way, one that disregards the traditional segmentations, one that recognises the difference between cause and effect.
You do not buy fillet steak because you are a 35 year old graduate earning 150k +, with no children, you buy filet steak because you like it, or your partners school friend is coming around for a BBQ, you buy it because it is the right product for the job to be done. Nobody buys a Ferrari to get from point A to point B, they buy a Ferrari to make a statement, as a car costing 10% of the Ferrari will offer reliable, relatively comfortable transport.
The marketing of every product can benefit from these simple questions, asked from the point of view of the prospective customer:
- What job do I want done?
- How will this product deliver on the job to be done?
- Which of the acceptable product options offers the best value, however the I define value in the circumstances?
