Aug 12, 2009 | Marketing, Sales, Strategy
Brands take years, often decades of work, investment, and insight to develop, but they can be destroyed in the blink of an eye.
In channels where there is an imbalance of power between links in the supply chain, such as FMCG retail, the retailers short term best interests are often maximised by attracting consumers to their stores with deep discounts (funded at least partly by the manufacturer) of well branded products. Often they are able to persuade the marketers that their best interests are also served by the promotional activity, and if they fail to persuade, their power to delete and manage shelf placement is usually sufficient to swing a deal.
The advent of scan data has lifted the veil on some of the decision making that occurs at point of sale, and it has become clear that long term sales of solid proprietary brands are not maximised by short term price promotional activity, it simply diverts resources from the long term to the short term, reducing average purchase price by the retailer, and enabling pantry stocking by the consumer, eating away over time at the brand equity so challenging to build.
What we need is more marketers, people who understand the psychology and dynamics of the relationship a consumer has with a brand, and we need those people to be sufficiently supported by their organisations to be able to tell retailers where to stick their short term price promotions, and continue to invest in the brand, in order to be able to continue to harvest it over the long term.
Aug 11, 2009 | Demand chains, Management, Strategy
Technology has multiplied the potential for information flows through a value chain, but often human behavior hampers it as individuals use the available information to enhance their own position. This happens internally, but is even more prevalent in the interactions between firms, as individuals seek to enhance not only their own position, but the perceived negotiating position of their firm.
A key metric to look at when assessing the health of a value chain is the exchange of information between firms. The actual measurement will usually be a combination of hard & soft data such as joint strategic planning, shared KPI’s, availability of data when needed and in a useable form. A technique I have sometimes found useful is an adaptation of an HR practice, do a “360 degree” performance assessment on the available information amongst those who come into contact with it, and have a use for it.
Another of those paradoxes that exist in human relations, elicited by the information exchange in supply value chains:
Why is it that the passionate exchange of information that occurs on social networking sites is rarely replicated in a value chain?
It seems odd to me that people who are willing to share sometimes pretty personal stuff on a networking site are unwilling to share information of a non- personal nature in a commercial situation, even where the commercial case for the exchange is clearly made.
Such information exchange is a pre-requisite of creating a demand chain from a bog standard supply chain.
Aug 10, 2009 | Management, Marketing, Sales
As a senior marketing executive in a previous life, in a business with a highly seasonal FMCG product range, I used to force the marketing department to spend substantial amounts of time in the field with our field sales force in the critical pre Christmas period.
The November and December period was critical to the achievement of the years budget, a miss by more than a couple of percentage points would never be made up before the June 30 year end.
This provided a great excuse to get desk bound marketing staff into stores, interacting with the consumers, products and brands in the categories where they had responsability. “All hands on deck” speeches were common, to overcome the reluctance, after all, they consistently told me, they looked after the brands, and the long term interests of the business, and stacking shelves in Woolworths was a waste of their time.
The underlying motivation, much more important than a few extra relatively unskilled (in that environment) people in the field, was the opportunity to gain the first hand views of the “coal face” which were much more directly connected to our consumers in a competitive market than a research report ever will be, albeit at a qualitative level. It also offered the front line personnel a chance to get stuff off their chest, very useful feedback for office bound marketers.
Interestingly, the marketing staff who enjoyed the experience were also generally good at the marketing job, and those who resisted, only went out reluctantly (usually with my boot up their clacker) were also not the best marketers, and so the process offered me another measure of the potential of an employee to make a worthwhile contribution to the marketing and brand building challenges we faced.
Aug 9, 2009 | Uncategorized
There is a growing trend, perhaps driven by the difficult times for management to set very big goals, the “Big Hairy Audacious Goals” proposed by Jim Collins and Jerry Porras in their book “Built to last”, and hope to create the focus necessary to achieve the BHAG outcome.
Often however, the opposite appears to occur, as those in the organization charged with the execution of the plans simply do not believe the objectives are achievable.
Sometimes this is just that the objective is divorced from the reality of the competitive environment, sometimes it is simply a failure of leadership to recognise and allocate the necessary resources, but most often, the BHAG is just wishful management thinking that takes the place of the hard analysis and challenging leadership that goes with out of the box development.
The lesson is to develop audacious goals within a framework of communication and consultation in the business to develop the buy-in from the operating level people and then, a Big Hairy Audacious Goal can be a hugely motivating factor, and has a chance of being achieved.
Aug 8, 2009 | Management, Marketing, Strategy
That ability to make quick decisions that more often than not, turn out to the right choice is an envied and rare talent. How much is just pure talent, and how much is training, instinct, and experience?
After 35 years of engagement with management, it appears to me that the talent, without the training and experience is as good as a great cricketer with his favorite bat in hand, approaching the first tee in a golf tournament.
