Apr 14, 2009 | Demand chains
Most are familiar with the notion of supply chains, and describe them as assembling product, of some type, and moving it through a series of points where it often receives further investment in packaging and processing, to a customer of consumer.
Similarly, the concept of value chains is familiar, the emphasis being on the addition of the perceived value (usually again, packaging and the changing of the product form) at each point in the chain.
The notion of a demand chain changes the perspective of the chain 180 degrees, and seeks to define the whole chain in the terms of the end user, and what adds value to them. If some activity, or investment in the product does not add value to the end consumer of the product, why do it?
Most businesses, particularly in the agricultural sector where the food industry has its roots, produce stuff, and do it as well as they can, then look for someone to buy it, often an intermediary of some sort. This process repeats itself at each point in the chain.
How much better to start with the consumer, define their needs, and translate them back through the chain, with each point focussing on the end consumer as the reason to do, or not do, something. Voila, a demand chain!
Apr 13, 2009 | Marketing
The explosion of media options in the last 5-10 years is giving small businesses options they did not have in the age of mass media, mass marketing.
The recession will drive a continuing growth in alternative media at the expense of the traditional media, the growth is inexorable.
Small businesses now have the opportunity to connect with their markets in ways impossible a few years ago, meeting specific very narrow markets that may be geographically spread. Access to the “Long tail” of marketing, is creating markets that did not exist 10 years ago.
Small businesses with a “narrow but deep” market potential are no longer restricted by geography. Look at what my friend Jonathan Hatcher and his wife Alyssa are doing with their fantastic berry jam products grown and made on their farm in he NSW southern highlands. Their products have great appeal to the small , widely dispersed group of people who value the emotion that goes into each jar of jam.
Apr 9, 2009 | Marketing
In a downturn, the volume of low priced stuff increases, & as consumers reward themselves, some stuff a the “top end” also does well.
Beware if you are in the middle, and not the lowest cost producer, both your volumes will suffer, and margins will be squeezed as you try to compete.
Beware if you think you can move to the “top end” without a strong and unique value proposition that is compelling in the market.
However, if you have the strong value prop, even in the downturn, you should do well in many product categories.
There is always a silver lining if you look hard enough for it.
Apr 8, 2009 | Marketing, Uncategorized
The following is a letter published in the Journal of thre Australian Institute of Company Directors in their December 08 Annual report. http://www.companydirectors.com.au.
Very few businesses make a serious attempt at an audit of the returns from marketing expenditure. Why not? in many comapnies it is one of the largest items on the P&L, and it is certainly amongst the most important.
The Editor
Company Director
editor@companydirectors.com.au
9th September, 2008.
Dear Sir,
I refer to the article entitled “Pulling in the belt” in the current issue of the magazine.
Amongst other issues, in the article Mr. Corrigan refers correctly to the temptation for businesses to cut marketing expenditure when things get tight. Generally senior management sees the advertising budget as a fertile field for cutting, and it often is, but the complication is that “marketing” is a far wider question than just the advertising budget, and it goes to the heart of the commercial sustainability of the enterprise.
As directors, we spend substantial and increasing amounts of time managing the shape of the accounts of an enterprise, squeezing out other value adding activities that we should engaging in. We generally spend very little time on any sort of detailed review of the basis for marketing decision making that involves the wide range of resource allocation and management decisions that are driven by the competitive environment.
I speculate that this is because the accounting function is dealing with quantitative data, and therefore relatively easy to measure whilst marketing is more qualitative, and far harder to measure, and further outside the comfort zone of many in senior management and sitting on boards, than are the accounts.
In many businesses, perhaps most businesses, the largest asset class is the intangibles, usually only crystallized on the sale of a business, but nevertheless, the core of the sustainability of the business. Why is it then that we rarely analyse in any depth the building blocks of these intangible assets, the things that will generate success in the future.
As the guardians of shareholder interests, it should be incumbent on directors to spend more time considering the future of the business, not just reacting to the past, and a ‘Marketing Audit” should be on the agenda.
Yours sincerely
Allen Roberts
FAICD
Apr 8, 2009 | Marketing
You can no longer market to the anonymous masses, they’re no longer anonymous and they’re certainly no longer masses, but an agglomeration of individuals.
You can only market to people who are willing participants, so the marketing task is to identify that group of people to whom you can deliver something “remarkable”, to use the now classic description of Seth Godin
