Aug 26, 2011 | Change, Management, Marketing, Small business, Strategy
The decision yesterday by the federal Court to allow Metcash to purchase Franklins from Pick n Pay, then onsell, presumably with tied supply agreements is another nail in the coffin of competition in the retail trade, despite the interpretation of the law by the courts.
Now you have Coles, Woolworths and Metcash with a share above 90% of the supermarket trade, limited choice for consumers, a nightmare for suppliers, particularly the decimated local suppliers who have struggled against the increasing power of the retailers for 30 years, and have largely failed.
Several things will emerge that will accelerate change in the supply landscape.
- Scale should dominate the strategic thinking of suppliers. You need to be a gorilla to play with gorillas, so get big or get out. The only alternative is to back off and be a small specialty producer, concentrating on the small share of retail trade not controlled by the 3 gorillas.
- It will be increasingly difficult at the smaller end of the size scale. The businesses left that turn over between a couple of million, and 50 million, many of them regional, with extreme pressure on their finances at a time when banks are not being helpful despite their advertising, will struggle. There are only a few left, and many of those will go to the wall.
- Competition between supply chains, from growers through to retailers will increase. Soon, if you supply Coles, you will not be able to supply Woolies, without risking your position with Coles. Suppliers will need to make choices, and gear up to integrate themselves into a supply chain system, losing their independence, and closing off options. This may not be a bad thing, but it is a substantial change from the current practice and way of thinking, and it limits the scope of customer base available through which to reach consumers with your product.
- The move to housebrands will accelerate, further enabling global sourcing by retailers, squeezing local suppliers. The $A has punched this process along over the last couple of years, adding more pressure to local suppliers who, having lost shelf space for their brands, were relying on contract packing to stay afloat
- Retailers are lousy marketers, good at sales, but lousy marketers. With housebrands coming to dominate categories on price, attractive to consumers in tough times, where will the innovation come from? Where is the incentive for local suppliers to risk their limited capital in doing something different?.
The ACCC, governments at all levels and the courts implicitly decided years ago that the SME end of the food industry was fair game, the survival of the fittest, and all that, and from an economic perspective, it may be the right thing to have done, but at what cost in human terms. The old question I have used in many seminars to make the point about retailer power:
Question. “Where does the 400kg gorilla sleep?”
Answer. “Anywhere he bloody likes”
Aug 25, 2011 | Communication, Marketing, Social Media
“Old” marketing is all about a business sending its messages out to their markets, it is what we are all used to, and it is the way much of our marketing ecosystem has evolved, outbound marketing.
The “new” marketing ecosystem is all about attracting your customers, potential customers, and brand building targets to you, inbound marketing.
But is it “new”?
Not really, trade shows which have been with us forever, are largely about inbound marketing, and marketers have always been aware of the power of word of mouth, and have sought ways to harness it.
Inbound marketing is pretty powerful, as by the time a customer has come to you, the first couple of hurdles of awareness, and empathy that need to be cleared by outbound marketing before there is a chance of a sale, have been cleared by the customer before they meet you. They are willing to be engaged in the next stage of building a brand, or making a sale.
Social media, blogs, and all the exploding electronic opportunities to communicate constitute the means to embrace outbound marketing. Increasingly we are seeing research that supports the power of these “new” marketing mediums, and whilst some remain wedded to the old ways, the future is with those who innovate in the ways they communicate.
Aug 22, 2011 | Branding, Communication, Marketing, Social Media
Media is now “free”, you can make a commercial and put it up on youtube and work/hope to attract an audience, a significant difference to buying time on TV, where you are paying for the delivery of an audience to your advertisement, assuming not too many of them can time-shift to avoid it.
Most ads on youtube and other free media fail to generate viewers beyond the immediate family of those who made it. Some however, generate a significant audience, and a very few deliver a huge audience, one that chooses to watch, and have therefore the potential to delver a brand proposition with enormous authenticity.
This commercial for Dove achieves this rare double, powerful positioning, and a wide audience, almost 13.5 million views to date, although a few, like me, are hardly in the target market, but it is one of the very rare few where they got far more than they paid for.
Aug 18, 2011 | Marketing, Strategy
A common question every business asks itself regularly, and one with no answer without a detailed understanding of context.
Imagine you are in 1990, and someone asked you “how much would you pay for an internet search?” The only logical response is “a what?”
1990, there was no internet as we now know it, and little capacity to search the documents that were on the few networked computers of the time.
Fast forward to 2000, the same question would have brought an answer that gave the search value, as the net was around, but not everyone had access, or the know-how to search it effectively with the relatvively modest search engines of the time, so the quick assembly of the wide range of information that the few could gather had great value.
Fast forward again to 2010. Same question, different answer again, as almost everyone had the access and knowledge to do a comprehensive search, so the value is diminished because it is no longer a way of differentiating, delivering something unique.
This ebb and flow of value is common in almost any context you choose to examine, but we forget so easily that value is a relative term.
Aug 15, 2011 | Alliance management, Collaboration, Marketing
An ongoing frustration of innovation projects is the apparently always moving goalposts. How often have you heard “wish marketing would make up their minds what they want”
This desire to have the end point articulated at the commencement is natural, it enables good milestone and resource management, feedback and accountability systems, all beloved of the bean counters. However, if the requirements of a marketplace are evolving quicker than the projects can be brought to the market, leaving the goalposts untouched is the same as ensuring you bring a redundant project to completion, not much value there.
The challenge is to know if marketing is just a bunch of seat shiners who cannot make up their minds, or a group so intimately connected to the market that they see the evolution as it happens. Sometimes it is pretty hard to tell the difference. Therefore, the only way to ensure the development groups are connected to the market, via marketing or otherwise, is to and hold them to a level of personal and development group responsibility for the outcomes.
Aug 12, 2011 | Communication, Social Media
Yesterday I was surprised when I posted the entry having a shot at the crap service Optus offers customers with a problem of their making, and a screen came up telling me it was my 600th post.
Amazing to me, what started as a creative outlet, a way of expressing my views, and perhaps connecting with a few who shared those, and could contribute to their evolution, would extend to 600 posts.
Often I am asked “where they come from” , and I honestly do not know, experience, what I see around me, other posts and articles I see that trigger a train of thought, all over the place.
So, thanks to all those who have contributed, hopefully I have contributed something back to you, and we are both better off as a result.
Regards
Allen Roberts.
