Feb 4, 2010 | Branding, Change, Leadership, Marketing
The corporate left brain/right brain conflict is alive and well in Jetstar.
Currently Jetstar is spending on TV advertising their Asian destinations, pushing that they are not just a cut price airline, at the same time they are facing a PR debacle, having left passengers in Penang airport for several days due to mechanical problems with an aircraft. (perhaps they should change their advertising; “an extra 4 days at your expense” not a great idea?)
Gail Kelly at Westpac got it horribly wrong a few weeks before Christmas, raising the banks home mortgage rate beyond the increase in the prime rate, how many advertising dollars did that send down the crapper? Anyone who actually thought about the pricing challenge from a customer perspective would have predicted such an outcome, that the mistake was made by the former CEO of St George whose culture was all about customer care is inexplicable. Even the vaunted Toyota is struggling with a recall in the US of 9 million cars with sticking accelerators, not a good addition to their market positioning.
The list of companies that sacrifice their long term position to get out of a hole in a crises goes on, and on. The corporate “numbers groupthink” takes over, no-one states the obvious, but uncomfortable truth that the P&L needs to take a short term hit for the benefit of the long term.
Very occasionally, someone does it right. The classic is J&J’s recall of Tylenol in 1982, and subsequent leadership in introducing tamper evident packaging. Short term cost was huge, but the long term position was enhanced enormously. Arnotts in Australia had a similar experience in 1993, and came out of it smelling like roses.
Why do most businesses continue to make the same mistake when faced with a crisis, a short term focused response?
My conclusion is that the power of the short term performance metrics overwhelms common sense, and the only antidote to this long term poison is to build a culture that genuinely sees customers as central to the reason for the business existing, and only by serving customers can commercial sustainability be achieved. This commitment to long term customer value needs to be a part of the culture, as fundamental to an organisations shape and actions as DNA.
Feb 3, 2010 | Change, Marketing, Strategy
On the web, you have lost control of the conversations that can impact on you, anyone can say virtually anything they like, and unfortunately because it is “out there” it can gain traction, take on some credibility.
If you cannot control it, you need to be aware and find a way to participate in the conversation as a means to present the facts, alternative views, or a different perspective as a means to debunk the nonsense that can accrue in the absence of facts.
To do this, you need to be an active participant on the web in the forums and communities that talk about your product or service.
In the old days, (and even today) if someone prints lies in a magazine, you could sue, gain a retraction, an apology, some compensation, but on the web, you can do little to force a retraction, the best you can do is enter the debate and point out the nonsense.
Are the skills and aptitudes to effectively debate on line present in your organisation? At the very least, they will be cheaper than lawyers who will be totally ineffective, so look at the cost just as insurance if you cannot see the value in communicating directly with those interested in your product.
Feb 1, 2010 | Branding, Marketing, Sales
Most products have a range of alternatives that the buyer can purchase and use in relative certainty that it will deliver pretty much as promised.
Consumers when in a supermarket have a basket of products in a category they buy, usually with a first and second choice, and sometimes a third choice. On any trip to the supermarket, the purchase decision is made at POS based on a whole range of factors, of which price is only one.
Our task as FMCG brand marketers is to find the means to reduce the importance of price in the purchase decision, in an environment where the supermarket is hell bent on convincing us that price is the only factor that matters, and they have all the power of the channel at their disposal.
The power of data mining techniques that have evolved in the last decade is stunning, but they do not remove the basic dilemma for FMCG marketers, who must find the balance between price, stock velocity, retail margin, and brand building that has to be funded from their margins and long term returns, and which carries substantial risk.
Only building a brand that consumers have as their first choice in the basket of acceptable choices, where price sensitivity is less than the category norm will offer longevity, the rest just contributes to retailer profitability at the expense of the supplier margin.
Jan 27, 2010 | Branding, Innovation, Marketing
Product development is most often a process that in its early stages is dominated by technical considerations after the initial idea is articulated. It is about the dimensions, performance characteristics, functionality, features, technology platform, and so on. Typically the product brief will cover all these aspects, and more, but it will not be enough for the designer responsible for the way in which the products interact with the consumer, and therefore does little for the development of your brand.
At some point, you need to reflect the behavior of consumers as they use the product, the level of engagement it attracts, the way they interact with the features, the situation in which it will be used, what else is likely to be going on around them concurrent with use, the way it needs to look and feel, and many, often qualitative aspects.
It is a common mistake to put a lot of effort into the product brief, but less into the design brief, thus ignoring the most important factor in the whole exercise, the consumer.
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Jan 18, 2010 | Leadership, Management, Marketing
Customers remember the best and the worst.
When you absolutely “nail” it, they remember, and when you absolutely “stuff” it, they also remember, but guess which one they remember when you do both.
The parable of the bungled baggage, and variations of it is a story often used to illustrate the point, a small or seemingly unrelated factor can undo all the good work that goes into a customer interaction, so watch for the small things, and focus manically on what Jan Carlzon calls on the “Moments of Truth” those times when there is a direct contact between your front line of customer service, and your customer, after all, without customers, there is not much else.
Jan 11, 2010 | Branding, Marketing
A brand is the expression of consumers equity in a product offering. This offering is a mix of tangible and intangible factors, a bundle of benefits, each being inter-related to the others in ways that may vary depending on the differing consumers.
Brand strength = Differentiation x Relevance of the differentiation.
If you apply this formula, it may help in the difficult task of making the choices relating to which customers, which channels, which media approach, which opportunity to follow, which brand to invest more in, and so on.
It may also help to add some numbers to the often qualitiative marketing strategy dicussions, so the CFO can understand what you are doing, and why you are doing it. This is normally useful in a corproate environment.
