The ‘Marketing Alchemy’ that reversed the value of gold and iron.

The ‘Marketing Alchemy’ that reversed the value of gold and iron.

Jul 29, 2019 | Marketing, Strategy

1813, in Prussia, princess Marianne convinced people to turn in their gold jewelry to fund the war against France, and be given an iron replica in return. The replica jewelry was stamped with the words ‘Gold gab ich fur Eisen’ which means ‘I gave gold for iron’. Substitute iron jewelry produced by the Royal Berlin Foundry became the symbol of not just wealth and status, but of patriotism, .

Gold has an intrinsic value, it can be used, and reused, but its real value is in the belief we share that it has value in other ways, beauty, a symbol of wealth, luxury, status, and all the rest of the stuff we value.

The status of iron replica  jewelry was conjured to become higher than that of the gold originals.

Possession of gold signals things, but those signals can be reversed, because they are all about perception. It just takes a  bit of psychology, mixed in with the change of context and perception, achieved by marketing.

Marketing Alchemy.

The Prussians must have a skill for this stuff, despite their dour characterisation.

Frederick the Great achieved the opposite effect with his bit of alchemy with spuds. Frederick, who ruled Prussia from 1740 to 1786, was concerned that his people had only one source of carbohydrate, wheat. In a conflict, which he was pretty good at inciting, wheat fields could be devastated, and take a long time to be replaced, meanwhile his people would starve. The antidote was potatoes, which would provide a quick growing and reliable alternative  source, but Prussians would not eat potatoes, under any circumstances. After all, dogs would  not eat them, why should people?

Fred tried every form of coercion that he, as an absolute monarch, could dream up, but nothing worked. Then he found some magic marketing alchemy somewhere, and had his gardeners plant a potato garden which he decreed as Royal potatoes, reserved exclusively for the tables of royalty. He put a guard around his garden, but quietly he instructed the guards to be slack, and not enforce the security. This meant that the locals could nick in and knock off some royal potatoes pretty much without any real risk, while defying the king.

The net result was that potatoes quickly became a staple in the German diet.

Marketing alchemy at work!

Devising this sort of marketing alchemy is not easy, and is not always sensible at first glance. It is always different, counterintuitive, and will have more than its fair share of knockers. ‘It will never work’ they chorus, usually because they cannot see out of their status quo box. When you need some alchemy in your business, call an alchemist.

Header photo: iron jewelry in the Victoria and Albert Museum, London

 

 

Solving the paradox of marketing measurement.

Solving the paradox of marketing measurement.

Jul 22, 2019 | Branding, Marketing, Strategy

A bigger brain than mine observed that ‘You get what you measure’. This has been proven to be true time after time.

Our lives are run by those who make the rules based on what has been, simply because it is easy to quantify.

However, what do you do when you want an outcome you cannot measure?

Like ‘good parenting’. We all know the kid benefits, as does the family, and community, from good parenting, but what is the measure?   It is particularly challenging if you choose to try and measure good parenting in real time.

Like ‘Culture’.

We all want a great culture, but how is it measured? There are consultants flogging all sorts of snake-oil dressed up in pretty graphs and dashboards, but I am yet to see one that is of any demonstrable value.

Like ‘Great marketing’. ‘I will know it when I see it’ is simply not good enough!  How do you predict which marketing strategy will be great, and which will be a steaming pile of crap?

If a PhD candidate was to compare the balance sheet valuation to the market cap of the top 1000 listed companies of 1998, I would bet my house that there would be a far closer correlation then, than a similar comparison done in 2018. In those 20 years, capital markets learned to factor into their valuations the future value of intangible assets. 

Facebook paid 19 Billion, yes Billion US in 2014 for WhatsApp, when it was owned and run by 12 people in a garage, supported by a VC investment. At the time it was seen as an insane price by most pundits, the same ones who are now saying it was the purchase of the century.

Intangibles now make up a significant proportion of the market cap of most successful companies, and where do Intangibles come from?

Marketing!!

But what is the measure?

We can see the value with the great benefit of hindsight, but hindsight is not available to us as we do the planning.

So, the question becomes: ‘How do we generate quantitative links between cause and effect?‘

 Such links will provide the connections between Foresight and Hindsight, so we can learn and accumulate wisdom as we go, make resource allocation decision based on what should happen, rather than what we hope may happen, or even worse, an assumption that the future will look just like the past?

Even then, we need to remember the sage words of Einstein who knew a bit about measuring things, when he said ‘Not all things that are important can be measured’

 

Header cartoon courtesy of Hugh McLeod at www.gapingvoid.com

Genuflecting at the tomb of the unknown customer

Genuflecting at the tomb of the unknown customer

Jul 12, 2019 | Branding, Marketing

More money is thrown at the tomb of the unknown customer than any other source of marketing waste.

Unless you can define very well indeed who your customer is, you will be wasting most of any time, effort, and money you spend.

Defining who your ideal customer is involves choices, as you also  have to determine who is not, and therefore you will not spend resources trying to reach and influence them. This is really difficult for most, especially smaller businesses, to whom turning away a potential customer is an appalling thought.

Over 35 years ago I took over as Marketing Manager of the newly formed General Products Division of Dairy Farmers.

The brand of yoghurt we had was Ski, market leader in a small, and slowly growing market. When I joined, Yoplait had just launched, and the market had exploded.  Ski’s volumes were about the same, but share had dropped to single figures as Yoplait had, rightly,  taken all the growth for itself.

During a qualitative research project aimed at understanding who was buying yoghurt, which brands they preferred and why, the researcher asked the respondents to describe each of the major brands in human terms.

Yoplait was an educated, hip, self reliant, confident young woman who had her life in order the way she wanted it.

Ski was a reliable 50 year old farmer in wellies.

The advertising plan that was in place when I arrived was just more of the same old stuff, trying to convince ‘Miss Yoplait’ that the wellie wearing farmer was a good choice for her.

Might not have worked very well, so it was changed, and Ski started on a 5 year roll of product innovation that led to market leadership.

25 years later, Chobani came along and has done the same thing, again, as the so called marketers who followed, lost sight of the consumer, leaving the field open for a better targeted offer from a newcomer.

Need some help thinking this challenging stuff through? Give me a call.

If leadership is like gardening, is Jeff Bezos is the supreme gardener?

If leadership is like gardening, is Jeff Bezos is the supreme gardener?

Jul 8, 2019 | Strategy

Gardening may be an unusual metaphor for business building, but it works on a number of levels.

My grandfather was a keen, and hugely knowledgeable gardener, with a marvellous array of plants, edible, original, and decorative, coming together in a display that Henri Matisse would have been proud of, all year round.

As a young boy, drafted into digging some of his evil smelling concoctions into  the gardens with the spade he kept just for me,  he used to tell me he had only three jobs in the garden:

  1. Shape the environment in which the gardens (front and back were distinctly different) lived to best serve the plants he might want
  2. Plant the seeds at the right time, in the right numbers, in the best spots possible
  3. Nurture the shoots, giving them every opportunity and assistance to grow, but being prepared to dig them out when they failed to thrive, or a better use for the ground emerged.

This sounds very like what Bezos is doing with Amazon, the business, exemplified by the creation of Amazon Spheres, the gardens, at the Seattle headquarters. 

 

What price experience?

What price experience?

Jul 1, 2019 | Branding, Governance, Strategy

It seems to me that the development of robust, lasting, measureable and implementable strategy and marketing has gone to the dogs.

We are infested with short term rubbish that reflects the lack of experience of those doing the developing, and lack of understanding of those doing the commissioning, obsessed as they are with the short term.

Last week, Bloomberg revealed that the software in the Boeing 737 Max was outsourced to a bunch of recent graduates in India. Unfortunately, we all know the result of that exercise.

Not only were hundreds killed in the two crashes that followed, but the brand ‘Boeing’ took a dive with them.

How is that for the ROI on a few bob saved on experience!

You cannot put an old head on a young dog, all they do is yap.