Blunt Instruments No Longer

The shackles of control are broken.

Past undergraduate students of Economics 101 were lectured (with conviction) that fiscal and monetary policies were blunt instruments, which enabled governments to control, influence and modulate national, state and regional economies. Such contentions have morphed into studies of history.

It's time to hit the re-set button.

Governor of the Reserve Bank of Australia, Glenn Stevens, an eminently qualified economist with access to a plethora of global, national and sectional detailed data, information and intelligence recently conceded that he, the Reserve – and overseas, “The Fed” in the USA, and the Exchequer in Britain – can no longer accurately influence and forecast the marketplace or the consequences of monetary and fiscal initiatives. How refreshingly, open and honest.

It raises questions about the veracity and worth of the predictions and projections of countless economists from banks, professional associations and consultancies, who are inclined to be free with their advice and “insights” in the mass media.

To some, outside the sphere of economists, the only point of consistency among those supposedly authorative resources is that they are always wrong. The only difference is the measure of their inaccuracy.

Such common perceptions may explain, in part, the emerging presence of the new breed, - behavioural economists.

Statistics-based economics identify past happenings and trends. They do not isolate, analyse and explain the why of such reflective realities.

Given the evolving rebalancing of market forces in favour of consumers, and often, major spheres of influence (beyond the realms of government and the public sector) it is understandable that all players are beginning to recognise and respect the imponderables which populate society, the economy and marketplaces.

Sharemarkets are not immune to the new scenario. The number of investors who are reliant on, or influenced by “chartists” – those who record, track and graph trend-lines – is rapidly declining. Increasingly, they agree that -

The future is not a lineal progression of the past.

Perhaps there is now a better understanding of the nature, causes and consequences of the reference by Alan Greenspan, former head of the Federal Reserve in the United States of America to:

Irrational Exuberance

Oh, to retain the exuberance and contain the irrationalism. Imagine an emotion- driven, confidence-influenced marketplace.

SELF-DETERMINATION

There are few, if any “experts” who know the customers, clients, competitors, substitutes, suppliers and spheres of influence as well as business owners and their team members.

Concessions and exceptions can and should be made to those in business who have retreated, battened-down and “tightened the belt”. Likewise, advice of “all-knowing, all-seeing” external experts, - economists and accountants included, - is most relevant to those who are detached from market-players.

Many deliberations and decisions are typically, solely or predominantly based on analyses of the ”Big Picture”, macro-economies if you will. As previously discussed, many of the contentions are spurious at best, and about as relevant as the form-guides - of past events - for horses in the Melbourne Cup, or the records of teams on the recent Rugby Union World Cup – with the exception of the all-powerful All Blacks. Their form centres most on muscle, mental strength and formations (not past performance).

MICRO-MANAGEMENT

There is a lot of merit in micro-management at this time. Some, if not many things are beyond one's influence and control, including fiscal and monetary instruments.

Most sectional downturns are measured in lower-order single numbers. Therefore, business is still being transacted.

Hence, the appropriate focus and accent should be on how one is to achieve, sustain and progressively grow market-share.

With most competitors and substitutes consciously contracting – inventories, advertising, marketing, workforces and resources - it is not difficult to create and enjoy the future of an enhanced and heightened presence.

Most behaviourist economists will concede that they do not have a measure on consumer confidence. It is considered one of those imponderables that “cloud” the marketplace. In many respects the big picture simply provides the backdrop for personally initiated actions.

BUILDING BLOCKS

There is no single, universal formula for success. The individualism of, and differences between businesses, products, services, economies, marketplaces and target audiences need to be reconsidered and respected.

However, there are certain fundamentals which are sound building blocks, including:

•  Invest in one's presence. This includes:

•  Premises presentation

•  Website locations

•  Product/Service merchandising

•  Team member personal presentations

Consistently, these initiatives generate the most immediate and sustainably positive responses.

•  Develop People

•  Training and development are not discretionary. They are imperatives.

•  Refine and focus inventory

•  New products, services and applications can be, and are magnets.

•  Delete the tired, the obsolete and the irrelevant.

•  Increase and improve communications

•  Integrate a multi-channel positioning.

•  Maintain consistency of message and frequency.

•  Inform, educate and engage existing, prospective and past clients.

•  Launch, relaunch

•  Excite the market place with events that launch all that is new.

•  Provide samples, trials and interactions. Emotional connections stimulate sales.

INTERESTING FOOTNOTE:

These proven and, well-established and successful building blocks have scant presence in, and influence of macro-fiscal and monetary initiatives or policies, consequently do not receive much attention.

But they do provide the framework in which you are able to do what you do best .... lead, manage and control your own business.

THE AUTHOR

Barry Urquhart of Marketing Focus is an internationally respected strategic planner, consumer behaviour analyst, author and high impact conference keynote speaker.

Barry Urquhart

Business Strategist

Marketing Focus

Change - No Small Thing

Change is a big deal, particularly in the current marketplace.

Whether it is self-generated or imposed by external market forces, change demands attention, consideration, detailed analysis and the formulation, documentation and implementation of an integrity strategy.

Incremental change, and its consequences, dictate the need for respect. The scale of change differs little in importance from the frequency of that change.

In many, if not most instances, all change is significant to consumers. Accordingly, marketing, communications, promotions, merchandising, selling and service initiatives need more than “tweaking”.

Success in the introduction of change is not difficult. It is a consequence of detailed planning and respect for the impact on, and perception of existing, prospective and past clients.

Sadly, there is a long history of negative and sub-optimal outcomes as a result of change – big and small.

CAUSAL FACTORS

Clearly, a majority of unsuccessful change initiatives are derive from the management, and more disturbingly, marketing offices of companies, including manufacturers, distributors and retailers.

Greater knowledge, better education, unbounded creativity and originality, and a marketing degree, do not guarantee success and market acceptance.

Imposing and enforcing change on consumer perceptions, preferences and buying patterns is fraught with danger and difficulty. In such circumstances considerable time, money and resources need to be invested in the education and re-education of those in the primary, secondary and tertiary target markets.

Instant success is a rarity, if not a myth.

LESSONS TO LEARN

It is refreshing to learn, and reassuring to the owners, managers and marketers of small businesses that major global corporations, brands and product managers are prone to falling short in successfully implementing change.

The frequency of mistakes, shortcomings and outright failures is high. The scale of the consequences appears to be a differentiating factor.

CHEERS ...... TO TEARS

For some 15 years the largest selling beer brand in Australia was Victoria Bitter, “VB”.

The brilliance of the advertising which featured the voice of the late John Meillon resonated with Australian drinkers and teetotallers alike.

A national market share of between 12 and 14% was enjoyed for an extended period of time, until someone decided to introduce a low-alcohol option. That weakened the presence and profile of the brand.

VB has slipped the ladder of success to approximately 3-4% market share.

The biggest selling beer brand in Australia is now full-strength XXXX, once a regional Queensland-based offering.

For global consumers the labelling may imply that it targeted to illiterate consumers. Not so. Although it could be a strikingly adroit strategy to impact among the 60%+ of the world's population who sign documents with an X!

KING OF THE ROAD

For decades the Holden 6-cylinder Kingswood was Australia's own family motor car. Annual sales regularly exceeded 150,000.

Given the vagaries of oil supplies, and attendant price hikes, in the 1980s and beyond it was noted that a trend was emerging with the increasing popularity and sale of smaller, 4-cylinder European cars.

The decision was made – by whom I do not know – that the Holden Kingswood would be superseded by the Commodore, with the brand name Holden being removed or de-emphasised.

Sales plummeted to around 80,000 per annum. It was a costly lesson. Most changes come with consequences, some larger than others.

Holden never recovered and will cease production of motor vehicles in Australia by 2017.

WRAPPED UP

Glad Wrap is a constant in many Australian kitchens.

A recent change in the packaging and introduction of a new cutting device hurt sales, - and a number of customers. Revenue bled, so too consumers, who could not effectively use the innovative cutting device.

Appropriately, the new packaging was promptly withdrawn, to the delight (and well-being) of many consumers.

The change to McDonald's product range with the introduction of All-Day-Breakfast was hardly a resounding success. It seems consumers were happy to move on from breakfast mid-morning. McDonald's franchisees found the extended hours of a breakfast offering was inefficient and impacting on profitability and productivity.

In recent times, McDonald's, and the broader fast-food sector, have been experiencing falling demand, sales and squeezed profits.

The best change seems to be good, rather than fast ... consumer driven, rather than management rushed. The margins for effort, like profits can be, and are increasingly thin.

CHANGE ACTION PLAN FUNDAMENTALS

•  Identify, isolate and analyse the demand factors for change

•  Ensure customer drive, and acceptance

•  Differentiate wants from demands – the former can create fads

•  Formulate, document and implement an integrated change strategy

•  Recognise and respect that to consumers, all change is BIG

The Big Lie - No Excuses

 Scandal. Fraud. Scam.

These are words that cause shivers in the corridors of corporations, and rightly so. Particularly, if the events and inevitable consequences are self-induced.

The Volkswagen diesel engine emissions imbroglio, in which on-board computer monitoring was deliberately set to under-report emission levels, is a striking example of appalling leadership and a poor, if not toxic, corporate culture.

It seems inconceivable that anyone could believe that a deliberate lie involving some 11.8 million motor vehicles and hundreds of thousands of Volkswagen employees around the world could remain hidden.

Once recognised and revered, the consequences for Volkswagen of the scandal have been immediate, widespread and cascading. The “fall-out” will doubtless continue well into the future. Reputational damage extends beyond single brands. Individuals, nations and sectors will suffer the odium of reputational stains.

UNINTENDED CONSEQUENCES

This case study highlights the complexity of the principle of “unintended consequences”.

Volkswagen is the largest automotive manufacturer in the world, employing over 300,000 people, generating 206 billion Euro in revenue each year, and being owner of the Audi, Skoda, Bentley, Bugatti, and Lamborghini and Porsche brands.

Germany, its people and economy will be profoundly and directly impacted. One in seven of the workforce contribute to the production and export of motor vehicles. The Lower Saxony municipality owns 20% of the shares in Volkswagen and seeks regular and consistent dividends. They too will doubtless take a hit.

Questions will be put about the integrity of all things German, with probable detrimental influences on revenues.

Within two weeks of disclosure of the scandal, the resale value of all Volkswagen diesel vehicles in the United States of America had reportedly fallen by around 20%. That represents a large pool of disenchanted financially disadvantaged customers. It will probably get worse.

Satisfaction, loyalty, respect and referral business are concepts that will carry little currency into the immediate future for the Volkswagen group of companies.

CULTURAL ROOTS

The Chief Executive of Volkswagen has resigned with possible legal action pending. Two other senior executives have been dismissed, and a further trimming of the ranks is probable.

Search for a replacement leader has begun. Any trepidation about a poor record of external appointments of leaders for Volkswagen will be tempered by recognition that the current crisis is presumably a by-product of a negative, corporate culture.

Internal promotions and appointments would seem inappropriate to government, regulatory authorities, shareholders and customers.

VALUE JUDGMENT

The inept actions of many Volkswagen decision-makers beggar belief. What were the real long-term advantages and benefits? Any short-term beneficial outcomes were, in reality, false economies.

Greater respect was needed for the long-earned and justifiably commendable reputation for engineering excellence, reliability and value which had long been associated with the brand. A heavy price has already been paid, and will be paid well into the future.

7-ELEVEN ... ZERO

In Australia, the image and standing of the 7-Eleven convenience stores franchise network have been figuratively trashed.

Seemingly widespread, if not systematic underpayment of employees is inexcusable and unjustifiable. The image of poor treatment of “back-packers”, “short term tourists”, casuals, Indian nationals in particular, will have fall-out in the international standing of Australia, the local franchise sector, convenience store operators at large, corporate Australia and many business operators.

We deserve better than that, and should not suffer from the actions of so few.

In recent times the 7-Eleven Chairman, Chief Executive and Chief Operating Officer have each stood down or resigned.

The Deputy Chairman on the Board of Directors has been promoted to Chairman. However, he has reportedly been on the board for some 16 years. Therefore, he was present when the inappropriate actions took place. It is not a good look!

The same individual was the National President of the Australian Institute of Company Directors, whose charter is to promote ethical corporate behaviour and good governance. He either “stood aside” or was asked to “stand aside”. Rightly so.

What measure of confidence will 7-Eleven franchisees and the disaffected, reportedly underpaid employees feel?

He was also Deputy Chairman of a publicly –listed national network of motor vehicle dealerships. He recently made public he is standing down from that position. What has not been publicly addressed is his chairmanship of a transport company. Actions do have consequences.

Consideration must be given to the interests and concerns of shareholders, staff members, suppliers, associates and clients of that and other entities. The lessons apply to all.

In the current global digital and open marketplace there is, seemingly, no place to hide.

BUILDING INTEGRITY

There are four prevailing dominant forces in the marketplace. Each must be addressed, positively and proactively, being:

•  Fear

•  Risk

•  Trust

•  Integrity

The innate fears and risks associated with big lies will mitigate against ever attaining the exalted status of being trusted and accepted for one's integrity.

Today, as forever, there are no “white” lies or little fibs. Lies, and their consequences, are big.

There is much to commend the virtues of walking the straight and narrow line.

Differing Costs Of Production, Reproduction

The concept of, and concerns about production costs are so .... mercantile.

That was an era in commerce that is long past, and now out-dated. Arguably, the peak occurred in 1637, in the Netherlands, when the price of tulip bulbs, imported from Turkey, collapsed from 2500 florins (also known as Dutch guilders) to very little. Some people “had gone mad” for tulips. Or was it that they were simply mad? Shades of prevailing property and share prices in a range of marketplaces.

In the instance of tulips the bursting of the bubble had little or nothing to do with costs. An unexpected and rapid disruption to the supply had people take pause and re-evaluate the “true value” of a tulip bulb.

The consequences were immediate, widespread and dramatically substantial. This is a lesson relevant to all at this time.

Andrew Carnegie, the US industrialist, may well have argued that production, commerce and industrial might had attained their zenith in the late 1800s.

In reality, it is immaterial. Market presence, success, sustainability, wealth, value and intellectual property worth have evolved from material goods to the intangibles, of information, intelligence and communication.

MEASURING WORTH

Quantifying the value and worth of brands, products, services and skills is increasingly difficult, and highly subjective. One person's junk (mail) is another's treasure!

Moreover, an abundance of information is readily available to all .... and sundry. What's more, a lot of it is accessible free-of-charge.

The capacity to retrieve, collate, analyse and selectively disseminate intelligence is a key determinant in a sound measure of worth in the prevailing digital era.

Typically, the cost of producing, using, sharing and supplying information and intelligence is typically minimal, marginal, or possibly, even zero.

THE REAL ISSUE

Among the traditional, established and recognised barriers of entry are production costs. These include capital outlays, premises, materials, inventory, workforce, supply chains and distribution returns.

Individually and collectively, these could be, and were, formidable impediments, barriers and filters. Risk:Benefit analyses could be centred, and the conclusions determined, on these factors alone. No longer.

Original, “ground-breaking” products and services do require considerable investments in time, money, resources and people.

However, late-entrants into a product/service range, marketplace and sector can enjoy low-cost carriage by those “Barbarians at the Gate,” who are keen to intrude on the operations, presence and revenues of established market innovators and leaders.

The fundamental reasons are very conspicuous. While production costs can be, and often are, very high , reproduction costs tend to be minimal.

Original equipment manufacturers with enviable brand names like Caterpillar, Komatsu and the like, find it difficult to counter prompt, efficient and effective intrusions by unbranded interlopers. Today, reproduction does not imply inferior quality.

Protecting the integrity of intellectual property, design, processes and ingredients is becoming increasingly difficult. Patent– and copyright protection is difficult, expensive and time-consuming to invoke, enforce, police and maintain.

There will doubtless be increasing circumstances of “IBM-compatible” products and service offers, as a consequence of 3-D copying and similar technologies and capabilities.

Therefore, accelerated cash-flow positive returns will be possible, enjoyed and shared by “Johnny-come-lately” competitors, and substitutes.

Product lifecycles will inevitably be shortened, margins narrowed and exclusivity-price premiums curtailed, if not eliminated because reproduction is cost-free.

THE NEED FOR URGENCY

The increasing emergence of inequitable, low-cost reproductions in crowded, competitive and static marketplaces will underscore the need for all entities to place greater emphasis and value on enhanced productivity.

Windows-of-opportunity will be limited, product lifecycles concertinaed, investment return ratios will necessarily be refined, and risk-tolerance criteria will be reassessed.

A week may be a long time in politics. In business, the cycle may extend to, say three years, but seldom much longer.

Self-induced obsolescence will be considered a virtue.

Production costs may appropriately be outsourced, allowing product/service innovators and entrepreneurs the opportunities and needs to embrace the reality of utilising, profiting and creating wealth from stark and confronting NIL reproduction costs.

That will take a change in the business modelling and most likely a change in mindset.

Valuable Lessons From Product Failures

Product failures, it seems, are inevitable. Steven Jobs, founder of Apple had a refreshingly candid philosophy about the issue:

Fail big, fail fast and fail often.

Indeed, some iconic and global brands are serial offenders, or perpetrators, depending upon your frame-of-mind. No-one, no entity, product or service is immune.

The lessons learnt are invaluable, and accessible to all. Sadly, too few business leaders and marketers are alert and aware of the circumstances, the causes and the often very expensive consequences.

Coca-Cola, justifiably, stands proud and conspicuous among the great brands, companies and marketing entities around the world. A striking endorsement of its worth is the substantial shareholding retained in the parent company by the Warren Buffet-led Berkshire Hathaway group.

Its recent introduction of Coke Life, with stevia as a natural sweetener, has been, reportedly, less than stellar.

Sales in the first 5 weeks of trading throughout Australia achieved an estimated 7 million litres. That pales against a similarly inspired new product development, Coca-Cola Vanilla, which reportedly, registered sales of 14 million litres in the same initial period.

Coke Zero was a success story, with a reported comparative 30 million litres in sales.

A corporate executive stated recently that Coke Life may achieve a 1-2% market share of the Australian cola sector. The statement has the hallmark of a pre-emptive death notice.

What went wrong?

The global sales of soft drinks, cola in particular (which represents more than 80% of revenue in the sector throughout Australia) are declining. Indeed, 2015 will be a benchmark year as the sales of bottled water exceed those of bottled soft drinks.

Those in the key market segment, 30-45 years of age, are increasingly sensitive to weight-gain and obesity. Artificial sweeteners are not appealing and recent academic research has concluded that consumption of artificial sweeteners over an extended period of time can increase its consumers' girth.

Standard Coca-Cola has a long history of appealing to the younger, active youths. They can and do readily “burn-off” the reported 12 teaspoons of sugar in each can of Cola. For the more sedate consumers, that will require a 40-minute run ... calories are like that!

Thus, the potential lure of stevia, the new sweetener, is only a marginal factor in marketplace appeal.

Another issue is the green labelling. Green is not a good merchandising colour for products that are consumed into the body. The late Dame Anita Roddick, founder of Body Shop has a lot to answer for. Her use of green did introduce an acceptance of the colour for products that are typically applied to the body, not ingested.

Green may also be acceptable for BP (British Petroleum) in its implicit and explicit positive message about the importance of ecological sustainability.

BEWARE LINE-EXTENSION

The success rates of line-extended products and services are declining. It is important to be true to the market positioning of the product and the target marketing of primary consumers.

Colgate-Palmolive's entry into the microwave-heated snack market was somewhat less than a resounding success.

It seems that was simply a “bridge too far” for consumers, who were happy to brush their teeth and to clean their crockery with Colgate and Palmolive products but not ingest such. Gulp!

GET IT RIGHT

Good, relevant market research minimises risk and improves the prospect to attain the status of relevance. It does not ensure success.

Projective research, in which respondents are asked to project their actions, buying patterns and behavioural traits, is of questionable value and accuracy.

Steven Jobs declared that is was not wise to ask people what is was that they most wanted, given that which they were not able to presently get. He concluded most people didn't know, had not thought about such, and didn't have the answer.

It was his contention that entrepreneurs should develop products, services and applications, then “tell ‘em” and “sell ‘em”.

HISTORICAL RECALL

In 1975 Coca-Cola responded to the Pepsi-Challenge, in which consumers were invited, to nominate their preferred “blind-tested” cola drinks that they tasted from unlabelled thimbles.

Not surprisingly, over 75% nominated the Pepsi-Cola, with its higher sugar content (reportedly 14 teaspoons per can).

Coca-Cola rapidly introduced New Coke, with a higher sugar content. It bombed. Moreover, it was withdrawn from the market after just 79 days.

The key lesson learnt was that Coca-Cola and Pepsi-Cola are not typically consumed by the thimbleful. A full can of New Coke was just too sweet for its target audience.

The traditional Coca-Cola recipe had been retained and branded Classic Coke. Very appropriate - a classic case study on the need to manage and to meet consumer expectations.

Pepsi-Cola didn't learn those valuable lessons. It subsequently introduced Crystal- Pepsi which was a clear cola drink. Consumers, it seems, knew that real cola drinks were never transparent. The product stayed stuck to the retail shelves.

NO GUARANTEE

Success can be so fleeting.

John Sculley was the Pepsi-Cola executive who led the Pepsi-Challenge campaign. He was lauded internationally for his marketing and leadership brilliance.

Sculley was subsequently recruited to lead Apple. He supposedly conducted a forensic strategic audit of the company. A major weakness was identified ... Steve Jobs.

The founder was sacked. Sales fell, so too did the company share price. New products development dried up.

John Sculley soon joined the ranks of the unemployed. After several years in the corporate wilderness Jobs returned to Apple. It was a key factor in the introduction of iPads, iPods and iPhones.

On a platform of fail big, fail fast and fail often , Apple has become one of the world's highest capitalised entities and a brand leader.

ASK THE RIGHT QUESTIONS

The probability of product/service failure can be lessened if one asks the right questions of the right people.

Arguably, the biggest marketing failure in Australia during the twentieth century was the product of extensive and intensive research.

Leyland, the British-based motor vehicle manufacturer, asked Australians what they least liked about their present motor vehicles.

The findings were resounding. Put simply, the boot (trunk in the American vernacular) was not big enough.

Leyland promptly designed a big boot, attached an inadequate vehicle to it and launched the P76.

Alas, the company lost hundreds of millions of dollars, and is no more.

What questions were not asked included whether car owners would compromise aesthetics, leg room, space and power. Clearly they would not, and did not.

Ironically, the few P76 sedans that remain in Australia command a hefty premium ... good for some quirky individuals, but not for a corporation seeking volume sales.

Misleading Business Statistics

Statistics can be confusing, contradictory and difficult to comprehend.

Single-set figures and ratios can be, and often are, outright misleading.

Take for instance the recent national and state-based retail turnover data that was released by the Australian Bureau of Statistics.

Retail sales for the past 12 months were reported to have increased by 4.3%. Very commendable, on the face of it.

However, that raw data belies the realities of the national, state, regional and local retail sectors. Increasing bankruptcies, store vacancies, widespread rent abatement and peppercorn rental payments are symptomatic of an industry under pressure and challenge.

TRUE MEASURES

Achieving growth in top-line statistics is relatively easy to achieve. Many retailers are implementing such strategies.

Discounting prices by 20%, 30%, 40$ and 50% can do wonders for turnover.

The disturbing downside consequences are evident in appalling margins, profits and financial viability.

Each of the four statistics so far mentioned are not the fundamentals required to be measured, monitored and optimised.

Many businesses, retailers in particular, do not recognise, respect and utilise the three sets of statistics which can, and do, materially influence and improve turnover, margins, profits and substantial finance viability.

EFFECTIVE AUDITS

Increasingly, astute business leaders are looking beyond accountants, advertising agencies and digital marketers to formulate, document and implement strategic marketing and business audits. Seven key statistics highlight the fact that we do not operative in a two-dimensional world or marketplace.

Barry Urquhart

Business Strategist and Analyst

Marketing Focus

M:   041 983 5555

E:   Urquhart@marketingfocus.net.au

W:    www.marketingfocus.net.au

Aldi Under Attack

Well intentioned, but questionable information.

Supermarket chains Coles and Woolworths were recently recipients of some free, unsolicited, public advice from an investment bank analyst.

He proposed that both should attack the smaller, but growing presence of the German-based interloper, Aldi, by attacking the network where it was weakest.

Apparently, extensive and intensive analysis had identified four strategic inadequacies in the market presence of the discount supermarket group. They were nominated to be:

•  Limited product range – around 1350 SKUs (stock-keeping units)

•  Dominance of house brands

•  Lack of partially-cooked and prepared meals

•  Poor customer service

REALITY CHECK

Interesting.

It is not difficult to identify and appreciate the strongest attributes of Aldi. They are:

•  Limited product range – around 1350 SKUs (stock keeping units)

•  Dominance of house brands

•  Lack of partially-cooked and prepared meals

•  Poor customer service

Collectively, they enable Aldi to offer the lowest competitive prices to Australian consumers. In some price-surveys the differences in individual product and basket-prices can typically be as much as 28%, and in isolated instances up to 40%.

Consequently, the advertising and marketing campaigns of Coles (Down, Down, Prices Are Down) and Woolworths (Cheap, Cheap) have been ineffective against the smaller competitor. Put simply, Aldi owns the market positioning of “cheap”.

Unquestionably, Coles has taken the lead in supermarket presence against Woolworths, because of its sustained and expensive advertising theme and campaign.

On balance, it is probably widely recognised as “the cheaper of the two more expensive big chains”.

FIGURES DO COUNT

Since its introduction to the Australian marketplace in 2001, Aldi has grown its footprint among the eastern coast of Australia to number some 350 stores (in June, 2015).

A total of 50 further outlets are planned for South Australia and approximately 70 for Western Australia.

The growth rate appears relentless, reflective of and driven by consumers' acceptance and demand.

CUSTOMER FOCUS

Those consumers who are attracted to the value-offerings of Aldi recognise and accept that the four “strengths / weaknesses” represent the constraints within which they make purchase selections and decisions.

An overwhelming majority anticipate and do visit competing, if not complementary, supermarkets to make “top-up” purchases. They are typically for branded products which are not available at Aldi.

Therein lies the marketing dilemma and challenge for Coles and Woolworths.

At present, and in most instances among a select and growing target audience of consumers, they are second-choice outlets.

That limits scope for impulse and spontaneous purchases. Those stimulants are usually triggered within the Aldi premises.

First choice should be a goal for both Coles and Woolworths, rather than the trading name of a liquor store network owned and operated by one of them.

A fundamental marketing, business and life principle is that it is better and more advantageous to be first, the most preferred and top of the shopping list.

That is best achieved, and sustained, by a strong focus on, say, 2, 3 or 4 strengths.

BATTLEFIELD LESSONS

Military strategies tend to focus on the desirability of attacking the opposition where it is weakest. Identifying, isolating and accurately analysing those weaknesses are imperative.

A wrong call can be expensive, the consequences long-lasting and, all-too-often, the outcome fatal.

Therefore, value must be correctly assigned to intelligence, differentiating it from readily available information.

In this case, what is a weakness and what is a strength?

Objectivity, detachment, considered and informed decisions are called for.

The same fundamentals apply to banks, retail pharmacies, jewellers, financial planners, mortgage brokers and accountancy practices.

BEWARE COMMODISATION

On the fields of battle, and in the prevailing marketplace, there is considerable fluidity. Forces ebb and flow. Contingency planning, delegated authority, integrated communication networks, unimpeded chains-of-command and short supply lines, competitive advantage and sustainable market dominance need to be deployed adroitly.

It is inconceivable, if not improbable, that Coles and Woolworths, responding to advice about the nominated weakness of Aldi would decide to substantially increase the presence and percentage of house-brand products.

For both chains that category has increased in recent years from around 12% to 25% of the product range and sales.

Besides, it can be reasonably argued that it is a strength of Aldi.

Similarly, narrowing or expanding the current product range of Coles and Woolworths to attack Aldi appears, on the face of it, to be meaningless. It is difficult to identify and quantify the purpose and the probable or desirable outcomes.

Increasing the offering of partially-prepared meals should be a decision determined by consumer demand.

Previous attempts to launch, promote, expand and highlight the DIFM (Do It For Me) category, have been met with tepid consumer responses.

The one non-negotiable, acceptable and laudable proposition is enhancing customer service, extending customer engagement and upgrading the total retail experience. That is demanded, expected and will address a prevailing deficiency in many sectors of retailing and businesses- with or without the presence of Aldi.

Care would have to be taken to avoid the temptation to refine the marketing positions of Coles and Woolworth to more closely align with that of Aldi.

Few win in such circumstances, and in the short-term it is the cheapest who comes out on top: Read: Aldi.

Moreover, look over the horizon in the global economy. German discount supermarket group Lidl has just announced its intention to enter the Australian marketplace.

Alas, another guerrilla in this crowded Australian retail battlefield or is it a further Barbarian at the gates?

This situation calls for more strategic thinking, marketing intelligence, leadership, discipline and differentiation... built on, say, 4 discernible strengths.

THE AUTHOR

Barry Urquhart of Marketing Focus is an internationally respected strategic planner, consumer behaviour analyst, author and high impact conference keynote speaker.

In The Know

Big data is big on ... well, data. In other words, information. What it lacks is intelligence.

The leaders of customer-centric entities will fully comprehend these sentiments, and their implications.

It is rare that a consumer or client exclaims: You lack information.

They do, however, repeatedly declare that service providers lack understanding.

Big Data, and data at large, provide insights and, more particularly, overviews on what happens. To a limited extent they can and do offer perspectives on how things happen. Thus, for those who do not have access to Big Data, all is not lost.

However, like surveys, they have innate biases, limitations and differences.

Take for example, on-line after–sales surveys. They appeal to and attract a limited segment of customers, and an even lower percentage of people in general.

Time-poor individuals readily dismiss the opportunity to dedicate 10 minutes or more to complete a survey, with little evident, immediate and direct personally beneficial outcomes.

Time-saving initiatives in survey designs, like providing pre-coded answers, seldom, if ever, provide a complete and meaningful insight. They imply the researcher or the company already know the answers and are simply seeking to assign percentages. If it's communication you wish to promote, then be sure that it is two-way.

NO SHORTCUTS

A meaningful understanding of the needs, wants, values, aspirations and action determinants of customers is derived from a focus on the question, WHY?

Attitudinal (or qualitative) research is invaluable. It complements and adds both data value and meaning to the data which is retrievable from sales, service and call records, much of which is accessible from the cloud and is referred to as Big Data.

External professional researchers can be retained to formulate, document and conduct both quantitative and qualitative research methodologies. Their skills, experience and detachment provide for objective and pertinent analyses and conclusions.

However, that professional input should complement, not replace, the insights and understandings gained from the interactions between internal service providers and customers, clients, suppliers and associates.

GET PERSONAL

Personal, informal interactions offer scope for recognising, responding to, comprehending and influencing a broad spectrum of nuances, perspectives and expressions.

People - customers and clients – feel valued when they are heard, respected and directly responded to.

Relationships are founded and enhanced, trust is promoted and integrity established and sustained when time, effort and resources are dedicated to encouraging and enhancing relationships.

Big Data is one thing. Attention to the little points of detail is another. Remember, little things mean a lot.

INFORMED DECISIONS

The prevailing straitened times ensure that the margins for error are typically wafer-thin. Strategic and operational decisions are most effective when they are founded on well-informed analyses.

Big Data provides invaluable, but only partial information. So too do statistically based surveys. Both provide perspectives on the big picture, even with one-on-one relationships.

In many instances, the findings gleaned from Big Data and surveys identify their intelligence gaps and necessitate engagement with existing, prospective and past clients, to address the issue of WHY?

TRACK RECORD

Those businesses whose leaders encourage, facilitate and support increased interactions between their service providers and customers - external and internal - inevitably enjoy greater sales, customer satisfaction, repeat purchases, referrals and stability.

Specific skills, qualifications and training in research methodologies, practices and analyses can be, and are, readily complemented by the heightened sensitivities of engaged team members.

Those in the know generally seek more, achieve more and are more motivated.

One can never over-allocate time, money and resources to studying, understanding and intelligently interacting with customers. They will ensure that knowledge about the big and the small things is retrieved and can be utilised to refine philosophies, beliefs, policies and practices.

CALL-TO-ACTION

An eminently sensible approach to pursuing more information, intelligence and understanding of existing, prospective and past clients is to deploy efforts and resources to utilise and to integrate Big Data, qualitative and quantitative research and interpersonal interactions and relationships.

The most readily available pool for such is held by staff members. Leaders need to be selective in the questions. Many answers will be forthcoming, so that all will be “in the know!”

Save Face

There is increasing use of brand, product and company ambassadors by companies, governments, professional organisations and not-for-profit entities.

It can be an effective means to enhance profiles, elicit responses, increase uses and generate financial contributions, as well as communicate with select target audiences, at discrete times.

The options available to choose and use a “face for the purpose” seem boundless. Such is the nature of the celebrity era in which we live and operate.

However, the practice is fraught with dangers. Inappropriate behaviour, conflicting values and variable presentation standards on the part of individual and group ambassadors can, and do, have immediate and lasting consequences for the sponsoring entity, product, service or sector.

Look no further than the Australian National Rugby League (NRL) which has been a serial offender or victim, dependent upon your point of view.

Multimillion dollar advertising, marketing and promotion campaigns have been significantly compromised by the behaviour of and the circumstances surrounding chosen high profile players. Read: brand-damage.

International gold-medal swimmer, Stephanie Rice experienced the immediacy of public and sponsor responses to what many considered where inappropriate tweets about her then beau, Rugby Union Wallaby player Quade Cooper.

Her use of a three-star luxury imported German motor vehicle was withdrawn. Hurt was inflicted on a lot more than emotions by the instance.

More recently, the Australian Federal government, through the bureaucracy and its external advertising agency, appointed media identity, scientist and academic, Professor Karl Kruszelnicki to be the face, voice and presence of an expensive, extensive and intensive multi-media campaign, “The Challenge of Change”, to promote the virtues of the the 400 plus pages Intergenerational Report .

Karl's satirical statement was louder than his voice. It did grab attention, if not induce the masses to seek out, read, comprehend, embrace and support of the projective text.

It then emerged that after accepting the brief, the commission and the very substantial fee, Karl had not read the full report. Hardly a positive reflection on an established scientist.

Dr Kruszelnicki then publicly distanced himself from the report because, in his assessment, there was insufficient emphasis given to climate change.

Brand-damage has been inflicted on the Australian Federal government, the bureaucracy, a specific adverting agency, the report itself and on Dr Karl.

The resultant publicity generated in this case study was substantial, immediate and lasting. Sadly, much of it was unfortunate, negative and compromising.

It should be a lesson well learnt. The criteria applied in the selection of ambassadors must necessarily extend well beyond past and present achievements, profile and the capacity to be an effective mass – and multimedia communicator.

Consistent, compatible and integrated values, beliefs and philosophies are fundamental. There should be no gaps between those of the sponsor and the ambassador.

A further consideration on this topic is the use and profiling of business owners and managers.

In the former case, the issue of succession planning is very pertinent. Retention of an individual's name in the corporate identification package, whilst using next-generation family members in mass media advertising considerably lessens the impact and relevance of the communication.

That is self-evident with a national tyre retail group and several motor vehicle dealerships. There is confusion about who is the image-maker, the ambassador or the advocate.

The typically short tenure of senior office-bearers in corporations raises questions about the advisability of utilising such individuals as the public face of an entity, a product, a service or an application.

Mortality is a reality, particularly in marketing life cycles.

Ambassadors are usually best employed for time-specific tactical initiatives and campaigns. That is, for intra-generational campaigns rather than for the promotion of inter-generation projections.

Their selection warrants the investment of considerable time and contemplation.

THE AUTHOR

Barry Urquhart of Marketing Focus is a consumer behaviour analyst, business strategist and former university lecturer and organisational behaviourist.

He is an internationally recognised and respected conference keynote speaker and business development workshop facilitator.

What Industry Are You In?

It is a great question. It is challenging, confronting and often affronting. Contemplation on that fundamental point often leads to reviews, reflections and determinations on the current business model.

Corporate history is littered with examples of economy-leading and dominant sectors and entities rapidly becoming redundant and irrelevant.

In the early 1900s railways confronted a significant change in the competitive landscape. Motor vehicles and societal mobility necessitated a change of track, so to speak.

More recently, the appeal and presence of 6-and 8-cylinder “gas guzzling” family motor vehicles have been impacted by the sophisticated innovations of high-powered 4-cylinder vehicles and the ubiquitous SUVs (Sports Utility Vehicles).

Light bulb manufacturers have had to gear up and retool to embrace technological change. And what of the humble printing machine. 3-D has been a revolutionary addition to printers, manufacturing and medical implants.

Bicycle-powered couriers, who were once conspicuous in most cities are, today, a mere fond memory.

Charge-card services like American Express are exposed, threatened and losing appeal. At least five significant mobile payment systems, including those being promoted by Apple, Google and Facebook are in advanced stages of development. Many people and business will reasonably ask why they should retain and accept charge-cards, like American Express.

How ironic! Kodak, the very essence of traditional photography, developed digital photography. The company did not readily and quickly embrace the concept. That was left to competitors and, more significantly, substitute entities, including electronic and mobile phone manufacturers. Modern photography is not reliant on silver and paper-based reproductions. It is a whole new industry.

Protecting long-established products, practices and applications can be laudable. It can also be ill-advised. Recently, Kodak had to seek and to secure Chapter 11 Bankruptcy protection in the United States of America, to enable it to continue to trade. There is a long return journey to be negotiated.

And now, the august institution, Australia Post, has heralded a pending 43% increase in postage costs for letters from 70 cent to $1:00, with a lengthening in delivery times from “next day” to 3 days.

Can and will post ever effectively compete with - and, possibly beat - emails, texts and the spoken word? Efficiency, effectiveness and cost comparisons imply it is a formidable challenge.

In recent times Australia Post has been progressively refining its business model. This is evidenced by the introduction of digital post office boxes, and the broadening of the product/service mix available from Post Shops. The typical range totals some 1300 SKU's (Stock Keeping Units), of which fewer than 60 relate to postal and philatelic merchandise. That is around the same product range as an Aldi discount supermarket.

A significant growth in the home deliveries of products purchased on-line reflects the dynamics of the prevailing market forces. And yet, on-line sales still only represent 6.3% of total resale sales.

The cascading effect on the supply chain highlights the importance of logistics and distribution.

Little wonder that Japan Post has recently lodged a reported $6 billion takeover for Toll Holdings, Australia's largest logistics company, with operations that extend throughout Asia. That is a pending threat to the presence and dominance of Australia Post within Australia.

Future enhancements in nano-technology will inevitably result in smaller products' services, applications and, yes, businesses. Prices too, will become smaller. Increased productivity will result in more free-time and better timing. Skill-sets will vary.

CONTEXT OR CONTENT

The true measure of relevance of a company, product, service and application is often determined by its “fit” to the marketplace.

That is, the context, which can be, and often is, more important and influential than the content.

Indeed, the former can and does impact directly on the latter.

For instance, are postal services redundant to most? Some 98% of mail-usage is generated by business and public sector entities complying with regulatory obligations and practices. To many the service offering that is not pertinent, nor applied by individual consumers.

Therefore, why persist with the trading name:

Australia Post

It is as relevant as Post and Rail Fencing is to urban residents. What does it all mean?

STRUCTURAL CHANGE

These case studies are further evidence that the changes being experienced at present are not seasonal or cyclical. They are indeed structural.

It behoves all business owners and leaders to reassess and redefine:

What industry are we in?

The answer will inevitably evoke a lot of questions ... and changes.

So You Want To Be An Entrepreneur

“Windfall” wealth and profits do not an entrepreneur make.

Windfall events are welcomed and rewarding for those who are blessed with them. The nature, emotions - and probabilities of such windfalls are similar to winning lotteries, tote and lotto.

Entrepreneurism is an entirely different scenario. It is not a product of accidental or fortuitous good fortune – if you will pardon the unintended pun.

At this time Australia, New Zealand, Britain, North America – indeed, the world – needs more entrepreneurs.

Fostering, supporting and endorsing the endeavours of genuine entrepreneurs rewards many. Why? The very essence of an entrepreneur can best be expressed as:

With vision and commitment, to create wealth and generate employment, for the betterment of all.

GO FORTH, BOLDLY

Many business leaders and Boards of Directors are understandably timid, sensitive to and exhibiting a low tolerance for risk.

This pervading attitude is having widespread impact on new product development (and investment), growth, improvement and productivity enhancement.

Debt levels are being lowered, and reliance on bank funding is conspicuous.

The current state of the marketplace can be best and most accurately described as:

DEPENDENT

Decisions are being made and policies are being implemented, dependent upon positive cashflows, guaranteed pre-orders and approvals from lending sources.

True entrepreneurs, those who have established positive track records of success, exhibit a strikingly common characteristic, being:

UNCONDITIONAL BOLDNESS

They typically do not seek or are reliant upon the permission of those who are external to their entities.

Looking over one's shoulder for permission, approval or endorsement takes the eyes and the focus off the customers, clients and opportunities.

ENTREPRENEURISM CLUSTERING

Extensive and intensive study and analysis of the umbrella term, “entrepreneur”, has led one to conclude there are four strata, categories if you will, of these people. One sweeping general conclusion is that most individuals who describe themselves as entrepreneurs are, in reality, not.

ENTHUSIASTS

The entry-level strata is numerically the largest, possibly around 70%.

These individuals are the Enthusiasts , who posses abundance of energy, exuberance and expectations.

They are excited about the term entrepreneur, the concept and the perceived benefits, advantages and rewards.

Like comets that enter the Earth's atmosphere, they generate a lot of heat and light, before quietly burning out.

They typically leave little trace or legacy.

CREATIVES

Creatives represent around 15% of the targeted population. They have a creative idea, but no actual product, service, application or entity.

Creatives are deficient in their capacity to transform ideas to an income-generating, needs-fulfilling reality.

The essentials of capital, operating capacity, logistics network and infrastructure are mere entries on rudimentary business plans and spreadsheets.

Above all, these individuals typically need input from experienced, qualified, caring, supportive and understanding professionals who have the capacity to provide a master-plan of sequential steps to the market.

Many creative ideas, probably more than half, do not develop beyond the cerebral energy of the creative visualisation.

INNOVATORS

Innovators are the survivors from the attrition process of many enthusiasts and creatives .

They have usually invested considerable time and available (but often limited) funds into the production of a model, system or application.

The world awaits, together with the potential for profits, wealth, success and development.

However, there are barriers, filters and impediments to be negotiated, addressed and redressed. Not the least of which are adequate capital, operating capacity, integrated infrastructure, extensive logistical network, a retail presence and, most important, a marketplace which is willing to pay.

It is at this time that many innovative entrepreneurs are distracted, overwhelmed and relieved of considerable funds by patent professionals, lawyers, funding intermediaries and quaintly titled “Angel Investors”

Few of these spheres-of-influence have the skills or make promises to progress or to expedite the development of the product, service, application or entities. The ideas are often overwhelmed by the process.

Innovators soon learn to recognise that many from whom permission, approval and tolerance are sought are necessary, but not essential to success. The future is not determined by the ability to comply and conform.

Little wonder that so few innovators and creative ideas reach the marketplace in the first instance.

ENTREPRENEURS

Genuine entrepreneurs total no more than 5% of those who claim, or strive for the title.

With “unconditional boldness” and driven by self-belief in their vision, complemented by an uncompromising commitment, entrepreneurs do create wealth and generate employment, for the betterment of all.

There is little or no socialistic idealism in that statement. At best, they are first among equals; they revel in power, authority and the exercising of personal choices.

Evolving philosophies and models, centred on emotional intelligence, social responsibility and even philanthropic corporate behaviour can be embraced - but only as addendums.

The six fundamentals of sustainably successful entrepreneurs detailed in the book The Jindalee Factor retain their relevance.

Being “non-competitive” is an imperative, whether it is by a negotiated exclusivity clause, like that of the 20 years for the Perth's Crown Casino, or by overwhelming market dominance.

“Planning long, managing short” reflects the importance of strategic malleability and tactical financial prudence. Cashflow is second to none. Too many past, fallen entrepreneurs did not recognise or respect the fact that when they run out of cash, they run out of time and usually run out of business.

CONCLUDING COMMENTS

So you think you are, or intend to become an entrepreneur. Undertaking a scenario planning exercise is an appropriate first step.

Knowing the destination – entrepreneurism - is one thing. Establishing the starting-point and determining the pathway to success are essential prerequisites.

Be Careful, And Sensitive....

BE CAREFUL, AND SENSITIVE...

•  SEGMENTING

•  CATEGORISING

•  STEREOTYPING

Differentiation is an important concept in marketing.

So too are segmentation and categorisation. However, each can have a limited, and in some instances, a limiting role to play.

Like most things, the initial principles and applications are being progressively superseded and rendered obsolete. It is a common phenomenon in the current dynamic, digital marketplace.

Intimate knowledge of one's customers and clients is a marketing imperative.

Evolution, sophistication and information (data) explosion have been instrumental in the eclipsing of many previously sound management, marketing, selling, service and interpersonal relationship practices, including market segmentation.

The study of demographics is a case in point. Today, access to information on the age, sex, occupation, education standards and residence of existing, prospective and past clients and customers is, today, inadequate.

A more comprehensive, multi-dimensional profile improves the capacity for effective target marketing. It in turns enables, and influences, the determination, nature and content of communication. However, care and sensitivity is needed to avoid inadvertently precluding potential prime customers and clients.

It is prudent to be aware that many chronologically older individuals pursue and enjoy young lifestyles. The use of social media and e-commerce channels among consumers aged 50 years and older is more pronounced than thought by many. Similarly, an increasing number of younger consumers are discovering, exploring and enjoying music and fashion from the 60's, 70's and 80's decades. Look no further than the surging sales of vinyl records and vintage style stereograms. Old is new!

To ensure effectiveness in all marketing endeavours it is now important to avoid overly simplistic market segmentation, categorisation and stereotyping. Each can, and does, impact on sales generation, revenue stimulation, as well as the establishment and maintenance of sustainable, profitable relationships.

Overt and often unintended nuances in written, spoken and visual communication alienate potentially prime and profitable target audiences. Existing and prospective relationships are fractured because of what are received and perceived to be, slightss, offensive statements and inappropriate premises inherent in key messages. It is indeed a complex world in which we operate. Financial planners may well ponder what the label ”High-Net Worth” individuals really means. Does it mean the same to prospective clients who have funds to invest, but don't feel they qualify to be included in the category “High-Net Worth”? Many messages will be needlessly lost.

Marketing campaigns and strategic plans can readily miss out on customers based on shallow, often historic and traditional images, profiles and stereotypes.

Talk-back radio is a fine example. The typical audience demographic centres on the age distribution of 55 years- plus. However, the often unrecognised potential which exists with the 30-year-old and younger consumer group, represent immense, untapped potential.

A similar case is the emphasis by advertisers who are keen to connect with the “high-spending” 25 to 54-year-old age groupings on free-to-air television channels. The innate contentions are simply too black-and-white for communities that live, operate and buy in differing shades of grey.

Technology, innovation, digital enhancements, social media and the internet have individually and collectively, fragmented communication channels and consumer groupings. Micro-focusing on market segments can inadvertently fail to recognise value and miss out on a host of prospective new customers, clients and spheres of influence.

The value of all business philosophies and practices is largely determined and influenced by measures of relevance in marketing. It is as important to broaden the relevance of the messages and promises of benefits and advantages of products, services, entities and people as it is to be precise and to focus on the narrower target-marketing of all endeavours.

Therefore, when undertaking market segmentation, categorisation and stereotyping do so with care and sensitivity.

Extreme? Not Necessarily

First, think of the consequences.

“Extreme discounts” do attract widespread attention, can generate increased sales and revenue in the short-term and therefore, for specific time-periods, have the capacity to redirect traffic flows.

But the tactic is fraught with potential intermediate-to-long-term brand damage consequences. Questions about profit margins and value are understandably raised in the minds of many existing, prospective and past customers, along with those in the media and other spheres-of-influence.

This is particularly so for commodities like retail petrol, which too many is a non-emotional grudge purchase. Responding customers will take advantage of $1.00 a litre petrol prices, as recently offered in metropolitan Adelaide (in contrast to the prevailing $1.51 per litre standard retail price), but the prospect for repeat business and loyalty is scant.

For the right reasons, and for appropriate events, “extreme discounts” are effective in exposing companies, premises, products, services, periods, brands and models to a broad cross-section of new prospective clients and customers. They can be pertinent for the introduction - or for the deletion - of brands, models, colours and the like.

Compensating full profit-margin offers and transactions are, or should be, integral aspects of the total strategy and value package. Remember, someone must pay the piper.

BRAND POSITIONING

‘Extreme Discounts” can promote and establish high profiles for business, product and service names.

However, when poorly executed and too-frequently conducted, the brand can be, and often will be, inextricably associated with and be positioned by reference to the offer of extreme discounts.

Cash-flows will rapidly recede and dry up between “extreme” events.

The parallels with an over-reliance on the conduct of “sale” events are ominous.

IT DIDN'T HELP

Among the first advocates and adherents of “extreme discounting” were the department stores.

Featured among the post-Christmas sales offerings were a limited number of $50.00 television sets, refrigerators, lounge settings and dining room suites.

Only a very few of the teeming thousands of consumers awaiting opening hours for those ”door-buster” bargains went home happy and fulfilled. For most it was an unrewarding experience, with long-term adverse relationship and reputation consequences.

Moreover, for the department stores, it did little to enhance their images, appeal and economic viability.

Electronic appliance retailers learnt similar lessons, - to their own detriment.

POSITIONING BASE

It is important that the integrity of the brand name, be it company, product, service or premises, be respected and protected. Therefore, it is best that extreme discounts be associated with the positioned against special and date-specific events. When seasons are too long the possible flow-on consequences are too great.

These events can include generic occasions like “Cyber Monday” (late November) or Halloween. This tactic will ensure that there is minimal or no carry-over from the expectations and images of huge price reductions.

BE PRUDENT

“Dare to be different” is a challenge accepted by many. “Pushing the envelope” is another philosophical stance which can and often does lead to innovation, creativity and change. Both are relevant to the concept of extreme discounting, but do need to be applied with some degree of reserve.

EXTREME IS RELATIVE

A key lesson often learnt and widely forgotten during the past decade is that the measure of “extreme” is relative rather than absolute.

Prior to the turn of the century discounts of 15% and 20% were considered substantial and attractive. New, disruptive policies that were introduced changed the focus from post-Christmas sales, to pre-Christmas savings of up to 50%.

It did have an impact among consumers, not the least of which was educating consumers to expect, and then to demand 40%, 50% or 60% incentives. Once such inducements would have once been considered extreme. Not anymore. “Extreme” means 70% or more. Where does it end?

Being extreme can, and does have, extreme outcomes ... often not all are positive.

Execute - Or Be Executed

A strategy is only as good as its execution.

Indeed, in war - and in the boxing ring - the best of strategies can be, and often are, forgotten once the first shot is fired or the first punch is landed.

Strategies must be formulated, documented and implemented within the framework of philosophies and detailed mission statements. They should be structured, and based on the best available intelligence.

Realistically, much of the intelligence is only unsubstantiated, and often fractured, incomplete information.

Therefore, many strategies are flawed, - often fatally.

Moreover, they need to be malleable.

A common deficiency is the lack of detailed scenario planning. Perhaps, that should be refined to read:

SCENARIOS PLANNING

The process of identifying, isolating and analysing a range of probable, possible and unlikely scenarios enables the development of contingency plans.

FORESIGHT

Some people wish to see into the future. Others desire to live there.

The sobering reality is that we live, operate, plan and visualise in the here and now.

At best, we can anticipate, plan and prepare for the future, and ensure we have sufficient and appropriate resources available for deployment to enable us to fulfil our vision, strive towards our goals and to sustain our achievements and standards.

EXECUTE - OR BE EXECUTED

Proficient execution of strategies increases the prospect and scope for success. It does not, however, guarantee favoured outcomes. There are simply too many variables, some unforeseen.

Moreover, in the contemporary marketplace, circumstances and forces are in a constant state of flux. The very premises on which strategies are formulated, documented and implemented need to be progressively monitored, and most probably refined.

Variations in one strata of strategic plans necessitate change in others. Thus, the intent is to maintain consistency and compatibility between goals, objectives and targets.

However, care must be taken to avoid “paralysis by analysis”. Wars are only ever won when there are troops on the ground to claim and protect territory. Business is much the same. Presence is a fundamental influence in determining sales, profits, margins, market share, image and loyalty.

Many strategies fail because the orientation is attainment of specific goals. Astute strategies detail actions, risks and consequence beyond goals – because time is a key element in planning, marketing and business.

US. General George S Patton was a brilliant strategist in World War II. In 1944, his army was the first to reach the German homeland. His dictate to officers in the field was that he did not want to receive advice that they holding territory. The strategy was centred on the need to, and imperative of, advancing.

Authority and responsibility were readily delegated. Officers responded accordingly in their execution of the directive.

It was a good strategy, well executed.

KEY POINTS

•  Review, refine and recommit to the overriding philosophy.

 

•  Determine, formulate and document a specific targeted and time-specific mission.

 

•  Ensure scenario planning has been undertaken to identify, isolate and analyse probable, possible and unforeseen circumstances, forces and necessities.

 

•  Script and structure an integrated strategic plan, detailing goals, objectives and targets.

•  Ensure the strategy is understood and endorsed by all contributors.

 

•  Execute the strategy in a timely fashion.

 

•  Monitor progress; where necessary, refine and up-date the strategy, and above all, maintain momentum.

Socail Media and Digital Stifling Creativity and Originality

To be ranked in the top echelon of social media and among SEOs (Search Engine Optimisers) companies, brands, products and services need to comply and to conform.

Being part of the norm is the one way that algorithms, which recognise nominated key words and therefore determine the ranking on the internet, conclude overall absolute and comparative rankings.

Originality, creativity and “daring to be different” are the losers.

So too are consumers and clients: There is increasing recognition that marketing, selling, promotion and broader communications are being commoditised, for the sake, and in pursuit of high rankings in the social media and digital worlds. Boring.

Another conspicuous consequence is the inappropriate and incomprehensible use of certain key words. Algorithms recognise words, they cannot and do not comprehend meanings and respect contexts, nuances and reference points.

OPENING THE DOOR

A key and fundamental role for social media and online presence is to “drive” prospective customers to websites, premises or doorways. This reflects a very fundamental shift in the nature of “window shopping”. A majority of people now do it on-line.

However, it is important to note two pertinent features of the current marketplace:

•  Many “on-line visitors” are not qualified prospects. They represent the trend to mass non-discriminatory volume.

•  Some 65% of purchase processes which are commenced on-line are abandoned on-line. “Abandoned shopping trolleys” proliferate cyberspace. Where are those trolley-boys when you need them?

DEVELOPING THE SALE

Transition from an unqualified, but connected suspect who has entered your digital realm to a better qualified prospect can be, and often is expedited by creative, original and different graphics, merchandising, packaging and word usage.

What is lacking in many instances is a lack of integration between the key words and graphics.

CLOSING THE SALE

Nothing original here. Someone or something needs to effect closure of the sale.

The human quotient remains the most effective, efficient, perceptive and flexible means to recognise opportunities to increase the scope of the transaction, and the optimal time of when to conclude the deal.

By necessity and nature social media and digital marketing processes are pre-structured. That presupposes the designer is aware of all contributing factors – that is an unreasonable stretch.

COMPLEMENTARY CONSIDERATIONS

Once again, the principle that technology and social media should complement, not replace human beings is highlighted and reinforced.

There are few, if any things that are more creative, original and different then people. Moreover, it is they, not algorithms that recognise, respond to and enjoy that which is creative, original and different.

Liked, But Not Bought (Hit, and Miss)

So you're “liked”. So what?

Many people are just not buying it.

The perennial pursuit in social media of getting maximum numbers of hits and likes seems meaningless in business ....-unless and until such time as they are converted into sales, revenues, profits and dividends.

Getting people to register a “Like” on Facebook, Twitter and Linkedin is difficult. Even harder, and less frequently achieved, is to conclude a transaction as a consequence of a “like” being entered.

Raw numbers often cloud the underlying reality. The art of target marketing is often overlooked in social media. Volume too often overrides quality.

A “like” may progress a person from being “unaware” to a state of “awareness”. They may even develop to a sense of “recognition”. Some of those who “hit” could even elevate their “interest” to that of “seeking out” a name, a brand, product, service, company or individual.

However, before them lie the progressive stages of “trial”, “purchase”, “preference”, “re-purchase”, “refer”, “recommend” and “advocate”. Ah yes! The exultant state of being a committed, loyal, expressive and assertive “brand/product service ambassador”. However, that is some distance from a casual, easy-to-apply register of a hit or “like”.

JUST REWARDS

Increasingly, digital and on-line marketing agencies are negotiating or are being made to negotiate remuneration packages based on performance.

The most appropriate and meaningful key performance indicator is established on conversions to sales, to profit margins, gross or net profits and, in rare instances, to dividend payments.

LESS IS MORE

Many astute business leaders and marketers are happy to accept fewer hits and likes, in favour of higher relative and absolute conversions. You can bank on that!

ATTENTION GRABBING

Against the tide of calls for more and more hits and “Likes” some discerning business leaders are happy to attract less attention in favour of more profits.

In the contemporary marketplace visibility and high rankings on Google, Twitter, Facebook and LinkedIn do not depend on Search Engine Optimisers (SEOs).

Repeated and conspicuous use of the following marketing words will attract the attention of algorithms embedded in computers, technology software and search engines:

Innovative   Easy

Exciting   New

Cheap   Substantial

Quiet   Yes

  Now

Attracting the attention of customers, clients and consumers is quite different to generating patronage and payments.

But the words listed above have become passé. They have been commoditised by over-use and are considered bland, ineffective and in some instances, insulting by many of the consuming public.

So much for the mantra:

Big, Bigger, Biggest

Good, Better, Best

Cheap, Cheaper, Cheapest

Fast, Faster, Fastest

In the recent past it was a hit. Today, it is a miss.

TARGET THE RIGHT MARKETS

Put simply, marketers are reverting to the principle of “Ready, Aim, Fire”. The intent is to limit hits to the ....

BULLSEYE

In doing so, they are being diligent in avoiding:

BULLS HIT

Hype and High Water

Market bubbles, busts and waves have a common element – hype.

When emotions, rather than fundamentals are driving the marketplace it is time to take pause, and stock.

Now is that time. Clearing the inventory of current marketing, price, merchandise and promotional strategies is sage advice.

Reassurances that high prices are founded on solid foundations, all too often are devalued when those pillars turn to quicksand.

It is reassuring to some when commentators and analysts have “skin in the game”. However, when rewards and revenues are determined by transactions, counter-balancing information and intelligence sources should be used.

The current sets of global, national, regional and sectional markets are, to varying degrees, being artificially stimulated. Record low interest rates have primed stock markets around the world, residential property prices and new motor vehicle sales. They have equally influenced the movement away from liquid funds (cash) and investments in government bonds.

Quantitative Easing in the United States of America (best termed as “printing dollar bills”) has contributed to a lowering of the value of that currency and to “hyping” of others, including the Australian dollar.

Each of these factors and influences is contributing to the environment in which individual entities operate. Little or no control can be applied by business owners Boards of Directors and management teams.

Little wonder that many feel as though they are like a cork bobbing around in a volatile ocean of competing forces.

Therefore, most benefits will be derived from focusing on those aspects over which control and influence can be exerted, and exploited.

TAKE CONTROL

In the contemporary global digital, on-line and connected world “hype” is transparent. It is readily and promptly identified and dismissed, along with associated products, services, brands, companies and individuals.

ESTABLISH VALUE

Establishing value in the minds of existing, prospective and, yes, past clients is quite another thing, and in relative terms, can be achieved promptly, effectively and inexpensively. No hype is required.

Determining, and applying relevant buying criteria can and does effectively reposition the product, service, company or brand into a favoured competitive presence. Competitors are simultaneously repositioned to less-favoured profiles.

Take for instance Volvo motor vehicles. For a long time they enjoyed a “premium” standing on the issue of safety. However, one consequence was a market skewing of customers to older, conservative age groupings.

In recent times Volvo, now under Chinese corporate ownership, has entered and won V8 motor racing events in Australia. That has caused great anguish among the ailing Holden and Ford brand names.

It is fair to say that Volvo has added more “grunt” to its marketing, advertising and product range. The impact and consequences are self evident. Sales have increased.

A similar set of lessons are being learnt, albeit slowly, within the taxi industry. The global introduction of the UBER mobile booking application is revolutionising hire transportation, including taxis, limousines, and public transport, ferries and buses. Look out for the pending arrival of driver-less autonomous vehicles!

The internet, social media and digital technology have democratised the market place. Centralised government control, policing and protection are simply not possible, and for many, not desired.

Taxi networks, and individual drivers, will need to hone, and in some instances, introduce, set-price policies and personal “safety” measures to satisfy the expectations of customers.

Long-established practices and rules are today redundant. Consumers are applying new criteria in their purchase decisions. Moreover, they now have at their disposal a comprehensive network of information and intelligence on which to make informed decisions and value judgements.

DISCOUNT DISCOUNTING

The recent “reporting season” of Australian public listed companies projected one clarion-clear message from the airlines.

Qantas reported a loss of close to $3 billion for the past trading year. Virgin Australia, a much smaller entity, recorded an annual trading loss numbered in the hundreds of millions.

Both airlines have increased their passenger-carrying capacities and have undertaken deep price- discounting.

Qantas may well have retained its 65% market share of domestic Australian travel; at what cost? The hype of enjoying such a dominant market share cannot be banked. That is just one of the dividends that the airline must address.

The advertising theme and promise of “We can't be beaten on price” has become one-dimensional. Other criteria are needed to attract attention, patronage, loyalty and an appreciation of value.

SCOPE EXISTS

Accountancy practices, legal firms, plumbers, home builders, real estate agents, financial planners and engineering companies are fast learning the need for, and the benefits of developing, promoting and applying new selection criteria which are devoid of the unnecessary and ineffective hype.

It is often difficult to fulfil the promises of “Bigger, Better, Faster and Cheaper”. Besides- who cares?

Educating prospective and existing clients and customers on what bases value judgments and purchase decisions should be made is relevant, rewarding and appropriate.

The time to act has arrived.

THE FIRST STEPS

Introducing multimedia, omni-channels, digital marketing and social media to communication strategies is no longer an option. It is imperative.

However, to achieve optimal impact and to achieve increased revenue generation, it is essential that the messages have no (or minimal) hype, and a relevant, compelling set of purchase criteria.

In this instance, it is the content, not the channel that needs refinement.

Building A Better Business Model - Not Mouse Trap

Oh my, how things have changed, and continue to change!

Since August 1962, when J.C.R. Licklider of MIT, (the Massachustus Institute of Technology) first wrote a series of memos about his “Galactic Network” (which would evolve in the internet), the rate of change in technology, communications and business has accelerated.

The correspondence and date-line have proven to be significant benchmarks. Changes have been effected in all manner of ways in which we live, interact and do business.

OUT-DATED BUSINESS MODELS

Sadly, many business leaders have not updated and made relevant the business models of their operations. The consequences are palpable.

Bankruptcies and failures are increasing in volume and value across a broad cross–section of sectors, professions and regions. Look no further than retail pharmacies, newsagencies, fashion wholesalers and outlets, mining industry contractors, business consultancies and coaches and the taxi industry. Mining companies have not been immune to the trend.

Being out-of-step and out-of-date are the initial steps of being out-of-business.

THE EVOLUTION OF RECENT CHANGE

The August, 2008 onset of the Global Financial Crisis (GFC) heralded the start of an intriguing 3-phase global change-process for commerce and government.

Embarrassingly, the then Australian Labor Federal Government, and its arguably first-ever financially illiterate Federal Treasurer, declared that the nation had avoided the fallout of the crisis.

They were clearly wrong. The “cash-splash” handouts from the Treasury simply delayed the inevitable.

The journey has been interesting. The lessons learnt invaluable. The steps have been progressive ... as detailed below:

PHASE 1 – EFFICIENCY

Cash-flows and confidence throughout the world were quickly impacted upon with the collapse of Lehmann Brothers, in the United States of America.

Profit margins were soon under pressure. Cost ratios increased as a percentage of turnover.

Focus was promptly given to the call for “cost cutting”. Staff numbers were reduced. So too were inventories.

The consequences quickly registered along the extended supply- chains.

Within entities the ranks and tiers of management were aggressively thinned.

“Lean and mean” became another common catch-call and in some instances a badge of honour.

The measures of appropriate cost-containment were subjective, and often difficult to quantify. In many instances the “knives and axes” were applied too “liberally”. Cases of corporate- anorexia became conspicuous. In essence, the corporate body was feeding on itself and was deteriorating, often with terminal consequences.

An example: Only now are some business owners and managers negotiating new and lower rental structures for retail, wholesale and manufacturing premises.

KEY LESSON:

One should be in business to make money, not to save money! Stay focused on the appropriate, positive and longer-term outcomes.

PHASE 2 – EFFECTIVENESS

Following countless rounds of cost-cutting and crisis meetings for team members, emphasis was then given to improving effectiveness.

Many business leaders were sufficiently discerning to identify that their businesses had aged, become calcified and were inflexible.

Restructuring was suddenly in vogue. Silos were dismantled. Organisation charts redesigned, made flatter and more malleable. Departments were relabelled to be “tribes”, “camps” and “clusters”.

Any unsettling of internal confidence and stability was countered with positive feedback of the new approach from external suppliers, associates, customers, clients and channels.

Previous hierarchical rigidity was broken down. Authority and responsibility were delegated and warmly embraced by team members who had long desired the capacity to exercise control, power and choice in how they did business.

In short, business was better for many, and not solely measured by financial returns.

However, competitiveness, particularly on a global measure, was still found wanting in a high percentage of circumstances.

KEY LESSON:

There is always a better way. Find it.

PHASE 3 – PRODUCTIVITY

Once costs and structures had been reviewed, refined and developed attention needed to be redirected to productivity

Volume and velocity can be, and are, both a cause and a consequence of competitive advantage. Moreover, they are rewards that can contribute to sustainable leadership, progress and development.

Fixed costs (of doing business) are rapidly reduced in relative (to turnover) terms. Variable costs do truly evolve into being marginal costs.

Profit, margins and dividends escalate into being attractive and rewarding.

Businesses that have progressed to this phase are few. For some it seems to be a step-too-far. The prospects and outcomes of increased volumes and velocity are confronting, possibility challenging.

Now is a good time to commence the journey.

KEY LESSON:

Individually and collectively, simplifying processes, structures, policies, attitudes and work habits has a huge impact on personal, group and entity productivity.

Attracting and Retaining Great People

Great people.

They are attractive, appealing and valuable assets to any business. They are like magnets, attracting great fellow workers and truly great customers. However, they are often hard to find, identify, recruit - and to retain.

The adjective “great” is emotional-based, difficult to quantify and almost impossible to blanket-apply to a team of people. When recruiting, it can only be properly understood and applied in a context that reveals the culture of the enterprise.

Consequently, the search routine for “great” people is typically random, inefficient and generally well short of being disciplined. Identification through networks is compromised by mateship and questionable values applied by mutual associates. There are only occasional instances of the “meeting of the minds”. Questions arise as to a true and accurate measure of “great”. Questions remain as to how accurate was the title “Alexander the Great” (and whether he was Greek, Macedonian or a Serb!!).

LOOK NO FURTHER

The time, money and resources allocated to sifting through job applications and prospective recruits are usually considerable, often do not represent value and may not prove to be rewarding or, indeed, successful.

No-one knows better the presence and quality of “greatness” than the individual. Self-image is a key and fundamental component of self-determination.

In employment advertisements and placements a refocus from the position to the person is a scenario that parallels the substantial and significant progression from the sales to the marketing philosophies and disciplines.

The bold and challenging statement and declaration that an entity is seeking a “special” or “great” person – in advertising and conversations – triggers an intriguing process.

In the first instance the number of applications received falls appreciably; the overall quality of those applicants who do apply is high.

Typically, the interviews and interactions are interesting and challenging. After all, “great people” want to work for, and with great businesses, bosses and peers.

Individually and collectively “great” people have a presence. They generate a sense of energy and urgency.

The resultant culture and ambience are, well ... great.

A DESERVING LABEL

Expectations of and by “great” people are high, generally dynamic, and very personal.

Recognition of, and respect for the individual are imperative.

Elitism is not desirable nor typically functional. Therefore, great should be the norm, not the exceptional.

Moreover, “great” people are inclined to attract other great people. High-achievement becomes a base-benchmark.

KEY ATTRIBUTE

The specifics and presence of greatness are not conspicuously evident in curricula vitae. Who would be so bold!

There is no university subject or course on greatness that we can study and graduate in ... although experience suggests that there are differing grades of greatness.

Far too often, those identified as possessing the potential for greatness, regardless of the endeavour or pursuit, falter and fail to make the subjective grade. It is not an aptitude, with pre-determined dimensions.

Rather, greatness is an attitude, a self-belief which is articulated in so many ways, often non-verbal and subtle.

Others sense when they have been or are in the presence of “greatness”. It is a good feeling and promotes a want to belong and to remain.

NO RULES

Most, not all, “great” people don't need rules and policing to ensure compliance and conformity. Those simply limit the potential for, and fulfilment of greatness.

The positive alternative is to provide parameters within which people strive for and achieve their consistent optimal performance. Explanations of “why we do the things we do” promote and facilitate understanding and commitment.

Ongoing, prompt and genuine recognition and reinforcement are valued by all and contributes to cohesion, malleability and ensures dynamism, growth, and development.

Like many things in life, the essential component is the context rather than the content.

Managers seek to control processes and related inputs and costs. They find it difficult to exercise control over “great people”.

Leaders focus more on influencing and enhancing values. They facilitate individual and collective growth. Each is an integral component of the art of retaining the right and “great people”.

Above all, high achievers – whether they accept or embrace the tag “great” – set reasonable goals and contend that have much to contribute.

Their involvement is fundamental to retaining a culture of greatness and “great people”.

Customer Experience

Experience is, and should be, valued. Particularly when customers' and clients' experiences are positive.

There is increasing recognition that customer experience is not limited to local and physical considerations. It commences from the very first phase of the buying cycle and extends beyond the purchase process, installation and post-sale service delivery.

Indeed, the term “customer experience” has made obsolete the label “customer service”, and now embraces the concept, principles and applications of “ambience”.

Accordingly, operational silos, in which authorities and responsibilities are focused and constricted to specific actions have been dismantled. Internal business territorialism has been supplanted.

The allocation of resources, including capital, marketing, merchandising, sales, advertising, inventory and people is now determined in part by the desire for, and standards which are applied, to the customer experience.

Therefore, positional titles of “manager”, when they are related to the individual disciplines detailed above, seem inappropriate.

New measures of success are being implemented, in which the optimal outcomes are related to enhanced and positive customer experiences.

Hope springs eternal! Perhaps, the balanced, boring catalogue-type mass media advertising will be replaced by placements that abound with emotions, fun, advantages and benefits. Now that would be an experience!

Indeed, a single resolute focus on positive customer experiences for the progressive and complementary disciplines of public relations, communications, promotions, merchandising, sales and service will ensure a cumulative, reinforcing and positive delight for the intending customer.

STEP ONE

Astute business leaders who are keen to address and redress the most recurring negative experience of customers will give priority to refining the telephone interaction system and processes.

Automated telephone answering processes which, however much they improve internal efficiency and productivity, often incur delays, frustrations, annoyances and additional phases for the customers. Typically, satisfaction levels plummet, along with the image of the business and preferences for its products, services and people.

Furthermore, inefficient, cumbersome online networks are a close second-rated source of annoyance. Whatever happened to recognition of the need for “seamless organisations” and seamless experiences…...

PRIVATELY PERSONAL

The current digital era has witnessed, indeed has facilitated, increased efficiency and speed of transactions. It has also been instrumental in a loss of privacy and personalisation.

“Mass-customerisation” is a cute phrase. It is also an oxymoron – a contradiction in terms. Transparently computer-generated communications can be, and are perceived by many to be intrusive and, sometimes, offensive.

There is an understandable reluctance by a significant percentage of consumers, individuals and corporations to declare and share private, confidential information - including banking and credit details.

Some things are considered best kept private.

CONSISTENTLY INCONSISTENT

Customer experience surveys often do not address or measure all phases of the experiences to which the customer is exposed.

Most noticeable are the inconsistent levels of service and positive sentiments expressed about the eleven phases which typically characterise the total experience.

Two aspects in particular are consistently deficient in rating, and contaminate the expectations and the ratings of individual customers and clients.

Well-targeted communications, which feature the names of recipients in the salutations can be impressive. But, the positive experience is negated when consumers are encouraged or directed to initiate contact with a website or call-centre.

Smooth processes never counter the impact of disappointed, impersonal outcomes.

“Personal” is an attribute, feature or adjective that is never fashionable, cyclical, or seasonal. It is an eternal, compelling basis on which to establish and sustain relationships. Furthermore, the allure of “personal” is an equally compelling reason to make contact and to develop great “customer experience” expectations and for businesses to enjoy competitive advantages, benefits and above all, customer loyalty.

MATCHING AUTHORITIES

To be effective, Customer Experience Managers need to be responsible for each and all eleven phases of the customer experience, and to have the authority to effect and refine initiatives and interactions, including public relations, advertising, promotions, merchandising, selling and service. One suspects that for many entities, those that have simply introduced a fashionable new label in their organisation charts, this will be a step too far.

Shades of “Customer Service Manager”, when everyone in a business is and should be responsible for managing service.