|Follow The Data Carefully. By following the data carefully, you will make assumptions without bias (that's very important). If there are gaps in the data, you will be able to fill in the gaps intelligently.|
|Think Before You Assemble. It's important to understand the marketing process before you assemble the data -- otherwise your chart will look like you just "filled in the blanks".|
|Generate at least three strategic options.
One of the main
differences between managers who have professional training and those who do not is the ability
of trained managers to see several different ways to achieve a particular objective.
Scientific studies of decision-making behaviors show that all too often decision makers
lock in too early on particular pieces
of data and, therefore, on particular options.
Force yourself to come up with three ways to achieve
your marketing objective and then make your choice from among the three good options.
you show all three options, because someone else may not agree that you have picked the best one. Support
your options in every possible way.
|The Three Options. You should make projections of costs and revenues under these three conditions: 1. Optimistic, 2. Most Likely, and 3. Pessimistic Conditions. Support these calculations with explanatory footnotes. You will find that your footnotes contain many assumptions, and that the financial calculations integrate your marketing strategy.|
Be Brief. One of the skills that you must master is the ability to simplify the complexity of marketing problems down to the key points and deal with those key factors. Be as precise and specific as possible. Here are some of the factors that you will deal with:
The first and foremost ingredient in the marketing mix is the product.
A good product is essential. Without a good product,
a marketing plan will not work. If the product or service is not right
for the market or has no appreciable benefit, even a brilliant
marketing plan is "dead in the
water". Good marketing can only help sell a product.
It cannot raise a product from the dead.
The next consideration is price -- which is a part of the equation that perplexes most marketing people. In fact, determining a proper price in this overheated global super economy is a quandary for most business people.
In the book "POWER PRICING" by Robert J. Dolan and
Hermann Simon, the authors disagree with standard pricing practices such as "a markup on cost" or "what the market will bear".
These procedures are commonplace in the market, but the authors claim that they are "pedestrian" and
a product of other times. The authors recommend
"power pricing" instead. To be a "power pricer", you must know
what the product is
worth -- not two or three months ago but today! and you must know what the consumer is
willing to pay for your product.
The "power" pricer is a collaborator who works with all the functions of
the company who are interested in profit (excluding such people as
the sales force who are mostly interested in volume).
The power pricer is shrewd.
She or he knows that empty seats in an airplane don't
pay for themselves and that a high markup on 100 products sold yields lower profits than a low markup on
a 1000 products sold.
In their book, Simon and Dolan give examples of "power pricing" procedures,
such as a train company that abandoned its old practice of charging
"per kilometer" and decided to issue a "travel card" instead.
The travel card became a standard in everyone's wallet or purse -- often as a "just
in case" scenario if their car wasn't working. Another example was the "Swatch Company"
who introduced their watches not as
"timepieces" but simple everyday "fun" pieces that were a "celebration of life".
The "Swatch Company" priced all their watches at $40.00 --
a straight, clean, simple price that dovetailed with the "Swatch Watch" concept.
In today's market there are many example of good
pricing and some that are questionable. Let's look at an example:Toys R Us
. This company is now engaged in a price war with Walmart (and many other box stores). In their advertising,
they are emphasizing their special prices. While price is important,
the prices, on average, at Toys R Us are not lower. The only appreciable difference between Toys R Us and its competition is
its selection. The real marketing advantage for Toys R Us is that it carries more brands and more varieties of toys than anyone else --
which is a real advantage for the harried parent who must get just the right toy for their child -- yet the company seems to be avoiding
this basic unique selling principle.
What about a company who prices their product out of reach? Up in Canada, we had a major department store chain
named Eatons. Eatons was a department store that was a proud bastion of everything Canadian. With its catalogue,
Canadians in even the most remote regions of our country could purchase the same products as their city counterparts -- and the
products were good quality at a low price. All that changed, however, when the executives (owners) of Eatons
declared that markups were more important than sales and started to cater exclusively to the Carriage Trade. What this "high powered brain trust"
didn't realize is that high prices
appeal to nobody -- whether the customer is rich or not. Consequently,
the chain -- once a proud bastion of Canadian enterprise lost its customer focus and went bankrupt.
Eddie Bauer, the high-priced sports equipment retailer, is another example of premium-pricing gone totally wrong. In June, 2009, this once-successful
company filed for Chapter 11 bankruptcy. Why? Because their products were triple the price of what you would find
at Walmart or Canadian Tire or basically anywhere else! Granted, their products were of a very high quality, but today's consumer is
willing to forego a high degree of quality for a better price.
Research will help you get a good handle on your pricing requirements. Good research will help you determine what people are willing to pay for your product. Research can also help you out in other areas such as:
Packaging is the next most important issue.
In some cases, some products are sold almost
exclusively on their packaging alone. L'Eggs, a company that sells nylons,
is a good example. When L'Eggs nylons were presented in the conventional packages,
they didn't sell so well. So L'Eggs started to package
the nylons in an egg-shaped plastic case and sold the product based
on the catchy name. Absolut vodka is another excellent
example. Vodka is just clear aquavit -- with no appreciable taste. The marketers,
therefore, decided that rather than market the vodka based on taste,
they would develop a unique
bottle and sell the product based on the packaging. They created a beautiful
clouded-crystal bottle and focused the
advertising around the Absolut name.
The campaign is still alive and well, with hundreds of ads spinning off this one
Absolut vodka is another excellent example. Vodka is just clear aquavit -- with no appreciable taste. The marketers, therefore, decided that rather than market the vodka based on taste, they would develop a unique bottle and sell the product based on the packaging. They created a beautiful clouded-crystal bottle and focused the advertising around the Absolut name. The campaign is still alive and well, with hundreds of ads spinning off this one successful concept.
When all these marketing criteria have been met in the proper balance,
there are several different ways that you can sell your product. One way is through advertising, in other words the long term "image"
building of your product. If you can afford one, a professional advertising agency will help you! They are experts at research, marketing, advertising,
etcetera. A good advertising agency will be well worth the money spent.
A not-too-distant cousin to advertising is promotion. It
stimulate awareness of your product through
short term marketing events that create quick sales.
For example, perhaps you decide to take a few cents off the cost of your product and promote the discounted price. Another example of a promotion
is running a contest. These days, with tougher competition, it's important not only to have a good promotion, but an outrageous promotion as well.
A good case in point is Mel Lastman, a well-known entrepreneur up in our neck of the woods (Toronto). In the early fifties, he started a furniture chain
by the name of Bad Boy. He promoted his company by being outrageous with antics such as dressing up in a convict's outfit and parading through the streets on
a donkey cart. With these stunts and many others that raised eyebrows, Mel Lastman went on to becoming a retailing legend and eventually a millionaire.
What's the message here, folks? Well, to us, the message is "the nuttier the better!"
Often in the same breath as you hear the word "promotion" you will also hear the word "collateral" material. This means the "extras" that go along with an advertising campaign. In other words, the T-shirts or hats or lighters or whatever else that bears your product's name or logo.
As you work your way through your marketing and advertising plans, a word that you will often hear is "Positioning"
Positioning takes into account all the products or services that are competing against yours and positions your product or service against theirs. The classic positioning statement was Avis: "we're number 2, but we try harder." When positioning your product, take a good hard look at your U.S.P. (Unique Sales Proposition). In other words, what makes your product better or different than your competitor. There are a myriad of different ways to position your product.
As we have already mentioned above, (see above) the best example of this positioning statement is Absolut Vodka. When Absolut's hands were tied about what they could say to advertise their vodka, their President (Michael Roux) asked Andy Warhol to paint a picture of the Absolut bottle. The campaign it evoked -- "The Absolut" Campaign -- has gone down in the annals of advertising history.
This is a positioning statement that is being used frequently these days. Knock-offs of the original product are prevalent -- particularly with the East's ability to duplicate a product virtually overnight. So many manufacturers are standing up and saying "we are the original". Look at Coca Cola. It's a perfect example. With their statement "It's the Real Thing", they pre-empted their competition. Bailey's did it with "Bailey's -- the original Irish Cream" and Pabst Blue Ribbon fended off the copy cats with "The Real Taste of Beer".
This type of statement has become commonplace. Most of the retail chains use a "low price" as their come-on gimmick.
|This is a tricky one. If a manufacturer decides to market his product with a high price, he'd better have a good reason for the high price! Some companies have used this marketing statement to absolutely no success. However, companies such as Rolex, Mercedes Benz, Beefeater and Haagen Daaz Ice Cream are using this strategy well.|
|Maytag is famous for this type of positioning -- and they've done it brilliantly. Rather than say their products last for years, they've created the Maytag repairman -- "a lonely man" who never gets to do his job".|
Perfumes such as "Obsession For Men"and tight Jeans such as "The Gap" use this fairly common positioning statement -- and it works! A Canadian Copywriter note: perhaps you didn't know this already, but sex sells.
Seven Up is a perfect example of this. Their line "The Un-Cola" has gone on to the advertising "Hall Of Fame" and propelled Seven-Up's success.
Kraft's Parkay Margarine is being sold as a substitute for butter. Coffee Mate is a cream substitute. Equal is a sugar substitute. Wrigley's chewing gum took a unique approach when they started advertising their gum as an effective substitute for smoking
This is the granddaddy of all the positioning statements. This is where the "Psychographics" of the market usually come into play. Are you advertising to the young or in other words "the chasers and grabbers" or the middle aged "family-oriented" segment. Perhaps you're looking for the older market -- "the traditionalists". Pardon us if we imply that a certain age means a certain way of viewing life. Of course, it doesn't. For example, did you know that -- no matter what their age -- there is a marked difference between Dr. Pepper drinkers and Pepsi drinkers? People who drink Dr. Pepper are typically introverted and see themselves as "originals" who follow the beat of a different drummer. They consider themselves a little crazy and search for interesting experiences. Of course, all this must be ascertained through research -- but many companies who have performed this kind of research and discovered who their target market is -- have succeeded over the long run. POSITIONING is as important to marketing as mustard is to the Hot Dog!
Toy companies, baby foods, do this for kids. "Oil Of Olay" is effective in positioning their product for older women. In fact, with today's aging population, a lot of skin care products are positioning their products as turning leathered elephant skin back into baby-soft skin
Hanes advertises their stockings for the "full figure" girl. Plus there are Big and Tall Clothing Stores everywhere.
|There are still a lot of people today who enjoy being part of an exclusive "club". Club Med has an exclusive feel to it. The "Price Club" makes you feel like you belong to a group of people with interests similar to yours, etcetera, etcetera,|
Once again, Marshall McLuhan (our hero) is correct. With the Internet, people are very aware that the human race is just one big family. Benetton and Visa Cards put their advertising into this "basket".