Rice, Autos and Online Retailers

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Winning Marketplace Strategies

The biggest threat to success comes from failing to understand and incorporate all aspects of a winning marketplace strategy.

Success arises from differentiation in one or – better – more of three domains:

• Customer strategy (identifying and meeting unmet needs, branding – not just advertising – or finding new ways to go to market); 
• Factor strategy (raw materials, supplier relationships, logistics, manufacturing, technology); or
• Organization strategy (new business models, different systems and processes, new culture).

Many marketers focus exclusively on the first. But because differentiation is critical, marketing, perhaps surprisingly to some, has a significant, if not dominant role to play in understanding buyer behavior through the second and third, and then driving necessary changes through the organization.

To many Americans, rice is a simple foodstuff, something we eat in place of potatoes or bread, and as a side dish in Asian restaurants. And, like many, I grew up on Uncle Ben’s, Rice Krispies and Rice-a-Roni. Yet a master sushi chef in Japan might insist on Uonuma Koshihikari, which costs an order of magnitude more than the rice you’ll find in supermarkets (you can buy a 5kg / 11lb bag online for $130).

In 2009, both GM and Chrysler (for the second time) declared bankruptcy. Yet in 1990 – 20 years before – three MIT academics, James Womack, Daniel Jones and Daniel Roos published The Machine That Changed the World, a book detailing the Toyota Production System (TPS) that simultaneously cut costs and increased quality. Worse, intelligence on this radical new production and organization system was available to Detroit in the 1960s – the ideas that led to the TPS came from Ford, which opened its doors to extensive benchmarking by Toyota executives in the 1950s.

And new internet-aided business models can inhibit if not completely destroy your business. Perhaps the best known examples are the bankruptcies of Circuit City and Borders 2011 and, just this month, the announced closing of the remaining Blockbuster stores, driven by online retailers modeled on amazon.com, founded in 1994, almost 20 years ago…

Rice retailers, restaurants and food processors have multiple factor strategies to choose from, influenced by and influencing their customer strategies. And imagine if, when Chrysler first declared bankruptcy in 1979, US auto marketers had focused on understanding the role of Toyota’s factor and organization strategy on consumer behavior. Finally, only a radical shift in strategy to embrace an Internet business model confounded expert opinion that Best Buy would soon follow Circuit City.

Next: Surprise

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Opportunity or Afterthought?

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Support

How many great customer service calls can you recall? If you’re like me, you’re more likely to remember the endless prompts, being put on hold, or dealing with someone who can’t or won’t solve your problem.

How many trade shows or conferences have you returned from with a slew of unremarkable collateral? Admission: I don’t really collect a lot and mostly throw out what I do.

How many vendor capability presentations have caused you to take action? Or, as a consumer, how many unsolicited calls or emails have actually caused you to buy something? In my case, close to zero.

I once inherited an under-performing business development (cold calling) function. The sales team had hired a bright, engaging and outgoing young professional with the intent of qualifying leads and setting up sales meetings. But after six months and zero meetings, something had to change.

The reason soon became abundantly clear. This erstwhile and eager individual had received no training: not in the offering, not in the sales process and not in how to identify needs and nurture leads.

Six months completely wasted.

Support, or lack thereof, can make or break a customer relationship. Done well, and accounted for properly, it can pay for itself many times over. I willingly pay extra for a premium credit card because of the support I get – the company handles our inquiries with personnel whose sole purpose appears to make me a satisfied customer. And because of that, I almost invariably use that credit card for my purchases. Same with my bank: I maintain a high balance, initially to eliminate monthly fees, but more recently because it enables me to get through quickly to knowledgeable personnel who address my concerns promptly.

The subtitle of George Day’s must read book, The Market Driven Organization** says it all: your job is “Understanding, Attracting and Keeping Valuable Customers.”

This requires great support which, in turn, requires training.

Training is an opportunity, not an afterthought.

*Cartoon posted by Joel Leonard in a LinkedIn update
**Day, George, The Market-Driven Organization: Understanding, Attracting and Keeping Valuable Customers, Free Press, 2007

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Make Haste Slowly

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Effective Communications Briefs

Once you've developed a differentiated value proposition, you've got to communicate it to the target audience, using powerful language and visuals. You've got to find out where that audience “hangs out” – what television programs they watch, what magazines they read, what radio stations they listen to, what social media they follow and where they spend their time online.

Creating a winning (and by winning, I mean winning in the marketplace, not winning awards) marketing communications program requires a team of specialists: communications strategists, copy writers, graphics and layout artists, media buyers and, increasingly, social media specialists, often found in marketing or communications agencies.

How well your awareness-building initiatives succeed depends on your ability to harness the full power of these talented individuals. A good agency won’t start work without a good brief, which ensures that their team stays focused on your objectives. But developing a good brief takes time and hard work, and if you leave most of the effort to the agency, not only will you receive a hefty bill, but you and your internal non-marketing clients may become frustrated with the process. Plus, leaving it to the agency risks that they will only work with the marketing department, losing you an opportunity to engage with key business stakeholders.

The solution: create your own brief, which gives you the opportunity to harness the best thinking of your organization’s talent, and not just the marketing team. Here are some guidelines:

1. Start with your market insights. What's the big picture? What's going on in the market? What are the opportunities or problems in the market?
2. Who is the campaign talking to? The more precise and detailed the better. Describe demographics, firmographics and psychographics. Explain how the audience currently thinks, feels and behaves in relation to the product category, your brand, and your specific product or service.
3. What is the objective, the purpose of the campaign? A concise statement of the effect the communication should have on customers. Typically expressed as an action, focused on what the communications should make them think, feel, or do.
4. What's the most important thing to say? What's the single most compelling statement we can make to achieve the objective? This should be a simple sentence and certainly no more than a few sentences if absolutely necessary. Avoid generalities.
5. What are the supporting rational and emotional reasons to believe and buy? Explain why the customer should believe what we say, and why they should buy. Include all the major copy points, in order of relative importance to the customer. It is also helpful to include other information the agency might need, such as a description of the brand personality, positioning tag lines, creative thought starters, terms of direct response offers, result expectations, and mandatory elements such as the logo and Web address. 
6. What do we need from the agency team? And when do we need it?

Finally, make haste slowly. While it takes an effort to collaborate across internal functions who don’t speak marketing, engaging them in the process as trusted advisors (with marketing doing the heavy lifting) will increase both understanding and buy-in.

Don't squander this opportunity.

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Hammering a Nail with a Screwdriver

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Awareness Building

Marketing, in many respects, is about building awareness. After all, if customers aren't aware of your offering, they won’t buy it.

Unfortunately, awareness building is perhaps one of the most misunderstood aspects of marketing, by both non-marketers and inexperienced marketers alike.

In your marketing career, you've probably received an ad-hoc request to run an ad, post a press release or write a brochure. Each of these has a place in the marketer’s toolkit, but far too often someone reaches for the tool before adequately assessing the situation. It’s like trying to hammer a nail with a screwdriver because that’s what you have – it might work, but the odds are against it.

Successful marketing communications requires discipline. While there are occasions when you need to run, say, a spot ad as part of an existing initiative, you’ll be better off if you've done the heavy lifting of developing your marketing strategy and plan. Every single communication should be thought through and evaluated against the selected target markets and customer sets and the value proposition, whether it is an individual Tweet or a comprehensive thought leadership campaign. As a marketing executive you can’t, of course, micro-manage every detail, but that’s where the awareness-building plan, with associated tasks and responsibilities comes into play. Everyone should know his or her role, expectations, accountabilities and how he or she will be evaluated.

Start with the value proposition

A value proposition is a clear statement of the promise of value (expressed as a benefit or business result) you will deliver in answer to a customer need or problem. It answers the question “why should a customer buy from us?” Writing a great value proposition is neither easy nor quick, but here are some steps that will help.

1. Clearly and precisely identify the target segment you wish to communicate to. You may have multiple segments which, of course, means you’ll need multiple value propositions.
2. Prioritize the customer’s needs or problems identified in your insights work. 
3. Then list the primary benefit your offering provides for the expressed problem. For businesses, these often focus revenue generation or cost reduction; consumers might see more benefits in terms of status, ease-of-use or service and support. A useful exercise, once you've developed the initial benefits list is to look at businesses as consumers and vice versa. 
4. Compare this to competitive offerings and list the key points of differentiation.

With this information, write out the value proposition. Here is a “starter” I've found helpful:

For [buyers in priority segments] who need [statement of customer's problem], we provide [statement of the solution / key customer benefits].

Unlike [primary competitors], our offering has / does [statement of major points of differentiation]. 

Then test the heck out of it, both internally (especially with product developers and sales personnel) and with a sampling of target buyers.

With a differentiated value proposition, your marcomms team has a tool to create a powerful awareness-building strategy through the available communications channels: traditional advertising, digital advertising, website, direct, social media, events, word-of-mouth and point-of-sale. Assuming they know their stuff, they'll do an outstanding job.

Next: Creating Meaningful Differentiation: How Much Do You Know About Your Competition?

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Listening II

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Do you listen to understand?

Or do you listen to respond?

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Selling trust

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At a Meetup group sponsored by I Love Marketing (lots of good tips and videos), we listened to a local entrepreneur who has developed a 6-figure home cleaning business. She has built both a loyal clientele and workforce by delivering consistently superior results and is able to charge a premium - heck, who hasn't gone through multiple cleaning ladies (this tends to be a female dominated profession) and thus is willing to pay for reliable results.

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Buying v selling

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Who doesn't like buying? The excitement of acquiring something something new creates a mild euphoria in the human species. Yet, we hate to be "sold" to: we turn off very quickly the minute we feel we are being "closed?" Why?

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What are you paying for?

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I can't stand most Chinese restaurant food.

Yes, I'm spoiled. I spent two years in China and had really, really good Chinese food. Here, despite the sometimes attractive decor, all the sauces taste the same (and they're all bought in gallon jugs from the same distributors...), the food is too sweet, and the dishes have names that don't exist in China.

So, how do we pick? Easy.

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Losing the sale

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My daughter, shopping for clothes for her first job, walked into an upscale store, approached a saleswoman and asked if she had any suits.

"No," she said somewhat disdainfully.

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Dogs are loyal

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Dogs are loyal.

Until someone else gives them a treat.

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Dreaming of sushi

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Jiro Dreams of Sushi is a must-see documentary about the world's greatest sushi chef, 86-year-old Jiro Ono, the only sushi chef to receive 3 stars from the Guide Michelin. The restaurant, located in a subway station in the Ginza, has 10 seats. A 20-minute meal STARTS at $370, and diners often reserve a year in advance.

Jiro has been perfecting his craft for over 75 YEARS (his alcoholic father abandoned the family when Jiro was 7 and when he left home at 9, he was told he had no home to come back to), yet says "even at my age, in my work, I haven't reached perfection."

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Picked especially for you...

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Increasingly, I get eblasts that start "Picked especially for you..."

Amazon made this popular, and I still enjoy its missives, because it actually has made picks for me, based on sophisticated algorithms. I don't always buy, but I am always interested in learning about new books that may be an enjoyable read.

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Listening

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We'd heard about a nice local deli, and stopped in to see the offerings.

Greeted with a smile, we asked about their prepared dishes, particularly vegetarian ones which, unfortunately, were on the sparse side. Because the store came with high recommendations, we persisted in our questioning.

Until the clerk offered us a sampling of the store's meatballs, something they were well known for.

Huh?

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Movie theaters

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Movie theaters should be dead.

Yet, the latest statistics from the MPAA show international box office receipts are up 35% over five years ago and even US receipts are up 6% over the same period. This despite the fact that a ticket costs more than a monthly subscription to NetFlix, which many can watch on home systems exceeding the sound and video quality of the theater.

And yet the movie theaters are packed. Why?

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What's a smile worth? Redux

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In the local supermarket today, two young women offered wine tasting samples. Good location, right at the front of the store.

I walked right by.

Not because of the wine.

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What's a smile worth?

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I stopped at the local Fresh Market for a piece of fish for dinner.

While the prices are a little higher than the competing local supermarket, I go there often, for a variety of reasons, including the quality of the fresh produce, meats and seafood, the selection and the deli.

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Everyone lives by selling something...

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...said Robert Louis Stevenson, author of Treasure Island and the Strange Case of Dr. Jekyll and Mr. Hyde.

Sales reps, of course, sell products and services to customers.

CEOs sell their vision to their boards and employees.

CIOs sell their plans and budgets to the management team.

CFOs sell the company's investment plans to Wall Street.

CHROs sell the benefits of working in an organization to prospective employees.

Inventors sell their ideas to investors.

And CMOs must help sell all of these.

All require an in-depth understanding of both the offering and the buyer.

What are you selling?

And have you done the hard work to develop the insight required?

Experience matters.

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Why I'll go back

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Despite arriving on time for our reservation, we were told we had to wait. A bit annoying, since we could see a couple of open tables. The host then directed us to the bar, where the bartender, of course, asked if we wanted a cocktail, which we declined. Within the space of a minute, our anticipated pleasant evening was going downhill - I'm thinking typical restaurant trick, trying to eke out an extra couple of dollars from a patron. But then my attitude changed.

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Snatching defeat from the jaws of victory

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My wife and I just walked out of a Chinese restaurant. Not something we ever do.

Not because the food was bad, or because of the price.

The experience was perhaps the worst we've ever had.

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Branding overload

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Last week I wrote about the brander's paradise that is South Beach. This week, I spent some time in Manhattan, which most would think of as a brander's paradise.

But right now I only feel fatigue. And I'm not just talking about Times Square.

Manhattan, everywhere, overloads the senses.

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