There are strategies that can pave a path in the new economy. Some are mere reminders of timeless but essential business principles; others are sharp directives for companies still finding their footing in the Internet era.
Table of Contents
What is marketing?
High on the List
If not First
Honesty
Ego and Arrogance
Out of Touch
Technology
Business Models
Networking
Customer Relations
Finance
Positioning
Know Your Customer
THE 80-20 RULE
BECOMING A NUMBER
SHEDDING DEAD WEIGHT
What is marketing?
Marketing is any contact from any person to anybody else. Everyone in your company is representing your company. Be aware that everyone you deal with is a person to whom you are marketing. Therefore, marketing is all human contacts from you to anybody else. The more marketing becomes a process, the better it will work for you. If you want to invest money you can, but you should realize that your primary investments are time, energy, and imagination. The more time, energy and imagination that you invest in the marketing process, the less money needed to invest. Anybody can achieve sales, and get a lot of foot traffic into their store. But the important thing to track is profit. Profit is the only thing that you should be focused on. Determine your target market and aim your works and advertizing at it. Work on getting better at your primary market plan. Advertizing works only if it gets to the people who are interested in your products. Otherwise, your advertizing dollar is wasted. Marketing is providing the service of delivering your products or services to the customer with an attitude of honesty and quality, so that your customer has good reason to return.
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High on the List
What the customer thinks is first and foremost. Other people speak of the place on the mind’s list, and the need to be unique in the mind. It is better to be first in the customer’s mind than first in the marketplace. Which, if anything, understates the importance of being first in the mind. Being first in the mind is everything in marketing. Being first in the marketplace is important only to the extent that it allows the company product to get in the mind first.
Thousands of would-be entrepreneurs are tripped up every year by this fact. Someone has an idea or concept he or she believes will revolutionize an industry, as well it may. The problem is getting the idea or concept into the customer’s mind. The conventional solution to the problem is money. Unfortunately, this gives rise to the perception that the answer to all marketing questions is the same: money. Not true. More money is wasted in marketing than in any other human activity. If the product is to make a big impression on a person, you cannot worm your way into their mind and slowly build up a favorable opinion over a period of time. The mind doesn’t work that way. It is necessary for the product or service to blast its way into the mind. The reason for blasting instead of worming is that people don’t like to change their minds. Once they perceive the product or service one way, that’s it. They kind of file it away in their mind as a certain kind of thing, with a certain value, and the product cannot gain a greater value in their minds.
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If not First
Being first on the list in the customer’s mind ought to be the primary marketing objective. However, the battle isn’t lost if the product fails in this endeavor. There’s a hierarchy in the mind that customers use in making decisions. For each category, there is a product list in the mind. Brand names are listed in the order of value to the individual customer. The product or service marketing strategy should depend on how soon it got into the mind and consequently the position that it now occupies on the list. The higher the better, of course.
However, the mind is selective. Customers use their lists in deciding which information to accept and which information to reject. In general, a mind accepts only new data that is consistent with its product or service list, in that category. Everything else is ignored. According to Harvard psychologist Dr. George A. Miller, “The average human mind cannot deal with more than seven units at a time.” So the list is also short. The following questions should be asked before starting any marketing program: Where is the product or service on the list in the customer’s mind? Is it first, second, or maybe it is not on the list at all.
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Honesty
It goes against corporate and human nature to admit a problem. For years, the power of positive thinking has been drummed into all of us. “Think positive” has been the subject of endless books and articles. So it may come as a surprise that one of the most effective ways to get into a customer’s mind is to first admit a negative and then turn it into a positive. It is necessary to prove a positive statement to the customer’s satisfaction. No proof is needed for a negative statement. The purpose of candor is to set up a benefit that will convince the customer of the ultimate value of your product or service. This fact only proves the old maxim: Honesty is the best policy.
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Ego and Arrogance
Ego and Arrogance is the enemy of successful marketing. Objectivity is what’s needed. When people become successful, they tend to become less objective. They often substitute their own judgment for what the market wants. Success is often the fatal element behind the rash of line extensions. If the customer doesn’t want or like it they won’t buy it.
When a brand is successful, the company assumes the name is the primary reason for the brand’s success. So they promptly look for other products to plaster their name on. However, the brand got famous because they had made the right marketing moves. Their product got into the customer mind in first place, and the customer narrowed their focus. The company success puffs up their ego to such an extent that they put their famous name on other products. Result: early success and long-term failure.
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Out of Touch
The bigger the company, the more likely it is that the chief executive has lost touch with the front lines. This might be the single most important factor limiting the growth of a corporation. Small companies are mentally closer to the front than big companies. That might be one reason why small businesses grew more rapidly in the last decade. They haven’t been tainted by their own success and they pay more attention to their customers.
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Technology
Business could once afford the time to go over new technology before worrying about the impact. Today's network-driven companies don't enjoy that luxury. Businesses that jump as soon as technology snaps - aggressively, and continuously become leaders. Faster, better, cheaper ways to make stock trades opened the way to rapid trading of a 5 percent market share worth $100 billion. The software that spawned an online bazaar of Ebay, created a worldwide audience of buyers and sellers whose previous venues were garages and flea markets. A data-organizing language called XML opened up millions of shop-worn parts catalogs to an untold stream of business buyers. But when tech innovation outpaces consumer motivation to change, the result is often fruitless expenditure of capital. The smartest companies learn to adapt the best, not just adopt.
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Business Models
Because information courses through every artery of business these days, companies need flexible business processes to keep pace with ever-increasing customer demands. Where the Internet opens new opportunities, whether it's a way for car designers to collaborate with their parts suppliers, or a Web marketplace for bidding on office supplies, businesses' can't be afraid to forge new processes around them. Cutting out a few middle managers and deploying job titles like “Chief people officer” won't cut it. Innovating your business model demands reinvention of the organization. The most innovative models alter the structure of their industries, the way Dell Computer's build-to-order PCs pushed the entire computer business to change its ways. Companies must view their process as a product, too.
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Networking
Three groups of people-employees, customers, and partners make every company go round. But technologies that allow them to mingle under one electronic tent serve a critical purpose. Witness the dozens of new co-op-like Web marketplaces launched by former foes in auto, retail, and manufacturing. Companies that truly bank on this sort of networking understand that outsourcing and joint ventures are long-term skills, not just techniques.
Intuit didn't thrive in the booming 1990s because it suddenly morphed into an Internet company; it worked hard to adapt and expanded its core business for a networked market-place. It put its software on the Web and then expanded its finance services online. True, online sales now account for roughly one-third of its business, but its success really stems from the partnership skills it developed during the 1980s, when it convinced banks to recommend its software. In other words, Intuit saw the connection between its skills and the benefits of partnering in an age where everyone is connected.
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Customer Relations
Consumers and Business Customers-empowered by the Net, equipped with 24-hour access are disrupting standard practices. Companies must change pricing structures, distribution Channels, and the way they design and deliver products and services. They can't be ignored. The savviest companies jump at the chance to meet those demands head-on, inviting customers to participate in design and R&D, thus turning consumers into working assets. National Semiconductor brings in engineers to create scenarios for designing and testing prototypes to save themselves time. Cisco Systems customers can make last-minute changes to orders, even as products are being manufactured. Hewlett-Packard uses satisfaction surveys at all points of customer contact. Surrendering to the network-driven customer is a long-term winning proposition. Why? Because firms built on a customer-caring culture also win the hearts and minds of employees, too.
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Finance
For many companies, the past year has offered a rude lesson in finance. The weakest died, but even formidable players ran low on cash, lost their ability to raise funds, or had to scale back. Too few were paying attention to their financial design. Early on, companies must take charge of how they are perceived on Wall Street. High market value offers strategic advantages in valuable stock and sheer size. A company must also develop an infrastructure of financial managers to deploy capital. Companies have to structure their capital to leave room for change and growth.
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Positioning
Of course, marketing propositions can change, and customers can shop elsewhere. Companies need to maintain their distinction so they can attain a true enduring uniqueness. Just as distinction is hard to define, it's hard to defend. New technologies mean new services, which portend new markets and revenue streams.
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Know Your Customer
Today, companies are assembling detailed profiles based on age, gender, address, income, mortgage payments, credit card transactions, and even such personal information as whether you’ve just had a baby. That profile is then used to sell related products and services.
THE 80-20 RULE
An old saying says that companies get 80% of there profits from 20% of their customers. What’s new are ways that companies sort the 20% and ether convert them to the 80% profitability, or drop them from their customer rolls.
BECOMING A NUMBER
HNC mathematically processes credit card transaction data, along with publicly available demographic and census data, and information that can be purchased from others; such as notes from bill-collection agencies, catalog-order records and even internet surfers’ “click streams” of internet web pages they have visited, and translate every piece of information into marketing data. Thus every person is represented by numbers.
SHEDDING DEAD WEIGHT
Indeed, shunning costly customers is often the point. That has been the idea behind the controversial practice of “redlining” in some industries, whereby companies avoid seeking customers in particular neighborhoods or socioeconomic groups that are deemed unprofitable overall. Find the right way of managing customers to make them profitable. Banks, for example, are pushing expensive customers to less-expensive service options, such as automatic teller machines and online banking.
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