Marketing Strategy

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Perception - WCP 2014

The Importance of Market Perception

Perception Marketing has become big business and until recently I had applied little thought to the question of Perception versus Reality. People apparently now build entire careers around Perception Management, they are not involved in Product Development and Product Improvement, their mission in life involves changing us! Changing our Consumer Perception!

My regular readers are familiar with my commitment to Peter Drucker as the essential marketing guru. His definition of marketing is: – “to take something useful and turn it into something desirable”. I believed I understood this, yet recently I have encountered some surprising and strangely lasting, examples of perception marketing driven desirability.

A couple of weeks ago I was having a product discussion with my son, the CEO of a US based FINTEC company, and I offered the opinion that the product (under discussion) was crap! He answered promptly, “I know that, you know that, but the market perception is different and the market perception is reality”.

At first I was disturbed by this, isn’t it wrong to sell a substandard product, even if the customer is satisfied?  Well let’s think again before we decide.

New Scientist magazine recently published an article describing how researchers at Harvard tested a new painkilling drug as well as placebos on migraine sufferers. The placebos, despite their lack of real painkilling ingredients, were remarkably effective. “The placebo… accounted for more than 50% of the drug effect,” the scientists found.

To most of us this is hardly news; drug trials routinely incorporate control groups who are given placebos to assist in identifying results that are outside the standard placebo effect. Other drug trials have shown that tiny placebo pills can have stronger effects than large ones because they are perceived as especially potent. Placebo colour can make a difference, too.

I had to ask myself are placebos “my crap” or “market reality”?

The lesson for marketers is that our experiences are shaped by our expectations

Do we have other examples of “placebo marketing”?

Until recently we had a substantial investment in the wine industry. Wine is the ideal product to illustrate how marketing perception affects consumer experience.

Most of us and even those within the industry don’t have the honed palate of a master of wine, and how we enjoy wine is heavily influenced by what we think we know about the wine.

Perception marketing experiments showed that the same wine thought by a taster to cost $45.00 rated better than when it was thought to cost $5.00. Not only was this a win for the perception marketers, it actually lit up a wider area within the pleasure centre of the taster’s brains. In other words the perception became reality, it really did taste better to them.

It’s an example of consumers really believing “You Get What You Pay For” – yet again Marketing Perception has trumped reality.

This brings me back to Peter Drucker’s quote. Desirability may not be a product of quality but of expectation.

By, Neil Steggall

The Barking Mad Blog

SMS Advice with Bite

http://wp.me/p401Wv-eC

 

www.wardourcapital.com

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Marketing Redefined WCP 2013

Marketing Redefined

Think, Change, Grow, Prosper!

 

In the dark distant past when coffee came without froth and computers were kept in sealed rooms and operated by bespectacled men (sorry ladies its true) in white coats, I spent a few years climbing the corporate ladder which included a stop off in the Marketing Department of a major multi-national.

We saw marketing in aggressively military terms of war, battles, and campaigns, all fine-tuned through tactics, strategy and whiskey.

Statistics and information was gathered from the market and analysed, products were designed, costed, tested, refined, manufactured, advertised and sold, hopefully, at a profit.

Much thought and combative discussion was applied at each stage, key objectives were established, strategic marketing plans, short term tactics, placement attacks and budgets were drawn up and approved before being committed to endless reams of paper. Weekly meetings were held to gauge progress and we wrote up even more notes in pencil before dictating them to our “girl”, sorry PA, to be typed up.

Much time and efficiency was lost in the process and very few really great ideas came out of it.

When I attend marketing meetings today the mood is less combative and the whiskey has unfortunately disappeared  yet I fear just as much time and efficiency is being lost in the discussion of SEO’s, word place rankings, the placement of hash tags and how well the product will look on mobile devices. I leave the room bored and just a little concerned that no one is actually marketing the product.

Perhaps it’s time to redefine MARKETING.

“Marketing is too important to be left to the marketing department.”

– David Packard, co-founder, Hewlett-Packard

When you own the show you can make such bold statements! However, if we ask any ten business leaders today to define marketing we will probably get ten different answers. Marketing its function and its purpose appear to have entered a management grey zone.

I was fortunate some years ago to meet the father of modern management, Peter Drucker, on a number of occasions and his view was: “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing is the distinguishing, unique function of the business.”

So, what is marketing and are we moving closer to a definition? The Silicon Valley venture capitalist and former Intel executive Bill Davidow said, harking back to warfare, “Marketing must invent complete products and drive them to commanding positions in defensible market segments.” The man should know. He wrote the seminal book on high-tech marketing.

Interestingly Davidow didn’t learn marketing at university as he studied electrical engineering. Steve Jobs, another brilliant marketer, dropped out of school. These guys and others like them demonstrate that great marketing skills can be developed.

So how do great marketers learn about marketing? I am convinced that great marketing skills are best learnt on the job. Doing the hard yards.

SME’s and Startup companies are great places to learn and develop marketing skills because they’re all about developing innovative products and getting customer traction – and not much else. Further they’re always strapped for cash and needing people to wear multiple hats.

Interestingly as an engineer by training I also learnt marketing on the job.

Its been a long and complex journey but here are THE SIX KEY LESSONS  I learnt along the way:

Marketing is Hard.

It has been said that “Marketing is like sex: Everyone thinks they’re good at it”. Well I’m not getting into that one but on observation there are more posers in marketing than most other fields, probably because the demand is so strong and the supply of real talent is so weak, and it’s easy to fake. When discussing a Telco acquisition with an American banker some years ago he started to tell me how the marketing model needed to change. When challenged he answered “Bankers like to think that they are marketing geniuses. We really do.” He said, this is because “we can fake it far more convincingly than in other areas …” It’s worrying but it’s out there, be warned.

Understand People.

It’s about determining what customers want, often before they know it themselves – look at Sushi-Sushi and how they got everyone eating raw fish. If you’ve got a knack for that sort of thing, trust it. Be your own focus group of one. And while it’s tempting to think of markets as amorphous virtual entities, remember that, even in the B2B world, every product is purchased by a human being in the real world.

Marketers don’t reinvent the wheel.

Some people are great inventors. They come up with wild concepts that nobody’s ever thought of. But great marketers tend to be innovators who turn inventions into things people can use. Marketing thrives on reusing ideas in new ways. Most modern Japanese industry was based on this premise. Steve Jobs didn’t invent he moulded inventions into products people wanted to use.

Marketing is too important to leave to the marketing department.

It really is! Marketing is the hub of the business wheel. It’s where product development, manufacturing, finance, communications, and sales all meet. Marketing’s stakeholders are every critical function in the company. Every member of the leadership team is an adjunct of the marketing department. SME or Giant Corporation it’s all the same.

Marketing Really Counts.

Contrary to today’s popular feel-good wisdom, in business, winning is everything. Every transaction has one buyer and one seller. If you do it right, buyer and seller both win. All the other would-be sellers lose. The real world is brutally competitive. Be different to win.

Great Marketing Ideas are Rare.

By executing the right communication strategy, great marketers can create a groundswell of customer excitement and viral demand for a company or product that nobody’s ever heard of. And it can be done on a shoestring budget. Steve Jobs was a master at maintaining secrecy and controlling exactly how and when anybody learned anything about Apple’s products. MacDonald’s are turning bad press about fast food into selling points through its new menus and PR.

The truth is that great marketers are few and far between. Which begs the question, who exactly are you trusting the most important aspect of your business to? Something for you to think about as you take your SME global.

Finally my definition of marketing is to “take something useful and turn it into something desirable”

 Neil Steggall

The Barking Mad Blog

SME Advice with Bite!

http://www.neilsteggall.org

Shortlink: http://wp.me/p401Wv-9O