Marketing

Why Marketing Never Changes

Posted by on Mar 19, 2012 in Marketing | 0 comments

Why Marketing Never Changes

From the very first business exchange thousands of years ago, to the online purchase completed a millisecond ago, marketing hasn’t changed. Many people claim that the Internet and, more recently, social media have transformed marketing into something that hardly resembles what it once was. But it’s not true, because marketing never changes. What is marketing? Marketing is the essence of a successful business. It involves 3 simple steps: Identify a customer need or want. Create a product or service to fulfill that need or want. Deliver a superior customer experience that serves as the foundation of a long-term relationship. Author and management expert Peter Drucker held a similar belief: “Because the purpose of business is to create and keep a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” If not marketing, then what? Some businesses choose different strategies that little resemble marketing. Production-oriented organizations focus on the physical manufacturing process. They create a quality product and expect customers to buy it. Sales-oriented organizations sell existing products. With little regard for customer needs and wants, they use aggressive sale techniques to push products on customers. Neither of these strategies is particularly effective over the long term. A production-oriented strategy can only work when demand is high and supply is low. Alternatively, a sales-oriented strategy can only work when demand is low and supply is high. A company cannot survive when it relies on a single supply and demand condition. Only marketing-oriented organizations consider actual and potential customer needs and wants. This strategy focused on continued customer satisfaction and every touch point in the business/customer relationship. What has changed? If you’ve ever taken a class in marketing, you probably learned about the 4 components of marketing—the 4 Ps—product, price, place, and promotion. While technological advances have allowed the 4 Ps to evolve, at the core they remain the same. Product Over the years, product production has expanded beyond individual customization to encompass both mass production and new mass customization. Computer technology has revolutionized that we used to think of as a product—a physical entity with some sort of packaging. Now, products such as software, publications, and music don’t require packaging of any kind. Instead, the customer receives an electronic file to be “consumed” on any number of devices. Despite these changes the product (or service) must still be created to fulfill a customer need or want to be successful over the long term. Price Pricing strategies remain essentially unchanged. Techniques such as discounting, variable pricing, and price leadership remain common. Corrupt people continue to attempt to manipulate prices however they can. Pricing has always been a complex component of marketing, but the competitive global marketplace makes it even more so. At the same time, computer technology enables sophisticated, real-time price changes and creates options—such as auctions—formerly limited to certain groups. In addition to creating products that meet customer needs, organizations must establish a product value that matches that of the customer. This requirement will never change. Place Products will always need distribution channels. Physical products will always be dependent upon various modes of transportation to reach customers. But transport time has diminished significantly, and products are commonly transported...

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What Infomercials Can Teach Us About Marketing

Posted by on Mar 18, 2012 in Marketing | 0 comments

What Infomercials Can Teach Us About Marketing

“Looks like denim…but feels like PJs.” That’s the unique selling proposition of one of the newest infomercial product sensations–Pajama Jeans. Why do so many of us want these jeans? Excellent marketing. Direct marketers have always possessed keen insights into what will drive a customer to make a purchase. Here are 6 things we can learn from the direct marketing techniques of our favorite infomercials: 1. Focus on benefits: Too often, organizations primarily emphasize their own excellence, rather than how they can help their customers. The benefits of Pajama Jeans are simple and direct–style, comfort, and value. That’s exactly what their target customers want and need. 2. Show and tell: Demonstrations sell. So do testimonials and case studies. Recommendations are the #1 driver of consumer purchases. Your customers want to “experience” your product before they buy. 3. Start with the challenges: The products sold through infomercials are almost always brand new inventions, conceived by individuals or small groups, and then marketed by experts. The inventor sees a challenge and creates a product to overcome that challenge. Many companies start with the product and don’t consider the customer until it’s time to start selling. 4. Make the call to action irresistible: The call to action is the most exciting part of the infomercial. You can’t wait to hear the offer. (With Pajama Jeans you get a free t-shirt, that’s yours to keep!) You can’t just place your URL and phone number on your marketing piece and call it a day. You must tell your customer exactly what to do and why they should do it now. 5. Be extraordinarily creative: Infomercial brainstorming sessions must be lively. Direct marketers think of every possible use of the product, even the ones that seem totally crazy. (Have you ever wanted to exercise in your jeans? Now you can!) You can find new customers and enter new markets just by thinking creatively. 6. Let the data drive your choices: Direct marketers are data junkies. They test. They gather information. They track with precision. As a result, they can predict what will trigger a purchase, and when it will happen. Although infomercial marketing can seem overly aggressive, the core techniques can teach us a lot about what works, and what doesn’t. If you’re curious about the Pajama Jeans infomercial, check it out. It’s an entertaining 2...

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7 Ways Baseball is A Lot Like Marketing

Posted by on Mar 17, 2012 in Marketing | 0 comments

7 Ways Baseball is A Lot Like Marketing

I love baseball season. My sister Whitney and I are die-hard fans of the San Diego Padres. We’re always excited to see how our scrappy, low-salary team competes against the big-name, big-spending teams. In many ways, baseball is a lot like marketing. That’s probably why I’ve always found both so fascinating. Here are 7 similarities: 1. You must have a comprehensive strategy to succeed. If you get to the field without a strategy, you’re sure to fail. 2. You must analyze the competition. You need to understand their talents and their patterns to be able to compete. 3. Individual contributions can make a difference, but in the end, it all comes down to how the team works together. 4. A big budget can help, but it’s not always the deciding factor. When resources are limited, talent and creativity matter most. 5. When you identify a weakness in your team, you should bring in an expert for specialized training. 6. You must review your performance regularly, and collect actionable, statistical data to assess your strategy and make changes when necessary. 7. Sometimes you’ll get lucky and hit a home run, but you can’t count on it for every game. Consistency is critical to long-term success. Marketing, like baseball, requires strategic planning, smart execution, and careful analysis. Without these things, a last place finish is almost...

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The Effect of Marketing on Company Profitability

Posted by on Mar 16, 2012 in Marketing | 0 comments

The Effect of Marketing on Company Profitability

Marketing is misunderstood. Marketers are thought of as spenders, rather than profit generators. Many are skeptical that marketing dollars spent will increase incremental revenue. These misunderstandings are a result of a number of factors, including the lack of exposure to research on the subject. In this post, I’ll do my best to clear up these misunderstandings by: Discussing the question “What is the purpose of a firm?” and providing common responses. Exploring the effect of a market orientation on company profitability. Examining marketing budget processes. Analyzing the measurement of marketing effectiveness. Addressing the dichotomy of interests between marketing and finance, and proposing methods for reconciling differences to increase company profitability. What is the purpose of a firm? A compelling and much-debated question is “What is the purpose of a firm?” Traditional economic theory calls for a single, simple goal: the maximization of shareholder value. In other words, increase the wealth of the owners. Most organizations focus on maximizing profits, which may or may not increase shareholder value. Other organizations shun economic theory and choose a different strategic objective—increase market share. They assume that beating the competition will lead to increased profitability. Honored as one of the world’s leading marketing thinkers, Philip Kotler is the S. C. Johnson Distinguished Professor of International Marketing at the Kellogg School of Management. He argues against a strategy focused solely on profit: “Private firms should not aim for profits as such, but rather to achieve profits as a consequence of creating superior customer value.” At the core of this perspective—from a marketing expert—is the customer. Creating customer value involves 3 steps: Use targeted market research to identify customer needs and wants. Develop and enhance your product or service to fulfill those needs and wants. Execute an integrated marketing plan that focuses on the customer experience. The company profits through customer satisfaction. Focusing solely on profits or shareholder wealth—instead of creating customer value—has its problems. Such a strategy neglects the long-term financial health of the organization. A company that lives and dies by the quarterly profit numbers can certainly boost its share price—in the short term. Over time, companies must adapt to the changing market and current financial conditions to remain successful. From the finance perspective, corporate goals are much more complex than profit maximization. Goals must incorporate proper rate discounting and adjustments for future risk. And, there is no definitive proof that increasing market share always leads to increased profits. The effect of a market orientation on company profitability While there are disagreements as to the purpose of a firm, the purpose of marketing is clear: create customer value. By concentrating on the customer and satisfying their needs and wants, marketing can achieve the ultimate goal of profit maximization. Many studies have connected marketing to the profitability of a firm. The academic research of John Narver and Stanley Slater serves as the foundation. They use the term “market orientation” to illustrate the importance of this connection. Market orientation consists of three behavioral components: Customer orientation is a sufficient understanding of target buyers to be able to continuously create superior value for them. Competitor orientation refers to understanding the short-term strengths and weaknesses and long-term capabilities and strategies of both the key current and key potential competitors. Inter-functional coordination is the coordinated utilization of company...

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Branding Yourself With Color: 3 Everyday Sources of Inspiration

Posted by on Mar 15, 2012 in Marketing | 0 comments

Branding Yourself With Color: 3 Everyday Sources of Inspiration

There’s no rule that says only businesses can brand themselves with color. You can strengthen your personal brand by choosing a color palette that truly represents who you are. It all starts with a single color choice. Don’t worry if making this choice sounds like an incredibly daunting task. You will find your color inspiration in the things you see every day: Your clothes Your furniture & decor Your car (or the car of your dreams) Clothes Take a look in your closet. If you’re a bit quirky like me, it will be organized by color, starting with a crisp white button down shirt, and ending with a black wool blazer. If not, you’ll still notice that some colors will stand out. What’s the most “popular” color in your closet? What color do you tend to wear the most? In my closet, varying shades of blue tend to dominate, followed by red. What color is your favorite shirt? Think about choosing a single item from your closet that you love wearing. Now ask yourself this: What color in that item connects to who I am? Furniture & decor I’m not a decorator, and there’s a good chance that you aren’t either. Still, we’ve undoubtedly made many color choices that make us feel comfortable and happy in our surroundings. Look at these items: Sofas and chairs Bedding and pillows Artwork Accessories Walls (if you had the luxury of selecting the paint colors) Which colors do you see most often? Which ones do you gravitate to? Even if someone else selected the furniture and decor, you will still be able to find color inspiration in the things you like the most. To determine which shade of blue would represent my personal brand, I went to the Pottery Barn catalog straightaway. That aesthetic has always appealed to me visually, so it was very easy to find the right blue. If you were redecorating your room, what color choices would you make? Maybe your inspiration will come from an architectural magazine or an art gallery. It doesn’t matter where the color comes from, as long as it fits your brand. Car Look at the car you currently own, or the car you dream of owning. Even if you live in a city and have no need for a car (like my sister in NYC), you’ve probably imagined the car you would want if money wasn’t a factor. Maybe it’s a bright red sports car or a dark grey luxury sedan or an aqua blue classic. Think about what color you would choose if you weren’t being practical. The colors of the cars we drive are often determined by necessity, not inspiration. For example, I chose silver because it doesn’t absorb the sun or show much dirt. Sometimes you get a better deal on the less popular colors. Just think beyond what you need. What color is that dream car? Turning your inspiration into a color palette Once you have found the color that represents your personal brand, you need to create a palette. Fortunately, there are lots of great tools that will help you accomplish this. I started by figuring out the hexadecimal color code of my Pottery Barn Blue using Gimp, a freeware application similar to Photoshop. Then I went to a number of different color palette websites to...

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Origins of an Entrepreneur

Posted by on Mar 14, 2012 in Marketing | 0 comments

Origins of an Entrepreneur

Every kid has a touch of entrepreneurial spirit. It comes out as soon as they realize that the things they want, like toys, candy, ice cream, and DVDs, aren’t actually free. Kids say the darndest things I remember my then 4-year-old brother Jordan asking me to take him to the store to buy Pokémon cards. When I told him I didn’t have any money, he said, “Just go to the ATM and get some.” Then he gave me driving directions to the bank. Who needs a GPS unit when you have a determined kid in the car? More recently, my 3-year-old nephew Shane asked me why I didn’t have more Play-Doh at my house. Then, he told me we could “go buy it at the mall.” But I protested, “We can’t. I don’t have any money.” His response: “I have money.” Wow, he’d already started doing chores (small ones of course) to earn some cash. Both my brother and my nephew figured out that some adults would (eventually) decline their demands. But they quickly deduced that some way, somehow, they would need their own money to get what they wanted. That’s the entrepreneurial spark. Pom-pom racketeering In third grade, my friends and I resolved to turn our pom-pom making hobby into a small business. (Pom-poms are those puffy things made from yarn that you often see on clown costumes.) We had a large supply of yarn, courtesy of a knitting grandma, and dreams of big profits. We created two price points: a dime for a small pom-pom and a quarter for a large one. Once we exhausted our neighborhood customer base, we moved distribution to a much bigger market—our school. It didn’t take long before our business faced an imminent shutdown. The principal wasn’t very happy with our backpacks filled with pom-poms…and cash. We had to negotiate with him to be able to prevent our pom-poms from being locked up, but every deal has its price: no more selling (anything) at school. So maybe the pom-pom business wasn’t for me. That didn’t stop me from dreaming up new ways to make money. From lemonade stand to Broadway production The school year wasn’t really the best time for a kid to run a small business, so I set my sights on a summer job. What’s the perfect business for a 10-year-old during summer vacation? The lemonade stand, of course! I used to spend my summers at my Dad’s house. He lived on a street with lots of kids my age, so I had plenty of potential business partners. Cutting production costs We started with a small business loan from my Dad to purchase powdered lemonade mix and cups. For a few days, we were thrilled, but the overhead was killing our profits. We needed to cut the cost of goods sold. We were already using the cheapest cups possible, so we looked to the lemonade itself. That powdered mix was expensive—we could buy several huge bags of sugar for the same price. So that’s what we did. Living in Orange County, California, we had an endless supply of fresh lemons from the trees around our neighborhood. In fact, most people had so many that they encouraged us to take as many as we wanted and to keep coming back. The...

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