Marketing 101

[cbotc]

To all fellow Marketing professionals and academicians,

 

Let's start this forum as a venue for all questions, problems, situations concerning the theory and practice of marketing. For businesses to survive in this time of economic crisis, the choice most take is to do more with less. The first thing companies resort to is downsizing of headcount, operational expenses (opex) and capital expenses (capex).

 

Sales or revenue targets are also downsized, but not to the degree done with cost center budgets. The implication here is the marketing effort has to be brought to a ever higher level. All facets of the marketing function - sales and distribution, marketing communications (advertising, sales promotions, public relations, direct marketing,personal selling), including market research need to sharpen more than ever that competitive edge. More creative minds in strategy and operations have to bloom now at this time.

 

Hopefully, this forum will be the first of a thousand steps toward that direction of advancing the practice of marketing profession.

[kadafy]

here's something from the guru of branding...jack trout...

 

1. It is better to be first than it is to be better.

2. If you can’t be first in a category, set up a new category you can be first in.

3. It is better to be first in the mind than to be first in the marketplace.

4. Marketing is not a battle of products, it’s a battle of perceptions.

5. The most powerful concept in marketing is owning a word in the prospect’s mind.

6. Two companies cannot own the same word in the prospect’s mind.

7. The strategy to use depends on which rung you occupy on the ladder.

8. In the long run, every market becomes a two horse race.

9. If you are shooting for second place, your strategy is determined by the leader.

10. Over time, a category will divide and become two or more categories.

11. Marketing effects take place over an extended period of time.

12. There is an irresistible pressure to extend the equity of the brand.

13. You have to give up something to get something.

14. For every attribute, there is an opposite, effective attribute.

15. When you admit a negative, the prospect will give you a positive.

16. In each situation, only one move will produce substantial results.

17. Unless you write your competitor’s plans, you can’t predict the future.

18. Success often leads to arrogance, and arrogance to failure.

19. Failure is to be expected and accepted.

20. The situation is often the opposite of the way it appears in the press.

21. Successful programs are not built on fads, they’re built on trends.

22. Without adequate funding, an idea won’t get off the ground.

 

 

- 22 immutable laws of branding

[Google]

niche marketing is better than mass marketing.

[slimguyph]

Ok. Here's a question.

 

You have a new company. After one year of operations you get 50% of the total market.

 

Next year, the three top companies are out to get your market share.

 

What do you do?

[cbotc]

Ok. Here's a question.

 

You have a new company. After one year of operations you get 50% of the total market.

 

Next year, the three top companies are out to get your market share.

 

What do you do?

At 50% share of market, one could assume your company is the market leader. Without any more information to work on, I would advice a generic approach that you as a market leaders would do - defend share and increase size of total market.

 

Defending share means beating competition to introducing better products (new and improved product strategy), introducing innovation and new technology into your products, being a pricing leader (pricing strategy), outshouting competition (be the market communication leader - spend more in ads, etc), out distribute competition, among other things.

 

The rationale for increasing total size of market being advantageous to the market leader is simple. A rising tide lifts all ships. Your company, being the bigger ship will rise and maintain its share or even increase it and the other smaller ships will rise as well but at a smaller displacement (volume and share). Also the increasing size of market will play into the market leader's advantage because of economies of scale. The big boys get the benefits first and foremost in the [alying field.

 

Hope this helps.

[slimguyph]

At 50% share of market, one could assume your company is the market leader. Without any more information to work on, I would advice a generic approach that you as a market leaders would do - defend share and increase size of total market.

 

Defending share means beating competition to introducing better products (new and improved product strategy), introducing innovation and new technology into your products, being a pricing leader (pricing strategy), outshouting competition (be the market communication leader - spend more in ads, etc), out distribute competition, among other things.

 

The rationale for increasing total size of market being advantageous to the market leader is simple. A rising tide lifts all ships. Your company, being the bigger ship will rise and maintain its share or even increase it and the other smaller ships will rise as well but at a smaller displacement (volume and share). Also the increasing size of market will play into the market leader's advantage because of economies of scale. The big boys get the benefits first and foremost in the [alying field.

 

Hope this helps.

 

 

Thanks for the insight.

 

Follow up question:

 

1. The incoming companies are bigger than me. How do i handle that?

 

Thanks again?

[cbotc]

Thanks for the insight.

 

Follow up question:

 

1. The incoming companies are bigger than me. How do i handle that?

 

Thanks again?

Bigger companies usually have more resources than you. That being the case, it would be prudent to avoid a head on confrontation. Be like Pacman when he demolished the Golden Boy. Be like David when he beat Golaith.

 

Choose your battles, be selective in playing the battlefield. There are instances where it takes too much effort for the bigger companies to exploit the situation, there are situations (product areas, pricing levels, territories, customers, market segments) that big companies will not or cannot exploit because it is not worth their while.

 

Big means the financial breakeven levels are usually high. That means, for a situation to be viable to a large company, it has to deliver sufficient volume (sales) to be of any value to big companies. Breakeven volumes are usually high so that smaller volume markets are left more often than not unattended by large companies.

 

It is often the case that in business (as in sports) big is sluggish and small is more agile.

 

Hope this helps.

[spadon]

There is the classic story about two shoe salesmen.

 

The first is offered the exclusive opportunity to sell shoes to the inhabitants of a tropical island, none of whom wear shoes. The salesman turned down the offer because, “Those people will never buy my shoes.”

 

The same offer was made to a second shoe salesman. This time the man’s face lit up. “Wow! What an opportunity!” he exclaimed. “A whole island full of people who don’t have any shoes yet!”

 

The second salesman became rich because he saw an opportunity and seized it.

[cbotc]

There is the classic story about two shoe salesmen.

 

The first is offered the exclusive opportunity to sell shoes to the inhabitants of a tropical island, none of whom wear shoes. The salesman turned down the offer because, “Those people will never buy my shoes.”

 

The same offer was made to a second shoe salesman. This time the man’s face lit up. “Wow! What an opportunity!” he exclaimed. “A whole island full of people who don’t have any shoes yet!”

 

The second salesman became rich because he saw an opportunity and seized it.

This is classic case illustrates a basic marketing skill one has to develop - demand recognition, the ability to see demand where others see none. Without this skill, marketing opportunity (right under your very eyes) slips away for others to exploit.

 

The other basic marketing skill one has to develop - demand creation, the ability to create demand where there is none.

 

Both skills require a certain amount of creativity and ability to think out of the box.

[Guest lorrainemay]

Thanks for the insight.

 

Follow up question:

 

1. The incoming companies are bigger than me. How do i handle that?

 

Thanks again?

 

If I may add to the insights already given to you, don't overlook niche marketing ( as Google posted earlier). Sometimes, there is no sense trying to compete head on with companies with bigger resources than you for the same market. 2009 would be very difficult for all businesses. It doesn't make sense to keep serving an over-saturated market with less opportunities for gains since you would be forced to cut your spreads to remain competitive. Niche marketing will create a new client base. And I think the most important thing of all, keep your customer happy. A happy customer tends to become a loyal customer.

 

Just my two cents.

Edited December 11, 2008 by lorrainemay

[spadon]

If I may add to the insights already given to you, don't overlook niche marketing ( as Google posted earlier). Sometimes, there is no sense trying to compete head on with companies with bigger resources than you for the same market. 2009 would be very difficult for all businesses. It doesn't make sense to keep serving an over-saturated market with less opportunities for gains since you would be forced to cut your spreads to remain competitive. Niche marketing will create a new client base. And I think the most important thing of all, keep your customer happy. A happy customer tends to become a loyal customer.

 

Just my two cents.

The aim of marketing is to know and understand the customer so well, the product or service fits him and sells itself.

Peter Drucker

Marketing is essentially a battle to satisfy needs of customers and companies compete to outdo each other in this.

[kadafy]

the problem with a lot of companies is that most of the time, they would like to be the over-all leader in all categories. be the ultimate "king". but that goal would require tons of energy, eats a lot of time & consume a lot of resources.

 

you said that bigger guys are after your market. and you mentioned you are the current market leader (commanding a 50% market share). The best thing to do, IMHO, is to reflect: what made you number 1. why half the market place is patronizing your product. recognize that single ,most common "answer" to the mentioned question. Then focus all your resources towards building & strengthening that position. brand management. remember: it is better to be first than to be better. you are first. you have the advantage. but also remember: it is better to be first in the "mind" (of customers) than be first in the marketplace. Thus, the need to strengthen your company/brand image.

 

my 2 cents

[spadon]

the problem with a lot of companies is that most of the time, they would like to be the over-all leader in all categories. be the ultimate "king". but that goal would require tons of energy, eats a lot of time & consume a lot of resources.

 

you said that bigger guys are after your market. and you mentioned you are the current market leader (commanding a 50% market share). The best thing to do, IMHO, is to reflect: what made you number 1. why half the market place is patronizing your product. recognize that single ,most common "answer" to the mentioned question. Then focus all your resources towards building & strengthening that position. brand management. remember: it is better to be first than to be better. you are first. you have the advantage. but also remember: it is better to be first in the "mind" (of customers) than be first in the marketplace. Thus, the need to strengthen your company/brand image.

 

my 2 cents

Unless I'm mistaken, these concepts are from the classic book of Ries and Trout: Positioning: The Battle For Your Mind. The crucial marketing battles are for the minds of customers.

[cbotc]

Unless I'm mistaken, these concepts are from the classic book of Ries and Trout: Positioning: The Battle For Your Mind. The crucial marketing battles are for the minds of customers.

Positioning is the ability to create a distinct image of the company, its products or services in the minds of the customers. It is not what you do to the product, it is what you do to the mind of the customer. You position a company and its product in the mind of a customer, a mental image usually in terms of quality and price.

 

A marketing skill, particularly important in product management.

[spadon]

Traditionally, companies were headed by CEOs with strong financial academic background and work experience. Today, the trend is to appoint CEOs with impressive marketing trackrecords and well honed marketing expertise.

 

Question: which would be a more successful CEO - one with a marketing or financial background? Why?