Don't sell the steak, sell the sizzle.
Sell the crunch not the apple.
The buyer buys the seller not the salt.
Understanding human needs is half the job of meeting them.
- Adlai Stevenson
The optimist says the glass is half full.
The pessimist says the glass is half empty.
The project manager/engineer says the glass is twice as big as it needs to be. (There's more..)
The realist says the glass contains half the required amount of liquid for it to overflow.
And the cynic..... wonders who drank the other half.
Every marketer should have a wide variety of skills:
Communication skills - business management skills - Sales skills (especially closing the sale) - marketing skills (marketing mix, marketing strategies, marketing plan, marketing management, product demonstration etc)
Fortunately, this guide covers all of these skills. You just need to use the 'Table of contents'.
Marketing is the process of finding customers for a business, or in other words, satisfying the customer's 'needs and wants'.
Marketing management is the process of finding who the customers and what they need (customer research), who the competition is how to differentiate your product/service (competition research), and then coming out with a marketing strategy, which includes a marketing plan and a marketing mix.
It is a combination of several marketing details. When it first came out in 1053, the classical marketing mix was the famous four Ps of marketing: price (competitive pricing), product (features and benefits), promotion (tactics), and place (where it would be sold).
In the last 2 decades, the famous four Ps was replaced by four Cs, of which there are two varieties.
Lauterborn's four Cs: Consumer (start with what the customer wants/needs), cost (what the customer can pay for it), communication (how to communicate how different and better your product is), convenience(ease of buying).
The marketing mix keep changing to Ps or Cs, according to the trends of the age.
For example, Motorola's SAVE model in today's services-dominated industries, which shifted the focus from products to services: S (solutions) - A (where the services can be accessed), V (value of the products), and E (education - explaining the value of the service to people who need them).
How a business presents its marketing plan to the customers/end users. There are many marketing models. Basically, companies try out things and stick to whatever works for them. Some examples of marketing models are:
- Mass Marketing (e.g. Coca-Cola): These companies have one offering or a set of a few offerings for all customers. The companies build a strong and reliable distribution network and spend vast amounts of money in mass-media advertising.
- Continuous Innovation (e.g. Apple, Sony) : These companies have a backroom-driven approach to marketing. This involves visualizing what the customer wants even before she has sensed the need. The key ingredients of this model are strong capabilities in manufacturing, research and product development.
- Customization (e.g. custom cars, hotels): These companies customize their offerings. For manufacturing companies, this means a system that can produce customized offerings at short notice. For service companies, this translates into a skilled and trained workforce, and advanced database management capabilities.
- Trust-based (e.g. Mercedes): These companies try to attract customers by using the selling proposition of trust. This requires them to offer products or services that are consistently of a high-quality, and respond quickly to customer demands.
- Customer Community (e.g. Harley Davidson, Apple Computer ) aka Cult marketing : These companies do not just sell products or services (see Cult Brands) . They sell customers access to a 'way of life' that is usually built around the product. The success with which a company adopts this strategy is a function of branding.
- Value Price ( e.g. Southwest Airlines)/aka cut-price: These companies offer customers a basic product or service shorn of frills at a low cost. The offering remains as functional as other offerings, built its low price attracts a segment of customers who do not want any fancy frills.
- Prestige ( e.g. Rolls Royce, Jaguar) : These companies offer customers a premium product at a premium price. The success of this model depends on their ability to convince the customer that price is not a consideration. This requires the ability to build a premium, exclusive image around the product.
- Full System ( Du Pont, Intel): These companies often sell to other businesses (and selling to 'normal' customers too. This model requires companies to understand their customers’ businesses.
- Good Citizen ( e.g. Body Shop, Google in its 'Do no evil' days): Thinking that social and environmental responsibility can be used as a branding attribute and a selling proposition. The public focus that any such initiative attracts ensures that only companies that are really we are, socially and environmentally, can use this approach. The Good Citizen Model is related to the concept of Ethical Business.
- Aesthetics ( e.g. Bang & Olufsen) aka good looks: These companies try to differentiate their product on the basis of aesthetics. To succeed, a company using this model needs to ensure that the product loses none of its functionality.
(Source: Philip Kotler)
Marketing strategy is how you will plan to increase your sales as well as also become a dominant player in your industry for a long period of time. Thus, marketing strategy is a mix of short term thinking (sales and pricing tactics), as well as long-term thinking (competitive strategy, product development strategy etc).
5 C's of Marketing Strategy
- Customer Needs: What needs from which clients do we seek to satisfy?
- Company Skills: What special competences do we possess to meet those needs?
- Competition: Who competes with us in meeting those needs?
- Collaborators: Who should we enlist to help us and how do we motivate them?
- Context: What cultural, technological and legal factors limit what is possible?
An outline for a good marketing strategy: Answer these properly categorized questions as honestly as you can (and keep revising/referring often)
1. Makeable or Marketable Product?
2. Who is buying, who’s using?
3. What is the buying Process?
4. Who are the 'influencers'?
5. How important is it to the consumer?
6. Who needs it and why?
7. What is the value to the end user?
8. Is it a planned or impulse buy?
9. What are the perceptions of our product?
10. Does it meet consumers’ needs?
How can I become the customer's first choice?
Who is your most important customer?
What are that customer’s top three priorities?
How do you score?
How does your best competitor score?
11. What is the market’s nature? - size, growth, segments, geography, Product Life Cycle (PLC)
12. Competitive Factors? - Quality, Price, Advertising, R&D
13. What are the Trends?
14. What is your company good at? Poor at?
15. What is your position in the market? - size, share, reputation, historical performance
16. What are your resources?- Trade relations, Sales Force, Cash, Technology, R&D, Patents
17. Who is gaining or losing share?
18. What do your competitors do well?
19. Compared your resources to theirs?
20. What are the barriers to entry?
21. What are your objectives and strategy?
22. Any contingency plans?
23. Short-and-long-term plans and goals?
24. Who is the target?
25. The Product? - fit with other products, Differentiation, PLC, perception, Packaging, features
26. Place?- how best to reach segment, channel mathematics, draw channels
27. Exclusive, Selective, Intensive distribution?- fit with product
28. Who has the power?
29. How to motivate the channels?
30. Promotion?- the buying process? How are the funds targeted to buying process goals?
31. Push or Pull Strategy? Or, both?
32. Media? - type, measures, message
33. Dealer Incentives?
34. Consumer Promotions? - coupons, contests
35 Pricing?- What strategy? Skim, penetrate?
36. Seek Volume or Profits?
37. Perceived Value, Cost-plus Pricing?
38. How does Price relate to market, size, product life cycle, competition?
39. Breakeven in Units?
40. Fixed cost/( Selling - variable cost) Included fixed marketing and promo costs in fixed costs of the plan?
41. Relate breakeven to relevant market
42. What is the Payback period? Exclude Sunk Costs
43. Are Goals reasonable? Attainable?
(Source: Adapted from ’10 Day MBA’ by Steve Silbiger)
Once you have finalized your marketing mix and the marketing strategy, you will now come up with a marketing plan, which will detail the actions resulting from all that notes and theory. A typical marketing plan contains the following elements:
Market research: Look at market dynamics (how things work in your particular market), patterns (sales), customers, and the current sales volume for the industry as a whole.
Competition: Who they are, how you will differentiate and survive against them, what you plan to do to become a market leader.
Market plan strategies: This is the meat of the marketing plan - marketing and promotion strategies - advertising, direct marketing, training programs, trade shows, website, mobile app, etc.
Marketing plan budget: How much you plan to spend (and also considering how much return the spending will bring).
Marketing goals: Attainable marketing goals - e.g. increase sales by 50% each quarter.
Monitoring the marketing plan results: Finding things that are working, those that aren't but can be made to work, and some that never got off the ground.
- The first rule of marketing planning: Always start at zero.
- Beware of written surveys: It's far better to conduct oral surveys, as you have a chance to clarify any misunderstandings.
- Beware of focus groups: They often reveal more about group dynamics than about how individuals think.
(Source: Harry Beckwith)
No marketing is ever complete without mentioning the popular laws of marketing first put out by Al Ries and Jack Trout.
- The law of leadership: It’s better to be first than it is to be better - marketing is the battle of perception, not products.
- The law of the category: Promote the category. If you can’t be first in a category just create your own new category. (Examples: multimedia computer, magazine for mature women, Clothes for tall people, etc.)
- The law of the mind: Being first in the mind is most important when possible. Apple got off the ground with very little money. They had a simple, easy to remember name and a focused, creative ad plan.
- The law of perception: It’s not a battle of products. Do not focus on the facts, 'the truth' and the features. This is all good, but marketers need to sell the product around what people want and perceive. Your name, slogan, image, message, etc. all need to factor into this.
- The law of focus: Own a word in the mind of your prospect. Simpler words or concepts are the best. If you’re not first or a current leader, you need to reduce the scope of your operations and focus. Protect your word and continue to brand and focus on the law of the mind. Focus on a single, powerful word if possible.
- The law of exclusivity: It’s hard for two competing companies to own the same word in the mind of the consumer. Safe, fast, affordable, etc.
- The law of the ladder: Trying to get into the mind first is best but there are strategies to use to play off your competitors if you’re behind. 'They’re big and we’re small and better', 'They’re more successful in the market but we try harder', Sometimes it’s better to be 3rd on a big ladder than first on a small ladder.
- The law of duality: Gradually over time the battle becomes a two rung affair.
- The law of the opposite: Wherever the leader is strong, there is an opportunity. Turn the strength into the weakness. Don’t try to be better, be different. There are people that want to buy from the leader and there are people that absolutely don’t want to buy from the leader. You are the alternative. A second rung company must go for these people. (Example: Broiled, not fried, etc.)
- The law of division: The market is an ever dividing sea of categories. The automobile industry is a perfect example. Find or created a new category and stick with it. Do not try to get into other categories after having success - history has shown this is a mistake.
- The law of perspective: Most of time what works in the short term usually doesn’t work in the long term. Line extension is a major concern. Instant results might give you trouble years down the road. Focus on your core goals.
- The law of line extension: Do not spread yourself too thin and try to be everything for everybody. Development, marketing budget, support, staff, perception, are all affected. Be strong somewhere instead of weak everywhere. Less is more. Narrow your focus.
- The law of sacrifice: Rule 1 - Minimize product line (don’t be a dept. store without focus), Rule 2 - Limit your target market, Rule 3 - Be consistent. Have a brilliant narrow position and stick with it. Do not become all things to all people.
- The law of attributes: Do not emulate the leader. Play off against the leader and offer something similar but opposite to differentiate. It doesn’t even have to be different, just a needed niche.
- The law of candor: Consider being honest and admit a negative but twist it into a positive. With a name like Smucker’s it has to be good, We’re smaller and younger but more focused on you, Listerine tastes bad but something so strong has to kill a lot of germs.
- The law of singularity: Focus on several good marketing avenues. Don’t dabble a little in everything. Trying harder does not get you to success. Make a single bold stroke that is least expected by the competition. Find out where the competitor is vulnerable.
- The law of unpredictability: Do not assume the future. Get a handle on trends not fads. If something can go bad, it will always go bad so prepare for it. Try to build an enormous amount of flexibility into your organization so when things change in your industry you’re ready to deal with it - and deal with it quickly. Always keep innovating.
- The law of success: Lose your ego and be more objective. Do not substitute your own judgment for what the market truly wants. Do not blind yourself by success, focus. Always think like a prospect thinks and try to base that on trends and real data. Do not try to read your prospects mind. Do not oppose your view of the world on the customer. Never lose touch with the front lines.
- The law of failure: Do not try to fix things. Recognize a failure early and change fast. The ready, fire, aim approach - try new ideas but nobody succeeds every time. Reward new ideas and the resulting success. Do not be afraid to take risks.
- The law of hype: When your company need 'the hype' it usually means you’re in trouble or your plan is not strong or failing. New products that are going to 'revolutionize the industry' are popular candidates for hype. Real revolutions don’t come down main street with a marching band - they sneak up on your in the middle of the night.
- The law of excelleration: Do not focus on fads. Focus on market trends.
- The law of resources: Even the best idea in the world will not go far without proper funding. Ideas without money are worthless.
(Source: 'The 22 Immutable Laws of Marketing' by Al Ries and Jack Trout)
Best way to get publicity? Announce a new category, not a new product.
8. Positioning: A product's positioning is how potential buyers see the product. It is how a product/service stands out in today’s me-too market place'.
- Stand for one distinctive thing that will give you a competitive advantage.
- To broaden your appeal, narrow your position.
- Choose a position that will reposition your competitors; then move a step back toward the middle that will cinch the sale.
- In positioning, don't try to hide your small size. Make it work by stressing its advantages such as responsiveness and individual attention.
There is also the idea of 're-positioning' where companies try to change how they are perceived in the market.
For example, IBM re-positioned itself from a seller of computers to a providers of Information Technology (IT) services.
You must position yourself in your prospect’s mind.
Your position should be singular: one simple message.
Your position must set you apart from your competitors.
You must sacrifice. You cannot be all things to all people; you must focus on one thing.
- Al Ries and Jack Trout
Your positioning statement:
Who: Who are you?
What: What business are you in?
For whom: What people do you serve?
What need: What are the special needs of the people you serve?
Against whom: With whom are you competing?
What’s different: What makes you different from those competitors?
So: What’s the benefit? What unique benefit a client derive from your service?
Positioning Your Business
To get started on a positioning program, there are six questions you can ask yourself.
3. For whom
4. Against whom
5. What's different
- Beware the deadly middle. If you price in the middle, what you are saying is 'We're not the best, and neither is our price, but both our service and price are pretty good.' Not a very compelling message.
- (When selling services) Don't charge by the hour. Charge by the years (of experience).
- In services, value is a given. And givens are not viable competitive positions. If good value is your best position, improve your service.
To Stand Out, Stand Out.
People don't believe what you tell them.
They rarely believe what you show them.
They often believe what their friends tell them.
They always believe what they tell themselves.
- Seth Godin
A brand is a something that makes you noteworthy in the crowded market, a word/symbol/design etc or a combination, which the market thinks of as your assurance of trust, reliability and quality.
A brand is a 'proper noun that can be used in place of a word.'
The five elements of a brand:
2. 'Brand messages': Things you stand for.
3. Brand voice: Friendly/formal/conversational/etc.
4. A tagline: A very short, clear and memorable sentence that encapsulates the whole experience your brand creates. 'Organizing the word's information'.
5. Consistency: For example, don't change the color of your logo all the time. It may confuse some people.
Search Google for 'logo design tips', 'logo ideas' etc.
- Generic brand name = bad.
- Own a word. Like 'luxury'.
- Select a brand color opposite of that of your main competitor’s.
- Perception of quality is built by a narrowly focused brand, a high price, and a better name.
- Claim your product is a 'leader', not 'better'. All products claim they are better, but you can’t argue with leader.
- The Law of Expansion: The power of a brand is inversely proportional to its scope. Trying to be all things to all people undermines the power of the brand.
- The Law of Contraction: A brand becomes stronger when you narrow its focus. By narrowing the focus to a single category, a brand can achieve extraordinary success.
- The Law of Publicity: The birth of a brand is achieved with publicity, not advertising. A new brand must be capable of generating favorable publicity in the media or it won’t have a chance in the marketplace.
- The Law of Advertising: Once born, a brand needs advertising to stay healthy. Sooner or later, a brand leader has to shift its branding strategy from publicity to advertising.
- The Law of the Word: A brand should strive to own a word in the mind of the consumer. If you want to build a brand, you must focus your branding efforts on owning a word in the prospect’s mind.
- The Law of Credentials: The crucial ingredient in the success of any brand is its claim to authenticity. Coke is the real thing in the minds of many, even though the last 'real thing' advertisement ran almost thirty years ago.
- The Law of Quality: Quality is important, but brands are not built by quality alone. Does a Rolex keep better time than a Timex?
- The Law of the Category: A leading brand should promote the category, not the brand. The most efficient, most productive, most useful aspect of branding is creating a new category.
- The Law of the Name: In the long run, a brand is nothing more than a name. In the short term, a brand needs a unique idea or concept to survive.
- The Law of Extensions: The easiest way to destroy a brand is to put its name on everything. More than 90% of all new product introductions in the U.S. are line extensions. Line extensions destroy brand value by weakening the brand.
- The Law of Fellowship: In order to build the category, a brand should welcome other brands. Consumers want to have choices. Choice stimulates demand. Healthy competition helps to build the category.
- The Law of the Generic: One of the fastest routes to failure is giving a brand a generic name. The problem with a generic brand name is its inability to differentiate the brand from the competition.
- The Law of the Company: Brands are brands. Companies are companies. There is a difference. Customer’s think of brands, not companies.
- The Law of Sub-brands: What branding builds, sub-branding can destroy. Sub-branding erodes the power of the core brand.
- The Law of Siblings: There is a time and place to launch a second brand. A second brand can be launched to focus on a new subcategory within the same product family.
- The Law of Shape: A brand’s logotype should be designed to fit the eyes. Both eyes. A customer sees the world through two horizontally mounted eyes peering out of the head. For maximum visual impact, a logotype should have a horizontal shape. The ideal shape is 2 1 /4 units wide by 1 unit high.
- The Law of Color: A brand should use a color that is the opposite of its major competitor. Coke is red, and Pepsi is Blue. Hertz is yellow, and Avis is Red. Color consistency over the long term can help a brand burn its way into the mind.
- The Law of Borders: There are no barriers to global branding. A brand should know no borders. The perfect solution to growth in a competitive market is not line extensions, but building a global brand. A brand should have a consistent message globally, but must take into account the perceptions of its country of origin.
- The Law of Consistency: A brand is not built overnight. Success is measured in decades, not years. This is the law which is violated most frequently.
- The Law of Change: Brands can be changed, but only infrequently and only very carefully. Nothing is absolute and there are exceptions to every rule. There are three situations where changing your brand is feasible: When your brand is weak or non-existent in the mind, when you want to move your brand down the food chain to a lower price and perception point, or when your brand is in a slow-moving field and the change is going to take place over an extended period of time. Remember, changing your brand is a long and difficult process. Change at your own risk!
- The Law of Mortality: No brand will live forever. Euthanasia is often the best solution. While the laws of branding are immutable, brands themselves are not. They are born, grow up, mature, and eventually will die. Yet companies that are willing to spend millions to save a dying brand, won’t spend pennies to launch a new one. Opportunities for new brands and threats to old ones are constantly being created by the invention of new categories.
- The Law of Singularity: The most important aspect of a brand is its single-mindedness. What is a brand? A singular idea or concept that you own inside the mind of the prospect. It’s as simple or as difficult as that.
(Source: 'The 22 Immutable Laws of Branding' by Laura and Al Ries)
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