I believe that the answer for small and also to bigger businesses is:
1) Increase their Market Orientation skills
2) Review their Costs Structure
1)Increase their Market Orientation skills
Many businesses fail to acknowledge of where the market is heading, and also don’t realize that economy is not frozen in time, and the value bubbles through the Production->Market Chain are constantly changing result of macro and micro factors.
So, before investing, Managers should analyze better if their expectations meets the market trend.
2) Review their Costs Structure
Considering two types of costs:
Variable costs – Which increase or decrease, according to the increase or decrease of business volume (or in another word, of “sales”)
Fixed costs – Which remain the same, even if the business volume decrease.
Companies usually increase their fixed costs, when the “economic weather” is good, and forget that all economies evolve in cycles, and economic storms will happen.
Like Romans use to say, “In time of peace, we prepare for war”, in economics, the sentence is also applied as “in time of good economic periods, we should prepare for harsh economic periods.”
So, all businesses should invest more in solutions (human, technological, infrastructure) that will allow accomplishing two goals:
a) Increase their performance and efficiency.
b) Decrease the weight of fixed costs, on the company cost structure. By doing that, companies will perform better with “good economic weather” and will cruise through “economic storms”.
2008-09-28
2008-06-25
How to make a successful advertising campaign?
An advertising campaign that is successful has followed for sure at least one of these guidelines.
- Huge impact through an ad which has a lot of creativity allowing to invest less in media coverage.
- High intensity in the media, which requests a great budget investment.
- Find an accurate mix of creativity and media pressure to push the ad.
So, if you have a limited budget, creativity is the key for your success and if you have a huge budget, a good basic ad could be enough, but as everybody knows, huge budgets are hard to find.
Those are general rules, however specific characteristics of each advertising campaign target, should be taken in consideration as well, especially when choosing the campaign channels to advertise (TV vs. Radio vs. Magazines and others).
Although the guidelines mentioned are very simple, it is very hard to successfully accomplish one of them.
- Huge impact through an ad which has a lot of creativity allowing to invest less in media coverage.
- By capturing immediately the audience attention, through creativity impact.
- By creating word of mouth between the audience.
- High intensity in the media, which requests a great budget investment.
- By repeating the same message over and over again, it eventually will stick on the audience mind.
- Find an accurate mix of creativity and media pressure to push the ad.
- This is a grey area, where is hard to be successful, because this perfect mix of creativity vs. media intensity, isn't always the same as it depends of the market targeted. So in this case, the contribution and know-how of a market expert could be decisive to achieve a successful ad.
So, if you have a limited budget, creativity is the key for your success and if you have a huge budget, a good basic ad could be enough, but as everybody knows, huge budgets are hard to find.
Those are general rules, however specific characteristics of each advertising campaign target, should be taken in consideration as well, especially when choosing the campaign channels to advertise (TV vs. Radio vs. Magazines and others).
Although the guidelines mentioned are very simple, it is very hard to successfully accomplish one of them.
2008-05-21
Price as a measure of quality?
First perspective: – Reality
If it is more expensive is it better?
Not always, it’s easy to find products that are similar and have different prices, like commodities as bleach. Bleach is basically the same; however you find different brands with different prices.
But, it’s common knowledge that usually better products and better services tend to cost more in production and providing (better materials or better human resources tend to cost more).
Second perspective: – Perception
Customers make associations and define the brand positioning according to different factors, and one of those is the Price.
Usually, customers have limited knowledge about the service and product they intend to buy, even if the information is available, most customers don’t expend must time researching for more information about products like soap, toothpaste or others.
So, most customers tend to make a mental shortcut to optimize their time, and associate Price with quality, assuming that if it is more expensive, it’s better.
If it is more expensive is it better?
Not always, it’s easy to find products that are similar and have different prices, like commodities as bleach. Bleach is basically the same; however you find different brands with different prices.
But, it’s common knowledge that usually better products and better services tend to cost more in production and providing (better materials or better human resources tend to cost more).
Second perspective: – Perception
Customers make associations and define the brand positioning according to different factors, and one of those is the Price.
Usually, customers have limited knowledge about the service and product they intend to buy, even if the information is available, most customers don’t expend must time researching for more information about products like soap, toothpaste or others.
So, most customers tend to make a mental shortcut to optimize their time, and associate Price with quality, assuming that if it is more expensive, it’s better.
2008-05-17
What effect rebuilding the U.S. infrastructure will have on the U.S. economy?
The effect of rebuilding will be positive in U.S. Economy, however the effect will not be as huge as most think.
This type of economic strategy was developed by Keynes that defended the interventionism role of the government in the economy. As you all know the U.S. President Franklin Delano Roosevelt, applied Keynes strategy also known as “New Deal” between 1933 and 1937 with the purpose of recovering U.S. Economy following the stock market crash in 1929.
The “New Deal” in short terms was a government investment plan to reduce and control agriculture production, regulate the financial markets and specially, introducing a huge government investment in public infrastructures. As you all probably know FDR’s “New Deal” was a success.
However in the 70’s following the world economic crisis originated by the oil embargo to the U.S. and to some European countries, similar strategies of the “New Deal” were implemented in the U.S. and in Europe, but this time without success. It was the end of the magic formula to recover economies.
So, we learn from the past that:
- Government investment in infrastructures stimulates positively the economies.
- Full economic recovery usually depends of more factors that only government investment.
- Before a strategy implementation, it is mandatory to analyze the economy and identify the origin and weak spots of the economy, to design an economic strategy with chances of success.
This type of economic strategy was developed by Keynes that defended the interventionism role of the government in the economy. As you all know the U.S. President Franklin Delano Roosevelt, applied Keynes strategy also known as “New Deal” between 1933 and 1937 with the purpose of recovering U.S. Economy following the stock market crash in 1929.
The “New Deal” in short terms was a government investment plan to reduce and control agriculture production, regulate the financial markets and specially, introducing a huge government investment in public infrastructures. As you all probably know FDR’s “New Deal” was a success.
However in the 70’s following the world economic crisis originated by the oil embargo to the U.S. and to some European countries, similar strategies of the “New Deal” were implemented in the U.S. and in Europe, but this time without success. It was the end of the magic formula to recover economies.
So, we learn from the past that:
- Government investment in infrastructures stimulates positively the economies.
- Full economic recovery usually depends of more factors that only government investment.
- Before a strategy implementation, it is mandatory to analyze the economy and identify the origin and weak spots of the economy, to design an economic strategy with chances of success.
2008-04-23
What will be the next "big thing" in direct marketing?
The next big thing will be Direct Marketing by request.
How?
By the development of interfaces that will allow customers to request more information about a product or service when they see an ad commercial on TV or on another media channel.
To visualize what I’m describing, I’ll give you an example:
Imagine that you are in your living room watching TV, commercials are on, and you see an ad about a product or service that you are interested in.
You will be able to request to be contacted immediately about that product or service by a click in your remote control.
The contact will be made or by video call through your TV, or through your phone if you are pre-registered in this service.
How?
By the development of interfaces that will allow customers to request more information about a product or service when they see an ad commercial on TV or on another media channel.
To visualize what I’m describing, I’ll give you an example:
Imagine that you are in your living room watching TV, commercials are on, and you see an ad about a product or service that you are interested in.
You will be able to request to be contacted immediately about that product or service by a click in your remote control.
The contact will be made or by video call through your TV, or through your phone if you are pre-registered in this service.
2008-04-17
Sales Techniques: Answering a question with a question?
If you are consider answering a question with a question as a technique to avoid tough questions that will lead to a failure, because usually that intention is perceived by the customer.
However if you answer a question with a question with the purpose to bring to discussion other relevant factors that favor you, which the customer isn’t considering in that moment, by doing that you increase your chances of success.
One of many classic examples:
Question: Why is this automobile so expensive?
Bad answer: This is a good automobile, who cares about the money?
Good answer: This automobile pollutes less, if you care about the environment and with the future of your grandchildren, this automobile isn’t expensive, or is it?
2008-03-31
Is a marketeer a sales person?
No. However a marketeer that doesn’t know how to sell isn’t a marketeer.
Why?
In a competitive market, the ability to present your product/service in a most appealing way, giving all the best tools to your sales personal, can make the difference.
And, to do that successfully, the knowledge of “How to sell” is irreplaceable.
Why?
In a competitive market, the ability to present your product/service in a most appealing way, giving all the best tools to your sales personal, can make the difference.
And, to do that successfully, the knowledge of “How to sell” is irreplaceable.
2008-03-26
Consumers Behaviour Tip
Sometimes consumer preferences are not revealed by questioning.
The best way to really acknowledge consumer behaviour is to submit consumers to a real test, which they don’t know what is being tested.
Example:
The majority of people say that prefer the colour blue.
However, when confronted with two similar products, one with blue package and other with red package, the majority of people are most attracted to the red one.
The best way to really acknowledge consumer behaviour is to submit consumers to a real test, which they don’t know what is being tested.
Example:
The majority of people say that prefer the colour blue.
However, when confronted with two similar products, one with blue package and other with red package, the majority of people are most attracted to the red one.
2008-03-22
Superbowl Ads
The Superbowl ads are played in the most expensive TV airtime in the world.
So, companies try to make the best ads…
All 2008 Superbowl Ads:
So, companies try to make the best ads…
All 2008 Superbowl Ads:
What is the marketing formula to the Youth segment?
If you intend to make a campaign targeted to the Youth segment, it is a mistake to look in to the past.
The Youth segment is all about trends.
You need to listen teens directly and understand what they are responding to now.
Remember that teens focus shifts very fast, so what was trendy yesterday, could be boring for them today.
My point is that, in Youth segment the best formula is not using a formula.
The marketing should flow with the trends and understand what teens want in that short period of time.
The common mistakes are engaging in old formulas, and look to teens through an adult point of view.
The challenges of this segment are looking to teens through a teen point of view, and staying a second ahead of the new trends.
The Youth segment is all about trends.
You need to listen teens directly and understand what they are responding to now.
Remember that teens focus shifts very fast, so what was trendy yesterday, could be boring for them today.
My point is that, in Youth segment the best formula is not using a formula.
The marketing should flow with the trends and understand what teens want in that short period of time.
The common mistakes are engaging in old formulas, and look to teens through an adult point of view.
The challenges of this segment are looking to teens through a teen point of view, and staying a second ahead of the new trends.
How do you define a successful ad campaign?
Setting the goals is the first step of any ad campaign.
Different industries, different markets (different countries or sometimes different regions) and different target audiences, will affect the ad campaign goals.
Usually, there are two types of goals:
- Image projection goals - like brand acknowledgment, brand loyalty, brand image association and brand positioning.
- Operational goals – like sales increase, retaining actual customers, gaining new customers, pitching for a recently launched product, and others which may vary according to the industry.
Image projection goals, are measured when the ad campaign ends, and it is measured with market research (like phone surveys or other techniques).
Operation goals are measured as well when the ad campaign is terminated, and it is measured with internal operational data.
Note 1: Not all ad campaigns target sales increase. Example: ad campaigns made by non profit, or social awareness organizations.
Note 2: Ad campaigns can have one or multiple goals, but has more chance to be successful if it narrows the list to fewer goals, because the message can be conveyed more clearly.
So, it is a successful campaign if it achieves the goals set at the beginning of the process.
Different industries, different markets (different countries or sometimes different regions) and different target audiences, will affect the ad campaign goals.
Usually, there are two types of goals:
- Image projection goals - like brand acknowledgment, brand loyalty, brand image association and brand positioning.
- Operational goals – like sales increase, retaining actual customers, gaining new customers, pitching for a recently launched product, and others which may vary according to the industry.
Image projection goals, are measured when the ad campaign ends, and it is measured with market research (like phone surveys or other techniques).
Operation goals are measured as well when the ad campaign is terminated, and it is measured with internal operational data.
Note 1: Not all ad campaigns target sales increase. Example: ad campaigns made by non profit, or social awareness organizations.
Note 2: Ad campaigns can have one or multiple goals, but has more chance to be successful if it narrows the list to fewer goals, because the message can be conveyed more clearly.
So, it is a successful campaign if it achieves the goals set at the beginning of the process.
Why should I matter about Brand Loyalty?
Brand loyalty is very important, because increases the brand value, and by doing so allows to set higher prices.
Imagine a market without brands, there you will find a market where the competition is only made by setting smaller prices, and by that the risk of destroying market value is high.
Pricing is the most sensible item in marketing, because projects your image and positioning, defines your profit margins and in the end defines the company sustainability.
So, why brand loyalty is so important to pricing? Increasing brand value by acknowledgment, image associations, attractiveness and brand loyalty, will permit to set higher prices, therefore higher margins and in the end, higher profits.
Besides that, is common knowledge that in almost all industries is cheaper to increase sales through actual customers, than invest to reach new customers.
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