Red Zebra Business Centre - Management Memos
January 2012 Making Measurably More For Your Business Since 1985! Page 1
Opportunities will arise this year - but they need marketing!
Max Williams, Principal Consultant

2012 opens in uncertain times. The real question is "Are we going to be defensive, or is attack the best form of defence?" With so much unused resource available to SME's, attack looks like a good option.

In the main article this month we take a new look, and not a very flattering one, at the role and function of the marketing department in a typical mid-size and larger company. As specialists in the SME field, we take some lessons for medium and smaller enterprises out of this review.

Recently, while we were working on a very significant project for a client, the comment came back to us "I just don't really 'get' marketing". The comment arose from discussions about buyer behaviour - in this case the likely buyer responses to various advertising assertions being suggested by the client.

As usual, the client knows the business very, very, well, and can readily and quickly identify what the customer needs  - and why they might need it. But that is not the issue. Since advertising is aimed at getting a store visit, a website visit, an email enquiry, or a phone call, you need skill in motivating prospective buyers. Industry specialist knowledge is not much help.

And of course, this is only the advertising part of the marketing mix. How many business operators forget that advertising is just one part of the marketing mix?

Typically, this results in a  very confused attitude to marketing, and inevitably a very confused marketing message. Consider this (quite common) scenario:

Trader: "We are certainly not the cheapest in town!"

Prospect: "So, why would anyone, like us, buy from you?"

Trader: "Because we have the best products (or do the best job), so we offer the best value."

Prospect: "How can I be sure you're offering the best value if I can't check prices?"

Trader: "This model here is the lowest price you'll ever find - I know you won't find anything cheaper."

Here the conversation ends, because the trader just isn't clear on what they're offering. Hence, nothing is believable.

How different that could have been if the trader had understood price segmentation. Then acted in a way which answered the customer's personal needs, rather than simply addressing the technical issues surrounding the enquiry?

If you don't 'get' marketing, then you won't be sending clear, simple messages you want to send to the market you. You'll be sending out clear messages alright, but messages that hinder, not help, your business.

With the opportunities that present themselves now - especially if you're adjusting your business to the high Australian dollar, working towards using the NBN to help you grow, and all that kind of thing - you will need a renewed marketing effort. Otherwise, you'll send out the wrong messages.

Make headway this year. Learn to 'get' marketing.

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hatever happened to the Marketing Department? For a larger corporation that is a very significant question. For SME's, though, the question should probably be "Whatever happened to my marketing plan". Assuming, that is, that you have one!

Marketing Marries the Business to the Market Place
This fundamental aspect of the marketing function seems to have 'fallen off the desk'. Let's freshen it up a bit!

"There is a belief in Australia, that anyone can do marketing", says recruiter Anthony Hourigan, who placed the chief marketing officer at Telstra. "They're wrong, of course," he went on, "but that's what they think".

Why is that?

In a corporate environment, there are many reasons. One is the rise of the corporate information officer to control public statements for the daily news cycle. Important for the share price, and the CEO needs to control any statement that might affect it.

Another is the rise of the buying office whose performance is judged on price alone. "Cheap marketing services are good marketing services" is the mantra - even if it's wrong.

More generally, though, "marketing' is thought of as "advertising", and we are all consumers of advertising. So, we all know about advertising. Right? No.  Wrong!

Firstly, there is much more to marketing than just the advertising element.

Let's consider your business as an 'operation', it might be a manufacturer, wholesaler, or retailer, but in every case your staff present goods and services for sale. Bridging those internal operations to the customer is the totality of the marketing function.

This includes a wide range of functions:
  • Finding out what customers want
  • Identifying how to increase their satisfaction
  • Identifying where the purchase is most likely to be made
  • Identifying the preferred place and mode of  purchase
  • Finding out the quantities and frequency of purchases or the quantities and frequency that would be preferred
  • Determining what price looks like value to the customer
  • Finding out what would make them buy more, or more often, or pay more
  • Learning how to communicate with them
  • Building a communication strategy - remember inbound as well as outbound
  • Setting up channels-to-market so people can actually buy
  • Setting up the mechanisms to make everything work
  • Measuring the effectiveness of all of these steps, and,
  • Going around it all again!
In all of that, advertising does not even get a specific mention. It's part of the communication strategy - and only just one part of that.

So, if you are a small (or even a medium sized) business, the marketing task is very comprehensive. Overlook these functions at your own risk!

Making This into a Marketing Plan
For a small or medium business, this generally means getting everyone together to share ideas. Not much wrong with that, but ideas are only part of the solution. Marketing skill is what's needed.
Ideas People
In most cases, you will have a pretty fair idea of what people want. Your own experience and the advice of suppliers are good guides.

But have you had any 'lemons' lately? Things that just didn't sell. If not, you are probably not trying hard enough.You're not pushing the boundaries to see where your customer tastes and preferences are going.

When it comes to pricing, there is colossal resistance to review and change. After all, you have an idea of what competitors are charging, and generally that is way too low. So you can't go up, and you won't come down.

If you haven't changed the price of a range recently, and measured the change in volume, you are leaking money!

Here is a good example of the way the whole marketing plan integrates together. If you change the pricing, nothing will happen until you communicate that to the market. So pricing, which is a key part of the marketing mix, comes together with advertising to help drive your business.

Perhaps your pricing is just right. But don't bet on it! Even if it is right, do your prospective new cusomers know?

So what of your communication strategy? Is it just a bit of advertising here and there, or a complete plan that involves all the modern media available to you?

There area gazillion options for you, and some will be costly and not effective - others much less costly, and perhaps more effective. Which to use?

This is also a complex issue. For instance, we have heard clients say that they would never use press ads, because press ads don't generate any leads for them.

Quite right, but if you need an ad to generate trust, press is the only way to go. For example, if you were selling commercial air conditioning installations, a press ad will not generate any leads at all - but it will persuade someone who needs commercial air-conditioning to add you to their enquiry list. Then they will probably check your website.

Will your website turn that enquiry into a lead? Only if it has been properly designed to do so. Having a great looking website that pleases you does not mean that it will generate any sales.

All of which means that you need to think and plan very carefully to get your marketing right. And not everyone can do it!
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McNicol Williams Management & Marketing Services is a Small Business Advisor listed with the Small Business Victoria, and has presented The Red Zebra program under its auspices. This listing requires that the first hour's consultation is always free. So when we say "No charge or obligation", we mean it!

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