Moving From Tragic To Strategic Marketing

Strategic Marketing FIVE Main Reasons for “Tragic” Instead of Strategic Marketing Introduction Did you know that in September 2009 there are at least 26,000,000 keywords search globally on Google for ‘strategic marketing’? Did you know that when you type strategic marketing on Google Search it suggests at least another 10 items that carry strategic marketing phrase at the beginning such as ‘strategic marketing solutions, strategic marketing plan, strategic marketing process etc..’? Did you know the Cost Per Click (CPC) for keyword ‘strategic internet marketing’ is USD 20 per click? Make sure you don’t simply click because it will balloon our friend’s advertising budget!

Why strategic marketing is such an important phrase? What is strategic marketing? Marketing deals with a lot of activities which we call as programs. Programs entail events, mailings and press release. Programs are created based on the tactics that have been agreed upon. Tactics activities include channels, message and sales plan. How to we derive into tactics? It is from the strategy. Strategy answers our overall business goals which concern the organization as a whole. So, whenever any activity that affects the organization as a whole and long term, we called it ‘strategic’. Therefore strategic marketing is extremely important especially in today’s business. Strategic marketing is marketing activities that focusing on the business goals for long term survival of the business. But which organization does not focusing on business goals and long term survival? Super majority businesses have their strategic plan for their long term survival but it is rare to find a company that really follow what they have planned. Most of the time it is just a nice plan. And these people always wonder why on earth they don’t achieve our goals but been running busy all the while? Perhaps it is good to analyze what are the reasons for such “tragic marketing” instead strategic marketing. The following are some of the main reasons.

Lack of Expertise Actually there are not many “real marketing person” around in the job market. Real marketing person means someone who can see, feel and understand the total marketing from business perspectives. Most of the time the marketing person employed based various criteria. Based on my experience that candidate with event, branding and media background will have the highest value; at least in today’s world. Therefore you will notice that some companies overused the event, branding and media such as public relation as their marketing strategies. We all know they are oblivious with what they do, but that’s the reality here. The second highest value now is, if you are from FMCG (Fast Moving Consumer Good) company. Companies such as Nestle, Procter & Gamble and Coke. More so in today’s highly populated world (around 6.2 billion people) where food needs are in high supply, marketers with FMCG background know more about consumer than any other people in this world. Some might argue that FMCG is more of retail than business to business marketing which involves millions of dollars in transaction, but people in FMCG deals directly with the consumers. They are usually upbeat and adaptable to change quite easily. They also are very close with the market and sensitive with the changes around it. Simply because that’s how it is when you are dealing with highly fragmented customers these days e.g. same product needs different packaging and size to cater to different needs. Tough right? Can you guess what type of marketer an organization will employed when they are in crisis? People with financial expertise and background. They say, now it is the Chief Financial Officer (CFO) is the number two most powerful person in organization. Sometimes the CEO assumed position as CFO, in that case they are the number one. To me, typical financial person only concerns about profit and loss. But the good news when we hire financial background people for our marketing department; we no longer have any problem with the CFO. They talk the same lingo and they shared the same values and opinions. They probably the same person who handles finance and marketing departments! You will see (or rather experience) budgets slashed in marketing. Of course it will be reflected as higher net profits by the fiscal year in the balance sheet, but we all know that will not last. Marketing requires investment, and investment requires time to flourish. Quarter to quarter will not work. Because of lack of expertise, our dream for strategic marketing is a tragic nightmare. We spend a lot of money but our return on marketing investment (ROMI) is very poor. The second reason why our strategic marketing fails to deliver is customer focus.

It’s the Customer, Stupid! If you have experience working in marketing or sales, you will know what I meant. Not many organizations know what they can and cannot do when it comes to looking for specialty to serve their customer. We all want to be everything to everybody but at the end we are nothing to everybody. So we are nobody. Business wise, we are just a product, not an experience or utility. I remember a visit to an organization that wants to launch a new product. I was hired as the consultant to facilitate the brainstorming and discussion about their new product. They are in software development and the CEO feels that they can do more with what they have now. So I was hired. Remember, this was my first time meeting so I don’t have any idea what is it about but I rather not investigate. I attended the brainstorming session with an open mind. The moment of truth came. That meeting I attended was the 4th meeting (work in progress meeting) which is conducted bi-weekly. The CEO will be there and the head of departments will present their progress. I observed through the presentation, trying to grasp what really happen, watching their face to engage, writing some notes on my book but I still don’t get it. What I scribbled in my book was, “I don’t understand.” Then going-roundtable if any question, I asked. “Who is the target group for this product?”. I got a super laugh from all of them except from the CEO. I concurred something was not in place. I continued asking all the marketing questions and no one could answer. Aha! Then I can see the CEO face smiled and he quickly excused himself to another meeting. The CEO sms’ed’ me and I took over from there. When we design a product (new, extension or refresh), we need to focus it to the customer. While all of us know about this because we are customers too to some other service providers, many didn’t know how to exactly use the marketing tools and direct it to the customers. We usually jumped into the product features based on our own experience and lenses. At that experience and lenses are from a provider perspective instead of customer’s. Peter F. Drucker once said, “The customer sees a product (or service) as their utility. As long as their needs are satisfied by the utility delivered by the product the customer will continue to purchase until that product is no longer provide them the satisfaction they wanted.” Take home point here is, focus all your marketing energy to the customer.

Change in the marketing environment “Change is the new normal.” That was quoted by Philip Kotler in his new book “Chaotics”. While many see change as negative, there are a lot more businesses today see change as a good thing. Peter Drucker wrote in his book, “Entrepreneurship and Innovation”, that change in organization, industry and demographic are sources of innovation. And from Jack Welch in his book, “Winning”, he also said “change is inevitable, you got to embrace it!.” Change means any change that happened in this world that leave impact to your business. We have witnessed how change in technology has changed the way communicate and commute these days. We also experienced change in demographic and how it has transformed many businesses in this world. We also have seen how change in population has revolutionized the food business and supply chains. We also recently shocked by the global financial crisis that only happen once in the lifetime for many of us. Change is inevitable but the ability to respond to change is what matters. As Darwin once said that “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”. And it has to be done fast enough. Let’s take a look of what happen in the recent crisis. Don’t look far, look around us. How many us realized the subsequent few months after the crisis hits Malaysia (or at least the spiral effect), the advertisement dollars shaved and subsequently plummeted. You will see this especially in The Star, English dailies, on their Saturday’s copy because that’s like the bumper issue of the week. And usually inflated by the job advertising for various companies but when the crisis hits, it was very thin. I remember holding The Star on two Saturdays of a Sunday size (usually the Sunday size is the thinnest of all). Is it fair to say the recruitment was freeze that time? Potentially yes. I also observed there were less commercial ads filling our TV3. Well, ASTRO advertised itself in its own channels, so we don’t see much differences. There was a lot of SALE going around at shopping malls to charge back the economy. Government pump priming few billions ringgit to cushion the economy a bit. Not to mentioned the stimulus packages and new projects worth billions of ringgit to give more hope to our business people in the country. All these changes have a chain effect in our business environment. Take for example if early of the year we already plan to launch a new premium service and suddenly the crisis hits, we will think many times whether to launch or postpone. Chances are we will postpone it. When crisis hits, don’t take chances. Deal with the present first. Another example is reflecting how Malaysia has evolved so much demographically. And we are still in the transition period of this change. We haven’t settled yet. Our demographic is evolving and it is evolving very fast. It is unlikely to slow down. In fact it will not slow down because it is like a moving average in the financial market statistical tool; the average gets higher and higher by the day. Look how it has changed the job market, consumer market, commodity market, technology market, education market and a lot more other markets. Not to mention the emerging of women purchasing power. 

I attended a seminar in Kuala Lumpur recently and bumped into a client. He is now working with a top public university in Malaysia. We chatted and I asked him why his university still doesn’t offer distance learning to cater for growing “middles” i.e. middle class, middle manager and middle age group that account more than 30% of Malaysian total population of 28 million? Remember he is the Head of Marketing and his answer was, “We have yet to see a real demand.” My eyes went rounded and I was shocked. I told her that Open University Malaysia (OUM), one of the leading pioneer of distance learning universities, has cumulatively more than 90, 000 students, Multimedia University has more than 20, 000 and not to mention other private universities and colleges that usually cater long distance students in their twinning programs with United Kingdom, Australia and United States. In total I estimated at least 250, 000 adults now on part time or distance learning and attending weekend classes. If you don’t call that a niche market and demand, I don’t know what is. Therefore, changes in the marketing and business environment do affect strategic marketing, but what are we going to do about it matters the most. Remember, the direction should be on the customer and not you. Lack of Support Heard of NIMBY? It is a jargon word means “Not Invented in My Back Yard”. This is to explain that when someone doesn’t involve in a particular initiative, he stops providingany support. It is either because he doesn’t know how to play a role or simply ignorant. NIMBY is used when you “perform” the later behaviour; ignorant. In some cases, NIMBY type will sabotage that initiative. And this is intolerable because it will jeopardize the entire organization. Some places call it NIH, means “Not Invented Here”. The sad part is most of them are managers that suppose to direct resources and achieve business goals. To ensure our marketing successful, we need to make it strategic. And to make it strategic, we need to make it coordinated and integrated. An orchestra will not achieve it’s full performance if one of the cellists decided to play his own tune, the clarinettist decided to eat chewing gum and the bassist uses different string quality that was supplied by his friend. As quoted by Philip Kotler, “Unfortunately not all employees in a company are trained or motivated to pull together.” There are two common problems observed here. One is between the marketing functions itself i.e. sales, advertising, research and product are not coordinated. Worse off when the marketing team has to literally fight with other departments such as production, engineering, administration and finance. Marketing does not work when it is only a department. It was well quoted by David Packard of Hewlett Packard, “Marketing is too important to be left to the marketing department.” Because they are currently too many goods chasing too few customers, lack of support from other functional divisions are sure way to close business.

Lack of Involvement Most of the time any activity that carries “strategic” will be an exclusive event for the top management. This practice has to go especially if you are running a growing small business firms; where every dollar is very important and resources are scarce. The last thing you want to do is to plan something that you suddenly realize not going to work only when it reaches the customer. Big no no. Unless you are running a super big multinational such General Electric (GE dubbed as the world’s 5th largest population if it’s a country), then the central (or sometimes call head quarters) will do the planning. Nonetheless GE placed many sensors in every place they do business, so it helps a lot when they have such system in place as their marketing information inputs. Former General Electric (GE), Chairman and Chief Executive Officer, Jack Welch, in Global Business Forum 2009 held with University of Miami Alumni quoted, “At GE, the managers and the employees know exactly what they have to deliver and achieve. They also know what kind of performance metrics and measures will be used during their assessment. The employees will rate their managers and vice versa. Top performers will be heavily rewarded and the underperformers will be fired instantaneously”. GE must have put a lot of efforts to achieve this level of performance. Unfortunately, not many companies able to do this especially the small medium businesses. At least, our strategic marketing planning should look like the following example.

When more people get involved in the marketing planning, we will be able to decipher greater details that tend to be overlooked in smaller crowds. I don’t mean we need to get everyone on board, but rather every department must be in the meeting. At least for the first few rounds. We can ask each department to elect 2 persons from their team to be present at the meeting. These representatives must be able to represent the department needs and issues to be escalated in the marketing meetings. It is pointless if they are just there to take notes and unable to speak up. Talking about speaking up, the higher management or the chairman of the meeting (usually the senior manager or managing director himself) must be able to open the discussion and allow it to gel. As long as there is no chair throwing and emotional bashing, we should allow it to flow. As the chairman, you should manage and don’t get engrossed in the discussion. You should ask few questions for clarification and make it firm. Other than that you are doing too much already. Conclusion There are many more reasons to screw up a marketing plan and make it more tragic. Nonetheless, making it tragic benefits no one to the organization. As you can see, some of the tragic reasons are internally driven factors and can be mitigated early. It can save the organization marketing dollars and from “wholesale” public humiliation. Strategic marketing can bring forth a lot of benefits to the organization and its members in the long run. Benefits such as higher salary, revenue sharing, job security, self pride and bonuses to name a few. To make sure strategic marketing planning successful, the organization needs to ensure its members able to work together and synergize their efforts focusing to the customers. A concerted efforts by each individual is vital in making strategic marketing planning successful.

References 1. “Marketing Management”, Philip Kotler 2. “Chaotics”, Philip Kotler and John A. Caslione, AMACOM, 2009 3. “Entrepreneurship and Innovation”, Peter F. Drucker, Harper & Row Publishers, 1993 4. “Contextual Marketing: The Real Business of Internet”, David Kenny and John F. Marshall, Harvard Business Review, 2008 5. “Memo to Marketing”, Peter Lorange, MIT Sloan Management Review, Winter 2005 6. “Motivating People, Getting Beyond Money”, McKinsey Quarterly, November 2009 7. http://www.wisdomquotes.com/003120.html , Charles Darwin 8. “Winning”, Jack Welch and Suzy Welch, Harper Collins Publishers, 2007 9. “The Fifth Discipline”, Peter M. Senge, Random House Business Books, 2006

Moving From Tragic To Strategic Marketing

by bites consulting on Dec 01, 2009

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Moving From Tragic To Strategic Marketing — Document Transcript