Why do you have to keep justifying your good performance?

The bottom line is the final line in the P&L.

If I am CMO (and I have been) then I have a budget.  I manage that budget and I do not want to have to keep  justifingy everything I do with that budget - as long as I am making or exceeding the revenue and profit expectations.

Sure I will measure the elements (metrics) I use.  Sure I could justify what I do - but why would I be expected to do that on a monthly basis?

I do not ask the other departments to justify to me every element.  I do not expect to have to have a continual set of little bottom lines every month.  If that is happening then the CFO and the CEO need a kick in the Duff - where do they think this revenure is coming from??

Dr. Brian

CEO MAANZ International http://www.marketing.org.au

Twitter @smartamarketing https://twitter.com/#!/smartamarketing

What Does Marketing Involve?

At a basic level, marketing isn’t that complex.  It includes the following important elements:

• Becoming customer focused rather than self or product orientated   Understanding (through researching) the market and finding out what customers value.  That is – what do they want enough to exchange their own value for? (money, time and risk )
•  
• Developing and designing a value proposition (a combination of product, price, and promotion) and delivering that offering so that it satisfies customers value perceptions

 This means:

• Producing the right amount, of the right quality, to the right target (customer) at the right place (availability)
•  
• Getting the price right so that the product is affordable to customers but also allows the business to make a profit (quality specifications also need addressing) 
• Making sure that through effective marketing communication, that the customer knows about our value proposition (product) 
•  
• Ensuring the product is available in a manner (quality, quantity, size, appearance, packaging) and in a place convenient to the customer

To accomplish this requires a marketing plan.

How to strengthen the position of Marketing (& CMO's) in organisations?

Marketing and marketers get a lot of stick from organisations and from consumers it is apparent.

A few months back we did a great discussion based on some (supposed) research that 73% of CEOs didn't think too highly of CMO's.  And marketers know that consumers often lambast "marketing" as the dark side,

The usual response of marketers is to explain that enough CEO's don't understand marketing - which seem true but doesn't really help the position of marketing.

All of the C suite bar the CMO have legal responsibilities.  The CEO to the board and shareholders (a legal resonsibility to maximise profits).  The CFO to report finances accurately - especially to the board, shareholders and government authorities.  Even the COO usually has the responsibilty of producing products that are safe and meet any legal requirements.

Certainly the CMO has responsibility to ensure that any marcoms are not misleading.  But we could do better.

Modern marketers are taught that their prime focus should be on consumers - and while they are constantly told/reminded that shareholders must come first they all know that unless consumers are buying shareholders won't prosper.

Problem is that in business law, consumers come in last.  If a business fails they have few if any rights.  Certainly there are growing consumer protection laws - but if marketing and I think business overall is to prosper more, consumers need to be moved to the top of the legal framework.  And because consumers are their primary focus of marketers - make consumer's rights their responsibilty.

With such legal responsibilties is going to come more authority and respect within the company - if the marketer is doing their job properly.

Yes the upshot will be more work for the CMO/Marketing department but that is the price I expect we have to pay if marketing is to gain more respect in the C suite.

The other result will be better marketing and a lot better deal for consumers/buyers.

What do you think?  Let me know?

What are the Characteristics of Successful People?

Here are what we think the characteristics of successful people are:

1. They have focus.  Whatever their field thay keep their eyes on waht is importnat - that leads to success


2. They are hard working. There is no such thing as easy money. Success takes hard work and people who are willing to do it.

3. They are honest. Those who are successful long-term are the honest ones. Dishonest people may get the first sale, but honest people will get all the rest!

4. They persevere. How many success stories will go untold because they never happened? And all because someone quit. Successful people outlast everybody else.

5. They are friendly. Most successful people are friendly and people oriented?

6. They are lifelong learners. Successful people are people who stretch themselves and grow continually, learning from all areas of life, including from their mistakes.

7. They over-deliver. The old statement of under-promise and over-deliver became famous because it made a lot of people successful.

8. They seek solutions in the face of problems. Problems are opportunities to do the impossible, not just complain. Successful people are the ones who find solutions.

9. They can see through the eyes of their customers or audiences

If you want to be creative - ask Dumb Questions

The Only Dumb Question Is the Question You Don't Ask

Implicitly or explicitly, creativity always begins with a question.  And in both your business and personal lives, the quality of your cresitivity is determined by the quality of your questions-by the way you frame your approach to circumstances, problems, needs, and opportunities.  A creative approach makes life a questioning process.

 In the same way, when you bring creative questioning into your ife, you don't care what you find.  You do it for the adventure itself, without defining expectations.  Even if you rather expect red, you're as pleased to find blue.

 If you pursue a questing question, the end is usually creative, even if it's unexpected.  Columbus's question was, "Is there a sea route to lndia?" His answer was the astonishing discovery of a new continent and evidence about the shape of the world.

Asking questions as dumb as the kind you fear people might dismiss with "Of course not, dummy" takes a great deal of initial courage and eventual endur­ance.  You have to draw deeply upon your essence quality of strength because you are flouting public opinion, swimming against the current.
 

Young children ask dumb questions about everything.  

What's behind a rainbow?

What color is the inside of my brain?

 What's inside ofa rock?

Does the sky have an end to it?

You once asked questions like that, too.  That's how you leamed about the world.  But sooner or later your authorities-parents, teachers-gave you the message that such questions were not welcome.  You became more careful.  Your inner voice began to build a defense against questions.  You intemalised adult laughter, scom, and irritation, and learned to avoid the questioning creative process.  Pretty soon the questions stopped coming to you; and cynicism set in instead.

By then you had lost a very useful ability and tool. 

What do you think?

Ways to help you stimulate new idea thinking

How do you stimulate new idea thinking?  

 Perhaps you lay back and chill out with a brew?  Do you meditate and consult the inner you? Let me know your perferred methods.

In the meantime let me give you one approach - Brainstorming and its derivatives.

Dr. Brian Monger

Brainstorming and brainstorming-type techniques

Brainstorming is a procedure whereby groups of individuals focus on an issue —idea generation — and use their brains to show the problem. It is a method used to foster intuitive thinking, where individuals are encouraged to use others' ideas to trigger and develop their own. Potentially, brainstorming can be used for a number of purposes; however, our concern is for its value in generating new product ideas. It is founded on a number of principles which are set to encourage creativity.

Deferral of judgement.

The atmosphere to be encouraged in brainstorming is that of free-wheeling thoughts, where rejection of ideas is eschewed in favour of producing a large number of ideas, as quickly as possible.

Group idea building.

As it is a technique based on intuition, associations of ideas are to be encouraged. This means that all the group members must be able and willing to listen to one another.

Multi-disciplinary composition.

In order to encourage new perspectives and cross-fertilisation of ideas, the group should be composed of individuals from several functions within the organisation. Where the group is composed of consumers, as well as or instead of employees, they should come from different consumer segments.

It is suggested that a group should consist of a leader, an associate leader who performs the role of scribe, about five regular 'core' members and five guest members. Research has shown that four to seven members may achieve best results (Schlicksupp, 1977) but, there is no magic number, and the leader should choose a group sise that is comfortable to work with.

Seniority

A final point in relation to group composition relates to seniority: it is important not to include individuals ranked significantly 'higher' than other members, as this can hinder the latter's freedom to contribute, since an element of judgement may be inferred.

Quantity is the main aim.

The more ideas produced, the greater the probability that a really original idea will emerge. This condition reinforces 'deferred judgement'. Ideas are not described in detail at this stage.

Duration.

There is no ideal time limit to be set. After a ten minute warm-up, the session should last between 30 and 45 minutes with  If after 20 minutes of brainstorming proper, fewer than 10 ideas have emerged, it is time to restart, beginning with a further warm-up.

Topics need to be well defined and have to be focused on problems or opportunities which can be resolved or exploited in numerous ways. Typically, in brainstorming, the activity is focused on one question only. It is important, therefore, that this question is the right one, and that its wording is interpreted in the same way by all participants. The question should not require expertise of a technical nature which is outside the experience of the group members.

Brainstorming derivatives.

Negative brainstorming.

Carried out in two sessions, the first collects all the negative aspects of a new product idea or ideas and the second focuses on improvements to the weakest issues.

Brainwriting.

Also based on association, participants do not communicate orally, but write their ideas down on paper, which is then circulated. The idea is to avoid the influence of dominant personalities in the group, but the technique may hinder the associative richness produced by verbal discussion.

Method 6X5.

Six persons brainstorm to produce three ideas in five minutes. The ideas are written down and passed to the next group, where association will be developed. This technique focuses discussion on a smaller number of ideas and maximises variations on the basic themes.

Brainwriting pool.

Participants write down four ideas on a sheet of paper which is placed in a central pool. They then pick from the pool, adding ideas to the bottom of the list until they run out of ideas, when they exchange sheets of paper. Other techniques which are based on this principle include 'card circulating' and the gallery method. In the former, each participant writes down one idea on a card and passes it on to his or her neighbour who can use it for further stimulation. With the latter method, it is the participants who walk from one card to the next.

Collective notebook method.

A group of 8-10 participants are asked to put down ideas in a notebook, writing down at least one idea per day. After a week or so, notebooks are exchanged, allowing the associations to begin. This process continues for about four weeks.

So what are your suggestions?

Idea Generation - what do you think?

I think the New Product Ddevelopment  process is not linear, as portrayed by many of the models.  So it follows, that idea generation, the 'first task' in the process is rarely a true beginning, set on a blank page.What do you think?  What is your experience with NPD and or idea generation?

Before the 'first task', new product strategy and objectives have been set, all within the context of a organisation's strategic plan, which itself is based upon its operating, competitive and market environment. So, idea generation will be inevitably imbued with opportunities and constraints that define what can realistically be achieved. A simple example is that, without an active and resourced idea generating department, radical ideas will rarely develop, nor will a organisation have the know-how to realise any ideas which do come to the fore. Furthermore, the results of strategic tasks of environmental scanning and market intelligence gathering should provide a fertile source of new ideas which underpins the 'idea generation' process.

As well as having no 'discrete beginning', idea generation does not stop as the NPD process unfolds.The NPD process is highly iterative. New ideas, better ideas reformulated may appear out of every stage. They do not conveniently appear in the idea generation stage only.

Ideas are not always of the same degree of newness, nor do they always apply to the product itself. Newness may refer to technologies and therefore to the product, but it may also refer to markets. Another form of newness for an idea relates to the new business model - the pursuit of a totally different approach to business. So, the newness is not always a product idea. Another example is how developments in manufacturing leads, eventually, to new products. The new ideas in irradiation for food preservation led to new food products, which is challenging the traditional ways of preserving food, with sugar, salt or refrigeration. The more emphasis is put on the negative effects of sugar and salt, the greater this potential challenge will be.

Ideas' do not always have to be 'generated'. The whole process of selling corporate and new product strategies sets out ideas for development. Technologists and scientists working in research laboratories are working with ideas constantly, designers are at the creative -idea generation - heart of the organisation, sales and marketing personnel are in constant contact with new ideas both from competitors and from customers. This means that, far from being 'generated', as if they do not already exist, many ideas really have to be managed.

Generating new ideas involves two central themes:   

• locating sources of new ideas and
• activating those sources.

Promotion and Persuasion

To develop an effective promotional campaign, a firm must select the right spokesperson to deliver a compelling message through appropriate channels or media.

Source, message, and channel factors are controllable elements in the communications model.  The persuasion matrix helps marketers see how each controllable element interacts with the consumer’s response process.’ The matrix has two sets of variables.  Independent variables are the controllable components of the communication process; dependent variables are the steps a receiver goes through in being persuaded.

Marketers can choose the person or source who delivers the message, the type of message appeal used, and the channel or medium.  Although they can’t control the receiver, they can select their target audience.  The destination variable is included because the initial message recipient may pass on information to others, such as friends or associates, through word of mouth.

Promotional planners need to know how decisions about each independent variable influence the stages of the response hierarchy so they don’t enhance one stage at the expense of another.  A humorous message may gain attention but result in decreased comprehension if consumers fail to process its content.  Many ads that use humour, sexual appeals, or celebrities capture consumers’ attention but result in poor recall of the brand name or message.  The following examples illustrate decisions that can be evaluated with the persuasion matrix.

1.         Receiver/comprehension: Can the receiver comprehend the ad?  Marketers must know their target market to make their messages clear and understandable.  A less educated person may have more difficulty interpreting a complicated message. jargon may be unfamiliar to some receivers.  The more marketers know about the target market, the more they see which words, symbols, and expressions their customers understand.

2.         Channel/presentation: Which media will increase presentation?  A top-rated, prime-time TV program is seen by nearly millions of households each week. But the important point is how well will it reach the marketer’s target audience.

3. Message/yielding: What type of message will create favourable attitudes or feelings?  Marketers generally try to create agreeable messages that lead to positive feelings toward the product.  Humorous messages often put consumers in a good mood and evoke positive feelings that may become associated with the brand being advertised.  Music adds emotion that makes consumers more receptive to the message.  Many advertisers use explicit sexual appeals designed to arouse consumers or suggest they can enhance their attractiveness to the opposite sex.  Some marketers compare their brand to the competition.

4.         Source/attention: Who will be effective in getting consumers’ attention?  The large number of ads we are bombarded with every day makes it difficult for advertisers to break through the clutter.  Marketers deal with this problem by using sources who will attract the target audience’s attention-actors, athletes, rock stars, or attractive models.

Source Factors

 We use the term source to mean the person involved in communicating a marketing message, either directly or indirectly.   A direct source is a spokesperson or endorser who delivers a message and/or demonstrates a product.  An indirect source, say, a model, doesn’t actually deliver a message but draws attention to and/or enhances the appearance of the ad.  Some ads use neither a direct nor an indirect source; the source is the organisation with the message to communicate.  Since most research focuses on individuals as a message source, our examination of source factors follows this approach.

Companies are very careful when selecting individuals to deliver their selling messages.  Many firms spend huge sums of money for a specific person to endorse their product or company.  They also spend millions recruiting, selecting, and training salespeople to represent the company and deliver sales presentations.  They recognise that the characteristics of the source affect the sales and advertising message.

Marketers try to select individuals whose traits will maximise message influence.  The source may be knowledgeable, popular, and/or physically attractive; typify the target audience; or have the power to reward or punish the receiver in some manner.  Herbert Kelman developed three basic categories of source attributes: credibility, attractiveness, and power.   Each influences the recipient’s attitude or behaviour through a different process

Source Credibility

Credibility is the extent to which the recipient sees the source as having relevant knowledge, skill, or experience and trusts the source to give unbiased, objective information.

There are two important dimensions to credibility, expertise and trustworthiness.

A communicator seen as knowledgeable-someone with expertise-is more persuasive than one with less expertise.  But the source also has to be trustworthy-honest, ethical, and believable.  The influence of a knowledgeable source will be lessened if audience members think he or she is biased or has underlying personal motives for advocating a position (such as being paid to endorse a product).

One of the most reliable effects found in communications research is that expert and/or trustworthy sources are more persuasive than sources who are less expert or trustworthy.  Information from a credible source influences beliefs, opinions, attitudes, and/or behaviour through a process known as internalisation, which occurs when the receiver adopts the opinion of the credible communicator since he or she believes information from this source is accurate.  Once the receiver internalises an opinion or attitude, it becomes integrated into his or her belief system and may be maintained even after the source of the message is forgotten.

A highly credible communicator is particularly important when message recipients have a negative position toward the product, service, company, or issue being promoted, because the credible source is likely to inhibit counter-arguments.   Reduced counter-arguing should result in greater message acceptance and persuasion.

Managing the Mature Product

The onset of aggressive competition in the growth phase of a product life cycle may well lead to the beginning of premature maturity for the innovator who first introduced the new product to the marketplace. Thus, while industry sales continue to grow rapidly, the innovator's sales may plateau out and call for a quite different set of tactics from those appropriate in the growth phase. In this topic we examine in some detail what factors result in the slowing down of the growth phase, the characteristics of maturity and the options available to the product manager to exploit fully the opportunities available in the mature phase of product and market development.

Maturity - Its Nature and Causes

As the market approaches saturation so the growth rate slows down until eventually it stabilises at a sales level equivalent to the replacement rate together with any natural growth in market size due to increases in population. Usually this is the longest single phase of the life cycle and will normally be proportionate to the length of the gestation/introduction phase. That this should be so is logical in that the very forces which accelerate or delay the acceptance of a new product invariably hasten or delay its decline. That said, it is also true that in the same way that medical science has been singularly successful in extending the mature phase of the human life cycle, so product managers have been particularly successful in prolonging the life of mature products.

It is this perhaps this very success which has been cited by critics as a reason for dismissing the concept as not having any practical value. The OLC/ PLC charts the progress of an innovation in the absence of managerial intervention. Our continued emphasis upon its utility means that by identifying the stage of the life cycle we can define the strategic options available to the product manager and so develop effective action plans. Further, by identifying the transition from one stage to the next we can judge when it will be beneficial to modify one strategy for another to take account of the changing conditions in the marketplace.

As growth slows and the product enters maturity, profit margin will begin to decline. (We emphasise margins because mature products usually make up the backbone of a firm's product portfolio and are frequently the major source of cash to sustain current and future operations: hence, 'cash cow' in the BCG growth share matrix.)

Possible reasons for the decline in profit margins:

• Increasing number of competitive products leading to over-capacity and intensive competition.
• Market leaders under growing pressure from smaller firms.
• Strong increase in R&D to find better versions of the product.
• Cost economics used up.
• Decline in product distinctiveness.
• Dealer apathy and disenchantment with a product with declining sales.
• Changing market composition where the loyalty of those first to adopt begins to waver.

Because of this profit erosion the industry tends to stabilise, with a set of well-entrenched competitors all seeking a competitive advantage, the absence of above-normal profits deterring any further new entrants. However, before examining the strategic options available to these entrenched competitors it will be useful to look more closely at the symptoms and causes of maturity

The increasing number of competitive products leading to over-capacity and intensive competition is the natural reaction of suppliers in a market faced with slowing sales and a perceived limit to growth. As predicted in our life cycle model, as a phenomenon approaches a limit to growth its behaviour becomes erratic ('hunting') as it seeks to avoid the limit or find a way around it. Once it is appreciated that the market is of a finite size and approaching saturation, individual suppliers will recognise that further increases in their sales can only come from increased market share. While demand is growing rapidly all suppliers can benefit from this without worrying unduly about the sales of competitors — it is a win—win situation. But, when sales stabilise, the only route to continued growth is through aggressive competition for market share which, inevitably, is a win—lose situation. In these circumstances individual suppliers will resort to predatory tactics — product proliferation, discounting, own label manufacture, etc. — in an attempt to consolidate and protect their share. Ironically, these tactics tend to accelerate maturity rather than stave it off.

The main reason why this should be so is that by concentrating on product, price and place, suppliers reduce their emphasis upon promotion. This is not to suggest that this reduction in promotional support is not justified, as it will usually be obvious that spending money to support new products will be more effective than seeking to prop up old ones. That said, the reduction in promotional support will often lead to a contraction in overall demand as the product loses the front-of-mind awareness, stimulated by advertising, so that usage will gradually decline. This phenomenon was quite marked in the market for FMCG in UK supermarkets during the late 1980s and early 1990s. As the major retailers increased the number of own brands, the branded-goods manufacturers' share of market declined. Faced with declining sales many manufacturers reduced their promotional spend and this was paralleled by a reduction in sales volume for the product category as a whole, i.e. consumers consumed less. This decline in volume sales impacted on the retailers' overall profitability with the result that many pegged the proportion of own label products so as not to discourage branded goods manufacturers from promoting the generic product — instant coffee, breakfast cereals, canned foods, etc. — through the medium of their own branded product — Nescafe, Kelloggs, Heinz, etc. In the case of Heinz it also prompted the firm to use modern direct marketing methods to deliver promotional incentives direct to consumers, thereby encouraging them to 'pull' Heinz brands through the distribution channel.

Market saturation is not simply a case of having reached all potential consumers of the product in question. In reality sales will usually plateau before all potential users have tried the product. Drawing on the concept of adopter categories introduced previously, it is quite likely that by the time laggards are entering the market the innovators and early adopters will be becoming bored with the product and so consuming less of it, or even switching to other, possibly completely new products. This trend is likely to be accelerated by changes in the distribution channel as wholesalers and retailers become less willing to carry the product, as it offers them lower margins than other, newer products in the growth phase of their life cycle. Given that there is a limit to the amount of display space available in a retail outlet, most retailers will seek to carry that assortment of products which maximises the return from the space available. Consequently, they will tend to reduce the space available to slow-moving products and those with low margins in favour of faster-moving products and those with higher margins.

Some years ago one of the authors (Baker, 1980) proposed a series of marketing maxims, one of which is that 'consumption is a function of availability'. Clearly, this is a truism but the implications are obvious. The bigger and more prominent the in-store display of a product the greater the likelihood that consumers will notice it and be prompted to buy. The obverse is equally true: as retailers reduce display space for mature brands so they are likely to hasten their decline. Further, the retailer is likely to use the evidence of declining sales to put pressure on the manufacturer to provide price incentives to boost its purchase, thereby reducing its profitability still further and encouraging the manufacturer to turn to other, more profitable products.

Despite the pressures on mature products described above, their classification as cash cows makes it clear that a mature product can be a considerable asset to the firm and an essential part of a balanced portfolio. It is for this reason that much thought and effort has been devoted to the management of mature products. Indeed, the discussion to be found in most marketing management textbooks implicitly assumes that one is dealing with such a product and focuses on how to manipulate the marketing mix to best advantage — it is the development and marketing of new products (usually the subject of a single topic) that is regarded as the exceptional case. The effect of this concentration has been the prolonging of the mature stage of the PLC beyond what might be anticipated if events were allowed to take their normal course.

Four basic mature product strategies are available to the marketing manager:

• An offensive or 'take-off' strategy
• A defensive strategy
• A recycle strategy
• A stretching and harvesting strategy.