CAMBRIDGE MARKETING
FEATURES
Blueprint for an Integrated Marketing Campaign B-2-B Marketing: Undervalued? REPORTS
The 6Cs for Making Your Enterprise More Social VIEWS
The Tyranny of Forecasts & Budgets
Rita Clifton Chairman of Interbrand How to Build a World Class Brand
ISSUE 3 SPRING 2012
BUILDING A BRAND
Classics of Advertising
ŠExxon Mobil Corporation. Reproduced with permission of Exxon Mobil Corporation.
Tiger In Your Tank
One of the all time classic creative adverts, it has set the style for Esso branding for nearly 50 years. First used in 1959 to underline the performance power of the fuel, the campaign has passed into advertising folklore. Many people today recalling it in unprompted recall tests were actually not born until after the campaign ended. So phenomenally successful was the ad style that there was even a campaign to stop Esso ending its use. The campaign was merchandised with over 2,500,000 tiger tails being sold to affix to the petrol cap.The tiger has turned up in Esso advertising in to the current century. Watch one of the original ads from 1959: http://bit.ly/EssoTiger We are grateful to EXXON Mobile for the right to reprint the above original advert from the US Humble campaign.
OnT heE dg ei sa ni nc r e di bl eone da ydi g i t a l c onf e r e nc ebr i ng i ngt og e t he rt hemos ti ns pi r aona l a nds uc c e s s f ul s pe a k e r s f r omt hedi g i t a l wor l d. Y oua ndhundr e dsofot he rbus i ne s spr of e s s i ona l sf r omt hewor l d’ smos ti nue na l br a ndswi l l l e a r nt hes e c r e t sofdi g i t a l ma r k e ngs uc c e s si nauni quee v e ntt ha twi l l pus hbounda r i e s , r e wr i t er ul e sa ndl e a v ey ou wi t hnoa l t e r nav ebutt os uc c e e d. Gua r a nt e e d.
L ondon, 21s tJ une ont hedg el i v e. c o. uk
CONTENTS
CONTENTS 5 Editorial FEATURES
6 How to build a world class brand An address from Rita Clifton, Chairman of Interbrand, London.
30 the constructive swot Analysis An extract from “The Constructive SWOT© Analysis” by Harry Macdivitt. 34 social media in academic publishing It’s time for marketers in the academic publishing world to embrace the social medium.
10 the branding iceberg An update and expansion on this marketing model from its creator, Hugh Davidson. 12 marketing Profile: grand arcade, cAMBRIDGE How the city’s shopping mall became East Anglia’s premier retail destination. 15 Case Study: gRAND ARCADE Lidia De Luca, Marketing and PR Manager at Grand Arcade on creating a successful integrated marketing campaign. 18 b2b marketing: A review The periodic revival(s) of business-to-business marketing. 22 the marketing research mix A tool for practitioners and scholars. REPORTS
VIEWS
36 it’s time to listen to the voices It’s time to make the most of the opportunities you have to enhance your public profile. 40 Seminal articles: market sEGMENTATION The first in a new series of ‘must read’ articles. 42 imperfect storms With new ideas, seek input from the real world (the only world that matters). 44 the tyranny of forecasts and budgets Lessons learned from historical context. 48 the eu e-privacy cookie directive An opportunity, not a threat.
28 The 6 Cs for making your enterprise more social A guide for successfully integrating social media.
52 intellectually curious Fresh ideas and resources to expand your knowledge.
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Publishing Editor: Craig J. Stone Chairman: Charles W. Nixon Contributors: Nigel Bradley, Rita Clifton, Hugh Davidson, Paul Fifield, Chris Ford, Andrew Jenkins, Harry MacDivitt, Don Moyer, Claire Powell, Jenny Ridge, Paul Woodhouse, and Laurie Young. Contact: Cambridge Marketing Press 1 Cygnus Business Park Middle Watch Swavesey Cambs CB24 4AA Tel: +44(0) 1954 234944 Fax: +44(0) 1954 234950 Email: craig@marketingcollege.com Issue III Spring 2012 ISSN 2047-962X
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If you would like to comment, please contact the editor, Craig Stone: Tel: +44(0) 1954 234941 Email: editor@cambridgemarketingpress.com
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Please contact the editor, Craig J. Stone, to subscribe to the printed editions: Tel:+44(0) 1954 234941 Email: craig@marketingcollege.com
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Conventions: • We are marketers not marketeers; we are not cavaliers. • We practice marketing not advertising or PR. • When we refer to products, we mean products and services. Otherwise we refer to offerings.
EDITORIAL
Editorial Third time’s a charm.
W
elcome to the the third edition of the Cambridge Marketing Review. We hope to build on the quality of Issues 1 and 2 and continue to provide new, thought provoking and above all, interesting content. This is my first issue as editor and I must tip my hat to the great Craig j. sTOne work done by my predecessor, Mr Chris Burgess. Chris set great standards here at the CMR and has built a solid foundation for future issues. Having spent the last sixteen years in the United States working in the publishing sector (both on- and offline), coming home to the U.K. provides an interesting insight into a ‘new’ culture and climate. The need to engage with Social Media is firmly embedded in the fabric of the business and commercial sector in the U.S. From my experience so far, I see there is still a resistance to fully embrace the medium here in the UK (for many reasons, from what I read). It is therefore refreshing to read Jenny Ridge’s article (p 34) on the use of Social Media in academic publishing. It is also good to see the re-examination of accepted tools (The Constructive SWOT Analysis p30) and Malcolm McDonald’s discussion on the Tyranny of Forecasting and Budgets (p44). We also start a new series in the issue–Seminal Articles. As marketers we are often asked if we have read ‘so and so’. There are countless new titles appearing on the bookstands and these tend to swamp the classics, though often add little to our understanding. We are starting a series with Dr Paul Fifield to review and list the definitive articles that all marketers should read. We kick it off in this issue with a review of Marketing Segmentation (p40). This issue features articles from across the spectrum of marketing: from a discussion on Branding with Rita Clifton (p6) in her address to the Annual Cambridge Marketing Dinner and the success of the Grand Arcade shopping mall as an integrated marketing case study (p12); through to a different approach to market research with Nigel Bradley (The Marketing Research Mix, p22); to the issues of digital and social marketing. The latter is addressed in three articles: the use of social media in academic publishing (p34), the implications of the EU “cookie” directive (p48), and a guide to making your enterprise more social (p28). We also look at the crucial but often forgotten sector of B2B Marketing (p18). Our aim at CMR is to offer Food for the Head, to stimulate and provide ideas for the intellectually curious. It is our hope that this edition certainly stokes the boiler.
Annual Cambridge Marketing Lecture 2012 We would like to invite you to join us at our Annual College Dinner and Marketing Lecture on Wednesday, July 4, 2012. The speaker this year is Dr Nicola Murphy, Founder and CEO of The River Group. Nicola will be speaking on Marketing and The Entrepreneur. This year we celebrate the 21st anniversary of the College (having been founded in 1991) and would very much like to see you at this important event. It will take place in the Great Hall at St John’s College, Cambridge and will begin with drinks at 7.00pm on the College Backs. Dress code this year will be black tie. We do hope you will be able to come and join us—simply e-mail Shane@marketingcollege.com to confirm your attendance. We look forward to hearing from you.
The Cambridge Marketing College Annual Dinner and Lecture series brings together marketers from a wide range of backgrounds through its choice of involving, interesting, and respected speakers. Join us this July 4 for our Black Tie event.
Craig J. Stone is the editor of Cambridge Marketing Review. Email your comments to editor@cambridgemarketingpress.com
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HOW TO BUILD A WORLD CLASS BRAND An edited extract from the 13th Annual Cambridge Marketing Lecture, presented by Rita Clifton, Chairman of Interbrand, the world’s leading brand consultancy. wHEN ALL ELSE FAILS, lET’S THINK UP A NEW NAME Far too many companies see a brand simply as the face of the company, the external facade that stakeholders buy into -- or not as the case may be. This attitude makes it all too easy to simply try to ‘re-badge’’ rITA CLIFTON a company with a shiny new name and logo when actually what needs doing is a more fundamental rebranding exercise across the business, inside and out. Of course there are valid reasons behind rebranding; some companies will have been forced to create a new identity following deregulation or privatisation or they may be searching for an improved image in a business environment that has become very different from the one they entered. However, when PricewaterhouseCoopers (PwC) set out to rebrand its consulting arm, renaming it “Monday”, headlines suggested “PwC Rebranding is just as exciting as a Monday morning”. The new name had been intended to denote fresh thinking and new beginnings, rather than the unwelcome start of the working week after two days of freedom. ‘Rebranding’ in this case was perceived as a failure, although in fact it was never given time to prove long term effectiveness one way or another, as the division was acquired just six weeks later. The general point is that a new name is not going to make a bad or confused company any better; proper and relevant rebranding, which address all business operations, may well succeed. Brands are any company’s greatest assets, but this is a realisation that is coming much too slowly to many companies. “Our people are our most important asset” is a sentiment thrown around far too often; businesses need to realise that “...brands are the most important assets. People die, buildings fall down, but what lives on are the brands, in any category... Strong and sustainable brands are the only way to generate the kind of wealth we need to pay for civil society, and to build hospitals and schools, etc”. One chief executive of a FTSE 100 corporation fell foul of underestimating the importance of his brand suggesting “...branding is not our main preoccudcpation...” on the receipt of a new book about branding. What he really meant was “we have a logo thank you” – the CEO in question lost his job within six months. BRAND IT LIKE BECKHAM Branding is not something that just applies to companies and products. In today’s competitive global market, nations are realizing that their reputation and the image of them that the rest of the world sees is vital to their growth and development. The brand image that the rest of the world puts on them can be either a valuable asset or
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FEATURE—BRANDING
Interbrand have more than 40 offices and are the world’s largest brand consultancy
a harmful detriment to their economy, industry, and relations with other countries. It is therefore not surprising that the business of nation branding has become a popular marketing strategy among federal governments and national tourism sectors in recent years. Interbrand recently worked with Estonia to promote its image in the international community. As a country formerly under Soviet occupation it lacked a firmly established national identity. Aiming to increase foreign investment and tourism a marketing campaign to brand Estonia was established. In this instance, the reality of Estonia was so much better than the perception, and so the role of marketing and a new brand identity was to promote the attractive reality. “Welcome to Estonia” was the phrase chosen for Estonia’s campaign logo. With a strategic design and typeface, this logo has become widespread throughout the country, supported by Estonia’s national airline, businesses, tourism industry, and shipping docks. It’s not only countries which have realised how important branding is. Celebrities are increasingly wanting to turn themselves into brands, using their fame to succeed in business or attract lucrative advertising and sponsorship deals. The challenge for celebrities is to go from being just a short term marketing phenomenon to become a sustainable brand, able to generate long term sustainable business beyond the immediate reasons for celebrity. nO LOGO VS. PRO LOGO The Naomi Klein book No Logo has become a cultural manifesto for the critics of unfettered capitalism worldwide. The book suggests we live in an era where image is nearly everything, where the proliferation of brand name culture has, to take one hyperbolic example, created “walking, talking, life-sized Tommy [Hilfiger] dolls, mummified in fully branded Tommy worlds”. The validity of Klein’s arguments are however, widely challenged, with The Economist running a leader article explaining why mainstream opinion should have a “Pro Logo” attitude; after all, brands with reputations to protect are likely to do the right thing. Developing countries want strongly branded businesses to invest in their countries and provide development and employment, knowing that these organisations will not want to damage their reputation. Further, a strong brand means a more loyal ‘customer’, more secure income and earnings for that organisation (including not for profit organisations) and more secure employment –an important social benefit in its own right. RESEARCH BY INTERBRAND Interbrand continuously researches into the value of brands and people’s attitude towards them. Evidence shows that the best
“...TO PROMOTE THE DEVELOPMENT OF chINA’S BRAND COMMODITIES SO AS TO BENEFIT THE WORLD’S PEOPLE... DEVELOPMENT OF BRAND COMMODITIES CONCERNS CHINA’S ECONOMIC GROWTH AND SOCIAL PROGRESS.” - wU BANGGUO, CHINESE vice premier global brands consistently outperform stock market indices. The fact that a brand is the most important and sustainable asset any organisation has should mean that it is used as a core driver to the operations of a business. However, when asked ‘does your brand influence all decisions made at your organisation?’, only 36 per cent of Chief Marketing Officers/Seniors marketers said yes. Two thirds of companies do not see their brand as a central organising principle, where brand is perhaps still following the old model of a concept limited to the marketing department, rather than a driver of behaviour and actions across the whole business to deliver a branded experience to their customer. A further question reveals the primary inhibiting factor to changing how a brand is delivered throughout the company is perceived to be the inability to prove the financial benefit of the brand. However, this is something that Interbrand pioneered in the 1980s, and is now accepted as best practice. If it was understood that metrics and appropriate incentives can be so easily created, CEOs and Chief Financial Officers may be more willing to accept brand value. The Tip of the iceberg A brand’s visual identity, including the name, product range, marketing activity and logo, is the tip of the iceberg in terms of what a brand represents. Companies are often too concerned with only the top of the iceberg. The aspects of a brand which really define it are found deeper within the business; these include a brand’s vision, values, business processes, purpose, training and recruitment, brand strategy, management controls and beliefs. There are hundreds of textbook definitions of branding but the one originally created by Interbrand was this “...a mixture of tangible and intangible attributes, symbolised in a trade mark which, if properly managed, creates influence and generates value”. But of course in practice it is a lot more than this, it is living business asset which over time becomes a key source of value and competitive
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Visual identity 3D - environments
Names
Product ranges External communications Vision
Values
Business processes
Management controls
Training and recruitment
The Branding Iceberg.
Sense of purpose Shared sense of fate
Methods of rewards
Employee communication Beliefs and personality Clear brand strategy
advantage to the business. A brand should also represent a central organising principle. To succeed in building a strong and reliable brand the entire organisation must deliver it; this requires rethinking the delivery of the business strategy. Brand strategy should no longer be seen as just the responsibility of the marketing department, it should be the alter ego of business strategy, integrated into every aspect in the business, with all segments of the business working with brand strategy at the core of their activities. To deliver this successfully there are three key concepts: Clarity, Consistency and Leadership. BMW provides a good example of this. BMW has a clearly defined profile and value system. Its brand identity specifies characteristics and describes the way in which the brand aims to clearly differentiate itself from its competitors’ offer. Its brand identity acts as a guideline for its products and services, people and behaviours, environments and channels and communications. For example the BMW training facility, ‘Group Academy UK’ is a purpose-built training and development centre which reflects BMW values, with clean lines, organised rooms and an environment of discipline, order and inspiration. It is not a place where you would wish to turn up late or looking scruffy. This consistent training and development engages staff and partners in the BMW brand, as well as bringing the best practice and knowledge for the management to share.
McDonald’s: I’m Lovin’ It At number six of the best global brands is McDonald’s, a brand recognised throughout the world. This global dominance has meant it has been in the critics’ firing line more often than most in the same industry. For example the film “Super Size Me” by Morgan Spurlock
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GOogle Placed at number seven in 2009 Google [Interbrand’s 2011 rankings now place Google at four] is one of the list’s greatest risers, with a 25 per cent increase in its brand value. Since its establishment in September 1998 Google has revolutionised the internet and how people interact with it. Prior to Google search pages were crowded and messy. The clean, simple and easy to use interface provided by Google was a highly attractive proposition for millions of people, and reflected the clarity of its vision to organise the world’s information. Google has had a strong corporate philosophy which underpins its values and is translated to its brand. These core principles guide their actions: 1. 2. 3. 4.
Focus on the user and all else will follow It’s best to do one thing really, really well Fast is better than slow Democracy works on the web works
Image: Interbrand.com
The World’s Top Ten Brands Each year Interbrand produces a list of “Best Global Brands” by calculating the value of the world’s biggest brands. The brand value given to each company is a financial representation of businesses’ earnings due to superior demand created for its products and services through the strength of its brand.
asked the intriguing: What would happen to a normal 33-yearold man in perfect health who stands six feet two and weighs 185 pounds if he ate nothing but McDonald’s fast food for thirty days? The results did not show McDonald’s in a positive light at that time. Despite being ranked number nine in 2006, McDonald’s set out to deliver a single motivating brand value proposition that would enhance the brand globally, without diminishing local relevance or sales. This value proposition focused on simple, easy enjoyment. As part of this new value proposition McDonald’s have made various menu innovations and improvements in the restaurant experience and environments. McDonald’s also recognised there was a large market for coffee which it had been missing out on, with companies like Starbucks cashing in. It was recognised that a coffee experience was more than just coffee. Being able to provide a quality coffee at the convenience and price of McDonald’s, and in an agreeable space is a competitive brand advantage.
FEATURE—BRANDING
look to the Web: According to Interbrand, Coca-Cola is currently the most valuable brand in the world http://bit.ly/interbrand100
5. 6. 7. 8. 9. 10.
You don’t need to be at your desk to need an answer You can make money without doing evil There’s always more information out there the need for information crosses all borders You can be serious without a suit Great just isn’t good enough
These principles are not just something written in a corporate manifesto and then forgotten. At Google they are brought to life everyday, whether it is through the health facilities provided for staff at the work place or lava lamps and scooters dotted around the office. Amazon.com Almost everyone is familiar with the Amazon.com brand, and a large number of us will have had some form of interaction with the company. The internet giant’s brand proposition can be best summarized as convenient, low-priced, efficient, personalised, and customer-friendly service. These key qualities in an online retail brand go a long way to explain Amazon.com’s popularity. The Chief Executive Officer of Amazon is very clear as to what his company’s primary value should be, his mission is “... to be the Earth’s most customer–centric company...” and this is reflected throughout the value chain with a strong emphasis on customer relationship management. Consumer research confirms that Amazon.com is the top performing brand in the U.S. based on “trust” and “recommendation.”
Annual Cambridge Marketing Lecture 2012
We would like to invite you to join us at our Annual College Dinner and Marketing Lecture on Wednesday, July 4, 2012. The speaker this year is Dr Nicola Murphy, Founder and CEO of The River Group. Nicola will be speaking on Marketing and The Entrepreneur. This year will be the 21st anniversary of the College (having been founded in 1991) and we would very much like to see you at this important event. It will take place in the Great Hall at St John’s College, Cambridge and will begin with drinks at 7.00pm on the College Backs. Dress code this year will be black tie. We do hope you will be able to come and join us—simply e-mail Shane@marketingcollege.com to confirm your attendance. We look forward to hearing from you.
Apple Apple is an iconic brand with a base of core fans that are truly passionate about Apple and its products. Again, as with other top brands, Apple’s vision, mission and values are strongly evident in its people and behaviours, products and services, environments and communications. For example even its retail spaces truly reflect the brand’s values of being different and designed for humans, unlike so many other stores on the high street. The values and principles of the world’s top brands may sit in stark contrast to one another but what allows them all to succeed in their own unique way is consistency. Their brands are a true representation of the founding beliefs of the company and these are delivered and understood by every channel of the business. They also share the sense of restlessness and innovation that characterises true leader brands. To Conclude Branding is not just about advertising and packaging — it’s about how you train and develop staff, develop distinctive products and services and maintain a consistent idea. A logo is the visual bit, but the substance is the most important thing. It’s what under the shiny logo that adds the truly sustainable value to businesses.
Rita Clifton is Chairman of Interbrand, the world’s largest branding consultancy. She is also former vice chairman and executive planning director of Saatchi & Saatchi.
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The branding iceberg The concept of ‘The Branding Iceberg©’ originally appeared in Hugh Davidson’s keynote speech to the Marketing Society Annual Conference in 1989, and was later included in his book, “Even More Offensive Marketing”, Penguin 1997. This update on and expansion of ‘The Branding Iceberg©’ was written at the request of Charles Nixon, CEO of Cambridge Marketing College, in October 2010.
T
he Branding Iceberg is a graphic way to demonstrate that most of the elements contributing to a brand’s reputation – things like superior innovation, highly motivated employees or excellent quality – are invisible to the customer, and outside the direct control of marketers. Using the iceberg analogy, they are below the waterline. Only one seventh of the typical iceberg is visible above the water. In the case of the Branding Iceberg, the elements most visible to customers include presentation, communication, names/ symbols, price, and products/services. These are important, but they are dependent on the invisible skills and competencies below the waterline which power them. The invisible elements provide innovation, quality, value and operational efficiencies. Without this powerhouse below the waterline, the Iceberg would melt or break up, and the visible elements of the Branding Iceberg would then disappear. The Branding Iceberg demonstrates that the brand promise is delivered by the whole organisation, not just by the Brand Manager or the Marketing Department. The graphic of the Branding Iceberg illustrates that brands are business systems, not just names and advertising. Branding goes well beyond names and symbols. Strong branding is the result of successful business strategy. It is not a matter of manipulating advertising, name and presentation. Is your brand just a name, or is it shorthand for a distinctive business proposition? Most so called brands are merely names masquerading as brands. To deserve the title ‘brand’ a product or service needs to be perceived by its customers as different, or better, or cheaper than its competitors, ideally all three. Unfortunately, most so called brands are undistinctive, pimply Me-Toos or Me-Threes, offering identical benefits to their competitors. Strong brands are distinctive, and deliver superior value for money. They achieve this mainly through continuous improvement, deeply held values and a superior business system, invisible to the customer, below the water line. Figure 1 illustrates the Branding Iceberg for Fairy Liquid, which achieved brand leadership in the dishwashing market three months after launch in 1959, and has retained it ever since, for over 50 years. In constructing a Branding Iceberg, you should identify below the waterline elements which are different or superior. The exact elements of the Branding Iceberg will differ by market, although most of those in Figure 1 would be included. For instance, ‘Presentation’ would be packaging for consumer goods companies, store fascias and interiors for retailers, and branch offices, people and literature for mortgages.
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FEATURE—DAVIDSON
look to the Web: Offensive Marketing: An Action Guide to Gaining Competitive Advantage scr.bi/hugh_davidson
Figure 1: The Fairy Liquid Branding Iceberg ©
• Symbol • Product
• Brand
What you can see
name
• Sales otion • Packaging prom • Communication • Pricing Key Assets and Competencies
• • • • • • • •
Vision and values Superior product quality High marketing investment High volume/low cost production Superior customer understanding Continuous improvement Effective selling, supply chain Strong R&D, innovation
What you can’t see
Images: Reproduced by Amanda Barrett
You will have noticed that elements below the waterline are company-related competencies or assets, while those above the waterline refer to a specific brand. This is because the business system driving most brands below the waterline is organisation wide and will often cover a number of brands. The elements below the water line contribute most to building and developing strong brands. Unfortunately many marketers do not fully appreciate this. They spend a disproportionate amount of their time on what you can see, especially sales promotion and advertising/communication. This is partly because many marketers find these ‘creative’ activities more interesting, partly because they hae direct control over these areas, which are usually implemented by outside agencies under their direction. The most effective marketers are both left and right brained – creative yet strong with numbers and analysis. They are good at motivating colleagues in other departments who do not directly report to them, such as Operations, Sales, Supply Chain and Finance. They recognise that the skills of these colleagues, below the waterline of the Branding Iceberg©, are critical to brand success. They are complete Brand Managers. The Branding Iceberg is applicable to any type of brand – from products to services, from universities to charities. Figure 2 analyses Tesco, a leading service brand, which is one of the largest and best managed supermarket brands globally. Figure 2 is a summary and could easily be expanded. For example, clear and consistent strategies, almost unchanged over 14 years, are a key asset for the Tesco brand below the waterline. The Branding Iceberg highlights that the strength of many brands derives more from powerful underlying business systems than from advertising or promotion. Another reason why the iceberg analogy is apt for brands is that icebergs will melt unless they enjoy the right environment. The natural progression for brands is to melt, as they are attacked by new competitors or diffuse their customer franchise with too many line extensions. The melting tendency in the brand life cycle can only be countered by innovation and continuous improvement, largely below the water line. A final point on the Branding Iceberg. It demonstrates why Marketing is so misunderstood by both the general public, and nonmarketers. They only see what is above the waterline, and therefore think that Marketing is only about advertising, ‘spin’ and sales promotion. Marketers need to emphasise at every opportunity, their key role in activating and managing the diverse elements below the waterline, in order to deliver better value for customers.
Figure 2: The Tesco Branding Iceberg ©
• Store layout and loc atio
n
g • Ser vic • Parkin e • Pricing • Brand name t duc • Pro range • Communication
Key Assets and Competencies
• • • • • • •
Property skills Effective supply chain Continuous improvement High quality management Range of store formats Private label skills Low cost/high productivity
What you can see
What you can’t see
Hugh Davidson is a former chairman of The Marketing Society. He has worked at senior level in over 100 categories across 15 countries for P&G, United Biscuits, Playtex International and Oxford Strategic Marketing, which he co-founded.
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Marketing Profile: The Grand Arcade
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he Grand Arcade in Cambridge is the focal point of the city’s shopping experience. As the premier shopping destination in East Anglia, it is more than just a shopping centre. A brand in its own right, it is a marketing blueprint and aims to provide an experience where ‘shopping Paul Woodhouse comes to life.’ Before the launch of the Grand Arcade, which opened back on March 27, 2008, the first task for Marketing & PR Manager Lidia De Luca was to create an integrated marketing campaign. “It was imperative that we got it right first time and that the public embraced the brand positioning. We conducted in-depth market research including focus groups, which enabled us to perfect our creative output and resulted in measurable benefits and an award winning campaign.” The campaign itself (see page 15 for a detailed case study), however, came at a time when the retail market appeared to be on the brink of a dramatic decline. While many shopping centres reined in their marketing budgets in response, the Grand Arcade’s landlords, USS and Grosvenor, backed the launch. “It was an innovative launch campaign,” says De Luca, “which involved 80 foot projections of fashion images onto iconic Cambridge buildings. It engaged our target customers and resulted in exceptionally high footfall and sales figures” The Competition and the Consumer To help maintain its ambition as the premier shopping destination in East Anglia Lidia has segmented her competition geographically covering an area of up to 90 minutes drive time from the Grand Arcade. Just over two million people live in the catchment area and this is boosted by four million tourists and 22,000 students who visit the city each year. There is a very precise method behind all the segmentation and targeting of the customer base in and around Cambridge. It is followed up with targeted marketing activity. Lidia says “When we launched the Grand Arcade, we used television and cinema to reach the wider catchment populations. Now we employ various outdoor channels like Bus T-Sides and 48-sheet advertising platforms plus radio, regional press advertising, pay-per-click and our own targeted magazine.” There is a very strong brand identity that communicates a consistent message about the type of shopping experience that the consumer will aspire to. Interaction and engagement is noticeably core in the marketing employed by the Grand Arcade; including blogging, e-marketing, a strong digital presence and some very successful event management. If the aim is to engage with the consumer, has been achieved as the Grand Arcade has become the premier shopping destination
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FEATURE—GRAND ARCADE
in East Anglia. What does Lidia attribute this success to? “The establishment of the right retail mix combined with quality, impactful advertising and a precise, well-targeted media schedule. We have always used integrated campaigns that stand-out and utilised other strong forms of brand support like our well known fashion shows.” Marketing Activity Lidia is proud of the innovative marketing activity that goes out. In particular the magazine and the many events, such as the afore mentioned fashion shows, that have been conducted. The bi-annual magazine, Grand Arcade, is a publication that embodies the desired brand associations and features all of the key brands located at the centre. “The bi-annual magazine is a bespoke publication devised to showcase the very best of what Grand Arcade has to offer across all our product categories and retailers in a cost-effective manner. The magazine is polybagged with Style magazine and the Cambridgeshire Journal.” “It is sent out to the targeted ABC1 postcodes in the outer catchment populations via newshare. It is also available in-centre, at key local hotels and from the Tourist Information Centre.” Since the opening of the Arcade, events have been at the
forefront of marketing objectives. Numerous events have been conducted from fashion shows with the University and partner brands along with the unveiling of Christmas lights and a first birthday celebration that featured Strictly Come Dancing stars Vincent Simone and Flavia Cacace. “It is about creating a welcoming and dynamic shopping experience for our customers, where they can not only shop but also benefit from a value-added experience which is memorable. Grand Arcade is very much part of the local community and works very closely with Love Cambridge (the trading name for the Cambridge City Centre Partnership) and its promotion of the city.” The Measure of Success The events have been a major part of the success story. The Grand Arcade has won several awards including two for its launch marketing. “We won a Gold European Solal Award in Vienna and a Best-ofthe-Best award in Las Vegas. These were both for the best integrated advertising campaigns in Europe and in the World. These were awarded for outstanding examples of shopping centre marketing. Of course, awards cannot be the only evaluation of success. When measuring market share and setting benchmarks, this process
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is as thorough as the planning stage. The ever changing needs of theconsumer and the economic environment provide challenges that have to be proactively evaluated. “We conduct market research annually via exit surveys and monitoring penetration from the outer catchment populations. We also measure advertising recall, average spend and any shifts in our demographics. At centre level, we diligently analyse footfall and impact on sales.” Partnership Marketing It is a fine balancing act between self-marketing and partnership marketing with the centre’s range of designer brands and high street retailers. Many of the most well known brands from Ted Baker and Hollister to John Lewis and Apple are going to have individual targets and their own high expectations. It is important for the Grand Arcade to support these and involve them wherever possible. Lidia feels that the responsibility is a balance that both parties have a part in to achieve success. She can only do so much to encourage the consumer to the Arcade, once they enter each individual store the responsibility is on the store to maximise the opportunity. “As a centre, we aim to stimulate brand awareness, increase centre footfall and promote centre events or retail promotions. It is the responsibilities of the individual stores to convert the footfall into sales turnover and to accentuate average spend.” Although working closely with the brands and developing these relationships inside the centre is vital, the Grand Arcade has become a huge brand in its own right, and attracts the consumer with its own unique marketing style. “The Grand Arcade has developed a strong brand identity and its own brand personality, which is synonymous with quality, innovation, style and aspiration. We are exceptionally careful with brand associations and advertising partners and I ensure that the Grand Arcade’s brand marketing reflects the quality of the retailer brands within the centre.” Digital Marketing and Social Media Despite the obvious challenges in retail regarding the current economic climate and increased competition online, Lidia feels that the Grand Arcade is addressing this competition by offering distinct variations across the marketing mix. The key is offering the consumer a unique shopping experience. “It is a challenge but we are able to offer an unparalleled selection of quality retailers under one roof in a beautiful city with strong cultural heritage. Therefore, we benefit from a very loyal and wide reaching customer base. Our retailers are proactive and pricecompetitive where feasible and we pride ourselves in enhancing the overall shopping experience by listening to our customers and by offering high standards of customer service within a welcoming environment.” It is a key point that part of the communication
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process, of engaging, creating loyalty and of building relationships is listening to customers. Engaging in two-way communication allows for Lidia to listen to customer requirements and respond to this. One of the ways to do is through digital marketing and although e-communications and the newsletter are part of this strategy, the Grand Arcade has yet to launch any social media platforms. This is something that is about to change though. “Social Media marketing is a very influential medium and we are due to launch Grand Arcade Facebook and Twitter channels very shortly. It will be used to engage our customers and to inform them about the latest trends, in-centre events and offers from our retailers in the centre. These channels will not be used in isolation but in integration with our offline marketing too. Once launched, there will be a full social media plan in place with clear guidelines and benchmarks for success.” The Future Social media is just one of the future aims of Lidia’s long-term marketing plans. When asked about plans for the next five years, the answer was understandably ambitious. “(We will) continue to build market share and to ensure that this continues to be the premier shopping destination in East Anglia. I will aim to fully embrace the opportunities of the social media world and maximise the centre’s strengths in the face of online competition. I also intend to continue to create more inspirational marketing campaigns which resonate with our key stakeholders.” As a successful marketer with the recognition to backup the high regard in which Lidia and the Grand Arcade are held, it would be remiss not to ask if there is any advice she would offer other marketers in her position. “Always be a proactive marketer and keep your eyes open to new ideas. Have an opinion, follow your instinct and always strive to be creative and innovative. Don’t be afraid to be a perfectionist and remember to always be customer-centric.” Paul Woodhouse is a Marketing Executive for Vetspeed Ltd. With a career spanning many sectors on both agency and client side, Paul has a passion for writing, and freelances for Cambridge Marketing College and other organisations.
CAMPAIGN Profile: gRAND Arcade An interview with Lidia De Luca, Marketing & PR Manager, Grand Arcade “Whatever you do, don’t make the advertising look like every other shopping centre.”
T
Some of Grand Arcade clients’ logos:
his plea from our landlords was the starting point for the development of Grand Arcade’s launch advertising campaign. Paul As the first major development in the Woodhouse heritage city of Cambridge for a generation, owners USS and Grosvenor set their standards for the centre high with a dramatic interior, high quality finishes and a retail line-up which had a clear vision from the start. A 280,000 sq ft John Lewis anchored the 450,000 sq foot development alongside an uncompromised array of 50 desirable, aspirational fashion brands such as Ted Baker, LK Bennett, Hobbs and Apple with a food offer provided by brands such as Carluccio’s. Just over 2 million people live in the catchment area, which is also boosted by approximately 4 million tourists and 22,000 students each year. Prior to the new development, Cambridge punched below its weight in terms of retail offer but in managing to introduce a new centre artfully built into original heritage frontages, Grand Arcade suddenly provided retailers the scope to take large units within the heart of the city and gave shoppers a unique opportunity to indulge in a quality shopping offer. Our challenge was to communicate this new offer to our potential market. With the scheme set to open on March 27th 2008 we wanted a campaign which would have creative impact at launch but be able to be build further, right through to Christmas and beyond. It would also need to work in parallel with our launch PR campaign and where possible help generate PR in its own right. Following a pitch, agencies were selected for media and creative work with extensive research being commissioned through our managing agents DTZ, which became the basis for our planning. Just as we were about to launch, however, the retail market appeared to be on the brink of a dramatic decline. While many landlords decided to scale-back marketing budgets in response to this, USS and Grosvenor were convinced of a need to spend more in order to ensure that the trading of the scheme held up over Christmas. We were then able to develop a campaign that we would run in cinemas and on TV across the Anglia region. Ultimately then, our brief was to develop a fresh approach to shopping centre advertising with a clear proposition and a strong point of difference. OBJECTIVES The campaign aim was to change people’s perception of Cambridge – from a historic seat of learning to a modern, relevant fashion destination.
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Lidia Alessandra De Luca’s ambition goes well beyond the confines of the University City. Lidia’s career started after completing her studies in Business Management and Italian at Royal Holloway University in London. She then spent one year at Padua University at the faculty of Political Sciences specialising in Marketing, which is where her passion for the discipline started. Lidia completed her Professional Marketing Diploma with Cambridge Marketing College whilst organising the set-up and launch of her family owned independent business, De Luca Cucina and Bar. She then moved on to Grosvenor Developments and was responsible for the development marketing of Grand Arcade prior to its opening before being appointed Grand Arcade Marketing & PR Manager in 2007.
We wanted to inform our local primary catchment about the depth of the offer at the new centre, while also targeting our secondary and tertiary markets. PR, through specialist agency Rave, was used to attract shoppers to the launch but our main objective for the advertising was to build a sustained level of footfall and tenant sales post-launch. In seeking to establish the Grand Arcade brand, the bulk of our advertising would be strategic in its attempt to carefully position the scheme. A small portion of the spend would also be used to promote tactical events and messaging regarding new openings through the year. We also wanted the ad campaign to be talked about, so achieving at least one piece in the Cambridge Evening News about the shoot was seen as essential. Key objectives: • To achieve footfall in line with, or above, the launch target totalling 6.8 million people by the end of December 08. • To achieve penetration among the secondary catchment of 35% by January 09 and in line with the catchment average of Wealthy Achievers (WA) and Comfortably Off (CO) profile groups. • To achieve an average spend in the scheme by January 09 of £25 (primary catchment) and £40 (secondary catchment). • To achieve awareness of the advertising of 18% (TV); 10% each (press , radio, posters and buses); 5% (cinema)
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The campaign aim was to change people’s perception of cambridge from a historic seat of learning to a modern, relevant fashion destination.
IMPLEMENTATION Mid-way through our planning process an event happened which dramatically affected our thinking—our initial advertising campaign was tested in focus groups. While some elements of the campaign were liked there was a unanimous rejection of our original intention to play on an academic/fashion theme. Locals found this too alienating. With deadlines approaching, an entirely fresh approach via agency Tomlin Bean was developed which built on the universal appeal of Cambridge’s stunning architecture and the fashion credentials of the new tenants. Our campaign theme became “Grand Arcade—The Architects of Fashion”. Images of aspirational models were shot in a studio and then projected up to 100 feet high onto key landmark buildings in Cambridge that would be immediately recognisable to a Cambridgeshire audience—The Fitzwilliam Museum and the new John Lewis. This was designed to firmly establish the visual link between ‘outstanding architecture’ and ‘stylish fashion’. These projections were then photographed in situ and these images became the basis for the ads. The campaign was again tested in focus groups and received a highly positive reaction. The ads then ran in 48 and 6 sheet format as well as on singledeck buses and mega-rears. Radio ads highlighted specific retailers and new store openings while Grand Arcade became the first advertiser to feature on Adgates at Cambridge train station. Inserts ran in the regional versions of quality press titles such as the The Sunday
FEATURE- CAMPAIGN PROFILE
press inserts, regional press ads, direct mail, a door-drop and radio. An online pay-per-click campaign was also run along with e-mailings to the database.
Photos: File Photo, Grand Arcade
RESULTS Our Objectives were: To achieve footfall in line with, or above, the launch target totalling 6.8 million people by the end of December 08. 7.9peoplevisited theschemeby theendoftheyear with significantpeaks in line with the advertising. Footfall was ahead of target for all months except September when student numbers were below expectation. To achieve penetration among the secondary catchment of 35% by January 09 and in line with the catchment average of Wealthy Achievers (WA)/Comfortably Off (CO) profile groups. Recent research* showed we attracted 43% of shoppers from the secondary/tertiary catchments. Further analysis of the data captured from the DM and Quality Press inserts showed high penetration amongst ‘Wealthy Achievers’ and ‘Comfortably Off’ Acorn groups. Against a catchment base of 70.4% WA/CO we scored 80.3%.
Shoppers at the 450,000 sq foot Grand Arcade have over 50 desirable and aspirational brands to choose from. A 280,000 sq foot John Lewis store, seen here, anchors the centre’s retail offerings.
Times, Daily Express, The Times, The Mail on Sunday and Weekend Mail. There was also a door drop to 38K primary catchment and 43K secondary catchment households. The centre also worked with John Lewis and other retailers to distribute the mailing via their stores and card-holder mailing lists. For Christmas our campaign was once again developed to appeal to our aspirational target market. We wanted to compete in the same arena as top fashion brands and to avoid the clichés of traditional shopping centre TV advertising. Building on our launch projection concept, agency Tomlin Bean reversed the idea of projecting people onto buildings and instead projected buildings onto people. A PR mechanic was again woven into the development of the ad, with a dance competition run in the centre to find a local shopper who would feature in the commercial. This again ensured we were being talked about prior to the ad being broadcast with local radio station Heart actively backing the competition. The ad launched in cinemas with the new James Bond film – the style mirroring that of a 007 opening credit sequence. (In a neat twist we used the same choreographer as the film and Joanna Lumley, who was in the first ever Bond title sequence, was used to voice the ad.) The TV and cinema campaign was again backed by quality
To achieve an average spend in the scheme by March 09 of £22 (primary) and £40 (secondary). The research showed an average spend of £35 amongst primary shoppers and £61 amongst secondary. We were particularly pleased with this as the frequency of visit amongst the primary market was also higher than anticipated so average spend might have been expected to have been lower. While it was not one of our original objectives, trading data was later shared by John Lewis. Their trading statements highlighted the strength of Cambridge’s performance which was 40% up year on year, Christmas trading being exceptional. To achieve awareness of the advertising of 18% (TV); 10% each (press, radio, posters and buses); and 5% (cinema). Recall of the TV advertising was 37%. (Magpie Research and ad agencies unconnected with the campaign have said that this is among the highest they have ever seen.) Amongst database respondents to the e-survey this was even higher at 46.8%. Press recall was strong at 30%, with radio at 15%. Posters were 27% with buses at 12%. Cinema recall (amongst a lower base of users) was 6%. Though not a major objective, one of the challenges we set ourselves was to get both the launch and Christmas ad campaigns picked up in the press. This was achieved in both consumer and trade press. * Research results based on 500 Exit studies conducted by Magpie research/DTZ in May 08 and Jan 09 plus e-mail questionnaires to xxx database contacts in January 09.)
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business-to-business marketing: A REVIEW
J
ust recently there has been one of those periodic revivals that happen around “b-to-b” marketing. The marketing society has made somebody responsible for it after a flurry of comments in their LinkedIn community. Some members were fed up with the obsession Laurie young with consumer agencies and lobbied for more activities around business marketing. The CIM too has begun to cover business marketing a little more fully with articles dedicated to it in The Marketer. It would be sensible, though, to step back and look objectively at the heritage, practice and success of business to business marketing. There is a vast range of specialist practices that are not well known or generally adopted. A credible heritage Marketing has been far too biased toward consumer goods marketing. Advertising and branding debates have focussed around the likes of Unilever and Mars; while marketing academics have been obsessed with the consumer goods industries. Until very recently, the text books and the courses of most universities were almost exclusively about consumer marketing practices. There was even a complete sub-discipline devoted to “consumer behaviour”. B-to-b marketing was an afterthought, seen as an unfamiliar and strange backwater which did not understand branding or segmentation and had small budgets reserved for dull activities. Yet that has never been true. Solid, effective b-to-b marketing has been around at least three hundred years and played a major part in economic and industrial success. You just have to dig a little to find it. Matthew Boulton was, for example, one of Birmingham’s most successful businessmen in the mid 1700’s. According to historian, Jenny Uglow (see Uglow, J. 2003) he started in a business which he inherited from his father: “toys”. By this the people of the times meant little trinkets which were collected by the fast growing population of newly rich industrialists and passed on as heirlooms. He used consumer marketing to make a fortune (catalogue marketing, field sales, special promotions etc.). Although he was most famous for his “manufactory” he was, at his core, a marketing man before that term was coined. (His friend, Josiah Wedgwood, created the up-market pottery brand and called his sophisticated marketing approach “the science of money getting”.) When he met the geeky technologist, James Watt, Boulton saw an opportunity in one of his inventions (an adaptation of the steam engine) and set out to apply a clear marketing strategy to it. He recognised that there was a vast business opportunity if they could industrialise this innovation and create markets for it. Yet they would not be the luxury consumer markets that he was used to. This was
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FEATURE—B2B MARKETING BONUS
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business-to-business and it needed new methods. It was hard trying to create a market for a true innovation at a time of great international instability and relative poverty. Involved in the strategy was (what would now be called): solutions sales, innovative pricing, word-of-mouth, investment in free trials, relationship marketing, sales reps, celebrity endorsement, account management, clear segmentation and Thought Leadership. For instance, the first segment the firm truly focussed on was the mine owners of Cornwall. Their proposition was a customised solution to the sector’s pumping needs based on a unique business model. They would set up the machinery and maintain it. In return, the miners would be able to get to greater depths and have greater yield from their mines. The company would receive an annual royalty, up to the expiry of the patent on the pump, which was calculated as a portion of the savings in fuel costs made possible by the new machine; in other words, from incremental value realised. In brewing, by contrast they used the power of celebrity and fame (King George III opened their engine for the brewer Whitbread). In another market they set out to prompt word-of-mouth through a business network. Joseph Jary, an owner of a coal mine near Nantes, paid nothing for the engine on the condition that he used it to “trumpet their name”. There are similar stories in the 250 years since then but for some strange reason they have not really entered the marketing literature. In fact, in many marketing books it is stupidly suggested that there was a “manufacturing period” followed by a “sales period” and that marketing took off in the big consumer campaigns of mid twentieth century America. Such ignorance undervalues the heritage of our craft and causes damage by denying generations of marketers the full range of experience. Pears soap, for example, successfully used viral marketing in the 1790’s to kick start their brand yet the technique did not appear in marketing training until very recently with the advent of the internet. It’s a disgrace that a wide range of b-to-b techniques have been similarly neglected. A vast speciality A vast number of businesses exist to market products and services to other businesses. There are estimates which suggest that there are, in fact, more marketers working in b-to-b than in the consumer equivalent. One study found that there were 176,000 marketers directing spend of £9.8 billion on b-to-b marketing communication in the UK alone (see Brookes & Chesher 2007). They conducted their study because they wanted to demonstrate that b-to-b marketing was “a viable and distinct audience, and cannot simply be dismissed as an adjunct to the higher-profile consumer marketing sector”. This research also exposed the exciting opportunity open to suppliers who really understand and penetrate this area. It found that over a quarter of b-to-b marketers did not use an agency at all and only 20% used agencies in any strategic role. At global level, business marketers in organisations like Accenture, GE, Deloitte and ABB put serious investment into
marketing. Some of it would be recognised by consumer marketers: above-the-line advertising, digital campaigns, product design, research and channel programmes. Their spend rivals the marketing budgets of consumer goods companies but not all of the activities which they consider to be marketing would be understood by some. These can be missed because the terminology is unfamiliar to consumer marketers: “thought leadership”, “customer hospitality”, “account based marketing”, “solutions”, “trusted advisor”, “business development”, “value proposition development”, “collateral” and many more. Moreover, the best tend to concentrate on the mystique of a few unique, elite media (like the FT, The Wall Street Journal, the annual meeting of the world Economic forum at Davos, the Mckinsey Quarterly and the Harvard Business review). Also, in an increasing number of global business providers, marketing is beginning to lead activities that it did not touch in the past. For instance, one of the world’s most valuable brands is a business-to-business, technology brand: IBM (valued at $56,201mllion by Interbrand). Between 1993 and 2009, It climbed from the 282nd position in Interbrand’s league table of the world’s best global brands to number two as the agency began to harmonise its valuations of different sectors. No book on management, strategy, the behaviour of market leaders or study into the success factors in dominating markets can be complete without IBM. For example, there were pc’s before IBM launched theirs and there are very few in the world today that are actually made by the company. Nevertheless, as the pc market began to take off, it was the layout and design of the “IBM pc” which became the market standard and allowed the market to boom across the world. In the same way that Americans “Fedex” a package and British people “Hoover” up dust, the “IBM pc” became a watchword for an effective personal computer. IBM has been used as case studies and examples in the field of management for decades. Its sales training was the best in its field and its account management practices were aped around the world in many different industries. For much of its life it has been considered to be simply one of the world’s best run companies, leading the industrial landscape. So, why hasn’t its marketing been used to create the fundamentals of marketing theory as much as, say P&G or Unilever? It has certainly pioneered a number of practices. In 2003, for instance, it embarked on an ambitious project to rewrite company values. Using its “Jam” technology, it hosted Internet-based online discussions on key business issues with fifty thousand employees over three days. The discussions were analysed by sophisticated text analysis software (eClassifier) to mine online comments for themes. As a result of this, the company’s values were updated to: “Dedication to every client’s success”, “Innovation that matters—for our company and for the world”, “Trust and personal responsibility in all relationships” Other “Jams” have since been held since to explore other issues in depth. IBM has made huge strides by the use of first rate marketing strategy and developing,
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impressive global organisational competence in branding and marketing. It’s simply b-to-b rather than consumer and some of its unique dynamics need to be understood. Differences from consumer marketing There are a number of important differences between consumer marketing and b-to-b which need to be understood and tackled. (i) Market size. Business markets are often smaller than consumer markets. In some, for instance, client-side marketers can virtually name all their buyers. So, b-to-b marketing has to be precise and, often, focussed on a very small audience. (ii) The frequency of purchase. In many business markets, it can be several years before business customers will buy a replacement or second product. So suppliers have to find ways to remain in contact between purchases. (iii) Intimacy of customers in professional networks. As business markets are small, they tend to comprise numerous inter-related networks of professional relationships. Opportunity can be increased by deepening these relationships; by increasing trust and developing links between two organisations. So, relationships with business executives can be the prime focus of b-to-b marketers. In fact, many say that “it’s all about relationships”. (iv) A more formal buying group. Some businesses use large, process-based bid techniques while others might turn on the whim of a forceful leader. Sales people need the help of marketing communications activities that allow for this variety and warm up different buyers to the point of sale. Business communications must be tightly integrated into the potential buying process to enable sales teams to function effectively. (v) Account management. Business suppliers tend to attract a number of repeat buyers who dominate the operations of the business and demand special attention. As a result, in many business markets the prime interface between a supplier and their customer is an “account manager” Many now treat their lead accounts as carefully as one of their regional businesses or geographic markets. There may be a general manger or senior director dedicated to that customer who is supported by a wide range of resources. Some call this “account based marketing” and it is radically altering b-to-b marketing across the world. (vi) The involvement and influence of professional buyers. From IT to professional services, purchasing managers are becoming increasingly involved in business buying. They introduce their own values, processes and criteria, demanding rigorous approaches from sales and marketing people trying to sell to their company. Business marketers must get to grips with the role and selection criteria of these hugely influential specialists in each customer organisation. (vi) Sector expertise. Business buyers expect their suppliers to understand the language, history, key trends and main competitors in their industry.
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Organisational competence One of the most significant issues in b-to-b is often a lack of organisational competence in marketing. Large, experienced business marketers have been driven there by market trauma and have progressively invested in ever more sophisticated marketing organisations and processes. Others lag behind in this development of marketing skills. Businesses range from tiny start-ups to medium sized companies and any marketing units within them are limited by both resource constraints and the understanding of the company’s leaders. At the extreme, it is not unusual for businesses to have just one, inexperienced marketer, sometimes drawn from another function (like sales). One person is all that the business can afford (or will tolerate). They need to construct their marketing with a hardheaded balance between what needs to be done and what can actually be done. They are unlikely to be able to invest in detailed research or elaborate market plans but must identify “strategic imperatives”; a tough mixture of sales, revenue, communication, NPD and political demands. They need to understand the broad range of resources available to them. This will involve: their actual budget, their actual staff, support from other business functions (like logistics, sales support or customer service), their suppliers, their professional association, and their wider professional network. Only the ineffective constrain themselves by the actual resources made available to them. They need influence to get the wider organisation to take on work and the budget to rely on external contractors. They need the capability to handle a wide variety of tasks but the humility to do much of the work themselves. Suppliers and agencies to b-to-b companies need to think through and compensate for this lack of organisational competence. They need to drop unnecessary jargon and invest in educating their potential client. They will normally have to swallow some costs in order to win greater account penetration at a later date. They might, for instance, have to invest in research or idea development in order to win campaign commissions which then lead onto further work once trust and confidence has grown. They will often have to gain access to the business owners and leaders in order to enter debate about strategic issues. Those that succeed in gaining this business-level access report great success from it. They find that business leaders are less risk adverse and quicker to take decisions than those in marketing functions; better even than CMO’s in some consumer organisations. They are also more willing to pay higher margins for demonstrable benefit. All b-to-b marketing activities of any worth (from strategic issues like branding, segmentation and market access to advertising and other communication programmes) flow from this fundamental approach to organisational competence in marketing. Both longstanding, senior client-side marketers and successful agencies report that, once gained, lucrative and exciting rewards follow. One of the fundamental assumptions of marketing is that it
B2B MARKETING
should be a lead function focussing the business on its market and creating value for customers by interpreting their needs. Marketers can frequently be heard bleating about the need to get the attention of business leaders and get a voice at board level. Look carefully and it can be seen that b-to-b marketing has done just that in numerous companies across the world for centuries. Side step the idiotic cognitive bias in marketing academia and its possible to dig out sophisticated marketing experience which will not only improve the capability of b-to-b marketing functions, but will cross over into consumer as well.
iDEAS A space for your thoughts.
REFERENCES
Brookes, S. & Chesher, O. “B2B marketing: an undervalued sector?” Admap. May 2007, Issue 483. Access via WARC.com Uglow, J. “The lunar men” Farrar, Straus and Giroux. 2003.
Laurie Young is a businessman who likes to write. Throughout his career, he has held senior positions at BT, Unisys and PricewaterhouseCoopers. He also founded, built and sold a company. Laurie holds the CIM’s diploma and an MBA. You can see his full list of brands in his latest book The Marketer’s Handbook (obtainable through the CIM or Amazon).
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THE MARKETING RESEARCH MIX A tool for practitioners and scholars.
M
arketing Research is important: Hess and Lucas (2004) attempted to answer the question, “How much marketing research should a firm do when it takes resources away from manufacturing the goods that generate revenue?” The findings give food for thought as they say: “firms NIGeL BRADLEY without initial knowledge of their potential customers should allocate one-third of the firm’s resources to marketing research.” This is an indication of the importance of research to corporations. Indeed an entire sector has emerged to serve users. The worldwide research turnover was in the region of 31,239,000,000 US dollars for 2010 (ESOMAR 2011). In the United Kingdom alone we find over 450 full service agencies, over 200 freelance consultants, some 70 fieldwork and tabulation agencies, and 30 data preparation and analysis providers. Additionally there are some 100 group discussion and viewing facilities available (MRS 2012). In spite of this activity it may seem strange that research is not part of the Marketing Mix, a tool that has been used in management for some fifty years. It is useful to explore this apparent absence by a review of the Marketing Mix and how it has evolved. This article then proposes and describes the “Marketing Research Mix”. This is a term developed by the author in 2004, a concept hitherto unused, yet very similar to the “Marketing Mix”. This similarity was deliberate. Just as marketing has adopted the four Ps to help marketing decisionmakers, this new “Mix” can help researchers to approach the complex area of planning research. There are several applications of the MR Mix: if there is a need for research, this structure helps to ascertain the parameters, the framework gives an aide-memoire to design research and arrive at a proposal. At a procedural level it gives guidance on specific aspects of the research, for example in questionnaire design or sampling it gives a checklist to pose relevant questions.
The Marketing Mix The Marketing Mix is a checklist that can be applied quickly and discussed in team meetings; the device can also form the basis of considered deliberation in written reports. There is an appeal in that the device, as it is taught, is easily memorised. Generations of marketing scholars have learnt how to use the Marketing Mix to create market plans. The Oxford English Dictionary even has a definition: “the factors that can be controlled by a company to influence consumers to purchase its products; a combination of these factors designed to promote a particular product or influence a particular segment of the market.” It is relevant to trace the origins and development of the Marketing Mix, because it will be shown that research was originally part of it. When inspecting the history of any topic, conflicting or
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FEATURE—MRM
look to the WEB: The 6TH Annual Cambridge Digital Marketing COnference (2012) www.marketingconference.co.uk
Figure 1: The Marketing Mix
Product
Promotion
Price
Place
untidy accounts abound; one version of history starts in 1948 when Culliton said that a marketing decision should be a result of something similar to a recipe. This version continues in 1953 when Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term ‘Marketing-Mix’. A prominent person to take centre stage was E. Jerome McCarthy in 1960; he proposed a four-P classification which was popularised. Therefore we have Product, Price, Place and Promotion, a classification that is still taught today. This is a useful tool to analyse the status of any marketing situation. In the original texts we find some other things of relevance. For example Louis Cheskin gave an interview that was published in January 1956. In it he said “the most popular talk I give is called “The Four Ps of Profit.” The first P is product, the second P is the package, the third P is promotion or advertising, the fourth P is Price” (Cheskin 1957: 100). By August 1957 this talk was committed to print in the Advertiser’s Digest and Cheskin moved away from “The Four Ps of Profit” to describe these four Ps as the “Four Pillars of Successful Marketing.” It is relevant to see how Cheskin places a major emphasis on marketing research: “A marketing program cannot stand on one or even two pillars. It must have four pillars and four walls, each buttressed with reliable research.” Here we see the four-P notion clearly described, and it does not ignore research. However interesting this may be, it is not clear evidence that either Cheskin or McCarthy were the originators of the Marketing Mix. In fact if we turn to a small booklet of 24 pages printed in 1956 by the Amos Tuck School of Business, Dartmouth College we find that it was authored by Albert Frey; it was called “The Effective Marketing Mix”. McCarthy may have popularised the 4 Ps but he does, in his book (1968:34), mention A.W. Frey. McCarthy calls his table an adaptation of Frey and it divides it into five considerations shown in Table 1. Frey calls his first consideration The Nature of the Market and he describes it in some detail. This first consideration is arguably marketing research.
A.W. Frey’s Five Considerations 1. Customer and Marketing Considerations; 2. Product; 3. Place; 4. Promotion; 5. Price. Returning to Borden we find that he provided 12 elements (Borden 1964), which appear here in Table 2. The final one is “Fact Finding and Analysis”. Is this last item not really marketing research? Apparently, for these many years, no matter which old documents are unearthed, or to which history we refer, there is no doubt that research was part of the Marketing Mix but seems to have disappeared. Borden’s 12 Elements 1. Product planning; 2. Pricing; 3. Branding; 4. Channels of Distribution; 5. Personal selling; 6. Advertising; 7. Promotions; 8. Packaging; 9. Display; 10. Servicing; 11. Physical handling 12. Fact finding and Analysis. So, in the mid-1950s the four Ps were brought into the world and it is fascinating to think that this concept has survived for so many years. We have seen it praised; we have seen it rejected; we have seen it compressed, we have seen it expanded. Some writers argue that the four elements could be collapsed: “Several aspects of the total mix really involve combinations of the four basic items” (Shapiro 1985: 32). There is another argument to expand the elements. Some authors have extended the four Ps to five: Nickels and Jolson (1976) added packaging whereas Mindak and Fine (1981) added public relations. We have also seen the four increase to seven: people, process, physical evidence (Booms & Bitner 1981; Rafiq & Ahmed 1995); and even seen it change alphabetically to the letter C (Robins 1991) and the letter V (Bennett A. R. 1997). The structure has been moved to International Marketing (Gruca et al 2001) and to Green Marketing (Bradley 1989). With the arrival of E-Commerce we have found it in Interactive Marketing (Peattie & Peters 1997). There is the E-Marketing Mix (Kalyanam & McIntyre 2002) and the WebMarketing Mix model with four S words: Scope, Site, Synergy and System (Constantinides 2002). Promotion has become the “Promotion Mix”, itself with four
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elements such as advertising, public relations, sales force and sales promotions. Then there is an extended Promotional Mix that embraces other aspects such as Sponsorship and Direct Mail. Again the appeal is that it helps to be able to remember numerous items by putting them under simple headings. This sub-set is sometimes called the “Marketing Communications Mix.” The Marketing Mix is a useful device, it can be moulded, recreated, applied, criticised, defined, adapted, adopted but most importantly for education, it can be remembered. In spite of this activity it may seem strange that research is not obviously part of the Marketing Mix. Again, a look into the past shows us that this has not always been the case. Borden and Marshall (1959) and Traynor (1985) offered a relevant P for the researcher, this is “Probing”. With an industry turnover of well over 31,329,000,000 US dollars perhaps it is time to give research some more importance? The Marketing Research Mix In considering research design let us go back to Jerome McCarthy who, when discussing the four Ps, made this observation (1960:33): “The framework may appear simple enough, but the task of making choices within this framework is fairly complex. For one thing, each of the four Ps has many potential variations, thereby making the number of possible Marketing Mixes very large. For example, if there were 10 variations in each of the variables (10 price, 10 products etc) there would be 10,000 possible Marketing Mixes.” Marketing researchers are, for the most part, testing the Marketing Mix and from this account it is clear that the research design must adapt to accommodate these numerous variations. Let us not forget that the researcher also has very many options. Sometimes these are so numerous that the human mind is incapable of considering the strengths and weaknesses of the many possibilities without time, resources and debate. To take sampling as just one example, Malhotra (1999:335) tells us that at least 32 different techniques can be derived from the combinations of aspects of the random technique. If multi-stage sampling is used and non-probability techniques are introduced, the choice is vast. A framework was sought to assist researchers to design studies, to help draw the parameters then begin a proposal. The term Marketing Research Mix (or the MR Mix) was coined by the author in 2004, the concept was created for students, and it has been used in classes with success. The name is of course very similar to the Marketing Mix, this similarity was deliberate and it also has four Ps. Unlike the Marketing Mix these elements are sequential and they match the main phases that need to be followed. These four Ps are: Purpose; Population; Procedure and Publication. Figure 2 shows these stages and Borden’s 12 elements outlines the main parts of each element.
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Figure 2: Stages of Research in Terms of the MR Mix
Purpose Population Procedure Publication
pURPOSE The purpose of the research is the reason why it is being done. The word “purpose” is useful because it has a wide coverage. It can be specifically defined or it can be loosely explained. The wide term also embraces studies to gather marketing intelligence, where the manager’s role is to scan the environment for useful data, and there may be no specific objective. Concepts Under the Heading of “Purpose”: • Aims • Objectives, Sub-objectives • Goals • Hypotheses • Intention Many marketers avoid the term hypothesis entirely and tend to use the terms “research objective” or “aim”. The word hypothesis (plural, hypotheses) is quite different from the terms mentioned above. It is an essential starting point for quantitative researchers, but takes a lesser role for qualitative researchers. The term is deeply rooted in the history of scientific thought. In statistics we expend much time and energy to generate hypotheses, to test hypotheses, and to reject them. Some people argue that we should only test one hypothesis; others say we should test several. In hypothesis testing we create a statement, which may be true or false, this statement is a “proposition”—we propose that something may be the case. If it is right then we accept it. If it is not right, if it is wrong then we reject it. The first step is to formulate the null hypothesis, abbreviated to H0. This is usually intended to be rejected. Another carefully constructed hypothesis is the alternative hypothesis or the H1; this is actually called the ‘research hypothesis’. After these have been articulated the researcher can design a research programme to test the hypotheses. When the results are received, they are examined
FEATURE—MRM
against the prediction of the null hypothesis. The basic idea is to use this possible explanation and then look for data to support the explanation (or not). It is best to spend as much time as possible on the hypothesis. It is the research question, and it determines how the study is carried out. It also determines the design because it defines the problem. The subject of hypothesis testing has been debated heavily for many years and there are suggestions that misuse of null hypothesis significance testing is widespread and damaging (Finch et al 2001), at least in psychological research. It is relevant to cite an article on hypothesis testing in marketing research by Lawrence (1982) who tells us: “Practical survey researchers (realise) that, in many cases, no adequate theory exists for setting up hypotheses in advance”. The article continues: “Drawing one-off hypotheses out of the air offers no solution to the problem. Researchers will be guided by their own ideas, experiences, hunches”. A mnemonic commonly used in management is the SMART acronym. It helps in planning, so if we set a business objective we want it to be Specific, Measurable, Achievable, Realistic and Timely. The fundamental idea is that any plans we have should not be vague, it should be possible to quantify them in some way so that progress can be evaluated, and it should be possible to carry them out and within a certain time frame. This can be applied to business objectives, marketing objectives; it can even be applied to sales or communications objectives. An example of a fully articulated SMART objective is “to increase sales by 250,000 units before December.” It could be argued that SMART is not fully applicable to research objectives since researchers often attempt to throw light on an area that needs greater understanding. There may be a clear purpose for doing research or it may be exploratory. For this reason specific objectives and clearly formulated hypotheses may be a mistake. We might suggest that preconceptions will push the research in one direction. SMART fails for Qualitative Research; it fails for Exploratory Research and indeed for intelligence-gathering where the environment is constantly scanned for changes that might trigger action. Such information may not be anticipated, and the SMART model is best applied to planning rather than describing. Sometimes projects are fact-finding missions and the researcher strives to avoid framing pre-conceived ideas about the market environment. Grounded theory (Glaser 1978) is usefully employed to capture the unexpected. This approach is a relatively young area for market researchers; in grounded theory a fact-finding exercise is carried out and information is collected without defining objectives. The resulting output means that the final overview (or theory) is “grounded” in the data. There may be no objectives but there is always a reason for such studies. This does not mean that researchers go into the field to collect any information that happens to come in their direction, there is always an overall purpose. The unknown elements, at the outset,
are what is required. By not drawing conclusions in advance of fieldwork, the research is not restricted, and the work continues until results make valuable discoveries. If we remember that expenditure on qualitative research is substantial, this is further proof that strict objectives are, in practice, not the norm. The term “purpose” is therefore broad enough to be usefully applied in studies that use grounded theory as a starting point. Much quantitative research is also fact-finding. Most questionnaires contain questions that are there for interest or curiosity, to follow up a hunch. In analysis of results there is much to be said for letting the ‘tables speak’, to trawl through numbers to look for patterns. This is done both by machine and by the human eye. The point is that the term ‘purpose’ is sufficiently loose to describe the first phase of research. It does embrace the straitjacket of the carefully worded hypothesis, but it also accommodates the other extreme of exploration to discover patterns that do not rely on prior knowledge. It is suitable for both qualitative and quantitative research. Population When considering any market sector we need to ask “Who is involved in this marketplace?” Who are the players? Who should be the centre of the investigation and where are those subjects? This area considers the target audience, customer or player; the users or non-users. Who will become the respondent or informant? Should we contact all players or just some of them? Should we carry out a census or a sample? Should respondents be selected by probability or non-probability methods? An important concept for primary research is sampling. We choose to interview or observe people who we think will give us the information that will solve our problems. So in choosing our research method, we need to consider whom we select and how we select. This applies to qualitative research, with only a few people, and quantitative research with many people. Much emphasis in marketing research is on the end user, but “experts” can bridge the gap between primary and secondary data. An expert may be someone who has been in the business for many years. This part of the MR Mix involves identifying relevant sampling frames. Procedure When considering the procedure the key question is “How should the study be conducted?” Will it be qualitative or quantitative? This area also covers the question of timing: when will the fieldwork take place? The best research starts by looking at secondary data, which is information that already exists. The two basic sources: internal (within an organisation) and external, published by someone outside have become easier to access in recent years. Information
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Technology, with Intranets and the Internet, has improved our ability to find such data. If secondary data doesn’t solve the problem then original data (primary data) is sought. It is useful to think of different primary methods in these terms: we can ask people what they are doing; we can watch them or detect what they have done by counting or we can manipulate some variables to discover the effect. This creates three categories: questioning; observation and experimentation. Primary data collection techniques can be subdivided into: interviewer-administered or respondent-administered; direct or indirect; personal or impersonal. Processing data, analysis and interpretation are essential parts of the procedure. Detailed examination of the appropriate tools used in the data collection needs to take place. Publication Under the heading of “Publication” the key questions are: Who is the audience for the results? What should be communicated? When and how should they be communicated? Research is of no use if findings are kept within the research team; similarly commercially sensitive information will have no competitive advantage if placed in the public domain. Choices need to be made on how publication takes place. Will a written report be created? Will tabulations be provided? Will a personal presentation take place? Who should be allowed sight of the results? There are many different readers of research reports and these audiences all have very different expectations. Reporting must be personalised, writing and presentation style must be customised and adapted to the user. At one extreme there is the general public. There are many reasons why research is reported to the “mass consumer”. It may be a government report that has been commissioned to be in the public interest: concerning health, welfare, transport and so on. It may be a consumer report: consumer watchdog reports are of great interest to the man on the street, so we find the Which? Magazine and similar bodies have enabled the layman to appreciate
survey findings. Editors of periodicals regularly commission research for editorial reasons, so the results may become part of an article for mass consumption. The research agency may report directly to the public on web pages, by email or by post; this is because it is now common to offer a short summary report to a respondent as a gesture of goodwill, an incentive, a thank you for co-operating in the research. Research findings may appear as part of a promotional campaign, appealing to the consumer’s need to know that indeed this is a best seller (“nine out of ten cat-owners prefer…”).Then there are smaller audiences such as managers who are anxious to receive a report in order to make instant decisions. Additionally there are managers who will benefit from the information much later when the report is consulted as secondary data in the future. How the MR Mix Has Been Received As stated, the MR Mix has been piloted in teaching; well over 200 students have been introduced to the concept. The MR Mix has been integrated into teaching University undergraduates on Marketing Research modules. It has also been introduced to postgraduates following professional qualifications for the Chartered Institute of Marketing. All students had a basic appreciation of marketing, so instantly recognised the similarity with the Marketing Mix and without exception they felt that this was a valuable mnemonic. The MR Mix replaces the stages of research that are often presented as 8 or 10 steps and so are less likely to be memorised quickly. With regard to the word Purpose some students were pleased to hear the synonyms and to be involved in the debate concerning wide and narrow thinking; it is true to say that some students feel uncomfortable with hypothesis setting and this umbrella term helps to overcome any reservations by a gradual introduction to the area. Students often take hypotheses and apply them rigorously to qualitative research and the word Purpose helps them to realise that this is not appropriate or necessary. In discussions some students felt that the MR Mix could be
Table 3: The Marketing Research Mix
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Element
Coverage
Purpose
Research objective & sub-objectives, aims, hypotheses etc.
Population
Who are the participants in this market place? Considerations about the target audience, customer or player. Users or non-users? Who is the respondent? Source of respondents. Should we do a census or take a sample? Selection by probability or non-probability methods?
Procedure
Data capture, data processing and analysis. Secondary or primary research? Qualitative or Quantitative? Personal, phone, post, online? Questions, observation or deduction? Continuous or one-off? Interviewer or interviewerless? Research Instruments: Topic guide or questionnaire? Projective techniques? Video? Scanner?
Publication
Limited or wide audience? Who should know? Timing needs? Reporting and presentation requirements. Written report, oral presentation? Electronic delivery? Hard copy? Visuals? Reproduction in the mass media.
FEATURE—MRM
look to the Web: Cambridge MArketing Review on Facebook http://www.facebook.com/CambridgeMarketingReview
reduced to three Ps whereby Population could be absorbed into Procedure, but counter arguments put forward argued that the Players are of major importance to any given market-place and the mere existence of the element confirms and reminds us of this. The word population was said to be clumsy, and someone questioned why it wasn’t called “Players”, not a bad idea. A few students stressed that the four elements are not equal in content and this is clear when arriving at the element called Procedure. This was seen to be the most compact of the four, in that it contains all of the mechanical processes involved in research. Within this element there is much to consider, as one student said “it hides too much”. In defence of the four, yes there is a huge difference between purpose and procedure, but the creation of a category for the objectives highlights the importance of getting the research question right before wasting resources. It is possible to find many marketing mistakes or business blunders that would have been avoided if research objectives were clearly defined at the outset. The terms used for each element have been the focus of much debate. The final choice of words may not be ideal; clearly they have been chosen to begin with the letter P and to approximately embrace the meaning inherent in the stages. Debate was particularly lively with regard to the word Publication. Some students felt that this word gives the implication that research findings are disseminated to the general public. It is true that some results of research may be for mass consumption, (we find political opinion research in daily newspapers) but on the whole marketing audiences are far more limited. One astute observer pointed out that this is not a problem for other forms of research (academic, social, medical) where the term Publication really is correct. This led to a debate about the fact that the MR Mix could be renamed as the Research Mix; it would then have potential uses outside the field of marketing research. My own view is that it works in marketing because McCarthy’s four Ps are so well known. Conclusions There are several applications of the MR Mix: the framework gives a reminder to design research and develop a proposal. This structure helps to ascertain the parameters, and it gives guidance for specific aspects of the research. It gives a checklist to pose relevant questions. We can use the MR Mix in questionnaire design: bearing in mind the purpose, the appropriate respondents, procedural features such as scales, showcards, and mode of delivery, and publication or production of the final questionnaire version. We can use the MR Mix in sampling: the purpose, the population needs careful analysis to make sampling decisions; the procedure involves selection by quota or other means and publication relates to the operation of making the sample ready for use in the field. In desk research projects the four Ps can be used to evaluate secondary data: why it was conducted, who was involved, what research procedures were used and why it was published. Indeed the four Ps can be applied to any
part of the research. Another application will come after research has been conducted, the mix allows the results to be organised, and findings can be evaluated by asking key questions about each P. For presentations the audience can pose questions with the framework, thereby leading to a greater understanding. Initial use in teaching has been favourable, the framework is very memorable to marketing students, and it allows debate to take place where there was little before. It is hoped that the MR Mix will serve practitioners; certainly they should be aware of the concept because they will be soon joined by people who are fully aware of the framework. REFERENCES
Bennett A. R., (1997). The five Vs – a buyer’s perspective of the marketing mix. Marketing and Intelligence Planning, 15(3), p 151-156. Booms B.H. & Bitner M.J., (1981). Marketing Strategies and organisation structures for service firms, in Donnely J.H. and George W.R. (eds) Marketing of Services, American Marketing Association, Chicago, IL, p 47-51. Borden N. H., (1964). The Concept of the Marketing Mix. Journal of Advertising Research, June, Vol. 4, p 2-7. Available in Schwartz G. Science in Marketing. John Wiley & Sons, NY, p 386-97. Bradley N., (1989). The Green Marketing Mix. Industrial Marketing Research Association News. December, p 8-9. Cheskin L., (1957). How to Predict What People Will Buy. Liveright Publishing Corp, New York. Constantinides E., (2002). The 4S Web-Marketing Mix model. Electronic Commerce Research and Applications, 1, p 57-76. Finch S., Cumming G. & Thomason N., (2001). Reporting of statistical inference in the Journal of Applied Psychology: Little evidence of reform. Educational and Psychological Measurement, 61, p 181-210. Gruca T. S., Sudharshan D. and Kumar K. R., (2001). Marketing mix response to entry in segmented markets. International Journal of Research in Marketing, 18, (1-2), June, p 53-66. Hess J. D. & Lucas M. T., (2004). Doing the Right Thing or Doing the Thing Right: Allocating Resources Between Marketing Research and Manufacturing. Management Science, (50), 4 March, p 521-526. McCarthy E. J., (1960). Basic Marketing: A Managerial Approach. Homewood, IL, Irwin. Mindak W.A. and Fine S., (1981). A fifth ‘P’: public relations, in Donnely J.H. and George W.R. (eds) Marketing of Services, American Marketing Association, Chicago, IL, p 71-73. Nickels W.G. and Jolson M.A., (1976). Packaging – the fifth P in the marketing mix. Advanced Management Journal, Winter, p 13-21. Peattie K. & Peters L., (1997). The marketing mix in the third age of computing. Marketing and Intelligence Planning, 15(3), p 142-150. Robins F., (1991). Four Ps or Four Cs or Four Ps and Four Cs. MEG 1991 Conference Proceedings. Shapiro B.P., (1985). Rejuvenating the marketing mix. Harvard Business Review, Sep/Oct 63(5), p 28-34.
Nigel Bradley is a senior lecturer in marketing at the University of Westminster in London. Nigel’s academic research interests include green marketing, Internet marketing, media research, graphology and ‘de-marketing’. Nigel is also a fellow of the CIM, a Fellow of MRS and a Chartered Marketer.
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the 6 cS FOR MAKING YOUR ENTERPRISE MORE SOCIAL A report on social marketing.
H
istorically, much of the discussion regarding social media has focused on B2C and external engagement with customers. Thanks to the evangelism of Jeremiah Owyang and Brian Solis, both from the Altimeter Group, and Michael Brito of Edelman, as well as others, Andrew JENKINS that discussion has gradually begun to emphasize that organizations look inside and develop social media familiarity and capability. Regardless of whether that discussion emphasizes B2C or B2B when it comes to external engagement, the successful incorporation of social media into day-to-day operations and the adoption by internal stakeholders depend on a number of factors that can be organized into six key areas: commitment, culture, content, channels, consistency, and conversation. The following explains each of those in greater details.
Commitment The world does not need another Facebook page, Twitter account, or other social media presence that ends up being abandoned when people discover the level of commitment required for social media success was greater than they anticipated. If your company is not up to it, then don’t do it. Your brand will thank you. Culture When you think about your corporate culture, how conducive is it to being more social and adopting social media technologies? How many employees are active in social media in their personal lives? The active people will be wise choices to deputize to help you roll out social media across the enterprise. As they show others how it is done and the benefits that can be derived, others will gradually join the movement. Content Most organizations have no shortage of stories to tell and content to share, but they are not always knowledgeable about how to repurpose or modify that content to make it more discoverable, consumable, and shareable. By looking at the various pieces of content you have as assets, aligning it with your planned marketing efforts, and incorporating representation from key areas of your company, you can create a calendar that lays out what kind of content to share, where you will share it, who will create it, and in what formats. Channels While deciding which channels to reach customers through will likely be based on where your customers spend their time, you will
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Show some humanity by conversing with people via social media and you will raise the likability of your organisation
Paolo Peralta, WikiMedia Commons
Consistency From the beginning, companies need to establish the thematic voice for their content and approach in social media. Granted, this can evolve over time based on how the audience responds, but your efforts should not be scattershot. You can only develop a following by showing people what they can expect from you in terms of content and conversation. People seek out content and conversations based on interests and referrals from likeminded individuals — take advantage of that. Furthermore, many brands use campaigns to garner followers and build a fan base. Such efforts play an important role, but consistent effort must be applied to maintain and grow a community after and/or in between campaigns.
organisations must look [internally] and develop social media familiarity and capability Conversation The importance of content was mentioned previously, but active engagement in social media cannot be based on content alone. There has to be conversation too. The first thing we do when we meet people we might do business with in the real world is talk to them to learn more about them, their needs, and their goals. People need to know that there are humans behind the brand or logo. Show some humanity by conversing with people via social media and you will raise the likability of your organization. After all, people buy from whom they like. While not an exhaustive list, these are six examples of the many actions organizations can take to become a more social enterprise. I would love to hear your thoughts and recommendations for making enterprises more social: ajenkins@volterraconsulting.com or twitter. com/ajenkins.
REPORT—THE THREE Cs
also need to consider which channels are most aligned with where and how you do business, what your company can reasonably handle from an adoption and staffing standpoint, and which channels your company can credibly participate in. If it looks or feels forced then it probably is.
Andrew Jenkins is principal and founder of Volterra Consulting. He possesses over 15 years of Information and Communication Technology (ICT) experience spanning social media, wireless, telecommunications, e-business, internet, software, and hardware solutions. Andrew has worked with a diverse list of companies in North America and Europe, including Britain’s National Endowment for Science, Technology, and the Arts (NESTA); the World Bank; Rogers Wireless; Bell Canada; InfoSpace; Compaq; HP; IBM; and Microsoft. His social media projects have involved both B2C and B2B companies wanting to market their products or services, raise brand awareness with consumers, and educate their affiliate and reseller partners.
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The CONSTRUCTIVE SWOT ANALYSIS What follows is an extract of “The Constructive SWOT© Analysis” by author and Value-Based Pricing specialist Harry Macdivitt. The full article was originally prepared for BPP as an online talk. A complete version of this paper is available for readers to download at www.marketingcollege.com/macdivitt What is the Constructive SWOT© Model?
T
his model has its origin in the wellknown, but often poorly employed, SWOT Analysis. Conventional SWOT Analysis is usually incorporated into HaRRY MACDIVITT company planning documents and business plans. It is invariably rolled out whenever someone mentions “strategy”! The way it is applied, however, is usually highly mechanistic and it does not enable the user to extract the maximum value and insight from the analysis. Even worse, it is a process that “we must go through” and so it becomes part of a mind-numbing routine that benefits neither the company nor the strategists! Nevertheless, SWOT is one of the most powerful tools available for strategic analysis and, in the right hands, can make an enormous difference to how business managers interpret the business environment and make coherent and effective futureoriented decisions. There are a number of variants of the SWOT Analysis tool. In this article we give a comprehensive overview of one approach which the author has used, and presented, for more than 30 years to hundreds of companies across the world. The Constructive SWOT Model The core of the model, Figure 1, is the SWOT Table. It is very similar to the conventional model with which the reader is probably familiar.
Figure 1: The Constructive SWOT Matrix
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Strengths ....................................... ....................................... ....................................... ....................................... .......................................
S1 S2 S3 S4 S5
O1 O2 O3 O4 O5
Opportunities ....................................... ....................................... ....................................... ....................................... .......................................
Weaknesses ....................................... ....................................... ....................................... ....................................... .......................................
W1 W2 W3 W4 W5
T1 T2 T3 T4 T5
Threats ....................................... ....................................... ....................................... ....................................... .......................................
Business Development Issues Business development is achieved by exploiting opportunities using the identified strengths. Our efforts might be frustrated if particular weaknesses prevent full exploitation of these opportunities. Therefore we need to examine the impact of both strengths and weaknesses on opportunities. We do this through the matching process. Matching Strengths and Opportunities Business development initiatives arise from addressing clear opportunities. If we have done our screening, analysis and thinking properly, we should now have a portfolio of real strengths which we employ in addressing these opportunities. This is the core part of the model which we call the Matching Process. We match up each and every S item with each and every O item, working from Strength to Opportunity. Each time we attempt a matching, we ask – and this is very important –“So What?” This question is so core to the whole approach that we have described this model in other articles as the SOWhaT Model! This question simply asks “What is the significance of this present combination to our business?” (We illustrate the method via a case study in the full length downloadable paper.) This leads to the identification of a strategic issue which we should record carefully using the Matching Matrix. Sometimes it will be obvious what the combination means. In such an event,
THE CONSTRUCTIVE SWOT
But there are three important differences. The first thing to notice is that we have identified only a small number of items under each of the four SWOT headings. While we do not specifically prescribe five items in each quadrant, we do advocate that these are kept to as small a number as possible. This will ensure that only the most important and significant entries are made. It will also cut down the analytical work which can be time consuming. By applying the criteria for each of the categories, and furthermore by making use of the screening filters, it should be possible to identify and include only strategically important factors. There is nothing to prevent us from using more, but more entries create additional work and may result in our including less significant elements. The second thing to notice is that every entry is given a unique reference number within the matrix. The two central columns are adjacent to each other. The reason for this will become clear shortly. The third thing to notice is that we have listed Strengths and Weaknesses on the left side of the table, representing the fact that these are derived from the internal assessment of the business. The right side of the table includes Opportunities and Threats. These are derived from an assessment of the market environment and are external to the business. As we explained earlier, strategy is created across the “intersection” of our business with its world. How does this actually work? Let’s explore how we use the Constructive SWOT table to identify Business Development issues and Business Defence Issues.
management, if they have a good understanding of the business and its context, will probably already be aware of the issue. In other cases the interpretation will not be quite so obvious or so straightforward. It may challenge our thinking and lead to debate within the team. This is a good thing, because then team members are engaged and thinking about something new and quite possibly innovative. Matching Weaknesses and Opportunities If we use our strengths to build business by exploiting areas of opportunity, then we need also to identify where our plans might be frustrated because we lack particular capabilities. The process is exactly the same. We match up each and every W item with each and every O item in turn. Again, in the generic model, this gives us 25 W-O combinations. This process is illustrated in Figure 1 – Identifying Business Development Issues at a point of real weakness. SoWhat? Analysis helps us highlight strategic danger zones, and gives us time to develop a robust defence strategy. We recognise that there may be a number of threats whose impact we can reduce or even eliminate by applying our strengths. So the second component of identifying the Business Defence issues is to match up all our strengths with the threats. The “So What?” question is – “How can we use our strengths to reduce or even eliminate at least some of the threats?” Outputs from the Matching Matrix Figure 2: Output from “So What” Questions
Combination
So What?
Output
Strengths – Opportunities
What is the impact of this combination on development or our business?
Weaknesses – Opportunities
How will our weaknesses impair or reduce our ability to exploit fully our opportunities?
Clear indications of actions required to build a viable and robust business development strategy
Weaknesses – Threats
What is the impact of external threats on the key areas of vulnerability of our business?
Strengths – Threats
How can we make use of our strengths to reduce or eliminate our vulnerability to these threats?
Clear indications of actions required to build a viable and robust business defence strategy
In Figure 2, Output from “So What Questions”, we offer an “at a glance” summary of the matching process outputs. Notice the central role of the “So What?” question. This is such a useful question to ask, not just in SWOT work but in many business situations. Although it might sound aggressive, it really is not! The intention is to probe the impact of a particular suggestion on the business.
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The Matching Matrix We record output from every “matching” on to a Matching Matrix worksheet, as shown in Figure 3 below. Once this has been done, we then look over the entries and look for broad themes to develop strategy. Again, the CeramSys case study via the full download will make this a lot clearer. Figure 3: The Matching Matrix
Combination
Issue
Issue
S1 – O1
.....
S1 – O2
.....
...
.....
W3 – O5
.....
...
.....
W4 – T4
.....
S5 – T5
.....
We are limited by space to present the whole matrix, but it is pretty obvious, anyway. If, as in the generic Constructive SWOT© model there are a total of 100 combinations, we create a matrix, pretty much to act as a checklist and capture the outputs of discussions. Start at S1-O1 and work all the way through to S5 – T5! Some people create the list in a random fashion – i.e. avoiding considering the factors sequentially. This is a good idea because it keeps our thinking fresh and stops us from getting bored and lazy!
Figure 4: The Matching Process Strengths
Opportunities
4
1
A
2 3 Weaknesses
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Threats
B
CONVERSION STRATEGY The last part of the analysis is to address the conversion strategy. From what we have said, not all weaknesses are of equal importance or significance. Some are more critical to the business’s future development than others and some are more dangerous than others. In this final part of the Constructive SWOT© process, we prioritise the weaknesses and identify ways in which these can be reduced or eliminated. These are, after all, internal factors and, at least in principle, subject to our control. Threats are, by contrast, external to the organisation and thus impossible for us to control, probably. But we can change the way we look at these things. We can try to understand the specific threat issue more clearly to identify if, in fact, it is a “well-disguised opportunity”. Such an approach may reveal new options for development. Of course, it might, quite simply, just be a real threat. Then at least we have taken the effort to try to understand it more fully. Figure 4 summarises the approach to adopt. Some final comments on the model Occasionally, the combination is “dry” because as far as we can see there is no ready interpretation. In the generic matrix we discussed above there are 25 possible unique and non-overlapping combinations in each quadrant, any one of which can be significant in terms of business development. Also, we have discovered, sometimes combinations of quite different elements seem to be saying substantially similar things about the business. This would suggest that there is a significant and important factor at play which is worth more careful examination. A full SWOT Matching analysis can be time consuming and intensive. Assuming that there are five of each of the S,W,O and T items, this would require 100 matchings to be done (25 S-O, 25 W-O, 25WT and 25 S-T). If each takes, let’s say, 5 minutes (some will take more, some will take less) we are looking at around eight hours of intensive consideration, and possibly more, to complete the Matching Matrix. Analysis of the results and developing a clear action plan might take another day. This is not a quick, five minute job. The outputs are hugely valuable, however, and it is well worth the effort of doing it. The Constructive SWOT is an excellent agenda for a management strategy session. It encourages sharing of ideas and challenges, focuses diverse expertise and builds an environment of collegiate problem solving in which all participants feel they have made a contribution. So What? Analysis is a generic tool and can be used in strategic analysis in much the way as we have described its application to CeramSys. In other companies, people have used this model in developing sales strategy at divisional and team level, competitive sales strategy and even personal CVs! It is a rigorous approach to building a practical plan, because it takes account of all of the internal and external factors. The more information you can gather,
THE CONSTRCUCTIVE SWOT
A complete version of this paper is available for readers to download at www.marketingcollege.com/macdivitt
and the more selective you are about what to include, the better the results you will enjoy. Summary The Constructive SWOT is a powerful tool. It is based on the classical SWOT Analysis model which has been used for many years since it was first introduced in the 1960s. It was initially used as a tool for strategy formulation but has since been used in many applications both at strategic level in companies and also as a more operational tool. Many managers and academic commentators criticize the tool, primarily because it fails to deliver meaningful and actionable results that could not be identified by other means. Conventional SWOT is also used as an integral part of business and strategy planning documents and, perhaps for this reason, it has become almost a meaningless ritual which has to be endured as part of the “strat planning” process. This is less a failing of the tool itself than of the managers who use it without undertaking the necessary preparatory work. For SWOT to work well, the thinking needs to be strategic and future focused. Populating the model with historical information will lead to incorrect results which if acted on will result potentially in catastrophe. The right way to use the method is to ensure that the correct data are correct and subjected to a degree of rigorous evaluation. We provide pretty clear guidance in the full article to help managers use the method properly. Used in conjunction with “industry standard” analytical models such as 5 Forces, McKinsey 7S framework, PESTEL and the Cultural Web, the Constructive SWOT will yield excellent and highly applicable results. Strategy analysis tools, like the Constructive SWOT, are only as good as the data collected and quality of thinking applied. They are not substitutes for insight, research and challenge. And they are certainly not reality. They are at best aids to our thinking and, like any other tool, care and experience are required in its use! In the Constructive SWOT model we employ both a matching process and a conversion process. In matching, we seek to use every validated particle of information we possess to identify both Business Development and Business Defence issues. These are at the heart of the model. We also demonstrate that, using the Matching process we can identify, and possibly prioritise, the S,W, O and T factors in terms of their strategic importance to our businesses. Recognising that in most businesses resources are limited, we need to make the best possible use of these. Again, by focusing on the issues of greatest significance in strategy formulation, we can identify which factors to strengthen, and why. We also make use of idea of converting weaknesses and threats into something a bit more manageable, either by taking management action or by altering the way we look at the issues. The article concludes with an overview of how the Constructive SWOT method was applied in a particular company.
Constructive SWOT comes with a health warning. At best, the model can give an indication of what managers need to do to build and defend their businesses. The outputs cannot, and should not, be followed blindly. Experience, mature judgment, creativity and pragmatism are also needed. SWOT outputs, even from a sophisticated method such as the Constructive SWOT should not be followed blindly. Furthermore, what we, working on our own as an individual, might consider irrelevant may to another executive from a different functional specialty may see as extremely significant to the business as a whole.
Harry Macdivitt is a specialist in Value-Based Pricing. Initially trained as a chemist, Harry spent a number of years in research before embarking on a career in business, and now delivers consultancy events for global companies. Harry is a co-director of Axia Value Solutions, and co-author of The Challenge of Value and Value-Based Pricing.
iDEAS
Space for your thoughts
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a fresh approach to social media in academic publishing Marketing departments in Academic publishing are still pondering the advantages of social media.
D
espite the relentless upward trend in social media use, it seems that Academic content publishers are still very hesitant to embrace what is in fact, simply another communications channel and an excellent, targeted route to market. While other businesses are leaping ahead jenny RIDGE and seeing huge benefits from the direct engagement with their customers, marketing departments in Academic publishing are still pondering the advantages and disadvantages, viewing short-term efforts as unsuccessful, and therefore investing minimum time in what is potentially ‘not suitable’ for Academic publishing and ‘unproven’ in terms of results and ROI. It wasn’t so long ago that I remember having the same conversations about email marketing. I believe that done properly, the benefits of social media to other businesses would also apply to Academic publishing. There are huge opportunities for Academic publishing and the Academic societies they work with. Social media can deliver incredible results with the right strategy realised for the long-term. It’s not just something you can throw together overnight and expect to deliver actual sales the following day. It’s an investment in a project that will enable you to build long-term relationships with your target market, communicate valuable marketing messages and also, very importantly, enable you to listen to what your customers are saying and respond accordingly; a marketing communications channel and a market research tool all in one. Social media engages customers in existing customer groups. The key to success is correctly identifying the groups appropriate to the products on offer. Here’s what social media could offer: • Customer engagement, integration and dialogue with you and each other • ‘Real time’ customer profiles, demographics, insights and feedback • Ability to respond to consumer comments quickly • Increased incidence of purchase from social media traffic • A 24/7 information platform • Excellent monitoring and analysis Academic publishers need to take advantage of this changing communications landscape and avoid being hindered by the comfort of using traditional media. Early attempts at adoption have included the creation of subject Facebook pages, with efforts focused on trying to drive traffic and generate ‘Likes’ which is often very time consuming, labour intensive and demotivating when results aren’t quickly and easily realised. That’s not to say that this product or publisher-based approach doesn’t work. Indeed, there
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The 2011 Digital Marketer, Experian, 2011
are examples of where this has worked really well. The publisher Continuum, part of Bloomsbury Publishing Plc, has created subjectspecific social media platforms for its products. These platforms incorporate a variety of social media feeds, including Twitter and Facebook, to add value to both the product and the customer experience. Continuum’s Philosophy platform is an example of this, http://continuumphilosophy.typepad.com. Carly Bareham is a former Marketing Executive for Continuum who developed their subject-based social media strategy, beginning with their Philosophy discipline. She comments that “The key to the success of Continuum’s subject-based approach has been in the recognition that a social media strategy is for the long-term and that in order for it to be effective it requires formal planning and consideration just as any other marketing strategy does. Our approach was effective because I had invested time into finding out where our markets were active online and listening in on the conversations they were having. From this I could establish who the key online influencers in our disciplines were and target both them and their followers with the kind of content they wanted, using the approach they best responded to. For maximum exposure, along with a link on the Continuum website homepage to the blog, an integrated social media strategy meant that new blog content would be immediately shared with Facebook and Twitter followers – these platforms chosen for their huge online reach. The Continuum homepage, @continuumphilos and Facebook. com/continuumphilosophy almost always featured in the top five referring sites to the blog.” A fresh approach to creating an online presence that could prove to be effective and beneficial in many different ways, as well as being substantially less labour intensive, would be to start with the Academic society itself. That is where the target niche communities already exist, so it makes sense to create an online presence around them, on the society’s behalf. Publishers are experts at managing content, and expert at managing society relationships, so to manage their social media sites would just be an extension of the service that’s already provided, bringing existing marketing practices and publisher services into the era of engagement. This approach also insures that the focus is on the communities, their interests, and their opinions, rather than pushing products directly. What’s in it for you? • Additional USP to the service you offer – a great selling point • It could pave the way for a chargeable service in the future
• • • •
REPORT CUSTOMER - SOCIAL VALUEMEDIA
over 50% of online adults use social media networking sites
The ability to push out communicate press pieces Managed by the publisher, so you keep control Builds relationships with societies, authors and customers who contribute content Instant access to society members
What’s in it for them? • Additional USP to the service they receive • Provision of specialist digital marketing skills, expertise and time resource • Ensures a professional and suitable social media presence • Ability to market society communications– exhibitions, seminars, membership • Excellent way to engage newcomers and raise society’s profile One online presence that has adopted a ‘niche’ approach, and done it well, is Cambridge University Press’ Linguistics blog. The blog feeds into a Facebook page and hosts its own Twitter feed. Although still in its early days, cup.linguistlist.org is rapidly growing in popularity. Laura Finn, Marketing Executive at Cambridge University Press explained, “As partner publisher to the international Linguistics community at The Linguist List, we decided that running a blog hosted by the society itself was an exciting way to engage our markets online. Cambridge Extra at the Linguist List retains a publisher presence yet its endorsement by the society means that it is more trusted and valued by readers. Our authors, who are themselves part of the Linguist List community, also see value in writing exclusive content for the blog, as it provides a means of peer engagement as opposed to simply being a publisher promotional tool.” “The blog now averages over 1,200 visitors a month and is expanding fast. It acts as the hub of Linguistics social media, feeding into Twitter @CUPLinguistics and facebook.com/CUPLinguistics. These two social media channels are the top referral sites, growing in numbers month on month and so proving to be valuable outreach tools.” Millions of people are checking into and participating on social media sites every day, sometimes several times a day, on PCs, laptops, iPads and smartphones. Most sites these days are mobile friendly and there’s always an App to support your preferred platform. Most are also easy to integrate across other social media platforms too. The opportunities are out there and everything we need to make the most of them: customers, devices, free tools and platforms, and most importantly, the desire to engage. Jenny Ridge, MCIM, began her marketing career working for smaller businesses where clients ranged from large multi-national corporations to local landscape gardeners. Jenny then went on to own and manage a successful direct marketing and design company, Busy Growing Ltd, based in Oxfordshire. After selling the company in 2009, Jenny moved to Cambridge to work in the Academic and Professional Books department at Cambridge University Press.
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It’s time to listen to the voices It’s time to make the most of the opportunities we have to enhance our public profile.
I
t used to be that your relationship with your customer was an intimate, personal thing. The best you could hope for was a good review in the newspaper, or a letter of thanks or celebrity endorsement to pin on the wall. At worst, you got letters of complaint or coverage in the chris ford press. Now that both our fans and our critics have a global voice across multiple communication channels, it’s time to make the most of the opportunities we have to enhance our public profile. Popularity is certainly an indicator of success, and numbers of followers can be a powerful influencer (“This many people can’t be wrong!”). Your customer reviews and testimonials can deliver the social proof you need to convince more sceptical prospects. But while no-one will say ‘no’ to sheer weight of numbers and pages of reviews, is quantity alone actually doing anything for your bottom line? While there’s no formula or equation for it, I’d rather have a handful of active customers who engage with me, enthuse about my service, product or brand and who I know intimately, than thousands of fans who have done no more than click on a ‘Like’ icon.
Social Proof And Advocacy While many of us are willing to check out something that seems popular before committing either enthusiasm or hard cash to a brand, most people require real, unbiased evidence--the ‘proof’ part of ‘social proof’. Reviews and testimonials are a great way to generate and demonstrate social proof, whether on your own website, through the reseller (such as Amazon), or drawn from a third-party review site (like Reevoo). Cynics may contend that review content can be biased (perhaps unwittingly by over-enthusiastic employees), or even deliberately manipulated. True enough, although savvy fellow users are usually quick to point the finger at any entries that look suspicious. But actual advocacy is much more than a mark out of ten in a standard review format in response to a request (direct or implicit). True advocacy comes from passion. In February 2011, Lady Gaga tweeted that 10 year old Maria Aragon was the future of music, and that watching the young girl’s video made her cry. Fast forward a few months and Maria had duetted on stage with Lady G herself, appeared on US television, met the Canadian PM, and performed ‘O Canada’ for Prince William and the Duchess of Cambridge. Advocacy thrives on viral communication, of course made all the more powerful when it comes from a celebrity with global reach. Advocacy works best when it comes from a trusted source – when someone we know or respect comments without inducement or prior incentive on something they have no obvious connection with. Stephen Fry’s early public adoption and advocacy of Twitter is
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Fandom and Advocacy I have a colleague who says he is a ‘practising Jobsian’. I know he loves Apple products – he’s a fan, yes, but I’m not sure I can call him an advocate, as I’ve never heard him recommend or praise the virtues of the shiny things he worships. In preparation for this article, I asked some friends a few questions about advocacy, and in reply I received mostly testimonials for a diverse range of products. Three things struck me as interesting about these responses. First, no-one mentioned services, even though I had included an obvious one (a supermarket) in my cover email. Interesting. Second, most of them enthused about products that I had never heard them talk about before. Strange. And thirdly, even given the opportunity to ‘advocate’, no-one suggested or recommended that I should give any of the products a try (in the case of the cycling enthusiast, that’s understandable). Take a look at the definition: ad·vo·ca·cy [ad-vuh-kuh-see] – noun, plural -cies. The act of pleading for, supporting, or recommending; active espousal If we are advocates, do we wait to be asked before we recommend? I don’t think so – I think the advocates you really want are the people who don’t wait to be asked: they are the enthusiasts who can’t wait to tell you about their latest, greatest find or to show you their latest purchase. These are the people who drag their friends to ‘come and have a look’; who leave cracking reviews on feedback sites; who participate in online user support groups. Who – unpaid and unasked – share their passion for your brand with others, and actively promote your product or service within their circle of influence. I concluded that none of the people I asked were advocates, even though they were happy to share their positive opinions when asked. It’s a fine distinction, but an important one, that makes all the difference in generating enthusiasm and interest in others. Which brings me to two key questions: 1. How do you get more advocates? 2. What do you do with them, aside from hoping they generate you extra business through their passion for your product or service?
REPORT CUSTOMER VIEWS: CHRIS - SOCIAL VALUE FORD MEDIA
a good example. He’s a trusted public figure: familiar, successful, intellectual. What makes his advocacy particularly powerful is the fact that he’s not seen as a tech geek or expert; he’s simply someone we recognise and respect who’s an enthusiast with a public voice and who uses the tool he advocates for to wax lyrically regarding its value and reach.
iF WE ARE ADVOCATES, DO WE WAIT TO BE ASKED BEFORE WE RECOMMEND? Turning Fans Into Advocates A quick search for ‘loyalty ladder’ online will bring up all sorts of variations on the same theme: how to advance people from one level of interaction and relationship with your brand to the next, from prospect to partner if you like. The first stage in developing advocates is knowing what you’ve got – creating your own version of this basic model. You may wish to add additional customer types (such as first time or repeat customer); some organisations differentiate between different levels of fandom; someone may become a fan before they are a customer (this is more likely for ‘aspirational’ high-end brands and products). You may also wish to add a final row, plotting existing and desirable interventions at each stage, such as: advertising and PR activities; your loyalty schemes and sales promotions; and including key employee engagement programmes that will drive customer engagement, underpinning the connection between brand and customer. Of course, it’s all academic if everyone’s still stuck at the prospect rung of your loyalty ladder. Get the all-important early steps right and you’ll provide the firm footing you’ll need to be able to do some of the fun stuff further on. Turning customers into advocates is not a dark art – it’s simply a question of delivering great value and supporting them with excellent service in a way that delights. The best way to look at this is to consider the brands you are an advocate for (the ones you really rave about, not the ones you simply like). They’ll have all their customer relationship ducks in a row: they’ll have first-rate branded and personalised communications; you’ll like the way they look and talk to you; their product/service works really well (and if it doesn’t, they’ll fix things so wonderfully that you’ll be even more impressed than you were before); they deliver on their promises and beyond; they provide relevant little extras and courtesies you didn’t expect but really appreciate; and above all, you feel that you genuinely have a relationship–even a kinship--with that brand. Finding Advocates Do you regularly check customer forums to see who’s contributing and what they’re saying? All too often we look for the bad news, wanting to serve the customer, protect our online reputation and set the record straight. But the good news can be a gold mine: those contributors who seem to know more about your product than you thought possible; the reviewer who has returned to use your service again and again; the person who helps other users out with their queries and questions on help forums.
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Relationship title
Potential (suspect)
Status
Unaware of brand
Aware of brand
Uses product or service
Engaged with the brand
Proactively creates positive ‘noise’ for your brand based on personal experience
Fits potential customer profile
Interest stimulated
Mindset unknown
Customer or aspiring customer
Customer
Sees Above The Line (ATL) activity, press or social media coverage
May be influenced by social proof or follower numbers
Purchase transaction
May follow and possibly contribute to social media content
Will instigate conversations about brand on and offline, and will personally recommend and endorse
Receives recommendation from advocate
May receive personal recommendation by advocate
May leave solicited review on retailer site (positive or negative)
May positively comment on features and benefits but not necessarily from experience
Will use opportunities to evangelise (such as in a blog)
May participate in ‘recommend a friend’, Member Get Member (MGM) schemes
May include on ‘wish list’ or top ten listings
Gives proactive and unsolicited support (such as providing help to fellow users)
Possible interactions
Prospect
Customer
Fan (follower, sup-
Advocate
porter)
Likely to participate in MGM schemes
Value
Potential personal purchases
Potential personal purchases
Potential future purchases
Potential lifetime value
PR and enhanced online brand presence (such as follower numbers)
Creates opportunities for sales growth with new audiences Enhanced Net Promoter Score
Contribution to online reputation (reviews) Do you regularly monitor customer accounts to view interactions with your organisation, and related comments? Even without a single view of the customer, capturing interactions is key–you should be able to identify signs that an individual or organisation could be an advocate for your business. This could be based on the type of query or conversation with your service team, number of purchases, or nature of repeat business. Harnessing The Power of Passion Once you’ve found your advocates, there are two simple ways to let your advocates help you and your brand: ask them to help, and give them a voice. How you do those things may require some creative thinking, depending on your proposition, but here are some ideas. Recommend a friend or member-get-member schemes are an excellent example of asking for help. Customers may participate– advocates are far more likely to. For example, you can create an advocate programme, like a loyalty programme, but geared more towards recognition rather than pure reward. How do you show your appreciation to those who rave about your brand? Is there a special area of your website for them? Do you invite them along to events as a ‘thank you’? Do you allow them special ID status on forums and blogs so their peers can recognise them as experts,
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authorised to offer advice on your behalf? If you’re pitching a business solution (internally or externally), have you ever considered asking one of your advocates to help: to give their opinion, or perhaps have lunch with the relevant budget holder or prospect (with or without you there)? Do you have regular sales meetings and conferences? Invite an advocate to come and speak about their experience with your brand. Invite advocates to test, review or even launch new products, or to participate in trials. This isn’t just advocacy, it’s recognition of their value to your organisation, which only serves to cement relationships further-and demonstrates to the world at large how much you value your customers and work in partnership with them. Ultimately, advocacy is all about free will, and the best we can do is provide the right conditions for our advocates to do what they do best--advocate. Chris Ford works for business services provider Grass Roots, where he leads on the development of communications with the Digital Marketing and Loyalty practice. He has a 20 year background in the communications sector as a consultant, Sales Manager and an International Sales & Marketing Director.
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seminal articles: MARKET SEGMENTATION
Over the coming editions we are publishing a series of seminal articles that all Marketers should read. These articles are based on the extensive research carried out by Dr Paul Fifield among practitioners, academics and consultants during the last few years. If you have any additional texts that you think should be added to the list please email editor@cambridgemarketingpress.com
M
arket segmentation (or, if you insist, customer profiling) is one of the basics of good marketing strategy. The ‘mass market’ (in both B2B and B2C) is long dead and today one size no longer fits all – if it ever did. Levitt said that if the organisation isn’t talking segments, it isn’t paul fifield talking markets. That means that without an understanding of the different groupings of needs and wants in the marketplace no organisation can hope to have the necessary customer focus required to stay relevant. Although it slowly rose in importance during the 1980s and the 1990s it is really only recently that market segmentation is (finally) starting to be recognised as a foundation for the development of any form of customer-driven marketing strategy. There are huge numbers of articles and books that have been written on the subject of market segmentation – what does the choice of just six tell us about the story?
1. Market segmentation was first developed as a concept in the late 1950s but started to enter regular marketing parlance in the 1980s. Wendell Smith’s article was groundbreaking at the time when the great consumer boom was just starting in the US and later in Europe. The approach here is simple, obvious and clear. One of the (oldest but) best definitions still comes from Kotler:‘ Market segmentation is the sub-dividing of a market into homogeneous subsets of customers, where any sub-set may conceivably be selected as a market target to be reached with a distinct marketing mix ’. From this definition we can see that market segmentation is all about: The identification of homogeneous sub-sets of customers, that is, customers who are alike in some way or other, (I prefer the idea of a common buying motive). Where any of these groups may conceivably be selected as a market target, in other words we can approach one or all of these groups but importantly we should treat them as a stand-alone market target. The final implication, a distinct marketing mix, is that the segments, once identified, may demand something different from us as a producer. In other words, the marketing mix (product/service, pricing, place/distribution, and promotion/communication) can be expected to be different from segment to segment. 2. Daniel Yankelovich saw the potential in the segmentation approach and applied it in his research organisation which was founded in 1958. This was the first time that anybody could see segmentation being used. 3.
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Russell Haley was the first author to point to what was
CUSTOMER VIEWS: PAUL VALUE FIFIELD
really possible in the area. His idea of ‘benefit segmentation’ (all toothpastes clean teeth but what else do different people/segments want from their toothpaste?) is still in use to day. Completely different from segmentation, “classification” is an internal methodology that an organisation uses to describe customers for the (internal) convenience of the organisation, its systems and processes. Classification methods (generally) don’t identify differences in customer needs or motivations; they describe customer characteristics such as: For B2C: age, sex, ethnicity, culture/sub-culture, socioeconomic groupings, neighbourhood, ownership, geography, etc. And for B2B: industry/vertical, company size, location, technology, company ownership, installed base, standard industry code (SIC). The advantage of this ‘classification’ approach is; it’s simple and cheap. It’s easily identifiable and easy to implement. But it is NOT segmentation (its not even cheap and lazy segmentation) and results fall far below what genuine segmentation can deliver.
6.2. Confusing segmentation with classification: This produces the groups we all know such as ‘18-24 year olds’, ‘women’, ‘AB, C1C2, DE’, ‘Financial services’, ‘Manufacturing’ but these are not segments, they do not pass Wind’s tests. 6.3. Treating segmentation as a tactical rather than a strategic tool: Many projects are treated just as a way of reducing the costs of communications. True, segmentation can reduce communications wastage but it can do so much more – it can not only save money, it can make more money through improved margins too. Segments that receive more tailored offerings perceive greater value in those offerings and are willing to pay extra. That is the whole point of segmentation.
REFERENCES SMITH W.
4. Yoram Wind was the first to add the critical measurements to the concept. These have been added to, subtracted from and modified but most serious practitioners and academics come back to the original. Wind describes a short list of tests that should be applied to any would be segment: Is the segment identifiable? (Can the members be identified?). Is the segment reachable? (Can you access it with communications and offerings?). Is the segment viable? (Is it big enough to make money from?). Does the segment respond homogeneously to a marketing input? (Do all the members of the segment like or dislike the same things or offerings?).
(1956)
“Product Differentiation and Market Segmentation as Alternative Marketing Strategies” Journal of Marketing, July YANKELOVICH D. (1964) “New Criteria for Market Segmentation” Harvard Business Review, March-April HALEY R. (1968) “Benefit Segmentation – A Decision Oriented Research Tool” Journal of Marketing, Vol32, July
5. “Rocking the Ages”, published by and based on data collected and analysed by the Yankelovich Partners Inc applies segmentation to one of the biggest (and still unexploited) the huge generation gaps between the Seniors, Baby Boomers. Generation X and Generation Y. These generations exist throughout the Western world and fulfil all the tests of segmentation – but are still generally ignored.
WIND Y. (1978) “Market Segmentation” Journal of Marketing Research, August WALKER SMITH J, CLURMAN A (1997) “Rocking the Ages” Harper Business, New York
6. Implementation remains the single biggest block to achieving the rewards that the approach promises. After completing more than thirty segmentation projects for different clients, I can point to a number of common failings that can turn a positive investment in competitive advantage into a costly waste of time. These are: 6.1. Segmenting the wrong business: Rolex is in the jewellery business, Sony is in the entertainment business and Boeing is in the transport business. These companies would not think of segmenting the watch business, the electronics business or the airplane business because that isn’t where they compete.
BARRON J, HOLLINGSHEAD J. (2002) “Making Segmentation Work” Marketing Management, Jan/Feb
Dr Paul Fifield holds a degree in Business Studies as well as an MBA and a PhD in Marketing Strategy, both from Cranfield University. He was elected a Fellow of the Chartered Institute of Marketing (FCIM) in 1988, an elected member of CIM Council 1999-2001 and the CIM International Board of Trustees 2002-2004. Paul was appointed Visiting Professor at Southampton University School of Management in 2006. He is currently President of the CIM Southern Region and a Fellow of the Royal Society for the encouragement of Arts, Manufacturers and Commerce (FRSA).
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IMPERFECT STORMS
Drawing ©2005 Don Moyer. Used with permission. Originally appeared in Harvard Business Review.
BY Don Moyer
F
or millennia, artists, scientists, and inventors achieved imaginative breakthroughs in splendid isolation. But creativity, the experts tell us, should be a group affair. Conceptual envelopes are notoriously unyielding, and pushing one requires the strength of many minds. Now, there’s nothing wrong with a freewheeling exchange, especially among folks with different perspectives, backgrounds, and thinking styles. But brainstorming sessions generate many ideas that can’t survive outside the incubator. Stoked by enthusiasm and straining to include everyone’s best suggestions, participants overreach on scale and ambition or lose sight of their end users. Those dangers are especially acute if the group includes more conceivers that executors.
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In his book Diffusion of Innovations, Everett Rogers reminds us how often innovations fail in the real world (the only world that matters). To improve their odds, brainstormers should seek input from customers and from those charged with executing their plans. They may also need to impose a little self-discipline. One rule of brainstorming is that there are no bad ideas. Lacking bathwater, participants may have to toss out a few more babies.
Don Moyer has collected his series of cartoons as a book, entitled 64 Drawings. It is available from Blurb at www.blurb.com/bookstore/detail/949041
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43
The Tyranny of Forecasts and Budgets and the Consequences
J
ohn Perton of Boston College said “The good thing about not having a strategy is that failure comes as a complete surprise and is not preceded by a long period of worry and depression.” maLCOLM It is amazing how many MCDONALD major organisations go under because they have little more than sales forecasts and budgets for 1 year only, and how surprised they are when their customers abandon them in favour of another supplier who has taken the trouble to work out a longer term strategy for understanding and really meeting their needs. Don’t be fooled into thinking those words from John Perton about lack of strategy and failure just represent an academic trying to score points by being clever, as hundreds of companies all over the world have found out to their cost. Indeed, up to 1990, many UK companies with the highest return on investment either went bankrupt or got into serious trouble. Neither did the best performing companies in sectors up to 2000 fare much better, with the likes of Marks & Spencer, ICI, GEC et al either going out of business or systematically destroying shareholder funds. Some of these companies have since partially recovered, such as M & S, BT and BA. Some have been acquired and are now profitable, but the lessons to be learned in the historical context of those decades are still highly relevant for companies enjoying high growth in the 21st century. Before going into further detail about the paramount importance of having a strategic plan for markets covering a period of up to 3 years, however, let us dismiss once and for all the mind-bogglingly puerile belief that all the directors and senior managers need to do is to write down some numbers that become targets and eventually, budgets. Apart from the fact that Mickey Mouse or Donald Duck could do this without any training, it only ever works in growth markets with little competition. For example, research into the banking sector in the UK threw up the following interesting observation: “In this Company, value creation was merely a matter of protecting market share and managing costs. The data show that the company’s business model is in effect a ‘money printing’ machine, therefore the challenge for strategists lies in how they can act as responsible stewards of a resilient business model.” Cranfield Doctoral Thesis, 2005
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Table 1: InterTech’s 5 year performance
Performance (£million)
Base year
1
Here are some recent quotes from well–known sources: “Improvements in a short-term financial measure such as economic profit can be achieved through postponing capital investments, reducing marketing and training expenditures, or by divesting assets, each of which may have a positive effect on near term performance but could adversely affect long term value creation performance. Nevertheless, when incentivised with bonuses to ‘manage for the measure’ this is exactly what many managers will do irrespective of the consequences on shareholder value”. Simon Court, “Why Value Based Management Goes Wrong” Market Leader, 2002.
2
3
4
5
Sales Revenue – Cost of goods sold
£254 135
£293 152
£318 167
£387 201
£431 224
£454 236
Gross Contribution – Manufacturing overhead – Marketing & Sales – Research & Development
£119 48 18 22
£141 58 23 23
£151 63 24 23
£186 82 26 25
£207 90 27 24
£218 95 28 24
£16
£22
£26
£37
£50
£55
Net Profit Return on Sales (%)
6.3%
7.5%
8.2%
9.6%
11.6%
12.1%
Assets Assets (% of sales)
£141 56%
£162 55%
£167 53%
£194 50%
£205 48%
£206 45%
11.3%
13.5%
15.6%
19.1%
24.4%
26.7%
Return on Assets (%)
A glance at Table 2, however, shows that on every market – based dimension, the company is losing ground dramatically and is likely to suffer serious consequences the moment the market stops growing. It is also interesting to note that the profit and loss accounts that occupy so much time at typical board meetings usually have a derisory one line for revenue and a substantial number of lines for costs, with variances from forecast taking up much of the directors’ time and energy. Rarely are the issues thrown up in Table 1 discussed, yet these are the variable that actually CAUSE the revenue referred to above.
VIEWS—McDONALAD HYPE CYCLE
There are, however, always consequences of such behaviour. It is interesting to note that, of Tom Peters’ original 43 so-called ‘excellent companies’ in 1982, very few survived because of a fixation with excellent tactics at the expense of strategy (Richard T. Pascale “Managing on the Edge” Simon and Schuster, 1990). Take for example the case of InterTech given in Tables 1 and 2. (Based on a real example, but disguised for reasons of confidentiality). Table 1 shows the kind of information typically discussed at board meetings, most of which is based on forecasts and budgets.
• •
• •
90% of USA and European firms think budgets are cumbersome and unreliable, providing neither predictability nor control. They are backward-looking and inflexible. Instead of focussing managers ’time on the customers, the real source of income, they focus their attention on satisfying the boss; that is, the budget becomes the purpose. Cheating is endemic in all budget regimes. The result is fear, inefficiency, sub-optimisation and waste. In companies like Enron, the pressure to make the numbers was so great that managers didn’t just doctor a few numbers, they broke the law.
Table 2: InterTech’s 5 year market-based performance
1
2
3
4
5
Market Growth
Performance (£million)
Base year 18.3%
23.4%
17.6%
34.4%
24.0%
17.9%
InterTech Sales Growth (%) Market Share (%)
12.8% 20.3%
17.4% 19.1%
11.2% 18.4%
27.1% 17.1%
16.5% 16.3%
10.9% 14.9%
Customer Retention (%) New Customers (%) % Dissatisfied Customers
88.2% 11.7% 13.6%
87.1% 12.9% 14.3%
85.0% 14.9% 16.1%
82.2% 24.1% 17.3%
80.9% 22.5% 18.9%
80.0% 29.2% 19.6%
Relative Product Quality Relative Service Quality Relative New Product Sales
+10% +0% +8%
+8% +0% +8%
+5% -20% +7%
+3% -3% +5%
+1% -5% +1%
0% -8% -4%
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•
People with targets and jobs dependent on meeting them will probably meet the targets, even if they have to destroy the enterprise to do it. Simon Caulkin, “Escape from the Budget Straightjacket” Management Today, January 2005. P.47-49.
Before the 2008 banking crash, a major bank was criticised for its contribution to personal debt of £1 trillion in the UK. Employees were set tough targets for selling loans and double their low salaries, which encouraged customer abuse and left many borrowers facing ruin. Banks were no longer there to help customers find the most suitable solution. “We have a target-driven culture that staff must hit targets” —A major bank 10th May 2005 Many economic commentators have also remarked on the destructive nature of targets set by the government for public services such as the police, the health service, social services and so on. For example, the impact of the government’s financial incentives for adoptions has caused genuine fear in society that children are being unjustifiably removed from their natural parents in order to meet targets which earn a financial reward from the government. There is a growing chorus of protest about this cruel distortion of values such targets are having on innocent victims. In September 2007 the national press reported that the Justice Secretary is reviewing the “perverse financial incentive” to remove children from their birth parents”. An MP (Mr Lamb, Lib Dem MP for Norforlk North) said “It ought not to be a factor that taking children into adoption means the social services bringing in money from the government” (Sunday Times, September 16, 2007). The police are yet another example which attracts daily criticism from both the popular and more cerebral press. With targets for arrests and with careers and promotion dependent on meeting them, many police officers are ignoring their real duty to society by avoiding serious crimes and ticking their target boxes with petty and insubstantial crimes. Indeed, a policeman who has resigned has said openly on his web site on 18th September 2007. “An obsession with targets and box ticking mean we get exactly the same points for cautioning a girl for pulling another girl’s hair as we get for a robbery”. Finally, it is well known that the British National Health Service change definitions of illness and accidents to meet their queue reduction quotas, often with a devastating impact on those patients affected. The common thread running through these and countless other examples is that the “customer, whether it be society or consumers, no longer become the focus of those organisations who should be meeting their needs. The majority of professional
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people such as the police, doctors, nurses, government officers and so on continuously complain about and decry the way their skills are being subverted by the culture of targets and long to put the customer back at the centre of their working lives. Finally, one last comment about the tyranny of annual forecasts and budgets: “Leadership is burdened with passive resistance and corporate gaming in the traditional annual planning model. They drive behaviours that cause inappropriate behaviours. Many have personal bonuses based on fixed annual targets and static measures. Forecasting processes frustrate the ‘right’ behaviours and drive the ‘wrong’ ones. The desire for HQ control often drives inappropriate and suboptimal behaviour.” Doug Ross, Strategy Magazine, March 2007 (Summary of research into the planning behaviour of 1000 participants internationally) Consider also the often puerile and backward-looking process by which quantitative objectives are set. Take the following hypothetical example, shown in Figure 1. Figure 1: Sales Revenue Target
$8m
9.6
(+15% On t-1)
t.0
T+1
From Figure 1 it can be seen that in the current year, this company achieved a 15 per cent increase in sales revenue over the previous year. But, being optimistic, the chief executive set a so called “stretch” target of plus 20 per cent for next year, giving a target of 9.6 million which, if achieved, would satisfy the budget holder. However, consider for a moment a different and more professional way of setting an objective for next year. If the market addressed were a growing market, a strategic objective might be “To be market leader in three-years-time”. In order to achieve such an
Figure 2: Strategy Before Budgets
Objective (to be Market leader in T + 3) 100
25 15 20
$8m
9.6
(+15% On t-1)
t.0
T+1
T+2
T+3
Every single element of this company’s resources including R and D, HR, IT and so on would be totally different if the current budget had been 15 million as opposed to the backwards-looking 9.6 million. Consider also where, in a typical tactically-orientated company, the 8 million on which the original forecast was based came from. The answer, of course, is the company’s own data base. Yet it has been consistently shown over the past fifty years that sales people sell the products they find easiest to sell, often at the maximum discount, to the customers who treat them nicest. Such sales go into the database of course. Consider also the kind of knee-jerk, macho managementby-objective targets that are often set by senior managers without considering the unintended consequences. A classic example of this is the desire to cut costs by reducing working capital, such as inventory. If the logistics manager is paid a bonus to make such reductions, then these reductions will be made. So the poor unfortunate customer asking for one hundred widgets and two hundred didgets, on being told they can only have fifty of each, decides to go to a more accommodating supplier. The consequence of the lost sale is lost in the system, because the logistics manager has achieved the objectives set and so has the finance director. But the database on which the next year’s forecast is made is impervious to all this and in most cases is merely a reflection of the organisation’s own stupidity!
VIEWS—McDONALAD ADVERTORIAL
objective, the chief marketing officer would need an assessment of market size in three-years-time – say 100 million. Market leadership in this particular market would be, say 25 per cent. So, representing this in Figure 2 and extrapolating backwards from this target, would give a target of 15 million next year, not the backwards looking historical target of 20 per cent (9.6 million).
Even the great Unilever, when losing market share to Proctor and Gamble, realised that their forecasting and budgeting system was holding them back and, in a presentation in 2006 to a research club at Cranfield, a senior financial manager said: “We used to spend £½ billion out of a £50 billion turnover just on budgeting. All it led to was setting the lowest sales/profit target (and under no circumstances exceed it) and the highest marketing budget (and under no circumstances underspend it). The consequence was appallingly bad behaviour on the part of everybody. We ... • Were boxed in by too many targets • defined ‘success’ in the wrong way • were too inward and backward looking • set the wrong performance targets “Our previous negotiation of budgets was a bit like allocating planes, tanks, etc. across the army by giving each division one aeroplane and one tank each, rather than putting the resources where they could be the most effective. Unilever’s planning system was in some ways similar to communist Russia’s old system – i.e. 50 many bricks, etc. But NEVER have any left over. That’s why you would frequently find buried bricks, buried bulldozers and the like!” “Unilever’s new system is more about helping people win than holding them to account. Now, when you meet people, you can’t tell what function they’re from, because they are just talking about the customer and the business”. Readers will doubtlessly be clear by now that the these particular professors have little patience with managers who believe that forecasts, budgets and tactics are all they need to do and that using them to put the fear of God into their subordinates somehow constitutes good management. You can get away with it for a while in times of growth, but sooner or later you will be found out as a mental midget. It is also one of the reasons that the authors keep on updating one of their books that has to date sold over a quarter of a million copies—“Marketing Plans: how to prepare them; how to use them.”
Emeritus Professor Malcolm H.B. McDonald MA(Oxon), MSc, PhD, D.Litt., FCIM, FRSA was, until recently, Professor of Marketing and Deputy Director of Cranfield School of Management. His extensive industrial experience includes a number of years as Marketing Director of Canada Dry. He spends much of his time working globally with the operating boards of the world’s biggest multinational companies.
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The EU e-Privacy Cookie Directive An opportunity, not a threat.
On the 25th May 2011 the amended version of the 2009 EU e-Privacy directive came into force. Eventually all EU members states must adopt it in some form and be able to enforce it. So far countries are interpreting it differently, with some likely to interpret it more stringently than others. CLAIRE i. POWELL The U.K. government has set May 25, 2012 as the date for its own enforcement. It is important to remember that the directive does not refer to cookies per se, but instead refers to “all files stored or accessed on an end user’s terminal equipment” that effectively track the behaviour of the user. This includes current technology (i.e. http cookies, flash cookies and beacon IMG tag technology) and all future technology. For simplicity, I’ve used the word “cookie” as a catch-all to make for easier reading. It is also important to be clear that the amended ePrivacy cookie directive is not really about cookies; it is about “tracking, transparency and trust”. The directive is also not going against or even trying to stifle the “new competitive principles of openness, peering, sharing and acting global” (Tapscott, Don, 2007). It is in fact moving the EU’s online economy closer to realising these principles as it requires companies to act transparently and give choice and control to consumers. It should be viewed as an opportunity not a threat. As consumers shift from a “carefree to careful” attitude online, publishers will find that engaging more ethically with consumers can transform the industry and its business models by re-engineering the customer experience. As a result, online consumers are more likely to trust EU sites because of their increased transparency. As long as the industry continues to behave in an ethically responsible and consumerfocused way, the cookie can live on and be perceived as a necessary and innocuous gateway. Online publishers may even find these same consumers more willing to pay for content as a result. Publishers will, however, need to educate consumers first about what tracking cookies are, be transparent about the use of them on their site, and use them sparingly in order to build trust with consumers. Unfortunately, misinterpretation of the EU directive has led to sensationalists claiming the amendment will signal the end of EU online start-ups. It has also resulted in over 80% of marketers believing it is bad for the web and bad for business. It is important to remember that the directive does not impact 1st party cookies, which are required on sites to deliver a convenient, relevant and personalised user experience. First party cookies are exempt if “technically necessary to provide the requested service”. The directive is hitting only at the heart of consumer concerns: third
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VIEWS—POWELL
parties with whom they have no relationship possessing, using or selling personal data without express consent from the user. In order for websites to use 3rd party cookies they will need to have users optin versus opt-out, and give prior consent – this consent needs to be explicit versus informed ambiguous consent. Gathering personal information on customers to improve their online experience is good for consumers, business and the economy. As long as the consumer is clearly asked for that permission the EU will not start handing out fines. However this directive does strike at the heart of the revenue model of online publishers: behavioural advertising. Nevertheless this does not necessarily mean the end of behavioural advertising. It should be remembered that scare-mongers were also predicting that spam would cause the death of email marketing. Data shows that consumer acceptance of email marketing has improved since 2006, and may be a result of the e-privacy directive finally paying dividends. Consumers derive significant value from all they do on the web, and currently advertising pays for most of it. Approximately 18% of publishers’ advertising revenue comes from behavioural advertising, although this is rapidly growing due to its relevance appeal for marketers. Marketers seeking the best ROIs gained twice as much revenue per behavioural advertising over run of network ads and they doubled click conversions, according to the Network Advertising Initiative. However, marketers’ focus on relevancy and behavioural ads may have blinded them to what truly matters: consumer trust.
approximately 18% of publishers’ advertising revenue comes from behavioural advertising. In the past the behavioural industry has only been concerned with measuring a campaign’s full reach (which is overstated by up to 2.5 times) and getting paid accurately. This has resulted in the industry looking for ways to combat the consumer’s inconvenient cookie rejection and deletion trend. This has given rise to the invention of flash cookies to respawn deleted http cookies and to continue tracking users without permission. These stealth cookies are effectively circumventing user choice and according to a 2011 report from researchers at UC Berkley many popular websites now deploy these (Ayesnson, et al, July 2011). Online publishers have worked on the principle that if consumers wanted more privacy protection they would have shifted behaviour and adopted browsers with better privacy controls and anonymous
GATHERING PERSONAL information on customers to improve their online experience is good for consumers, business, and the economy. browsing. However, the majority of users are ill-informed about browser security and default browser settings are not satisfactory. Equally, self-regulation in the advertising industry has come too late, and only now is it offering up alternative solutions, albeit inadequate ones, including do not track registers and “no track” buttons for consumers. One of the fastest growing businesses on the web is that of collecting data from online users. The more marketers are able to profile consumers the greater the revenue potential. Data collection becomes more lucrative for sites and advertisers when PII (personally identifiable information) and non PII data are aggregated. Despite all these attempts at profiling, only 14% of consumers believe that ads are relevant to their wants and needs and as such businesses are not adding value. Online consumers want more control over their data and the need for authenticity and openness from brands and the online publishing industry is rising. We are deluding ourselves if we believe one social media entrepreneur when he says privacy is no longer a “social norm”. In fact in a 2010 Forrester Report social media stagnation was attributed to the growing apprehension over privacy in social channels, especially in older generations. However, the Net generation does think differently about privacy than older generations. They feel that they have more control over their online world than offline. If you start messing with control of their choices and preferences, they will see this as a big invasion of privacy. Although 1/3rd of Facebook members have expressed concern or changed their opinion about Facebook because of its murky stance on user privacy and content ownership, beyond creating “hate groups”, this generation has not gone as far as quitting social networking sites. Regular reports of online identity fraud, although only impacting less than 1% of online consumers, are exacerbating a trend: consumers shifting from a “carefree to careful” attitude. Consumers are now demanding that companies and brands demonstrate they are responsible and authentic. They are also more willing to provide their personal details to brands that are transparent and with whom they have a relationship and trust. Consumers’ cautiousness is evident in data on how consumers
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Figure 1: Potential user experience effects of the new directive if sites do not react correctly
are reacting to cookies. Since 2003 there has been a very clear upward trend toward blocking, or mass deleting cookies (either manually or via spyware removal programs), with anywhere between 40-60% of users concerned about cookies to the extent that they take measures to combat them. Unfortunately, due to the industry’s lack of transparency regarding cookies and tracking, consumers may not truly know what they are doing when they exercise a generic DELETE ALL cookies choice, including those cookies actually needed for better user experience. Consumer cookie rejection will continue, and perhaps spike if online publishers do not change current strategy around tracking. Online publishers cannot dictate consumer behaviour; but certainly can influence:
cookie deletion and blocking will continue unless online [business] and advertising networks act now in a responsible way 50
• Their beliefs and perceptions – which can be unfrozen through education. • Their experience – which can be made more authentic to give users choice and control. Publishers need to be transparent; need to educate their audience; and relinquish control to the user. Online publishers need to get back to the time when cookies were plain old cookies: innocuous, useful and necessary. Being transparent about tracking data and use of cookies means not hiding or disguising them and instead, giving consumers educated choices to make. Transparency should be a deliberate strategy, and should help increase the company’s customer intimacy. The “cookie deletion and blocking” trend will continue unless online publishers and advertising networks act now and in a responsible way. This directive, if taken seriously by online publishers, will not exacerbate this upward trend in the mid-term, but likely bend this trend line downwards in the long term creating the cookie transparency effect as consumers move from privacy concern to privacy awareness and from mass cookie deletion panic, to educated prior consent on a case by case basis. The downturn in cookie deletion in the long run will be a sign that consumers level of trust is rising. Ultimately publishers should be striking a balance between data used to deliver really relevant ads and being seen in the eyes of consumers as a socially responsible brand.
VIEWS—POWELL
Being transparent about tracking data and use of cookies means not hiding or disguising them and instead, giving consumers educated choices to make. Online publishers need to: 1. Act now, educate users: Start listening to and observing customers’ requirements (or better still involve them) concerning more control and start being transparent; fully informing them of the tracking that is done on the site, giving them educated choices to make and control over that choice, if they want to change their mind. 2. Prepare for a cap on behavioural advertising revenues: Consumers are likely to continue rejecting cookies in the shortterm while they learn about cookies through publisher education. Publishers should rely less on 3rd party behavioural advertising. Start collecting and analysing more 1st party data about users, and by turning to other revenue generation advertising models like contextual advertising. 3. React in a relevant way by user segment to create the right experience: Pop-ups and banners obtrusively on your home page are obviously not good ways to ask for permission. Start by creating a new segmentation model for your users. The experience consumers have on the site should not be a one size fits all approach. Segment users in order to serve them a relevant experience based on their level of loyalty and the type of content they are viewing, and ask only for permission when they are more likely to opt-in. Transparency pays off not only for consumers but businesses too; it is a win/win. In order for marketers to support the strategic change required, they need to “make the consumer insight central, it is the age of the customer,” as Reineke Reitsma, VP at Forrester Research states. “Marketers should analyze their own consumers’ data and create insights to improve the consumers experience and not just sell the data,” he continues. Online publishers need to be transparent about their tracking and build trust by being honest about their commercial interests. By articulating the value exchange and giving different segments of users a relevant experience and the chance to make their own decisions about their advertising and content trade-off, publishers
may see more consumers turning to paid subscriptions versus free ad supported versions and trusting brands more. This could be the opportunity that most have missed through focusing too much on the threat and not enough on the solution.
References Tapscott, D., 2007. Wikinomics. USA: Mcgraw Hill Ayenson, M. D., Wambach, D. J., Soltani, A., Good, N., Hoofnagle, C. J., July 2011. Privacy II: Now With HTML 5 and Etag Respawning
During the last 17 years Claire I Powell has been a marketer, community site owner, consultant and coach/lecturer. For Measurable Marketing Projects, she has carried out interim assignments and projects for companies including; Philips, Forrester, PICNIC and IMS Health. She is also a Marketing Lecturer at the University of Applied Sciences of Amsterdam and a current student of Cambridge Marketing College on the Post Graduate Diploma in Marketing programme.
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Most popular Marketing Books ON Amazon. co.uk Here are the top 5 bestselling sales and marketing books on Amazon UK: 1. Google Adwords That Work: 7 Secrets to Cashing in with the No.1 Search Engine (52 Brilliant Ideas) By Jon Smith 2. It’s Not How Good You Are, It’s How Good You Want To Be By Paul Arden 3. 500 Social Media Marketing Tips: Essential advice, hints and strategy for business: Facebook, Twitter, Google+, YouTube, LinkedIn, Pinterest, Slideshare, and more! By Andrew Macarthy 4. Smashwords Book Marketing Guide - How to Market any Book for Free (Smashwords Guides) By Mark Coker 5. Facebook for Business 101 By Jim Bronson • Correct as of April 2012
Intellectually Curious Fresh ideas to expand your knowledge.
The state of linkedin Of the myriad social networking platforms out there, LinkedIn is the most popular by far for professional social networking. Chances are if you are a professional marketer, and you are reading this article, you will have created a LinkedIn profile for yourself. Am I right? According to its own advertising tool, the social network has approximately 150 million members worldwide and that growth rate is slowly increasing: on March 2011 registered users were at the 100 million mark. 40% of LinkedIn users (just under 61million) are based in the United States, which is the largest of any country, followed by India (almost 14 million), the U.K. (almost 9 million), Brazil (7.34 million), and Canada (5,73 million). Among European countries the most active are The Netherlands, France, Italy,
and Spain. Women make up 42% of users with most users (36% ) aged between 25-34 years old. The most represented industries are hi-tech (14 million), finance (12 million) and manufacturing (10 million). As well as professional networking, conferencing, and member and discussion groups, the platform also provides an ad platform for users that that can create targeted campaigns by profession, seniority, job title, industry and company size. Not bad going. Although much of the data presented in this article is available in various places on the LinkedIn site, Vincenzo Cosenza, Social Media Strategist and head of operations at the Rome headquarters of Blogmeter, one of Italy’s leading orgs for social media analysis, has made a hobby and a living
out of providing the analysis for us. I used information from Vincenzo’s blog, with permission, as the basis for this piece. This includes the impressive infographic on the page opposite. Vincenzo is just one of a legion of social media aficionados who help marketers and businessminded users understand the capabilities and uses for social media. We’ll be doing our best to highlight folk like Vincenzo on this, and other pages of the Review in issues to come. You can find out more about Vincenzo, his blog, his work, and many other socialmedia related goodies at his site, here: http://vincos.it/. Further information on LinkedIn data, user information and the platform’s various features is available here http:// blog.linkedin.com and here www.linkedin.com/ads/.
Image: http://kotlermarketing.com/
kotler on tape
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Here is a great opportunity to watch, listen, and learn from the best. Dr Philip Kotler, described by Management
Centre Europe as “the world’s foremost expert on the strategic practice of marketing,” and author of numerous textbooks you have at one time or another been assigned, discusses a variety of topics including how to create a cult brand, key marketing lessons from Obama, how to market in a price sensitive marketplace, why the 4 Ps are safe and much
more. Produced and hosted by The Business Voice, the video interviews show Kotler, Professor of International Marketing at the Kellogg School of Management at Northwestern University, at his versatile best as he expounds on a wide range of theory, practice, application, and emerging trends. In 2008, the Wall Street
Journal listed Kotler as the 6th most influential person on business thinking, and watching these interviews, it’s not difficult to understand why. Watch the videos here: http://bit.ly/kotlervideo Dr. Philip Kotler Answers Your Questions on Marketing here: http://bit.ly/kotlerQs
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