computer board

by Anne Yeiser

What can you learn from the Silicon Valley marketing experience? Can the hard-won insights of a high-tech marketing consultant benefit you?

The Regis Touch by Regis McKenna is subtitled "Million Dollar Advice from America's Top Marketing Consultant." The author has worked with more than 150 companies in Silicon Valley and helped bring success to upstarts such as Apple and its Macintosh.

He learned by experience that fast-changing industries must play by a new set of marketing rules since the old rules assumed that technologies and markets change slowly.

McKenna reveals these major points...

The new marketing, like the old is a battle for positioning, but the new requires dynamic positioning which is achieved through positioning the company, not just the product.

In a culture where constant flux and radical change are the norm, one must focus on intangibles such as quality and leadership in carving an image, rather than on price or product specifications. That is the only way to combat the fear, uncertainty and doubt (FUD) that trail rapid change, and to survive when the unexpected occurs-- and it will.

Recognizing that complexity is a growing cultural phenomenon, a company must target a specific niche rather than trying to be all things to all people. Products must be viewed in terms of unique benefits to capture prospects who are diverse and demanding.

Product positioning must be shored up through word-of-mouth campaigns in the marketplace because buying decisions hindered by FUD are based on personal recommendations more than on advertising. McKenna outlines how to launch a word-of-mouth campaign.

Strategic press relations and a good reputation in the financial community are also indispensable. All these elements and processes result in dynamic positioning.

Market creation, not market sharing, is essential in fast-changing industries. The traditional market-share strategies focus on advertising, promotion, pricing and distribution and on winning market share from others. Market-creating strategies instead emphasize 1. applying technology, 2. educating the market, 3. cultivating the good will and recognition of retailers, analysts and anyone between the customer and manufacturer who has an influence on the buying process, and 4. creating new standards. Marketing managers must think like entrepreneurs and be willing (allowed) to experiment and take risks.

Companies in the fast lane must be market-driven, not marketing-driven. Marketing-driven businesses stake their livelihood on advertising and promotion, while a market-driven approach 1. develops strong products, 2. requires the manager to understand the structure of the market, and 3. focuses on building relationships and strategic alliances with other people and companies in the marketplace. It uses advertising and promotion to reinforce positions, not to create them.

The new marketing is qualitative, not quantitative. Marketeers who rely on numbers can miss the action since extrapolating the trends of the past or the present "almost never works," says McKenna. Example: In the 1940s, computer companies estimated the total world market for computers to be several dozen. They obviously failed to envision the rapid spread of new applications, or the sharp decline in prices.

Qualitative marketing is based on intuition-- that sense of what is going on in the marketplace based on a broad-based, first-hand study of it. It takes into account the strengths and weaknesses of competitors, the perceptions and attitudes of customers and prospects, and the social and political trends of the nation. These factors are continually, creatively monitored, and marketing strategy is adjusted accordingly.

McKenna recommends:
»» a clear but flexible company mission,
»» internal and external audits to define company goals and market trends before strategies are laid,
»» roundtable discussions rather than lengthy marketing reports,
»» a company culture that encourages innovation,
»» an organization that enables fast decision making, and
»» selling to the right customers - those that make quick buying decisions, which often are not the [bureaucratic] Fortune 500.

He discusses 10 intangible competitors which marketing managers in fast-changing industries must confront. The first one mentioned is change. The U.S. auto industry is cited for ignoring the growing demand for small cars, which is how it lost market snare to the Japanese.

To discover McKenna's other nine intangible competitors, read The Regis Touch. To evaluate whether they might threaten your company, consult with us!

THE REGIS TOUCH, by Regis McKenna. Copyright 1985. Addison-Wesley Publishing Company, Inc.

Caesar

Nearly 2100 years ago on March 15, only a year after he had been appointed a perpetual dictator, Caesar was murdered by assassins whom he knew very well. He had been warned many times of their intent, which is why the saying, Beware the Ides of March, went down in history. The ides fell on either the 13th or 15th of the month in the ancient Roman calendar.

Why did the master of the Roman world--having been clearly warned about impending danger--elect not to worry? He was a military genius, an incomparable strategist! But the very man who proclaimed, "I came, I saw, I conquered"--got conquered.

Must the mighty always fall? Are there any warnings you have received about the health of your business-- and ignored? Beware the IDE's of marketing!

I is for Ignoring Information

Didn't Caesar believe there was a conspiracy against him? Did his emotional ties to those such as Brutus prevent him from mistrust? Whatever the case, if he had listened to those who warned him, he might have died of old age. Likewise, to avoid being murdered by the competition, an executive needs to carefully consider all information pertinent to the well being of the firm. Here, we can learn from the Japanese. Every major industrial group in Japan now has its own research institute whose main function is not technical research but research into knowledge, that is, to bring to the firm awareness of any important new knowledge, not just in marketing, but in technology, management--whatever--developed anywhere in the world. These think tanks have emerged from the Japanese insight that leadership throughout the developed world no longer rests on financial control but on who knows the most.

Could your organization have a think tank? Why not? People who are responsible for specific information gathering could come together once a month to share their discoveries. In the information age, what you don't know CAN hurt you.

D is for Deathwish Marketing

Deathwish Marketing is a term coined by agency professionals Kevin Clancy and Robert Shulman in their book, The Marketing Revolution. They define the malady as marketing efforts which emerge from errors such as
    • Basing key marketing decisions on judgment alone... "This is the way we made the decision last year."
    • Watching the competition for guidance. (They could be wrong.)
    • Demanding short-term results... Fast reactions are sometimes necessary, but following a process is what increases the odds of success.
    • Creating marketing programs that build consensus within the firm... but don't address real customer needs with real solutions.
    • Seriously considering far too few viable target markets, positionings, creative options, pricing levels, etc.... Tunnel vision based on untested or limited assumptions.
Consider your options! You could get your wish.

E is for Egocentric Efforts

Caesar enjoyed wearing a laurel wreath. Whether he was resting on his laurels we cannot say, because he wore the woven leaves not just to show he was a hero but to conceal his baldness. In either case, it made him a sitting duck. The moral? Be conspicuous for customer service. Stand out for helping your clients win laurels, not for your own feats.

Now you know the IDE's of marketing. Avoid them-- You have been warned!

meeting

A lot is written today on team building, shared vision and other such warm, fuzzy management goals. Yet the executive who excels at encouraging disagreement will make better decisions than the one who focuses on building consensus. Management expert Peter Drucker gives three main reasons for "organizing" disagreement among staff members.

First, it safeguards the executive from becoming a prisoner of the organization. "The only way to break out of the prison of special pleading and preconceived notions," says Drucker, "is to make sure of argued, documented, thought-through disagreements."

It provides alternatives to a decision. "If one has thought through alternatives during the decision-making process, one has something to fall back on."

It stimulates the imagination. Imagination must be challenged or it remains latent and unused. Disagreement is the most effective stimulus we know. "Unless we turn the tap, imagination will not flow. The tap is argued, disciplined disagreement." (Note- disciplined, not rude.)

These ideas are especially pertinent to marketing management. Be sure to organize disagreement among your staff at your next marketing meeting. Considering all the options is the safest way to arrive at a course of action that will succeed.

Quotes are from The Effective Executive by Peter F. Drucker. Harper & Row, Publishers, Inc. 1967.

guy with mobile phone

"You can catch more flies with honey than you can swat with a sharp stick."

In this analogy, the flies are your customers--very hard to catch-- and the product or service you offer is the honey. The question is: Are your offerings wonderfully irresistible? How can you make them so?

Quality is important, but in the current marketplace it is more important to know precisely what matters most to your customer. A "total quality" product may not be affordable; your customers may be happy with a lot less. Of course, customer service is a key, but that is no different than what your competitors are offering. What makes products and services truly irresistible is a unique differentiation-- something that the customer can't get anywhere else. For example, there is a self-serve gas station where the manager will pump your gas for you at the self-serve price. Now that's honey.

The sharp stick of Top Marketing Concept #1 is direct mail or email facilitated by database marketing. People will invest a lot in this form of advertising because they believe that sending a message by mail or email into homes or businesses insures that it will be noticed and read. Not so. You see, even with a pointed stick you can still miss your target. You need a swatter, a broader instrument. Some experts call that "integrated direct marketing" and they define such an effort as comprising print advertising in appropriate trade or niche publications, an 800 number, some telemarketing or personal selling efforts, perhaps some billboards or www banners, plus direct mail.

We recommend complementing your direct mail/email with other media. This builds your image and reinforces your message, and it is the interplay among various media that increases your direct mail/email response to way over the 2% which is the industry average for mailings that are not supported by any other media or efforts.

But first, start with the honey. Because you can point and swat all you want, but without honey, you may never catch the busy things.

concerned

"A pessimistic outlook can be more damaging to your company than faltering demand for your product of service." - Anon.

"Be aware that research has shown that companies that continue to advertise in adverse economic times will gain market share. Why? Simply put, it's because your competitors are sitting idly waiting for the market to turn around, while you're aggressively pursuing business!" - the Strategic Planning Institute of Cambridge, Mass., "Profit Impact of Marketing Strategy" Study.

"With talk of recession, budget deficits, ... and uncertainty with respect to interest rates, it is important to develop contingency marketing plans. No one knows which economic scenario will develop, but with the bottom line at stake, it is crucial to be prepared to adjust operations for the greatest possible profits...IN ANY EVENT!" - Avraham Shama

Avraham Shama in his book, Marketing In A Slow-Growth Economy, suggests these activities may help marketing managers:
    1.    Study how inflation affects the target consumers. Different targets are affected differently. Thus, various degrees of modifying the marketing mix are called for.
    2.    Keep costs down but don't lower prices, since consumers will relate this to low quality--which could result in decreased demand.
    3.    Institute a flexible price policy; frequent adjustment of prices may be important. An examination of the cost and price structure for consumer goods every 90 days is wise. Maintain competitive pricing. Emphasize profit margins, not sales volume.

The buzz words to use in advertising messages are: VALUE, ECONOMIZE, SALE, FUNCTIONAL.

shopper

"A bridge over troubled waters is better than burning your bridges after you've crossed them."

Companies tend to stop advertising in times of economic downturn or at a point when it just doesn't seem like the program is working. The troubled waters could be a recession or they could represent a time of year when people don't buy as much of what you sell. But at those times, what will happen if you drop your advertising? Will people forget you? Will someone steal your customers? Possibly.

Picture this: You have built a bridge, that is, a communication link to your customers. You have built up a certain amount of awareness. If you stop advertising, that will be lost. You will lose your investment. As one marketing guru has put it, "The bond of communication is too precious to break capriciously." Remember, it does take time for a program to show results. So be consistent in your efforts; regard them as an investment and be committed.

You need one bridge or program to reach, retain and cross-sell customers, and another to reach prospects. Often, people think of advertising only as a way to reach prospects, and that is unwise. In today's marketplace, retaining your customer base is a key to survival. To retain customers, do simple things like reinforcing purchase decisions with a "thank you" or with an elaborate brochure that celebrates the benefits of the purchase.

We usually court the customer with a brilliant website and gorgeous printed materials to sell the product, but once it's sold, we think all is well. However, that may be the very time when the customer begins to doubt his decision especially on large ticket items. At this point he needs a congratulations or other positive reinforcement. That will assure positive word-of-mouth advertising.

To get new customers, you need a creative advertising program which features a simple message touting customer benefits, not product attributes. Remember, a benefit is what a product or service attribute does for the customer. Make that clear to capture their attention and awareness. Then repeat the strategic yet simple message with as much frequency as your budget will allow.

©2014. DAY Communications/fastzone.com. All rights reserved.

Color talks

Your company colors communicate. Ideally, they add suggestive and symbolic connotations to your name and logo, accentuate them, and make them more perceptible, easier to identify. Ideally, they evoke a positive response and feeling in your customers and prospects. How are your colors performing?

We all instinctively recognize that colors symbolize concepts, and even the least artistically inclined among us would know not to use bright red on a nursing home letterhead or light blue for a trial attorney. But how does one determine the right colors for a new company or for a firm seeking to update its image? How will you determine the best selection of colors for your firm brochure? Consult with us. We'll help you be original without straying from the ground rules of good taste.

Times change. Architectural styles evolve, fashions are updated, and so are the colors of business. Rapid technological change and the trend of our society toward a service economy have made fresh colors and new color combinations the rule rather than the exception, because they have the power to tell the story.

Also, colors can help you achieve various communications objectives. For example, dull colors help to reduce tension. Add gray to a vivid color to get a dull one. Or, keep that vivid color if you want people to pay attention.

Want to show you are unique? Use an eccentric color like fuchsia, or introduce an unusual color combination such as burgundy with peach rather than gray or navy as is usually seen.

The ink companies always keep pace with the times by creating new colors for graphic designers. The Internet boasts thousands of colors! We're sure there’s a new color especially for your firm.

Of course, changing colors will affect nearly all the items which identify your firm to its publics. However, as with all professional advertising, it is a justifiable operating expense, and an investment which may spur new inquiries and growth. Contact us to profit by new colors.