Archive for the ‘Marketing’ Category

We know which brands are in higher demand simply by taking a quick look at daily consumer purchase decisions. Everyday supermarket customers are exposed to thousands of products to choose from, so what makes them pick your product over the competition? Here are some of the key attributes that help a product excel in a very competitive market.

Innovation

• Does your product bring something new to its category? If not, it’s high time to re-evaluate what you’re offering the public. No one wants just another “me too” product, so you better be offering something fresh, new, and exciting. However, your innovation can’t be too beyond the pale. Work with tangible consumer needs and trends to ensure that your product is offering something the public hasn’t seen before.

Taste and Functionality

• In order to sell successfully, your product must taste good – it’s as simple as that. Does it taste better than other similar products in the category? If you’re not selling a food, does your product make the grade in solving a particular household product? Be sure to conduct independent trials to see what the consumer actually prefers.

Packaging

• Believe it or not, packaging is important. It not only has to look appealing to the consumer but it also has to be functional. Does your packaging stand out and is it aesthetically pleasing? Does the packaging keep your product protected and fresh? It is often advisable to include as few marketing messages as possible on the packaging.

Sensory

• What does the consumer experience with your product? Does your product look good? How does it smell? If it is a food, how does it feel in the mouth? Do your consumers have a pleasant experience when eating this item? If it isn’t a food, how does it feel in context? Remember, consuming a product, whether it is a food item or not, is a full sensory experience. If there is anything that turns consumers off, you are probably going to see a drop in sales.

Value

• Everyone is concerned about money these days, so what is the value of your product? When it comes to value, it isn’t just the lowest price. People like to get the most for their money which means value goes beyond just the financial aspect. It also represents the satisfaction level a customer gets in relation to the amount they’ve paid. Often, you’ll see increased sales and a stronger bottom line when you offer a product that has that extra kick than the competition for the same price.

Health and Nutritional Value

• In addition to financial value, is there a health or nutritional value to your product? Today, the public places even more importance than ever before on the healthiness and sustainability of products available on the market. Is your company transparent when it comes to the ingredients and materials used in your product? Do you openly discuss the impact it has on the environment? Two of the leading priorities of your exporting business should be food safety and sustainability.

Companies from multi-million dollar corporations to small business ventures all over the world have faced the tough question of whether or not they should spend more money on marketing or sales. The funny thing is when you think about it is that each of these departments is attempting to accomplish the same thing: the promotion of the company and incurring of sales. For this reason alone many businesses lump their marketing and sales together under one umbrella. As a small business owner, you have this luxury.

However, it is imperative that you understand that marketing and sales is not the same thing and that there are different activities involved in each. When utilized correctly, marketing and sales can go hand in hand in promoting your company and making it successful. When they are misunderstood and mismanaged, the effects can be devastating. Marketing and sales strategies are best when they are used as an integrated unit. Before you can do that, you must understand how each division works.

Marketing is the part of your company that is charged with getting your customers attention and getting them to buy your product. It is really a persuasive art form, and the successful marketing department utilizes this persuasion in every marketing campaign they launch. They want to attract as many people as possible and will do so by branding your product, advertising it, promoting it through a variety of means, and using public relations to get the product out there. When marketing is performed properly and is effective, the customers are going to buy the product.

This is where the sales department steps in. Marketing brings the people in and sales close the door behind them. The sales department is interested in making a single sale at a time. They focus on the individual customer in an effort to make the sale, get a signed contract, or get the customer to enter into an agreement with your company. To do this, they can cold call customers, use an incoming call center to engage in the customer, or directly sell the product.

You can see the cycle. Marketing gets the customer ready to buy and sales closes the purchase. Sometimes it is necessary for marketing to provide the customer with additional information so they can make a decision. Sales will step back and wait to close the deal. As you can see, when these two departments are used together, they are an effective weapon for your business.

To start using a combined marketing and sales strategy you need to take a look at your contacts and customers and sort them out. One set will be current contacts and customers who simply need to continue being persuaded to purchase your product, called the warm lead. The other set will be contacts and customers who have never heard of nor have no interest in purchasing your product, called the cold lead. You should always start with the current customers and target promotional devices towards those who need a good reason to invest in what you are selling. Sales move in when the lead goes from a cold lead to a warm lead to seal the deal.

Always try to develop an integrated marketing and sales strategy that is in balance. When you do this, the two departments will be able to work in tandem to bring your company success.

Small businesses that are looking for an exporting opportunity should consider the many emerging markets that are appearing all over the world. One of the biggest opportunities out there is the technology marketing. Considered one of the most popular emerging markets, technology marketing is helping bring the world a little closer together in places that one would not originally have considered.

Exporting can be difficult in the first place due to the many cultural differences and dynamics that must be taken into consideration and explored. Being ignorant of the culture you are exporting to is not a good idea. One small mistake can cost your company billions. When dealing with exporting to emerging markets, this ignorance can cause businesses to look away from the viable and profitable markets, making this miss out on sustainable business opportunities that could’ve launched them internationally.

While exporting to developing nations has, in the past, been filled with prohibitive and dubious ventures, there are many emerging markets there that offer the small business a wealth of opportunity to enjoy. These are the areas where innovative ideas, methods and technology are the most welcome. The reason for this is the lack of an established technological infrastructure. Small businesses that enter these developing economies with technology marketing fare well. They do not have to upgrade an archaic, existing infrastructure in order to do business. They are able to go in and establish the standard that is used from the present on.

Africa and South America are two areas in the world where technology marketing has provided small businesses with a wealth of opportunities. In Africa, cellular phones are the preferred mode of communication in addition to the method in which citizens of the many African nations transfer money and pay their bills. South America has welcomed and embraced Internet cafes, something that is still not accepted as the norm in the United States. These are the types of emerging markets that are starting to appear in other areas of the world and offer the expanding small business numerous opportunities for success.

Keep in mind that the lack of infrastructure can also cause issues that make it important for a small business to plan carefully. If the company is launching a service or product where some exiting technology needs to occur, the company must ensure it exists and they have access to it. Researching the technology already in place and building from it needs to be done or else the company will not be able to participate.

Additionally, careful planning must be made when it comes to social aspects, such as the cost of the service in the first place. Citizens of developing countries have little to no disposable income. What the small business provides them must be practical and affordable. If there is no need for what the small business is offering then there is no way the company will be able to convince the citizen to invest in the technology that is being put into place. Ensuring there is a need and an ability to pay for it should be one of the first research goals for any exporting business.

Many small businesses have discovered that exporting to countries overseas is a lucrative business opportunity. However, when they sit down and develop their operating plan they are faced with the dilemma of what type of exporting to engage in. Franchising is a very popular business venture both on the domestic front and internationally. However, it is more difficult to franchise a business internationally than it is domestically. There are some key differences between the two that every business owner needs to be aware of, especially if they are trying to get their small business exporting division off the ground.

Franchising has long been a business that has proven to be effective and profitable on both sides of the fence. Domestic franchising is considerably easier, however, because all of the resources needed for it are within a reasonable distance of one another. International franchising, on the other hand, requires a great more patience, expertise, and resources, especially when dealing with a foreign culture that may or may not have the additional problem of a language barrier.

Does this mean small businesses should skip franchising as a way to break into the exporting market? No. It does mean that small business owners will need to be more on the ball when it comes to making sound financial business decisions.

There are three main issues each international franchiser needs to be aware of. Let’s take a look at them:

Issue #1: The risk involved

• There is risk involved in any business venture, but when it comes to international franchising they tend to be greater. Most small business owners suddenly find themselves working outside their comfort zone in dealing with product issues as well as staff. They are required to deal with markets that are unfamiliar to them both culturally and professionally and they must be prepared to deal with the unknowns of the business. Franchisers are required on the international level to deal with partners that are from the country they are setting up in which requires a great deal of research in order to find ones that are reliable. While using a partner with international experience is a plus, international franchising is still filled with risks.

Issue #2: The culture

• Research is imperative in any exporting operation, especially when you are not familiar with the culture you want to set your franchise in. Exporters need to educate themselves on the culture their franchise will be in, and it is a good idea to seek out indigenous partners and advisors who can aid them in understanding the myriad issues they will face during the first few years of business overseas.

Issue #3: Adapting to the international environ

• Not every franchise will work in the original format. For example, if the franchise is a fast food chain in India, there will need to be adaptations made to the menu. This is where many international franchisers run into problems. The franchise has to be adaptable otherwise it is not going to succeed in the international environ. International franchise owners must be prepared to adapt.

General image marketing is…

• a General Motors’ TV “corporate” commercial showing several of their cars in a beautiful field of flowers… With a happy looking family having a barbecue in the middle of the field. It doesn’t really cause anyone to take direct action and buy a car now, it is just supposed to give you a good feeling about general motors in general.

Direct response marketing is…

• a TV commercial from the local General Motors dealer telling you all about the July 4th super sale… special prices, super low payments, additional options added at no charge during the sale period only. This type of advertising causes people to actually flood into the dealership and actually want to buy the dam car right now. This commercial is not overly pretty, no fields of flowers, just straight talk about what you can get, and why it is to your advantage to buy it now.

The direct response ad is what actually brings in floods of money into the dealership.

The general image ad doesn’t make any real money for anyone except the ad agency that produces it.

The advertising world has many annual awards that they give out to ad agencies. When an ad agency wins an award for an image ad or campaign that they created… the people in the winning agency all go around “high fiving” each other in the office and at industry trade events for months… The award sits in a showcase in their lobby… it is their badge of achievement… however, research shows that most image ads that win creative awards FOR THE AGENCY… turn out to be a total non productive bomb for the poor client that actually paid for it all.

Each side of the coin seems to have a different set of values that they call winning. The purpose of today’s post is to help business owners differentiate between dollars that can be quantified and not when planning advertising or public relations budgets.

People often thinking of a brand as the symbol, name or logo associated with a product. In reality, branding involves far more. Branding is basically the process of creating a strong identity for an organization, and it applies to both product manufacturers and companies that provide a service. An organization’s brand identity drives the company as a whole by providing a framework through which the members of the organization can establish a memorable, active relationship with consumers. When a company brands itself successfully, people remember that organization and what it stands for, and they come to know exactly what to expect from interacting with its members or using its products.

In recent years, as marketing has shifted and become more about establishing a relationship with customers and less about bombarding them with names and logos, the role of branding has increased in scope and significance. Branding appeals to people’s memory of an experience with an organization. Clear and consistent messages about a company’s products or services, the experience of interacting with that company, and its appeal to the values and self-concept of consumers make for a successful branding campaign. A brand is, in effect, a company’s way of doing business, which develops as a result of its identity and its reputation. It is also the association that consumer’s have with its products or services. Customer service, or the way a company operates in relation to those it serves, is the action by which a brand is established and imprinted in the memory of a targeted market. Another way to say this is that a company’s brand is its way of standing out and separating itself from its competitors.

Though successful branding is often paramount to a company’s success, there are pitfalls and challenges that must be faced. A variety of common problems can stand in the way of a company’s efforts to brand itself effectively. One such barrier is not having a clear set of values with which to identify the brand. Without a clearly defined mission and vision that all employees share, a brand identity cannot be effectively established. An organization’s own members must connect to a brand identity before that identity can be communicated to consumers. Staff must be motivated to work together and act as representatives of the brand outside the walls of the organization. Management must be willing to make the changes necessary to accomplish this. Resources, processes and tools must exist to automate presentation of the brand to the marketplace, and the organization must stay connected to its customers and be willing to make adjustments dictated by feedback from them.

A brand name and logo are simply an association or way to identify the experience of the brand in its entirety, much like a person’s name or photograph evokes everything you know about who that person is, what he or she stands for, and how he or she behaves. Since all names and images carry associations, brand names and logos must be chosen with care. A good name is a positive influence on the way members of the organization identify themselves as well as how consumers view the product or service that carries that name. This is particularly relevant in cyberspace, where domain names need to be memorable on a global scale. Names that resonate across cultures and languages are crucial to branding success.

In addition to having a good name, a successful brand must be well positioned. The brand’s position is the place it has in the minds of those it aims to serve. A brand must be positioned in such a way that it’s uniqueness and value to the consumer is apparent. Since customers must feel connected to a brand, it not enough for the brand or logo to simply be recognized. Companies and consumers form an interactive relationship that involves an exchange between the organization’s offerings and the consumer’s needs and expectations. In this sense, brands are a form of communication, and a brand that communicates well in a way that is consistent with its actions gives consumers a deeper and more meaningful experience with the brand.

Companies can use any one of five strategies for branding, each with its own shortcomings and advantages. First, a company can develop line extensions, which new items are introduced within a product category, such as “all natural” or “organic” versions of a food product. While the brand may be in danger of losing its specific meaning in the minds of consumers, this strategy can also work well to attract new customers. Another strategy is brand extension. In this case, an existing brand name is used for a completely new kind of product. Using this strategy, a well-known apparel manufacturer may launch a line of perfumes or beauty products. As long as the new product is well received and the brand’s reputation is upheld, this strategy can help a company expand into new markets. A third strategy is multi-branding, which occurs when a company creates a variety of brands within a product category, each designed to appeal to a different audience. The danger here is that the brands may each compete with each other for small shares of the market with none of them doing particularly well on its own. Some companies create entirely new brands to launch products in new categories when existing brands and brand names do not fit the new product at all. There is also an emerging practice known as co-branding in which two well-known brands merge to create a new product that boasts both previously accepted brands.

For product manufactures, packaging is another key feature that affects how consumers view the brand. People often identify a brand by its packaging. Several elements are important here, including the “packaging concept,” which defines what the package should accomplish for the product. The package should be carefully designed with attention to size, shape, color, font and logo, as well as the type of material that should be used. Decisions about pricing, marketing and advertising are often dependent upon the type of packaging developed for the product, which may affect how it can be handled, distributed or displayed. The association that consumers make with a particular kind of packaging is as important as other features of the brand. For example, the Planters Lifesavers Company introduced vacuum-packed peanuts in 1992 to capitalize on the association that consumers already made between fresh coffee and vacuum packaging. Growing concerns about the environment make recycled packaging materials attractive to many people, and safety concerns have highlighted the importance of using “tamper-proof” packaging.

Companies that are successful at branding are able to develop a “story” around a product or service that will create an affinity with customers. Since most businesses today are difficult to distinguish from one another, an intermediary is often called upon to help envision a fresh perspective that can be developed into a lucrative branding campaign. An intermediary with experience in branding can leverage a company’s uniqueness and help launch, build, evolve and grow a business. Branding is more than selecting the right language and packaging, and it requires dedicated personnel and budgets, as well as time and expertise. With already overburdened staff members who may lack the experience, skills and resources specific to branding, it often makes sense to hire an intermediary to manage the venture. In some cases, intermediaries can be brought in as temporary consultants to give specialized, expert attention to developing or improving a communications strategy.

Hiring an intermediary to develop brands can benefit two distinct types of client companies. In one case, a firm that has been victimized in the past by legal or linguistic issues can alleviate fears of future mistakes by bringing in an intermediary. In other cases, firms for which branding is more than an afterthought can become truly excited by the expanded possibilities inherent in bringing in experts in the branding arena. Though the two groups overlap, the decision to hire an intermediary often comes down to a combination of uncertainty and hope that exists for most companies considering brand development.

Essentials of Marketing

Too often, advertisements are created without clear goals! And a campaign without focus is not very effective. The key to deciding what the role of advertising should be is to understand what the advertising can do. Though you may already be familiar with the principles of advertising, a periodic review of them can be helpful as I see many instances where bad decisions have been made - this applies domestically and internationally.

It is useful to think of advertising in terms of three broad categories: Product, Promotion, and Brand.

Product Advertising
Advertising was invented to inform consumers about a product. As competition grew among creators of similar products, it became increasingly important to tell consumers about superior features or attributes of one product versus another. As products became more homogeneous, it became harder to differentiate between them on the basis of features and attributes, so advertisers were forced to uncover subtle “benefits” to differentiate their products or their clients’ products from the competition.

Understanding the difference between a feature, an attribute and a benefit is important because they are hierarchical in terms of their ability to communicate. A feature is something about the product (e.g. twin rear-view mirrors; a price of $100; Teflon coated). An attribute is the functional result of the feature (unobstructed rear view, priced lower than the competition, easy to clean) and a benefit clarifies how this is important to the consumer (safer driving means lower insurance rates; more money to spend on other things; more time to spend with the family). It is generally easiest to describe a feature; most consumers will understand what it is. While an attribute may be a stronger selling point, it may not be relevant to all consumers. A benefit may have even less universal significance, though it is the strongest selling point for consumers that can relate to it. Regardless of which of these is most likely to differentiate the product most clearly, features, attributes and benefits can all be described in both functional and emotional terms. The manner in which you advertise a product should depend largely on the consumers’ knowledge of the product’s features, understanding of its attributes, and insight into how those attributes can be beneficial to them personally.

Promotional Advertising
Promotional advertising is designed to support sales and distribution efforts. A promotion has the singular goal of getting consumers to buy something now, and it is always based on a limited time offer that gives consumers a distinct reason not to wait.

The strategy in promotional advertising is to give the consumer a continual set of exciting reasons to visit your location and/or buy your product. For this strategy to be effective in the long term, however, the inherent value of the product itself must be apparent. If it is not, consumers will see no ongoing reason to buy the product once the discount or premium expires, and you may end up with a “discount brand,” in spite of your best marketing efforts.

Brand Advertising
Brand advertising communicates the superiority of the makers or presenters of a product over all others with similar products. Brand advertising communicates something about what an organization stands for in terms that consumers judge to be important. This information (often called brand attributes) can be functional (i.e.. quality) or ethereal (i.e., trustworthiness) in nature. Again, any brand attribute can be framed in either functional or emotional terms depending on the consumer insights that dictate the creative development of the advertising.

While brand advertising does not result in immediate sales, it is essential to the long-term survival of a company for three reasons:

• A strong brand pre-empts competition. It may be possible to duplicate every aspect of the product, but it is never possible to duplicate the attributes of a well-established brand.

• It supports premium pricing. It is well documented that consumers are willing to pay more for the promise a brand brings to the purchase.

• It builds value for shareholders beyond immediate sales results. Companies are including the value of their brands on the balance sheet as a significant component of the corporate asset base. This valuation is depends directly on the effectiveness of brand development, which in turn depends on advertising investment.

While “rules” in general do not make for great advertising, it is a good idea to keep in mind the general dogma of advertising and what it can accomplish. Product advertising differentiates the product. Promotional advertising communicates a compelling reason to buy now. Brand advertising communicates brand attributes. With this foundation, advertising can be evaluated on its creative merits (likability, intrusiveness, impact, etc.), simple ideas about what should or should not be included in the copy.

Marketing managers and PR specialists do not always talk the same language. Marketing managers are much more bottom line oriented, whereas PR practitioners see their job as preparing and disseminating communications. But these differences are disappearing.

Many companies are turning to marketing public relations companies (MPR) to directly support corporate or product promotion and image making. Thus, MPR, like financial PR and community PR, serves a special constituency, namely the marketing department.

The old name for MPR was publicity, which was seen as the task of securing editorial space-as opposed to paid space-in print and broadcast media to promote or “hype” a product, service, idea, place, person, or organization. But MPR goes beyond simple publicity and plays an important role in the following tasks:

• Assisting in the launch of new products: The amazing commercial success of toys such as Teenage Mutant Ninja Turtles, Mighty Morphin’ Power Rangers, and Beanie Babies owes a great deal to clever publicity.

• Assisting in repositioning a mature product: New York City had extremely bad press in the 70’s until the “I Love New York” campaign began.

• Building interest in a product category: Companies and trade associations have used MPR to rebuild interest in declining commodities such as eggs, milk, beef, and potatoes and to expand consumption of such products as tea, pork, and orange juice.

• Influencing specific target groups: McDonald’s sponsors special neighborhood events in Latino and African American communities to build goodwill.

• Defending products that have encountered public problems: Johnson & Johnson’s masterly use of MPR was a major factor in saving Tylenol from extinction following two incidents in which poison-tainted Tylenol capsules were found.

• Building the corporate image in a way that reflects favorably on its products: Iacocca’s speeches and his autobiography created a whole new winning image for the Chrysler Corporation.

As the power of mass advertising weakens, marketing managers are turning more to MPR consultants and firms. In a survey of 286 U.S. marketing managers, 3/4ths reported that their companies used MPR. They found it particularly effective in building awareness and brand knowledge, for both new and established products.

At KGI, our international MPR activities can contribute to the following objectives:

• Build awareness: MPR can place targeted stories in foreign media to bring attention to a product, service, person, organization, or idea.

• Build credibility: MPR can add credibility by communicating the message in an editorial context.

• Stimulate the sales force: MPR can help boost sales force and channel enthusiasm. Stories about a new product before it is launched will help the sales force sell.

• Hold down promotion costs: MPR costs less than direct mail and media advertising. The smaller the company’s promotion budget, the stronger the case for using
  PR to gain share of mind.

When developing a plan for international markets, executives and managers must decide how involved the firm will be. We’ll describe six basic kinds of involvement: exporting, licensing, contract manufacturing, management contracting, joint venturing, and wholly owned subsidiaries.

• Exporting Often Comes First

Some companies get into international marketing just by exporting – selling some of what the firm produces to foreign markets. Some first start exporting to get rid of surplus output. For others, exporting comes from a real effort to look for new opportunities. Some firms try exporting without doing much planning. They don’t change the product – or even the service or instruction manuals! As a result, some early efforts are not very satisfying – to buyers or sellers.

• Licensing is an easy way

Licensing is a relatively easy way to enter foreign markets. Licensing means selling the right to use some process, trademark, patent, or other right for a fee and royalty. The licensee takes most of the risk because it must invest some capital to use the right. Further, the licensee usually does most of the planning for the markets it is licensed to serve. If good partners are qualified and developed, this can be an effective way to enter a market.

• Contract Manufacturing takes care of the production problem

Contract manufacturing means turning over production to others while retaining the marketing process. Sears used this approach when it opened stores in Latin America and Spain. This approach doesn’t make it any easier to plan the marketing program but it may make it a lot easier to implement. For example, this approach can be especially desirable where labor relations are difficult or where there are problems obtaining supplies or government cooperation. Growing nationalistic feelings may make this approach more attractive in the future.

• Management Contracting sells know-how

Management contracting means the seller provides only management skills – others own the production and distribution facilities. Some mines and oil refineries are operated this way – and Hilton operates hotels all over the world for local owners. This is a relatively low-risk approach to international marketing. The company makes no commitment to fixed facilities – which can be taken over or damaged in riots or wars. If conditions get too bad, key management people can fly off on the next plan – and leave the nationals to manage the operation.

• Joint Venturing is more involved

Joint venturing means a domestic firm entering into a partnership with a foreign firm. As with any partnership, there can be dishonest disagreements over objectives – for example, how much profit is desired and how fast it should be paid out – as well as operating policies. Where a close working relationship can be developed – perhaps based on one firm’s technical and marketing know-how and the foreign partner’s knowledge of the market and political connections – this approach can be very attractive to both parties.

• Wholly owned subsidiaries give more control

When a firm thinks a foreign market looks really promising, it may want to take the final step. A wholly owned subsidiary is a separate firm – owned by a parent company. This gives the firm complete control of the marketing plan and operations, and also helps a foreign branch work more easily with the rest of the company. If a firm has too much capacity in a country with low production costs, for example, it can move some production there from other plans and then export to countries with higher production costs.

• Specialists can help develop the plan

Exporting does require knowledge about the foreign market. But executives and managers who don’t have enough knowledge to plan the details of a program can often get expert help from specialists like Khanstellation Group, Inc.

Exporting doesn’t have to involve permanent relationships. Channel relationships take time to build and shouldn’t be treated lightly – sales reps’ contacts in foreign countries are investments and require time to nurture.

In our increasingly global society, many companies cannot afford to live with the illusion that their domestic markets will always be strong. For this reason, many companies choose to market overseas as well.

By taking a venture into international markets, a company can offset seasonal fluctuations in sales and increase profits in general through exposure to a greater number of prospects. Further, technical proficiency is often increased by expanding into markets with greater expertise in certain areas of technology. In addition, expanding into foreign markets can minimize a company’s risk of losing market shares to customers who themselves take advantage of the Internet to look for suppliers of goods and services in foreign markets.

There are many benefits to marketing a company’s products or services overseas, but the decision to go international must be made carefully. Cultural and language barriers, political issues and variations in religious beliefs, societal norms, and business negotiation styles impact how business should be conducted with international counterparts.

Two steps can prepare an organization for an overseas effort. First, an international marketing plan must be developed, and second, the organization must determine how it will enter the new market.

Since creation of a dedicated export department can be an overwhelming and expensive task, an alliance with an outside party can reduce the time and effort it takes to become established in a foreign market. One option is to establish a joint venture. Another is the use of an export management company (EMC). An EMC like Khanstellation Group has contacts and knowledge of foreign cultures and governments that can smoothly facilitate an international effort.