Wisdom Without Waiting

Marketing in Tough Times

© John L. Mariotti 2005

When I sat down to write an article on "marketing in tough times", which seems to be a very popular issue, I realized the truth of the statement made by one of my VPs years ago. He looked at me and said, "all the times are 'tough times' especially if you are an industry leader." In reflecting on the years that have passed and what I have learned, I realized he was right. In fact, he was more right than he knew.

If you are an industry leader, the competition is always trying to take your business. Large competitors are attacking you in broad market segments. Niche or guerilla competitors are attacking you in smaller segments-where they might have some unique advantage. Customers are always pressuring you for a better deal. Consumers are always looking for better value and usually lower prices. Thus, an industry leader is always marketing in tough times.

If you are not a leader, and especially if you are not number one or two in your market, times are even tougher. You are usually "playing in a game where someone else (usually the market leader) defines the rules". You may be at a competitive cost disadvantage because of lesser size/scale economies than the leader. You may be a lesser-known brand or you may just have less influence with customers because of your smaller size and relatively weaker market position.

With this somewhat bleak perspective what is the best advice for marketing in "tough times?" For the answer to this, I will fall back on something I wrote five years ago in a book entitled Smart Things to Know about Marketing. (Capstone/Wiley) The book is being reissued in an updated edition in 2004, as Smart Marketing, and in it, I define the "Five Smartest Things to Know about Marketing."

  1. You must have a plan.
  2. Get close to your customers.
  3. Do your homework.
  4. Remember relationships.
  5. Use the speed and reach of technology.

You must have a plan.

In tough times, it is easy to become reactionary; to jump at every opportunity and to flinch at or respond to every threat. That is exactly when a plan is critical. A plan is not cast in concrete. It must be a living and constantly evolving guide. But it is the "compass," without which you and your marketing organization will quickly lose your way. The plan should not be lengthy. It should be concise and stated as simply as possible. Single lines, bullet statements with specific nouns and action verbs make the best plan statements.

The plan must define above all else, "What do we want to sell, to Whom, Where, When and How (and perhaps for How Much or How Fast?)" Answering this question, over and over, will help focus efforts and resources on the desired markets and segments. There will be no doubt in the minds of the people who must execute the plan, and this will help them stay on task and on target when competition rears its ugly head.

There is a plan statement a marketer can be proud of, and that an organization can clearly understand.

Is that clear? I think so. Is it specific and does it define the actions to be taken? Yes, it does.

Get close to your customers.

Noted marketing educator Theodore Levitt once said, "The goal of a business is to create and keep a customer." To do this, I propose (again) that you ask the question, "What do we want to sell, to Whom, Where, When and How (and perhaps How Much and How Fast?)" Not only will this help define what kind of customer you plan to "create and keep" but you immediately realize that understanding what your customers are thinking is critical to your success. Customers often don't know what they want until they see it. Then they know with certainty-until something different comes along and changes their mind.

A premise that I often argue is that "the best value wins." If you can accept that for the sake of argument, then I'll go on to point out that value is defined in the mind of the customer. This means the smart marketers must get inside their customers' minds to understand what their customers' perception of value is all about. Then they must translate and communicate that understanding to their organization.

The difficult part of this task is that the customer's picture of value is constantly changing. That means that marketing must be constantly in contact with customers (and consumers/end users if there are two steps in the marketing channel) to understand how that value perspective is changing. Value is a tough concept to define. It seems so simple on the surface, but in fact, it is not. Value is situational. Value is dependent on the context in which it is viewed. Value is made up of many elements, each with different importance to different customers. Each new competitive product or service affects and alters all of the prior value comparisons, requiring a "re-calibration" by marketing. This can only happen if marketing is very close to the customer-in regular contact, in a trusting relationship, and best of all in a collaborative partnership.

Do your homework.

Once you have a plan, and have started to get close to the customer, it is time to do your homework. This is where the real work begins. Homework is seldom fun. It involves digging for competitive intelligence, spending time in the factory or in the field learning first-hand about opportunities and issues. There is a huge amount of information available thanks to the Internet, but sifting through it for the right information, and the organizing that information into useful forms is hard work. Homework means attention to details such as documentation, specifications, competitive matrices, costs, comparative data accumulation, market surveys and so much more.

Preparation is another form of "homework." Too often marketers think they can go into a customer meeting, a sales meeting, or a market research project and just "wing it." Unless the hard work of preparation is done, results will range from mediocre to awful. In many cases, the only difference between success and failure is preparation-doing your homework-and doing it well. A good phrase to remember deals with both plans and preparation: "Failing to plan is like planning to fail."

Remember relationships.

Marketing is above all dependent on relationships. Relationships with customers permit you to "get close to the customer." Brands are relationships with consumers that are based on a value promise. Brands are promises and trust is part of the transaction. To break the promise of the expected value is to betray that trust and damage the relationship-and usually, to lose the sale-and perhaps the customer. Customer relationships are built upon commitments made and kept-on consistency and reliability.

Relationships with associates in all parts of an organization can also lead to success or failure for marketing. Marketing devises products and promotions based on the premises of what its organization can do. Unless there are solid relationships between marketing, sales, production, distribution, and logistics, many things can go wrong. Promises will be broken and commitments not met.

A product launch can fail due to misstated specifications, and a misunderstanding of the capabilities of plants and/or suppliers can cause this kind of error. Delivery commitments can be missed if there are not strong linkages and good communications between those in marketing making the promises and the people in other functional areas who understand the organizations' capabilities. I have seen instances where demand far exceeds capacity, and when this happens, disaster is the usual result. These are all decision factors based on the relationships between people in marketing and those in other parts of the organization.

Finally there are relationships that marketing owns indirectly, such as supplier relationships. In an era when outsourcing and complex supply chains are more common than ever, marketing is often dependent on supplier relationships-and in some companies-directly so.

Use the speed and reach of technology.

At one time, the belief was that the Internet changed everything. That wasn't quite true, but the speed and reach of computers and the communications infrastructure has changed everything. The world is a much smaller place, because information, knowledge and expertise can be transported to the other side of the world in a few seconds. This removes some of the competitive protection provided by distance and oceans. Some would say that the Internet resulted in the death of distance as a competitive factor. While that may not be totally true, there are elements of truth in that statement. Similarly, the Internet has made global pricing much more transparent, which has created a sort of leveling effect, essentially forcing higher priced markets to come down, closer to lower priced ones.

Communications technology also permits things to happen that almost never could have happened in years past. For example, I am sitting in Ohio in the USA writing this, and it will be electronically transmitted to your country-thousands of miles away-to be included in your local publication. Using the Internet, marketers can reach groups of customers and aggregate markets that never could have been aggregated before because they were small and too widely dispersed.

Surveys, polls, instant feedback are all possible with the Internet. Shopping is now a global activity. On-line auctions have changed the shape of price competition. Market research can be conducted, tabulated and disseminated faster than ever before. This makes one form of "homework" much more convenient to do. Catalogs no longer need be printed on paper. Digital photographs stored on web sites and easily combined with text and data have redefined the field of collateral material for marketing.

Anyone and any company that does not capitalize on this enormously powerful speed and reach of technology is conceding a competitive advantage to competitors who learn to do so.

Conclusion

The last "Smart Thing to Know about Marketing" is that culture is becoming an ever more important aspect of marketing. I am sure I have used phrases and idioms that might be alien to some. I am a product of a North American and English speaking culture. Others may be the products of different geographical and language cultures. Those differences alone can be quite large. Brands are global but cultural and language nuances are definitively local. A friend who is a well-traveled international business executive and educator once told me: "80% of marketing in a different country is the same as marketing in the US. Only 20% is different-but what a difference that 20% makes."

I learned the hard way while running a large US bicycle company that "close" is not good enough. We wanted to sell our bikes all over the world and the bikes were the same all over the world-or so we thought. In Japan, the handlebars had to be narrower; in Britain the caliper brake handles were reversed right/left; in Germany a generator for a light was required; in Spain it was simply a regulation requiring a homologation number to be placed on the bike. And then there was the fact that Canadian French, which we used for manuals in North America, was just a bit different from the French language in France. Mexican Spanish didn't match the Spanish spoken and read in Spain-at least not exactly.

That 20% of difference made a huge difference in the products and their marketing. Retailing was different too. Some countries favored very large stores; others preferred smaller stores. Thus, the sixth Smart Thing to Know about Marketing is to always consider the cultural differences.

So, you see, marketing in tough times isn't all that different from marketing in all kinds of times. Perhaps that is the important secret I can reveal. Under the pressure of tough times, it is tempting to try short cuts, radical actions or be more (or less) reactive than usual. In tough times customers especially value consistent and reliable suppliers. Marketing is the internal voice of the customer in communicating what kind of value must be delivered consistently and reliably "to create and keep a customer" thus marketing must reliably convey the customer's expectations. In tough times, this point becomes even more important, because poor information leads to poor decisions.

In closing, the most critical point for marketing to remember is to go back where we started-to basics-to answering that important question: "What do we want to sell, to Whom, Where, When and How (and perhaps for How Much?)" Next, ask Why have we been successful in the past, and at doing what?" Because you should strive to do more of whatever it is that makes you and your company special, different, better and more preferred than competitors.

Once you have addressed these two questions, you can go back to the Five Smartest Things to Know about Marketing. Following them carefully will help you serve customers successfully in tough times-and in any kind of times-and after all, that is or certainly should be, the goal of marketing people everywhere.

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