Thursday, August 16, 2012

Advertising is Still a Viable Marketing Tool

Everything I learned about advertising I learned by watching Mad Men.  Not.

I'm reading a very interesting and informative book; Kellogg on Marketing.  It is both an enlightening and exciting read for any Modern Marketer.  The last chapter I read was about Advertising Strategy and I want to share a few tidbits of wisdom from that chapter:

  • It is easier and more effective to advertise based on current customer beliefs rather than trying to change beliefs of the people in the target market
    • In order to use this concept, you must know or prove the customer beliefs.  Market research is best for this.  Guessing or intuition is not as good as market research.
  • If you choose to advertise by telling a story,  it should be relatable by your target audience. In other words, the advertisement should show a situation or scene where the target audience may find itself in relation to the problem you solve or the value you offer.
  • Comparative advertising is good for brands that are not leaders in their segment.  The challenger brand, if you will, could benefit from comparative advertising.  If a leading brand chooses to compare itself to a lesser brand, the risk is in promoting the lesser brand as much or more than promotion of its own leading brand.  It may make sense for any brand to compare itself to a superior brand in a different category.  For example, compare a margarine to real butter to show it's superior taste in the class of premium margarine.
  • It's important to show an early and strong link between the benefit (or value proposition) and the brand.  You do not want the target audience to recall your message but not know that it links to your brand or worse, to link your message to a competitor's brand.
  • Research has demonstrated that fear or threat advertising is not effective and may even be detrimental to your brand.
  • There is a real point where a frequently repeated message loses its effect. In order to maintain effectiveness, advertisements can be cycled. For example, on one quarter, off the next quarter.

These are just some highlights from one chapter.  I recommend this book for all Modern Marketers.  It is a great overview of the fundamentals of marketing.

Sunday, August 12, 2012

Is Your Target Market "Everyone"?

Is your target market 'everyone'?  And why shouldn't it be everyone?  The bigger the pond, the more fish, the more we catch, right?  Let's go a bit further with the fishing analogy.  In the pond are thousands of different types of fish who like hundreds of different types of food.  You've got a fancy new type of bait that you think all fish will like. No not just like, but love!  You eagerly bait up your line and toss it in from your boat which is randomly positioned in the middle of the pond. One hour goes by, two hours go by, only to see a few nibbles, but no fish are caught.  How can this be?  My new fancy bait appeals to all types of fish.  I'm the global leader in fish bait manufacturing.

Meanwhile, you glance over at another fisherman who seems to have strategically placed his boat in a small cove.  He appears to be hooking fish one right after the other and having a wonderful time.  You nonchalantly paddle over within shouting distance, "Ahoy, what's your secret?"

He responds that he has carefully chosen his bait to appeal to only 3 of the most tasty and feisty fish in the pond.  He further states that he has been studying the fish in this pond for many months to learn which fish are ideal to his taste (ideal prospect) and what these fish like to eat.  He even went one step further and found out where this particular fish lived in the pond.  He winds up the conversation by stating that he chose his target fish carefully, segmented them based on their likes and location, and the final secret was that he chose tasty fish that liked to eat flies that he happened to be expert at tying.  Oh, and he is the only one who knows how to tie this particular fly. (unique differentiation).

If you try to be everything to everybody, you end up being nothing to anybody.

The Modern Marketer must choose a target market and carefully segment it to fit his ideal prospect profile.  What's that you say, everybody is your target market.  Au contraire Pierre!  Your firm has strengths and weaknesses, a core competence, and a unique differentiator.  These characteristics make your offering good for some, bad for others, and indifferent to many.  The top notch Modern Marketer realizes this and selects a target market that fits with the strengths, core competence and unique characteristics of their firm.

I've seen some companies who choose a market segment simply because they like the segment; maybe it's a high growth segment or the companies in this segment are flush with cash.   But they have nothing really unique to offer.  A target market is a poor choice if you do not have something the people in that target market want or need.

A few basic rules:

  1. Choose a target market that can be defined and captured.  If you can't pick the target market out and make a list, the definition is no good.
  2. Choose a target market that you can efficiently reach with your message.  The target market should congregate in one fashion or another. (picture fish in a cove)
  3. Choose a target market that has a need your firm can meet with its core competence, uniquely if possible.  Should you develop a product to meet a certain market's needs?  Maybe, but if you're firm is already established, there is an infrastructure already in place that supports your core competence.  Going to something new might take a lot of resources to change.  think Delta Airlines and their establishment of 'Song' back in 2003)
  4. A good starting point is to define current heavy users of your current offering

Sunday, August 5, 2012

The 4 Parts of a Positioning Statement

Does your firm have a positioning statement?  Typically we see vision, values, mission statements, strategy, etc. But, I submit to you, Modern Marketers, that the written positioning statement is rare.  Maybe you could find a senior executive who could cobble one together on the spur of the moment based on experience and the many meetings he has attended.  If your firm does happen to proffer a formal positioning statement, is each and every employee able to articulate that statement?  Probably not.  Who is responsible for developing the positioning statement and who is responsible for ensuring that every person in the firm is able to articulate it?  I suggest that it is you, the Modern Marketer, especially if you are at a senior director, VP or CMO position.  If  your firm has one, then I applaud you and place you at the top of the heap of firms and marketers.

The Positioning Statement is comprised of 4 parts; the target, the category, the differentiator, and the payoff.  We'll talk about these in summary below, but first, there is some work to be done.  Before sitting down to write your PS, decisions must be made. You must choose your target market.  "All Industries" or "All People", by the way, are not a target markets.  More on target markets in the next blog post.  You must establish your differentiator. You must establish your target market's buying criteria and determine how your core competence fits or does not fit with the criteria. You should be intimate with your target audience.

The 4 parts of the Positioning Statement:
  1. Target Market.  You must know where and what the target is before aiming and firing (your marketing activity).  The target market should be defined based on criteria that is available such as demographics, geography, psychographics, pains, needs, etc.  Again, "all" or "everyone" are not acceptable criteria.
  2. Category.  Prospective customers (all of us) need a frame of reference when we evaluate a proposed product or service.  We want to know the context in which we evaluate.  Your customers want the same thing.  This can be achieved by stating a common category where you play like lawn service, PCs, digital television, tablets, etc.  If your prospective customers can't place your offer in a context, they will not spend any time evaluating the offer.
  3. Differentiation.   One point of differentiation is best.  Multiple benefits or features should not be provided as the differentiators.  The unique features or benefits will support the main differentiator.  Stating that your firm is "the global leader" is a weak differentiator and should be avoided. Rather, state the reason why you are the global leader.  Having the biggest market share or the biggest turnover are also weak differentiators.
  4. The Payoff.  This ties the differentiation with the needs or goals of the target market.  You need to tell the target audience how your differentiator will help them achieve what they want to achieve.  What's that you say, you don't know what your target market wants to achieve?  In order to have a meaningful PS, you must understand your target market intimately. This understanding should be based on real market research not hearsay.
Your Positioning Statement might be constructed something like this:

"To [target market], [brand] is a [category] that [differentiator] because [target market] needs [the payoff]."

One more thing to consider, this is a high level endeavor and will drive your marketing mix and many other strategic and tactical decisions. The highest level executives must buy in and support the initiative to develop a positioning statement.