Tough Decisions

I received an interesting email the other day on Insight into Decision Making – Tough Decisions.

A group of children were playing near two railway tracks, one still in use while the other disused. Only one child played on the disused track, the rest on the operational track. The train is coming, and you are just beside the track interchange. You can make the train change its course to the disused track and save most of the kids. However, that would also mean the lone child playing by the disused track would be sacrificed. Or would you rather let the train go its way?

Let's take a pause to think what kind of decision we could make...

Most people might choose to divert the course of the train, and sacrifice only one child. You might think the same way, I guess. Exactly, to save most of the children at the expense of only one child was rational decision most people would make, morally and emotionally. But, have you ever thought that the child choosing to play on the disused track had in fact made the right decision to play at a safe place? (albeit of course playing near any track in the first place is unsafe). Nevertheless, he had to be sacrificed because of his ignorant friends who chose to play where the danger was.

This kind of dilemma happens around us everyday. In the office, community, in politics and especially in a democratic society, the minority is often sacrificed for the interest of the majority, no matter how foolish or ignorant the majority are, and how farsighted and knowledgeable the minority are. The child who chose not to play with the rest on the operational track was sidelined. And in the case he was sacrificed, no one would shed a tear for him.

The great critic Leo Velski Julian who told the story said he would not try to change the course of the train because he believed that the kids playing on the operational track should have known very well that track was still in use, and that they should have run away if they heard the train's sirens...

If the train was diverted, that lone child would definitely die because he never thought the train could come over to that track! Moreover, that track was not in use probably because it was not safe. If the train was diverted to the track, we could put the lives of all passengers on board at stake! And in your attempt to save a few kids by sacrificing one child, you might end up sacrificing hundreds of people to save these few kids.

While we are all aware that life is full of tough decisions that need to be made, we may not realize that hasty decisions may not always be the right one. 'Remember that what's right isn't always popular... and what's popular isn't always right.' Everybody makes mistakes; that's why they put erasers on pencils.
[end of extract]

The reason why decision making is so tough is because of the consequence we need to face when making the wrong decisions. In the above example, it could be a psychological impact that we need to live with. Decision making today also comes with risks and trade-off. Making the wrong decision on your investment could mean great financial losses, or a missed opportunity. Marketing Management decision making impacts the marketing mix strategies and brand perception and positioning.

It seems the complexity of decision making can be proportional to the perceived consequence or impact. For simplicity case, let's categorize them into 4 levels;
Level 1 - Little or no impact, including personal and daily decision making, such as what's for dinner?
Level 2 - Involving 2 or more opportunity cost variables, such as cost, time, or product design changes which cannot be regained
Level 3 - Involving second person, especially when impacts trust and perception (example contracts, agreements, policies, negotiations)
Level 4 - Involving more people or the general public, especially impacts credibility and social perceptions, and including a combination of some of the earlier levels (also advertising campaigns, promotion, positioning strategies)

I heard that we need to make about 500 decisions a day on average. And since it's an overwhelming experience, we try to auto-pilot or delegate some of these decisions and even set up algorithms to make some decisions for us faster. Basically what we are doing is avoiding the consequence of making a wrong decision - since it was based on some model, or someone else's idea. And with the more decisions we pass over, we lose our thinking edge and decision-making intuition.

But how do we have time to manage over 500 decision a day? Well, with the impact levels, it helps to create a threshold when certain decisions can be auto-pilot (or delegated), and when certain decisions are just too important and need our attention and intervention - no matter how simple the surface impact may look. As a guideline, I would say anything from levels 3 and 4 should have our personal attention.

We need to recognize that each and every decision we make can have a different outcome. As much as we want to standardize things, it's impossible to have spaghetti every dinner. Circumstances (hunger, time) and expectations (motive) can change our decision making process, and ultimately the outcome. Simply setting auto-pilot or delegation decisions with level 3 or 4 impact can be disastrous - especially since it involves another person - and we've heard many times before that you can not be efficient in a relationship.

In making decisions, people try to get the best outcome. But what's the best outcome is also relative to the person making the decision - especially for post-purchase experience. The marketing team needs to persuade the potential customer that the product/service will satisfy their needs. Having made a purchase, the customer should be encouraged that he or she has made the right decision with the after-sales support and services.

Finally, in the book by Wharton on Making Decision by Stephen J.Hoch, we look at 7 Strategic errors in decision. Understanding and overcoming these strategic shortcomings will help improve our decision making effectiveness.

• Being blinded by emotions
• Overreliance on intuition
• Emphasis on speed
• Failure to detect deception
• Underestimating risks
• Insufficient information technology for decision support
• Insufficient regulation

Is Speed a Good Thing?

For those of you who have a Facebook account, you would probably have joined some Facebook games application.

I played the wildlife zoo game because it was entertaining seeing things grow (in this case, the zoo and it's population) and also challenging (how to manage funds to expand your zoo). This kind of game (strategic life simulations) have been around for a long time and most people would be familiar with SimCity developed by Maxis and published by Electronic Arts (EA) back in 2000. After over 16million copies sold worldwide, and numerous awards, this game has evolved with all sorts of simulation expansion packs today. Other equally successful games include Civilization, WarCraft, and many more. Simulation games allow you to flex your creative and strategic muscles in truly amazing ways. Whether you're planning cities, building societies, or controlling lives, the power is in your hand to express yourself while shaping entire worlds and destinies. (EA)

The most critical adversary in simulation games (or any other games as a matter of fact) is time. In all cases, the players have to abide by the time principles and resource issues. Time will decide if your army is capable to withstand the invading forces when they arrive. So the faster you train your army, or the faster you build your walls or weaponry, the better your chances for victory.

This is not so much different from real life scenario. In reality, we also need to abide by time principles and resource issues. But, society today wants things super fast, faster! And the expectations of this "super fast" is evolving to that of a simulation game timeframe which could be about 1:100,000 - for example, constructing something in 1 minute (game time) when it normally takes over 70 days in real life. I am not suggesting the time frame game developers use are innacurate, but rather, the mentality and confusion that it has shaped in society's expectations today; "If in the game I could do it, why not in real life?", "I just want it faster".

In supply chain and dealing with customers; customers want products and materials faster. And so often we encounter our customers will face "lines down" situation, and expect suppliers to switch assembly to accomodate their "more urgent" orders. But with all the switching and expediting, streamlining, lean, Kaizen, 6-Sigma, most of the time you probably won't be able to do much (with the exception of keeping inventory/WIP, cutting corners/materials, introducing additives, hormone growth and other unethical and unsafe ways, and perhaps planning in SIM world). In the example of Wildlife zoo, you can actually buy more wildlife dollars and points to speed up your zoo population - and this "business" is rather common with a lot of other games nowadays, where you can buy character points instead of earning them.

When there's no opportunity for virtual bailouts, marketers need to engage with better communication and product diffussion/lifecycle planning. The market will continue to expect things faster and faster, and narrowing the gap between reality and SIM time frames. Marketers, likewise are expected to be able to react swiftly in this new and challenging environment. In order to succeed, go play more SIM games - not really, but that would be a more fun and exciting choice. In reality, marketers need to equip themselves with the marketing fundamentals and knowledge on the latest trends and tools development so that when the situation arises, they can make strategic marketing decisions instantly - and this is a competitive advantage!

Speed of execution is a good thing, but there are somethings that you cannot cut corners or get someone else to do for you - learning, exercising and nurturing relationships. Invest some time today to identify the larger rocks, build solid foundations and overcome the quadrant 2 (important issues) first. In the meantime if you need to release some stress, enjoy a game or two.

Click here for more info on Facebook Wildlife Zoo

From My Book List: The Ultimate Book of Mind Maps by Tony Buzan

Fun with MIND MAPS...

Learn MIND MAP today,

• Unlock your creativity
• Boost your memory
• Change your life

(Mind Maps can also be used to describe the contents of your blog!)

Now you can create yours too, there are 3 simple levels!

Level 1 - Take a plain piece of paper and some colored pens (I used color pencils). BE CREATIVE!!! Start by writing or drawing the theme of your Mind Map. Use pictures or key words.

Level 2 - Create thick branches radiating out from the central theme. Use different colour for each to represent main thoughts.

Level 3 - Review the key words you have written - does it spark off further ideas? Draw further branches radiating from each of your key words in order to accomodate the associations you made.

Congratulations!

(Taken from the ultimate book of Mind Maps by Tony Buzan - please read the book to find out more)

The Customer is Always Right

We hear it all the time, "the customer is always right", or "the customer is king". So what should we do when the king is wrong? or is requesting something absurd? Good thing, there is a new phrase coined with a disclaimer, "the right customer is always right". Well, it puts things in a better perspective because the "right customer" should be that 20% contributing to our 80% sales or revenue - and should deserve that special privileges. But even so, if we had to weight brand reputation / business sustainability over customer's whims and fancy, the latter (brand reputation / business sustainability of course), without any doubt needs to take priority.

So, how do we treat our customers justly? Customers like us, are emotional human beings, have needs and wants, and learn to wear their pants one side at a time. Therefore, it should not be difficult to decide our course of action when a customer complaints or request for a refill, again. The Bible according to Luke 6:31, "And just as you want men to do to you, you also do to them likewise." And this verse today have become the "Golden rule" or ethical code that states one has a right to just treatment. But will that make us go out of business? I think not. In contrary, a delighted customer, not only buys more, but tells 15 others of their positive experience.

Well, that's easy and even our competitors can do it. So what's next? Take the golden rule one step further and you have empathy (defined as the capability to share another being's emotions and feelings - Wikipedia). Empathy involves understand customer's needs and expectation. Most writings and seminars today will also include listening as part of empathy. Listening to your customers involve understand their likes, dislikes, preference and most importantly motivation. Another important part of listening is to understand customer complaints (or a better phrase, customer feedback).

If you are not in the public sector, nowadays most customers don't complaint, they simply take their business elsewhere - to your competitor's door step (or website)! SME & Entrepreneurship Magazine Oct 2009 cover story quotes, When your customers say that your products need improvement, they mean it. When they say your services should have more "happy looking customer relations", they really mean it too. Nobody wants to be treated like a nobody.

Organizations therefore should encourage customers to provide feedback and create an environment where feedback are seriously reviewed and action taken. A good example I noticed was at Jusco (Queensbay Mall, Penang) where customer complaint cards, complete with some management response, are posted on a notice board, visibly, and in front of a customer service counter. Of course some other companies choose to reward their customers for taking the time and effort to respond, but the most important thing about this activity is not only about getting feedback, but taking action. Sometimes taking action can be easy like enhancing facilities, while others that deal with service level are more difficult (irrational ones could be ignored).

So how do we align our employees with this customer focus? Firstly management needs to play the leadership role and walk the talk, while employees should undergo adequate training on values and how to handle and respond to customer feedback. A reward scheme could also boost staff performance, and it's equally critical to make sure employees have some flexibility to make decisions that delight customers. I've seen Starbucks baristars going out to buy newspapers because they didn't have enough copies.

Whatever you are not willing to do for your customers, your competitors probably are. Making sure customers are delighted is not a simple task, and requires a crystal clear focus, dedication and commitment. But the rewards really do pay off. A delighted customer, not only spreads the word of joy, but remains a loyal customer - and we all know how much more business (and referrals) a loyal customer can bring. And, it's also less expensive retaining a customer than getting new customers.

Finally, here are Lisa Ford's Gold Standard Customer Service;

• Be reliable (do what you say you're going to do; do it when you say you'll do it; and do it right the first time)
• Be responsive (act fast and consider the human side)
• Make customers feel valued (make all customers think they are most important)
• Be empathetic (understand the customer's situation and feelings)
• Be competent (have the first person contacted take ownership of the problem and be responsible for getting it solved)

The Chartered Institute of Marketing (CIM)

As the world’s largest organisation for professional marketers we play a key role in training, developing and representing our profession.

Learn - We deliver accredited, practice-based qualifications through our UK and international study centre network. And we offer industry-proven marketing and sales training courses.

Develop - Increasingly recognised by the UK government as the voice of marketing, we set standards within the industry and are the first port of call for marketing information, knowledge and insight.

Belong - Being a member means being part of something bigger: a community of marketers who exchange ideas and experience. We help our members to continuously improve their skills and knowledge.


Qualifications

- Introductory Certificate in Marketing
- Professional Certificate in Marketing
- Professional Diploma in Marketing
- Chartered Postgraduate Diploma in Marketing
- Diploma in Digital Marketing Diploma in Managing Digital Media CAM
- Diploma in Marketing Communications E-marketing Award
- Diploma in Tourism Marketing
- Certificate in Professional Sales Practice
- Advanced Certificate in Professional Sales Management Practice
- Intensive Diploma in Strategic Sales Practice

Our industry-proven and internationally recognised qualifications can help you get ahead throughout your marketing career. From introductory courses for those new to the profession to strategic-level qualifications for senior managers, all our qualifications are based on detailed research and feedback from employers.

Our qualifications are accepted by 95 per cent of UK employers as they are the only ones mapped to the new Government Occupational Standards in Marketing. And with flexible study options and over 300 accredited study centres worldwide, you can get qualified at a time and location that that suits you best.

[This is not the official website/blog of the CIM. I have featured CIM here for information on Marketing qualifications]
http://www.cim.co.uk/about/home.aspx
http://www.cim.co.uk/home.aspx?sso=http://www.themarketer.co.uk
http://www.cim.org.my/   

Special Focus: Training and Development Programs

Here are some great training and development programs:

Management series - The Bullet Proof Manager (Crestcom International LLC)

From Fortune 500 companies to outstanding, local firms, Crestcom International helps organizations to see their business more clearly worldwide. The entire 12-months program features a unique blend of video-based, live-facilitated instruction in vital skill areas, coupled with goal-setting and personal application.

Introducing one of the finest collections of management and leadership talent ever assembled, including Zig Ziglar, Lisa Ford, Jim Cathcart, Dr. Jim Hennig, Harvey Mackay, Tom Hopkins and many more internationally recognised experts.

For Intermediate to Advanced Management level

Personal Development - The Seven Habits of Highly Effective People (Franklin Covey)

Stephen R. Covey's book, The 7 Habits of Highly Effective People®, has been a top-seller for the simple reason that it ignores trends and pop psychology for proven principles of fairness, integrity, honesty, and human dignity.

This highly acclaimed Signature Program systematically features the seven habits through a maturity continuum.

Dependence to Independence

- Habit 1: Be Proactive: Principles of Personal Choice

- Habit 2: Begin with the End in Mind: Principles of Personal Vision

- Habit 3: Put First Things First: Principles of Integrity & Execution

Independence to Interdependence

- Habit 4: Think Win/Win: Principles of Mutual Benefit

- Habit 5: Seek First to Understand, Then to be Understood: Principles of Mutual Understanding

- Habit 6: Synergize: Principles of Creative Cooperation

Continual Improvement

- Habit 7: Sharpen the Saw: Principles of Balanced Self-Renewal

Sow a thought and you reap an action; sow an action and you reap a habit; sow a habit and you reap a character; sow a character and you reap a destiny. - Emerson, Ralph Waldo

All levels recommendation

Supply Chain Fundamentals - The Beer Game (Bullwhip Effect)

The Beer Game is a relatively short game that illustrates the supply chain dynamics. This game shows clearly that fluctuations in demand at the final customer are amplified the more one goes upstream. This effect has been described in the literature as the "Forrester effect" or the "Bullwhip effect". The participants will experience the distortions in the supply chain, understand the causes of this distortion, and learn how to improve the supply chain performance.

The objective of the beer game is to create awareness for supply chain issues. It is an ideal introduction to an in-depth training on supply chain management.

Renewable Energies and Marketing Process

Renewable Energies (R.E.) is not something new today. What comes to mind when we think of R.E. include solar, wind, biomass, hydro and "foclear" (fossil/nuclear) energy systems. We see environment consciousness everywhere we look, from Prius (Toyota) to Efficient Dynamics (BMW) to an entire town illuminated only by LED lamps ("Green Avenue Azabu no Oka" developed by Toyota Smile Life Inc).

The race is on for newer and more environmentally clean technologies. The EU has agreed that by 2020, 20% of Europe's energy will be from R.E. sources, while Malaysia recently, in it's 2010 budget, introduced tax incentives for companies that are involved directly in R.E. services, systems and adhere to green standards outlined in the Green Policy. Even building architectures are going green like the Bird's Nest (venue for the 2008 Olympic Games in China) and the Copenhagen Towers.

It's only a matter of time when someone comes up with a catchy logo for R.E. to join the list like the recycle logo, or when R.E. becomes so embedded in our lives, that it becomes a "brand" we seek for... "R.E. compliant", and on your dinner plate for, "ingredients processed with R.E." 

This post is not about how to market R.E. or to promote clean energy, or why we should be more environment conscious - the Oscar winning documentary, campaign (and now book) "An Inconvenient Truth", by Al Gore successfully address that since 2006.

Here I would like to review how we can align the marketing mix strategies to be "green-focused".

Green Focused Marketing Mix

Products - Either a green technonology product or using R.E. directly or indirectly in the manufacturing process. Again we see this with automobiles, building architectures and books printed with recycled paper content and soy-ink printing. This creates more pies (see my earlier blog on "Creating More Pies") and opportunities for product innovation. However, it is also a threat for companies who ignore the warning in ensuring business sustainability.

Price - Current pricing strategies for green technology tends to be perceived as higher compared to standard products. This is either because of the high R&D costs incurred (as in automotive, photovoltaics), or you would be paying a premium for preserving the earth and environement. Pricing strategy needs to be attractive and competitive to encourage a more proactive diffusion of innovation process.

Currently total ownership costs are used to compare the benefits of green technology because the start up costs are usually very high, thus limiting the potential target market. How to overcome this is for companies to package promotions (including warranties) that makes the total ownership cost benefit more tangible and realistic.

Place - In marketing distribution strategy, there are endless ways to implement green focus; for example the product packaging, stores and distribution channel compliance, and also extending the green focus on third parties in the supply chain.

Promotion - Green incentives for customer, and also reducing waste from all the poorly planned promotion activities. Again, the awareness and making the choice for green technology is already a reward.

Services - Service standards to improve efficiency and green focused. Banks are now introducing e-statements as it has been estimated that over 50,000 trees are used to generate printed statements annually (HSBC advertisement below).

Corporate Mission, Objectives and Business Sustainability

Due to the growing awareness and consciousness, corporate sustainability objectives include a goal to reduce CO2 emissions and product carbon footprints, planting more trees, climate and resource preservation (including energy and water). European Eco Management and Audit Scheme(EMAS) requires an Environmental Policy to be in existence within the organisation, fully supported by senior management, and outlining the policies of the company, not only to the staff but to the general public and other stake holders. The policy needs to clarify compliance with Environmental Regulations that may effect the organisation and stress a commitment to continuos improvement.

Business for Social Responsibility(BSR), a leader in corporate responsibility since 1992, works with its global network of more than 250 member companies to develop sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. These developments reinforce the importance of innovative, sustainable business practices that lead the transition to a low-carbon economy, promote economic development, and rebuild trust in business.
http://www.bsr.org/about/index.cfm

Improved Collaboration Reduces Waste

Companies need to focus on collaborations efforts rather than competition. Today we see competition creating marginally incremental enhanced features (higher megapixels, faster MHz etc) that drive constomers crazy trying to keep up with the names. We need more breakthroughs like the ipod and iphone that actually creates more pies. Within-the-pie competition leads to waste especially when companies try to out-perform each other's product features marginally - we end up with more inventory, sales efforts, promotion banners and advertisement inserts in your newspapers.

Of course some may argue that better products are achieved through competition. But so does synergies. And synergies augers well with consumers because they get the best of both worlds, while the collaboration benefits both competitors. A good example is NUMMI (JV between GM and Toyota since 1984) where technology and best practices are combined and challenged.

The Future of Marketing

Green technology and R.E. cannot be avoided and the demand will continue to grow. It has been estimated that the environmental technology industries in Euro will grow to as about 3.0trillion Euro by 2020. Marketing needs to play an important role in ensuring customer needs are effectively and profitably met, as part of a more sustainable business practice.

Just Advertise It!

I counted over 200 advertisements on my 30km drive to work daily. Mostly billboards, banners and even on some products in my car. Having the radio on, I listen to another 20 or more advertisements within 30 minutes before turning off the noise. Imagine within that 40 minutes early morning drive, my mind is bombarded with more advertisement count than what would be the calories from my breakfast. It's really that serious how advertisements are affecting our psychological well-being daily - and there's no way we can avoid them.

Advertisements in all it's various forms are used to inform, build brands, promote, motivate or induce people to make certain decisions in life. Most of the time however, the advertisements we encounter today are simply to promote sales. And here it looks like to promote sales at whatever cost. Now, I don't mean advertising agencies are cashing in lucrative paychecks (albeit it's a $300billion industry) - but rather (it seems), they are forced to be competitive to generate the imaginary returns (ROI). If i'm going to be spending on an advertising campaign, let's make sure the ROI is enormous - and you can achieve this either through some award winning creative advertisement or make up something that sells! Just sell!

With such motive and exposure, it's just pure dangerous if advertisements are not governed or monitored by the right regulators and watchdog groups. My intention is NOT to demean or join the "complain-and-ban-all-adverts" bandwagon, but rather to illustrate the potential dangers of advertisement when let loose (too loose). When you have so many negative perceptions on advertisements (or "alert consumers"), it means people are becoming defensive towards advertisements, and advertising agencies are forced to get even more creative, and it a vicious cycle.

Ad agencies use more scare tactic (you'll miss out on the best deals today...that seems to lasts everyday), irrelevant contexts (cooking gas that makes your food taste better), sensual/sexual content (almost every other ads), and other means to manipulate and confuse consumers. Also, the misuse of standard, especially on quality, for example;

• I once purchase a pack of so-called "high quality envelopes" that would work better as a tracing paper. It also had innacurate sizes all across (perhaps hand folder) and you could never send a cheque with it - disposed as recycled paper!
• "High quality automobile" that earned the saying, "if there's no problem with the car, it's probably an imitation product".

(In countries where return policy seems to protect sellers more than buyers, false or misleading advertisements can cause serious harm or losses for consumers)

So what all these about? Advertising is any impersonal form of communication about the ideas, goods, or services that is paid for by an identified sponsor. Advertisements has evolved and became a new mode of communication. The fact that it can be so important and effective in marketing communication strategy, and practically lives and grows up with us, requires the use of professionalism and ethics in creating an advertisment/advertising campaign. Marketing is about defining and understanding customer's needs effectively - this should be the credo for any advertising campaigns/agencies. Creativity wins awards, but unique selling proposition sells!

Suggested reading:

• Differentiate of Die, Survival in Our Era of Killer Competition by Jack Trout with Steve Rivkin - look at Unique selling proposition(USP)!!!
• In Search of the Obvious by Jack Trout
• The Fall of Advertising & the Rise of PR by Al Ries and Laura Ries
• The Portable MBA in Marketing by Alexander Hiam and Charles D. Schewe

Creating More Pies

• Our competitor has 40% of the total market share!
• There are so many competitors going after the same market share!
• How do we increase our market share of the business?
• How much market share can we target to gain?
• Total market share is...

Instead of looking at market share pie charts with dread and the usual concerns, how about creating more pies?

The pie chart has been used in countless business presentations for a very long time. The earliest known pie chart is generally credited to William Playfair's Statistical Breviary of 1801, and has been criticised as the most ubiquitous statistical chart in the business world and the mass media (Wikipedia). But most people would argue it's effectiveness in presenting market share or comparison of various segments represented by the pie chart "slice".

Perhaps a more plausable disadvantage plaguing the pie chart is how it is causing modern executives to "think within the pie". The pie chart in all it's simplicity has created a restricted focus on how to operate and improve within the circle of the pie itself. And maybe the analogy of "thinking outside the box" should be changed to "thinking outside the pie".

Thinking outside the Pie

So, how do we think outside the pie? Basically "thinking within the pie" means focusing on the segments (or slices) within the pie - and usually the desire is to expand our slice (or market share, dominance, percentage of sales/revenue/profit. But this enless drive to "expand our slice" will reduce another slice within the pie, and when the competition awakes to their slice being eaten away, will introduce drastic counter-marketing plans to win back a portion of our slice or even someone else's slice of the pie...and this process repeats automatically everyday in a competitive environment. Eventually some slice gets eaten up completely through organic or hostile takeovers. While new entry to the pie chart just consumes someone else's pie share again.

Several strategic alternatives (to create more pies) I am suggesting here includes;
1) A strong strategic partnership to grow the overall pie chart. Does this violate antitrust or other (competitive) trade laws? I'm not sure exactly where to draw the lines, but what I am saying is to promote a healthy collaboration to share knowlegde, technology and technical expertise - which we have seen so many examples in business partnerships. So, how does this help the company to improve the market share pie chart?

Before we go any further, it is imperative for us to overcome the old mindset and limitations of the pie chart and represent business growth within the pie chart itself.  We need to think out of the pie and find ways to expand it as a whole. A delicious 5.0kgs cheese cake can be sliced into 10 slices of 0.5kg each. But expanding the cake to 10.0kgs allows each person a fulfilling slice of 1.0kg.

A caution to over-ambitious companies whose focus is only on ensuring a larger slice of the pie; the slice, or pie chart you are operating in may be made irrelevant by aggressive companies that choose to expand the total market share instead.

2) Creating more pies. This is simply line extension or product (use) expansion strategy, or the blue ocean strategy - how to create uncontested market space and make competition irrelevant. Again, thinking out of the pie creates new opportunities for existing products and endless market opportunities. For example, lobbying for automobiles to be compulsory-insurred allows insurance companies to expand their property insurance market segment. Business practices also create new pies, for example ISO and other quality certifications creates new pies for consultancy businesses.

Honda grows soybeans in Ohio so that it can fill up cargo containers being shipped back to Japan is an example of creating more pies. The "pie" here does not need to be limited to the same market - that is operating and thinking within the pie.

3) Overcoming limitations. So, if I had only 1kg of flour, how can I create 2 pies with limited ingredients? Well, again, the focus here is not to think of limitations. While limitations are real issues, we can still overcome them simply by focusing on a wider picture. If you wanted to, or had to create 2 or more pies with the 1kg of flour, naturally, you would find some ways by adding other ingredients to create more pies. This means the present limitations only applies when you don't change your scope, and insisted on only 1 chicken pie, when you could have both chicken and beef pies.

This idea works powerfully with positive thinking. Continuous positive thinking will put you in a driving gear that's attuned to absorbing new and creative ideas from all over. I'm not going to cover the science of positive thinking here, but to share a good quote I've heard, "positive thinking does not always guarantee positive results, but negative thinking always gets you negative results". The more your immense yourself in a thirst and hunger for positive and creative ideas, it will come to you, because naturally you are actively seeking out to overcome your brains blind spots and seeking out those ideas.

So, what pies can you create today?

I believe this concept can be applies in almost every situation. Even in expanding 24 hours a day! Delegation or outsourcing of certain activities creates more time, or more pies. So the next time you look at a pie chart, don't fret or fear it, but remember this, "how do we think out of the pie?" and how to "create more pies?".

Marketing Metrics Series

Far too many marketing positions today combines both sales and marketing function. Look at any job advertisement today and you will find, "Director of Sales and Marketing", "Sales and Marketing Manager/Executive". And you will also find job descriptions that include, "create and implement sales and marketing strategies for set goals and targets", "networking and negotiation skill", and "proven track record for sales experience".

So, how much is really marketing? Well, depending on how you want to see it. Sales is in fact part of marketing. Or somehow seems to have taken the dominant and only role in "sales and marketing" as it is easier to quantify with sales targets and sales-related scorecards. This creates a misleading definition of the marketing function because the marketing team will only be responsible for achieving a sales target and ignores the other critical marketing functions like, strategy, business development, advertising, PR or promotion, product development and others. In "create and implement sales and marketing strategy", the marketing strategy takes backstage and is used to compliment and support sales most of the time.

The Chartered Institute of Marketing (CIM) define marketing as 'The management process responsible for identifying, anticipating and satisfying customer requirements profitably'.

I believe in order to qualify a marketing position, certain metrics or marketing functions (besides selling) should be fulfilled. The marketing title can be exclusively used (and restricted) only when the position involves a level of marketing responsibilities. The CIM has introduced an effective professional qualification under the Chartered Marketer program to equip marketer with the necessary skill, knowledge and marketing acument. This should be enhanced by working with the necessary authorities to create a guideline and defining the global marketing jobcode description.

For example, a marketing position must fulfill a balance of;
- Customer engagement and Marketing planning - Segmentation, Targeting and Positioning, Forecasting, Customer satisfaction
- Products - Prices, Promotion and Retail, Product development

What I would like to emphasize here is not about creating another effective metric or measurement, but to enforce the relevant marketing metrics in order to qualify a marketing position. The future of marketing depends on this. As the distinction between "sales" and "marketing" becomes less and less, the future role of marketing could eventually be consumed by sales measurements. The once "tip of the iceberg" could become the iceberg because - because bullshit talks, money walks, and the money here is in profits and sales targets.

So how do we make marketing the money?

For someone to be in Marketing, you need to be accountable for the business performance, promotion program, product development and positioning, and others. You don't need a marketing degree or a Chartered Marketer professional qualification to be selling cars, credit cards or some product where customer feedback is just part of an annual survey - and where you have no influence whatsoever in the marketing mix and business strategy.

More on Marketing Metrics...

Measuring Marketing: 103 Key Metrics Every Marketer Needs (John Davis)
Marketing is now being asked to be measurably accountable for not only the top-line of their income statement, but also for the bottom-line as well. They're being asked to account for the total marketing program in addition to its component product programs, its advertising, sales promotion, sales and distribution, and pricing programs. This is the first book that addresses the clamor and demand from marketing’s many stakeholders to be accountable for its strategies and activities.

Magic Numbers for Consumer Marketing specifically describes key marketing measures commonly used in business. The book is designed to help marketers and non-marketers alike recognize the best measures to use when assessing the performance of marketing programs. Each marketing measure is defined, along with relevant examples and/or illustrations. Furthermore, the risks associated with relying too much on these formulas to the exclusion of other business inputs is discussed, providing readers with helpful guidelines of when these measures are most appropriate. From market share to customer lifetime value, there are numerous formulas that will help business people measure both the potential opportunity and actual results of various marketing activities. In addition, Magic Numbers for Consumer Marketing also describes key non-formulaic marketing frameworks, including brand value and brand culture. The frameworks and formulas are presented together because each depends on the other. Understanding the frameworks enables managers to more clearly see the link between organization design and outcomes, while the formulas help measure specific marketing program performance.

From My Book List: The FIVE DYSFUNCTIONS of a TEAM

Great book on management and team development. Redefines the business term "Team work" in a more effective way.

"Not finance. Not strategy. Not technology. It is teamwork that remains the ultimate competitive advantage, both because it is so powerful and so rare."

The Five Dysfunctions of a Team: A Leadership Fable (J-B Lencioni Series)

Patrick Lencioni (Author)
Publisher: Jossey-Bass; 1 edition (April 11, 2002)
ISBN-10: 0787960756

Features an amazing story (fable) on how to overcome the 5 critical dysfunctions of teamwork and a system to engage team effectiveness.
1. Absence of trust
2. Fear of conflict
3. Lack of commitment
4. Avoidance of accountability
5. Inattention to results

Now, what's this got to do with Marketing? Everything! Remember the famous quote by David Packard, " Marketing is too important to be left to the marketing department"? If we need everyone aligned and synergized towards the ultimate customer satisfaction goal, we need to take our current definition and expectation of "teamwork" to the next level.

Another Leadership Development Business???

Nowadays people ty to get over-creative in re-branding their business activities. Looks like everyone is pushing the "augmented-product" envelope too far that it's just sounds too ridiculous.

I saw this email recently (not meant to offend, and I intentionally took out the company name) and this blog is to discuss why we should be focusing more on Unique Selling Propositions (USP);

[Email extract]
"What Business Are You In?"

Network Marketing is a tremendously diverse industry with products ranging from nutrition to skincare to homecare that we often fool ourselves focusing on the products that we market and even touting ourselves and our downlines as experts concerning our business. We are making a fatal mistake by focusing purely on this part of our business and miss out on the true essence of the business.

Now I have either made you mad or scared you, please know that this is the reason that I say this. I don't want you to fail at what you are doing! I am not saying the products and marketing plan are not important, there are important. But you have to go beyond this to build a multi-million dollar organization, unless you are happy with just a few hundred ringgits a month.

Most people in this industry don't have a clue about what business that they are in! They think that they are in the business of marketing nutritional supplements or they think they are representatives of telecommunications or legal services or widgets or whatever!

You are not! Yes your business markets products, but you are not in the business of marketing products! Let's use a real world example. Ray Kroc, McDonalds king and founder (after the purchase from the McDonalds brothers) was in the business of hamburgers right? He wanted to make the greatest, fanciest ,most wonderful hamburger in the world right? He wanted all of his employees trained on selling the hamburgers to the people who came in the door, they knew everything about hamburgers and fries and shakes and cokes and . . . ? When was the last time you went into McDonalds and asked a counter person or manager what was in the hamburger?

Are you seeing my point? What if every time you went to McDonalds that the people working for McDonalds went through an educational course on the hamburger or service with every customer? Nobody would ever get a hamburger to their mouth because we would all die of starvation before the fact!

I know that this is over simplification, but it makes a great point. Ray Kroc was not in the hamburger business, he was not in the educational business and he was not in the fast food business. He was in the leadership business!!!

He was in the LEADERSHIP BUSINESS!

Who do you think bought the McDonald brothers out, Ray Kroc. Why? Because the McDonalds brothers did not have the leadership to do with this business what Kroc knew he could do! Kroc then went out and sold franchise, turn key businesses to whom? Counter persons? Managers? People on the street?

No, He sold these businesses to leaders!

We have a pet phrase that goes like this, "Leadership moves products, Leadership recruits distributors and Leadership trains these to do the same". Average people do nothing and make nothing in network marketing, they are the counter workers at McDonalds coming and going with blowing of the wind. I don't want you to send me email about dogging counter workers at McDonalds. Some of those people become mangers and even owners. But realize this, they worked hard, grew, developed and became what? LEADERS.

No matter what you physical product is in your current opportunity, your real product is PEOPLE. And more specifically the development of people into leadership.

I want to be really frank with you right now. Most people in the Network Marketing industry believes that if they have superior products and a superior marketing plan that they will succeed. WRONG

Do you know how many companies have great products? A lot!!! That's right, a lot of networking companies have innovative products that even revolutionize mainstream marketing opportunities!

Then why don't they all succeed?

What about compensation plans? Do most have decent compensation plans? Absolutely! Most companies are more than fair on how they pay out to their distributors!!! They pay more than any other form of marketing!!!

Then why don't they all succeed?

Since 1993, about 4700 network marketing companies have been born in USA alone, 4700!!! Out of those 4700 how many do you think went under? No suspense, 4300. Why? Crummy products? Lousy comp plans? NO, the lack of leadership. And the lack of leadership development. All companies are leadership driven. All organizations are leadership driven and all success stories are leadership stories.

So what business are you in? LEADERSHIP DEVELOPMENT, LEADERSHIP DEVELOPMENT, LEADERSHIP DEVELOPMENT. Leadership sells products, Leadership recruits distributors, Leadership trains these to do the same. Network marketing is developing a network of leadership that builds a thriving organization of distributors that take products to an end user. Of course you need good products and a fair part-time friendly compensation plan too, and (company) is one of the best from the industry in these areas.
[end of extract]

Now, what I think...

Leadership business alone is not going to make you the millions. Products will! People buy products (and services) – not the leadership qualities (unless you are selling leadership formula, like what Maxwell and others do). How to make millions is when you have money flowing, and to have money flowing, you need some form of exchange…products (or services). Simply re-packaging what you do as “leadership business” is just trying to use an extraterrestrial telescope to correct a myopic view. You try to see far, far away, but it’s all going to be fuzzy and confusing. The famous example of not being in the train business, but transportation business will be exaggerated as, “we are not in the train business, but leadership building because we transport people around to be leaders???”.

Let’s use a real world example, “A” joins a “leadership development” business. He recruits distributors, train these to do the same, and develop a network of leadership that builds on a thriving organization of distributors. But the key here is…he need products (or services). At the end, it’s still products that matters. People buy McDonalds for the burgers, not the leadership values. People put McDonalds in their mouths for the food (and whatever nutrition), not the leadership qualities of Ray Kroc. It could have been Harry, Larry and Moe’s burgers. But if they packaged it as tasty as McDonalds, people may still eat these burgers.

Leadership is extremely important, but it should not be confused for the business you are operating. Don’t get caught up in creative marketing and forget the unique selling proposition! If your product is great, people will buy it (like McDonalds), and that’s what keeps the business growing. And you should be proud of the product/brand you are representing!

Leadership qualities (is a must) and helps with how to improve your distributor performance, positioning and marketing the products effectively, improve people’s perception of network marketing, and how to improve margins by having a better distribution plan.

Isn't it just great how people use language to sugar-coat or exaggerate things;
"down-sizing" > "right-sizing" > "smart-sizing", just means layoffs.
"multi-level marketing" > "network marketing" > "leadership development" will still be "direct selling".

It's time to focus on your Unique Selling Propositions!

I may join one of these companies in the future because they offer great financial and learning opportunity. In my approach, I would emphasize on the product and brand I trust, and compliment that with Leadership Development as a business nurturing attribute, rather than the other way around.

Creativity and Marketing

It seems nowadays people associate marketing (and marketing program) with "creative-ness" to gauge the effectiveness or success. What role does creativity play in marketing? How effective is creative-marketing? or How creative should marketing be?

Defining the terms:

Creative: (According to Wikipedia) Creativity is a mental and social process involving the generation of new ideas or concepts, or new associations of the creative mind between existing ideas or concepts.

Marketing: (According to American Marketing Association) Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Measuring Creative Marketing:

Marketing and Creative(ity) may share no common element in their definitions. But as a matter of fact, marketing (programs) need creativity to arouse the attention level. Recall the AIDA model? (Attention, Interest, Desire, Action). People are more susceptible to novel and different, creative marketing programs. When people are impressed with a creative proposition, their defenses drop during the experience. But this could also backfire seriously if your propositions are perceived negatively or biaised - so, it's advisable to avoid being creative with sensitive topics.

Marketing, while focusing on the basics which is, effectively anticipating and solving the markets needs, sometimes need to engage a more creative avenue to create value or finding uncommon solutions to everyday problems. Using the AIDA model, creativity could be phased in the different steps of the process. This process needs to be coupled with a clear marketing unique selling proposition (USP) to define the purpose of the marketing program. Far too often we ignore the purpose of the marketing program and focus on the fun and creative part of it only.

So, as we established the need to have creativity in marketing, how do we learn this "creativity"? Good news! According to Jeffrey Gitomer (in his best selling book, The Sales Bible: The Ultimate Sales Resource), creativity can be learned!

Harvey Mackay's creativity killers includes:

1. It's not in the budget
2. The boss will never go for it
3. Form a committee
4. Think about it
5. Leave well enough alone
6. That idea could get you fired
7. Its not my job
8. Competition does it
9. Competition does not do it
10. Let the competition try it first (and see what happends)
11. Sounds like a good idea, talk to legal

Here are some ideas on unleashing creativeness:

History is not creative - or can it be? By history, I mean modify somethings that's been done before. Do more than modify - improve it for the new product, new market, new trend, new expectations. But if this is someone else's idea, how can it be creative? Like it or not, most creative ideas are/were the results of a former influence.

Thinking "out of the box". Mental barriers are the worst creativity restriction. When you think out of the box, anything goes, everything has an opportunity. Push the limits on your ideas, use 6 "why's" instead of the standard 5-why problem solving steps. What have people not thought of? or would not think of? When you work in this mode and constantly challenge your mental creativity, your subconcious mind will do the rest of the work.

Courage to be different or take risks. Far too many creative thoughts vanish every minute without action. Those who seive the opportunity and take action always have the 1 mile advantage over the rest. And don't forget to have fun.

Set the mood or pace. Some people get's creative shocks while driving, others during the shower. Some people feel creative in the morning, while others may get those ideas over a cup of coffee in retreat. What's yours?

According to Kenichi Ohmae in the classic "The Mind of the Strategies", Habits of mind and modes of thinking can be acquired through practice to help you free the creative power of your subconscious and improve your odds of coming up with winning strategic concepts.

Final note about creativity and marketing, read Jack Trout's "Differentiate or Die: Survival in Our Era of Killer Competition" - Chapter 6. Creativity is Not a Differentiating Idea.

The Creativity Trap
Puffery has been replaced with vagueness. A large amount of today's advertisement has gotten so creative or entertaining that it's sometimes hard to tell what companies are even advertising.
[end of extract]

Creativity may get you that 15 seconds of attention. But focusing on USP will get your customers to purchase your products. Never compromise creative promotion with fundamentals that sells (unless you're only after media awards)! Creativity needs to walk hand-in-hand with the USP to achieve an explosive marketing program result. If isolated, creativity draws the attention to itself and that's it.

The Future of Marketing

I recently read a white paper from CIM (Chartered Institute of Marketing, UK) titled; The Future of Marketing – Marketing's Decline: a Wild Exaggeration? (research completed by Aston Business School).

Extract from CIM introduction:
The Paper argues that marketing can be hampered by short-term thinking by the business and a lack of accountability, creativity and courage on the part of marketers themselves. The Paper shows that sometimes marketers are their own worst enemy, failing to account for their often considerable budgets, falling back on dull and uninspiring campaigns, and floundering when questioned on the financial impact of their strategies.
[end of extract]

It's interesting to observe how the role of marketing is also scrutinized during challenging times, and to think (in the future) what key roles marketing can play in enhancing business competitive strategy and transforming organization growth successfully.

I believe a lot of people (and company organization structures) still has the mindset that marketing equals sales! Despite the fact that every professional marketing course starts with the fundamental topic on marketing concept (you may recall the famous “sales is only the tip of the iceberg…”). While marketing has been around in the local academic architecture for a while, why is it that people still maintain that old mindset, or how do we explain the current less-exciting growth rate in student registrations for marketing these days?

The white paper points out some severe marketing weaknesses based on UK survey (with my own categories below):

1) Credibility: Marketing directors as unaccountable, untouchable, slippery and expensive.

2) Competence: Only 20% of senior marketers believe marketing is truly effective, 12% think the role of marketing is clearly articulated in their organization.

3) Effectiveness: Chief executives cannot find evidence of the added value of marketing.

These were the survey results from matured, highly developed companies that truly adopted the marketing function (in the deepest and fullest sense), meaning they’ve been there; done it; preach it and now go through a snag. How about companies where marketing is still in infancy stage? I believe some major weaknesses, or hurdles for marketing function in Malaysia can be summarized as:

1) Corporate shortsightedness: Just look at the local job listings and you’ll find marketing roles basically doing sales or customer service! No wonder our graduate students stay away from marketing courses if they want to avoid a career in selling (a career in sales/selling is not actually bad as most may perceive it, and I would like to cover professional selling in another discussion). Marketing jobs today covers everything except marketing strategy, product planning and other real strategic roles that marketer's should be doing.

2) Where is marketing Business Process Outsourcing (BPO)?: Almost every process is outsourced; finance, manufacturing, business operations, sales! But marketing functions are usually controlled by the corporate marketing team in headquarters. Now, coupled with the earlier point, what are the professional marketing opportunities available in Malaysia? So, how can we change this?

3) Lack of publicity or standard: The image of professional marketing needs to be improved. Marketing executives needs to be doing marketing. I saw an interesting advertisement from CFP with a clown with a scalpel attempting a surgery. The tagline: Certified or Certifiable? The CIM Chartered Marketer is a wonderful way to distinctively separate professional marketers. Wouldn’t it be great if we also had standard criteria in the job scope or KPI (Key Performance Indices) to meet before someone can hold the title Marketing Director?

The white paper also serves as a good alarm clock/history lesson/learning curve for companies pursuing to improve their marketing function. While for those still undecided (on the fence), the benefits definitely outweigh the weaknesses if you implement your marketing function with the following focus:

1) Marketer are particularly (still) respected for their ability to systematically measure customer satisfaction (65%)

2) Marketers (still) monitor the ability to serve customers (52%)

3) Marketers (still) promote customer needs within the firm (65%)

With this blog, I hope to change the perception of marketing in Malaysia, and to promote a higher degree of buzz and excitement for professional marketing. I am dedicating this blog entirely to discuss issues on MARKETING, including books, theories, and trends and about anything else (on Marketing).

On our local newsstands, I can only find 1 magazine on marketing (Marketingmagazine http://www.marketingmagazine.com.my/). I’m interested to know their readership rate (as a means to judge the interest in marketing among Malaysian readers). Clearly, Malaysian marketers need to collaborate, and step up their creativity, courage and efforts in driving this profession to the next level. The global market space is rapidly growing and evolving, and we need high level, professional marketing competency to maintain competitive advantage.

About the White Paper: What is the future of marketing?
Free to members, The Chartered Institute of Marketing’s White Paper, The Future of Marketing, will be discussed on 1 September 2009 in Birmingham. The paper is the result of research completed for The Institute by Aston Business School
To request for a copy from CIM http://www.cim.co.uk/resources/emergingthemes/futureofmarketing.aspx

About me (and why I keep mentioning CIM): I hold a CIM PostGraduate Diploma. I believe, and recognize CIM’s efforts in representing the profession, being the voice of marketing, setting (new) standards within the industry and being the first port of call for marketing information, knowledge and insight.

To participate in enhancing the role of marketing, share your thoughts, ideas, suggestions in this blog. Thanks!