MBA Marketing

The following article is taken from the current (February) edition of 'The Marketer', a magazine produced on behalf of the Chartered Institute of Marketing. It highlights the ageism which is endemic within the marketing and advertising industries.

Geriatric gaming
Gaming grandparents could cut back on car insurance thanks to a scheme from Allstate insurance. More than 100,000 Pennsylvania pensioners are using brain-building video games to test the effects of cognitive training on driving safety. The games use InSight video software from Posit Science designed to reverse dodderiness and improve the visual skills needed for safe driving. Positive results will mean discounts from Allstate for older drivers who game to stay sharp.

It is worth noting that the source for this piece (www.springwise.com) did not use the derogatory terms used by 'The Marketer', such as 'geriatric' or 'dodderiness'. Nor were stereotypes such as 'grandparents' or 'pensioners' used. In fact, the piece as originally written was about cognitive training for customers aged 50 to 75, which it was hoped would enable the company to identify the safest and most profitable customers. It is reasonable to assume, therefore, that it was the editorial judgement of 'The Marketer' to reduce the piece to a sniggering, puerile laugh at the expense of people aged over 50.

'The Marketer', let's remember, is a publication representing the 'leading international professional marketing body', as the CIM describes itself. I very much doubt that the CIM or its members would wish to be associated with such a flippant and puerile article. It is a lapse of judgement of Carol Thatcher-esque proportions - except that it was actually published, not said in private.

The main points of the argument relating to the ageism of the marketing and advertising industry run along these lines:

- Apart from the moral dimension of treating people in the same way, regardless of age, sex, class or race, people aged over 50 are an important economic group. They account for an increasing percentage of the UK population (40%-plus) and control the majority of expenditure and savings in the UK economy. Ageism is therefore not in the best interests of the UK economy.

- However, most advertising and marketing communications are not directed at this group, even when it would make economic sense to do so. For example, 70% of new cars are purchased by the over-50s, yet advertising persists in featuring young people and families.

- When advertising and marketing communications are targeted at the over-fifties group, they usually resort to patronising and often insulting stereotypes.

- Not surprisingly, 86% of consumers aged over 50 feel ignored by marketers.

- The reasons for all of this are a whole set of incorrect assumptions and mis-perceptions by marketers and advertising agency people, most of whom are under 50 themselves. For example, the majority of agency staff are aged under thirty, while only one in ten marketing directors is aged over 50. In an industry with institutional ageism, age is something as irrelevant and amusing as, say, black people seem to be to Carol Thatcher.

It is disappointing but not perhaps surprising that the youth cult of the the advertising and marketing industries has spread to the journalists writing about it. I have written to the editor of 'The Marketer' and to the Head of communications of the CIM and will publish their replies in due course.

Blog entry #19 from www.mba-marketing.co.uk

If business and the economy are broke, is marketing the solution?

As we face the worst economic situation since the end of WW2, what has marketing got to offer?

Was marketing no more than the froth on the surface of out-of-control capitalism, tolerated while the economy grew, and irrelevant now?

To start with, let’s look at the current edition of ‘The Marketer’, the official magazine of the Chartered Institute of Marketing, the self-styled ‘leading international body for marketing and business development’. Can we expect incisive thought leadership, with marketing as the saviour of business and the global economy?

Errr, no. The tone is set in the leader article, where the Editor suggests that we should offer something called ‘microfreebies’ in order to delight our customers, because ‘in the downturn businesses are going to need all the friends they can find.’ So far, so very unenlightening.

Later in the same publication, David Haigh reminds us that banks have led the way to the devaluation of the whole brand concept, with their ‘cynical disregard for customers and staff’. Taking his argument further, one could argue that 'marketing' as practised by most companies has been little more than a diversionary tactic for business practices which have been at best incompetent and at worst immoral.

So what exactly have marketers been doing while capitalism failed? The usual irrelevant fluff, apparently, as highlighted by one of the largest features in the magazine. Step forward Royal Sun Alliance, who decided to ‘re-brand’ themselves via an extensive process leading to a shortened brand name (‘RSA’) and a change of ‘logo livery’ (that's colour to you and me) to the ‘more modern’ magenta and purple. In the finest traditions of old-school marketing, numerous presentations were made to employees, telling them what management expected - ‘how we therefore wanted our workers to behave’, as marketing and customer director Claire Salmon elegantly put it, with all the finesse of a Victorian mill-owner. Needless to say, the success of all this can only be assessed in terms of our old friend ‘anecdotal evidence’.

So does anyone in the magazine – which is after all the organ of the ‘leading international body for marketing’ - have any solutions?

Well, the usual trivial, inaccurate and unintelligent observations continue to be peddled. For example, someone called Nik Margolis of an agency you haven’t heard of tells us that ‘there’s a three-second rule with DM – you’ve got that long to make them open it’. And you thought direct marketing helped build relationships, create dialogue, build engagement? No, it’s about making ‘them’ open mailing packs.

Fortunately, Seth Godin, the ‘new marketing’ guru is on hand, in an interview on the back pages. In his current book, ‘Meatball Sundae’, he states that the question for any thriving 21st century business must be: 'How can we alter our business to become an organization that thrives on new marketing?' And in his new book, ‘Tribes’, he argues that ‘the new marketing is about leadership’ – creating a following for what an organisation does.

Thanks, Seth. Thanks Chartered Institute of Marketing. You're not even asking the right questions yet, let alone giving us answers.

Blog entry #18 from www.mba-marketing.co.uk

Welcome to 2009.

It’s not going to be a great year, although it threatens to be an interesting one.

One of my resolutions is for my writing to be heavily influenced by Charlie Brooker. Here’s what the great man had to say about 2009 in his recent Guardian column.

Dim your lights. Here's the highlights reel. The worst recession in 60 years. Broken windows and artless graffiti. Howling winds blowing empty cans past boarded-up shopfronts. Feral children eating sloppy handfuls of decomposed-pigeon-and-baked-bean mulch scraped from the bottom of dustbins in a desperate bid to survive. The pound worth less than the acorn. The City worth less than the pound. Your house worth so little it'll collapse out of shame, crushing you in your bed. Not that you'll die peacefully in your sleep - no, you'll be wide awake with fear, worrying about the situation in the Middle East at the precise moment a chunk of ceiling plaster the size of a flagstone tumbles from on high to flatten your skull like a biscuit under a shoe, sending your brain twizzling out of your earholes like pink-grey toothpaste squeezed from a tube. All those language skills and precious memories splattered over your pillows. It'll ruin the bedclothes. And instead of buying expensive new ones, your grieving, impoverished relatives will have to handwash those bedclothes in cold water for six hours to shift the most upsetting stains before passing them down to your orphaned offspring, who are fated to sleep on them in a disused underground station for the rest of their lives, shivering in the dark as they hear bombs dipped in bird flu dropping on the shattered remains of the desiccated city above.

You’ll find more of Charlie Brooker’s work at www.guardian.co.uk/profile/charliebrooker . Watch his TV programmes and buy his books too. And I can do no better than repeat the ending to his article.

All things considered, this may be a bleak year but at least it'll be more interesting than, say, 2006, during which nothing happened. So grit your teeth and meet 2009 head-on, because it's not going anywhere until 2010 at the very earliest. In summary: happy new year.

Welcome to 2009.

Blog entry #17 from www.mba-marketing.co.uk

There can be no doubt that web marketing has played a vital role in today’s election victory for President-Elect Obama. For the first time, proponents of ‘new’, digital’ or ‘web’ marketing have been vindicated on a massive scale. Consider these facts:

 Obama raised $600 million in campaign funds, 50% more than MCain – mainly because of his online network.
 Obama was able to engage and communicate with supporters in a variety of ways, including his own YouTube channel, and social networking sites like FaceBook, where he had more than 2.3 million ‘friends’.
 Blogs have made more information, news and opinions available, more quickly, to more people – and have become trusted sources for media and voters alike.
 YouTube has created a new way of accessing speeches and media interviews, very quickly – available in small, easily digestible, chunks.
 All this has meant less power for conventional media, and more for voters. And as soon as something happens, it’s available online.

And as soon as it became clear that Obama had won, 3 million supporters received a text message thanking them for their support.

So, has ‘new’ marketing replaced ‘old’ marketing? I have to conclude that it has complemented it, but not replaced it. First, where was nearly all of the money that was raised spent? That’s right, mainly on TV advertising! And why have the UK media given so much coverage to the US election over the past four weeks, almost to the exclusion of some massively important UK and European political and economic events? Because the traditionally highly professional all-powerful American political PR machines puts ‘news’ on a plate for any accredited journalist.

And finally, what lessons can businesses learn from all this? Not a lot, in my opinion, What was really new about the Obama campaign was not so much the tehniques used, but the fact that they worked. And they worked because of the high level of involvement of voters with the election and the candidate. It mattered, hugely – to an extent that very few businesses or brands can begin to match.

Now then, what’s Gordon Brown put on FaceBook today….

Blog entry #16 from www.mba-marketing.co.uk

The England cricket team have recently returned from the privately-oragnised and funded Sandford 20/20 cricket competition in Antigua. Despite having been on a 'win bonus' of $1,000,000 per player for winning a single three-hour cricket match, and despite facing a team with only four or five top internationals, they lost. Not only did they lose, they lost convincingly, scoring just 99 runs - the lowest total yet achieved in international 20/20 cricket, which the opposition knocked off win style, with ten wickets and many overs to spare. Furthermore, at no time did the 'England' team really give the impression of being that interested, let alone motivated. By contrast, the game clearly mattered enormously to the winning team (made up of West Indians), who not only gave their all, but performed to a high standard in all aspects of the game.

This competition provided a unique and valuable experiment in motivation. I'm still thinking about the lessons learned, but the immediate and obvious conclusion is that economic man - whose performance is directly related to monetary remuneration - has his limits. Once our basic needs are taken care of, our motivation depends upon non-monetary factors - self-actualisation, for example. Watch those same England players take on Australia for the Ashes next year - they will need no motivation of any sort, let alone financial incentives.

West Indian cricketers are notoriously badly-paid - $1,000,000 would really make a difference. By contrast, most England cricketers - and particularly Kevin Petersen and Andrew Flintoff - are already financially secure. Playing just for the money against a bogus team called the Sandford Superstars was never going to motivate them. And the whole event made for very poor viewing on television as well.

Whether you are employing people, selling goods or providing a service, the most successful value propositions are rarely about price alone. The value that matters is often intangible and rooted in emotion. Most people want to be associated with businesses, organisations and brands which stand for something and which deliver emotional rewards. People are usually prepared to pay a premium for that reward. And it's where marketing comes in....

Blog entry #15 from www.mba-marketing.co.uk

When I set up MBA, it may not surprise you to know that I gave some thought as to which potential clients to target, what they might need, and what they might be prepared to pay me for.

One area I considered was service businesses and organisations, which have been poorly served by marketing for many years. Marketing for services businesses and organisations is fundamentally different to the traditional marketing thinking still employed by many agencies, consultants and practitioners. Yet even in today's service economy, service businesses are still expected to learn from marketing thinking rooted in the consumer goods boom of post-war America.

1950's America was an era of increasing consumer prosperity and expanding industrial output. The balance of power had shifted. Selling was not enough. By 1960, the 'marketing concept' was accepted by most consumer goods companies. This was often in the form of a 'marketing mix', whereby a combination of product, price, place and promotion could be manipulated to direct a mass consumer market to mass produced consumer goods via mass market a vertising.

This approach made economic sense at the time. However, marketing practice was slow to adapt to business and consumer change, and the 'mud at the wall' approach inherent in mass marketing became increasingly ineffective.
All of this meant that 'marketing' and 'marketers' were treated with increasing scepticism in the nineties: for example, a McKinsey report described marketing as a 'millstone around the neck' of a business, while some Cranfield research saw marketing directors described as 'unaccountable, untouchable, slippery and expensive' by their colleagues!

The mass marketing approach was never suited to service businesses. This is because service businesses are fundamentally different to manufacturing businesses. What they sell is not a standardised physical object, but something which is intangible, inconsistent, and created on the spot by frontline staff and customers. That’s if they ‘sell’ anything at all - think of the public and voluntary sectors.

For service businesses, ‘marketing’ is not about arms-length communications or superficial branding techniques. Neither is it the sole concern of a specialist marketing department. Instead, marketing is about an organisation-wide commitment to service quality, customer experiences and customer relationships. And because marketing is integral to the way the entire business thinks and acts, it may not even be called ‘marketing’ at all! Which is good news for the business, but not for career marketers!

So what are the central concerns of marketing for service businesses and organisations?
- Organisation-wide market and customer orientation. Marketing – in the form of a customer and market orientation – must be central to business strategy, operation, culture and process.
- Internal marketing; Co-ordination, collaboration and communication with staff, partners and intermediaries.
- Customer experience management and service quality. All points of customer contact and service must be identified, evaluated and optimised, from the customer point of view.
- Customer relationship management. This looks at the customer experience from a business perspective, analysing ‘relationship economics’ and customer data to plan marketing activity. It is not simply about IT expenditure, although this may well help!

Of course, the traditional marketing approach has also become increasingly inappropriate and outmoded for most manufacturing businesses. In a world where major product brands may not even own a single factory, service and relationships are increasingly important for most ‘manufacturing’ businesses. In other words, the difference between service and manufacturing businesses is, at best, one of degree. What's more, the principles behind the services marketing approach have become widely accepted and enshrined within such 'new' concepts as relationship marketing, CRM, new marketing, one-to-one marketing...the list goes on.

So, in the end I decided not to target! And on this basis, MBA is now open for business. Come one, come all!

Blog entry #14 from MBA - www.mba-marketing.co.uk

Recent events - AIG, HBOS, Lehman Brothers, the possibility of global financial meltdown - prompted me to write something pithy about the financial markets. It then occurred to me that - despite studying economics at University, despite an MBA, and despite having been the owner of all manner of financial products over the years - I know very little about derivatives, hedge funds, and so on. I am just another ignorant end user.

And that is the point, for financial markets have very little in common with any other 'market' or indeed with 'marketing'. Right up to last week, the financial markets exemplified the sort of free market economics and short-term profit maximisation that might surprise even Milton Friedman. In what other market would end users (people like you and me, with mortgages, say) be bundled up and traded from one financial organisation to another, as though we were pork belly futures? Bear this in mind if you ever hear a financial institution talk about 'customer relationship management'.

It is highly unlikely that there is any sort of consultation or research carried out with the individuals who make up these groups of 'bundled assets', or even with intermediaries such as mortgage brokers. Which brings me to this recent report in the Birmingham Mail: 'A plan to respray every cab in Birmingham has been put on ice after it emerged that consultants, paid £24,000 to assess the scheme, failed to ask cab drivers what they thought.'

This raises two points. The first is to say that in my experience, it has never been necessary to ask a cab driver what they think, as they'll tell you anyway. The second point is to say that this actually typifies a lot of marketing research programmes. Customers will be subjected to all manner of research techniques and methodologies, but often the actual frontline staff who live and breathe the subject (during working hours, anyway) are never consulted. It's importsnt to remember that frontline staff are important for (at least) two reasons: first, their own satisfaction is directly related to customer satisfaction; and second, they are valuable conduits of customer insight and intelligence.

I try to involve frontline sales and service staff in any project I am involved with. Recruitment is usually straightforward and participation can usually be relied upon. Above all, it is frightening how accurate many of the outputs from these sessions turn out to be - certainly when compared with those of management!

And in the case of financial markets, I have no doubt at all that London's cabbies have already solved most of the problems.

Blog entry number 13 from MBA – www.mba-marketing.co.uk

Traditional marketing thinking – both theoretical and practical – has always told us that the default mode for any brand or business is to ‘act like the brand leader’. Academic texts and trade magazines alike study the actions of leading brands, and generate theory and rules for the rest of us to follow.

The reality is that acting like brand leader is an option best suited to - yes -- the brand leader. Brand leaders have the marketing metrics to ensure a disproportionately high return on marketing investment. For ‘follower’ and ‘challenger’ brands, acting like brand leader is simply unaffordable – even if ‘me too’ were a viable strategy (which is rarely is).

Instead, it is necessary to sacrifice certain activities, to over-commit to others, and generally to do things differently to the brand leader. Adam Morgan, in his classic text ‘Eating the Big Fish’, makes these points extremely well, based on a study of around 100 ‘challenger brands’ – an early example being Avis (when you’re number two, you try harder – or else’).

I was reminded of this on a recent trip to the Champagne region. Imagine you were planning to launch a new brand into the champagne market – a challenging assignment, n’est ce pas? As I know only too well from recent experience, it’s difficult enough launching any new wine product, let alone a late entrant to such an established market as champagne. So I was more than a little impressed to learn about the Mercier brand, which did just that – in the 19th century.
By the mid-19th century, the champagne market was well established and the leading brand, Moet, had been around for a century. When Eugene Mercier formed his own business – Mercier - at the age of 20, he had no advertising or marketing experts to help him. Instead, he trusted his own instincts and anticipated the lessons of Adam Morgan by a century.

For the 1889 World Exhibition held in Paris, Mercier built a 20 tonne barrel, which was towed to Paris by 24 oxen and 18 horses, taking 8 days and requiring major construction work en route. For the 1900 World Exhibition, he not only commissioned the first-ever promotional film (from Lumiére), but also organised a branded hot air balloon to take people (10,000 in all) 300 feet above the city to sample the product.

Call these publicity stunts, or (as Morgan does) ‘using publicity as a High-Leverage asset’ – either way, they worked, and Mercier became a successful business, fast. It’s hard to imagine a so-called ‘experiental marketing’ agency thinking of anything better today – although I shall otherwise avoid any obvious remarks along the lines of ‘plus ça change’. Instead, I shall act like a cheesy TV travel show host, and simply raise a glass in your general direction, accompanied by the word 'salut'.

Blog entry number 12 from MBA – www.mba-marketing.co.uk

The normal deal with creatives in advertising agencies is that they take one aspect of a brand (preferably the bit highlighted in the creative brief) and dramatise it in some way. In the past, this has led to work which transcends the barrier of being just an 'ad' and becomes part of our culture.

Here are three current examples of TV commercials where this approach has been taken to ludicrous extremes, resulting (in my view) in extremely poor ads.

1. The Wild Bean Cafe. Rather unfeasibly, the 'hero' turns down the late-night offer of 'coffee' from an attractive girl in order to drive (alone) earest 'Wild Bean Cafe' (which is not really a cafe but coffee machines in BP service stations) to drink coffee. You can almost read the brief - 'coffee so good that...'.

Is this the latest update of the famous 'You're never alone with a Strand' advertising disaster? Surely, only losers and Alan Partridge choose to hang around service stations at night drinking coffee on their own.

2. Barclays Bank. A special offer of 'unexpectedly low interest rates' on loans means ads with lots of people walking around bumping their heads on low ceilings. Laugh? Me neither.

3. Fosters - some new product variant or other is termed 'laid back lager'. So guess what, we get lots of studenty-types with whispy beards and surf dude clothes walking around a beach bar in a 'laid back' posture, with their bodies leaning backwards. Holding the new product, of course.

What's gone wrong? Isn't advertising supposed to be (at least one of) funny, interesting, challenging and engaging?

I shall stop here as I am in danger of sounding like my alter ego - Dickie Beasley, from VIZ magazine, the little boy who always wanted to be an advertising account executive. I may post some of his work for you if I can find it.

Blog entry number 11 from MBA – www.mba-marketing.co.uk

Here's a great idea for a new television series. It will feature as presenter someone new to television, but who oozes charisma, wit and wisdom - that is, me. I will go into badly run businesses, large and small, tell them where they're going wrong in an extremely confrontational and aggressive manner, and swear a lot. The people in the businesses will resist me at first, before realising that I am right and they are wrong. They will then roll over, do exactly as I say and treat me as a God forever.

Those who know me will say that this is pretty much what I do already. The only differences are (a) the swearing, (b) the God-like status, and (c) the lack of cameras and a narrator as I go about my righteous duties.

My main inspiration here is of course the great Gordon Ramsey, who in his 'Kitchen Nightmares' TV series focuses only on restaurants and pubs. Goodness knows there are enough badly-run catering establishments in the UK to keep this programme going for ever, so I will leave this sector to Gordon.

For those not familiar with this series, here's how it works. Typically, Gordon arrives at an establishment which is owned and run by a pair of clueless incompetents with no discernible skill or experience, who somehow thought it a good idea to sink their life savings into a pretentious bistro called 'Cagneys' in a back street of Scunthorpe. Tumbleweed is blowing through their restaurant, the tables are covered in cobwebs, they are losing money and are close to bankruptcy. Enter Gordon, who - despite being the only person in the restaurant - receives slow service and (inevitably) revolting food.

The kitchen is usually run by a tattooed thug with no teeth, who is apparently on day release from his normal job with the Big Issue. He has no training of any sort, least of all in personal or food hygiene, and has as his signature dish frozen prawns flash fried with chocolate, tonic wine and packet soup. He and Gordon hate each other on sight. With his bosses, he and others like him are responsible for the poor food, lousy service and rip-off prices that we all experience every week in restaurants and pubs the length and breadth of the United Kingdom. They all richly deserve as much invective, profanity, spittle and halitosis as Gordon is prepared to provide them with.

So, back to me. I have much better skin tone than Gordon and I am sure I can work on the swearing. And I have extensive experience of working with businesses of all sizes which seem to have no idea why they are there, other than to do whatever they have to do to hit their next quarter's numbers, who have little interest in finding out what their customers really want or value, and no vision of where they are going long-term. This excludes current clients, of course. The rest of you - beware. Reality - in the form of me and my camera team - could strike soon.