Darrell Lea shouldn’t have gone broke, and COULD be saved… but is would take an open-minded and clear-thinking CEO, fully supported by shareholders, to save it.

DL, like so many other medium and large companies, suffers the two most eroding factors in business decline: Operational focus (not strategic) and corporate arrogance (generated by leadership of senior executives).

DL needed, and could still be saved by, blue ocean strategies identifiable by the most rudimentary market research, a disciplined adoption of advanced product portfolio management, a re-alignment of customer experience management, and an investment in corporate marketing governance, but mostly by skilled and prudent leadership.

The TRUTH is businesses don’t fail, management does. No difference here to Ansett, FAI, or any other noteworthy failure.

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The academic study of Marketing was initially undertaken to make business decision-making easy… and it worked! Marketing decisions that religiously, if not fanatically, followed the technical revelations of academic marketing teachings, have worked, and worked, and worked.
In my career, every single marketing plan based upon the teachings of my studies, and implemented accordingly, has “hit-the-ball-out-of-the-park”, so to speak.
In my 3rd year at Uni, a recent graduate guest lectured on the launch of Moove & & Good One in the 70’s, explaining how they simply applied text-book marketing theory and would up with the most successful marketing outcome in the history of milk marketing. It was text-book theory that was used to save and re-launch My Dog & in the 80’s.
With reverence to the KISS principle, after 13 years of studying marketing, 38 years of applying it, 7 years of teaching marketing at University, I can confidently suggest that the core to successful marketing comes from knowing the segments in the market place and targeting and positioning to attract preferred segments.
So, with segmentation being the virtual “road to riches”, you would think all marketing executives would scramble for any segmentation market research above all else, and covert the opportunity to get as much as possible to empower them and simplify their whole function.
Alas, few good marketers stand in the ranks of business, and many of these are constrained by superiors whose limitations create the black holes into which fall opportunity and money.
Reality slapped me in teh face recently, when my firm decided to systemise a method of empowering clients with segmenatation knwoledge, and offfered a promotion… 2 (ideally sequential, not mandatory) segmentation studies, worth around $160,000 for just $60,000 – with an $11,000 social media marketing promotion thrown in. This offer was sent to a select 60 key individuals I know needed a market segmentation study.
Can you guess the response?
Now these guys KNOW that “the segmentation studies they get now” – are likely (at best) to be performed by the guys that taught market research to their current suppliers of market research, so its not a matter of quality.
Loyalty? OK… is that loyalty well advise in the light of the best interests of shareholders? Is it in their own best interests to miss out on more frequent, timely and recent information? Given that fresh segmentation information could make the difference between growth or deletion, between profit and loss, between market dominance and market share erosion, wouldn’t it be worth the effort?
To a great marketer – this would be a great opportunity… there are just too few of them about.

The following is a summary of my presentation at the 2012 FMCG Summit on Longevity, held at MGSM.

Every company must follow its mandate/mission/vision and derived corporate objectives: That’s the Board of Management’s job!

So why is everyone complaining that WW & Coles are making it hard? It’s their job to maximize profit…. and ours to help them! If we happen to make mega bucks in the process – good on us! If we get deleted in the process, we should only blame ourselves.

When marketing science reigned supreme, a very accurate and detailed segmentation study, including positioning map and competition analysis, was a yearly investment, but in the past decade, as pressure has been put on improving WW & Coles profits, operational managers have sacrificed long term strategic foresight, and stripped themselves of their most powerful ally – market segmentation knowledge.

[A show of hands at the Summit showed only 1 attendee had commission a new segmentation study in the past three years – now wonder FMCG marketers are losing bargaining power!]

Now that Woolworths, and Coles have the power of loyalty card data… data that is fast, statistically reliable, accurate, and consistent, FMCG marketers are going to be stripped of their knowledge assets, and buyers will become category experts like never before.

Buyers can now rebuild a category from scratch… deleting big brands, ranging new innovations, with assurance and confidence they have never had before… because they really KNOW their customers.

The only tool that FMCG markets have to battle is better, albeit different research.

Now, more than ever, we must see Coles and Woolworths as trade partners sharing common needs… satisfaction of the customer. FMCGers must discard the red ocean strategies of undermining competitors and fervently pursue blue ocean strategies that can be exposed by trend analysis from consistent, quality market segmentation studies conducted periodically and analyzed meticulously.

It is up to us to demonstrate to buyers that there is real and sustainable commercial advantage in ranging our products. The two basic tools are marketing effort, and positioning strategy, that together build the asset of brand equity and the outcome of significant market share.

Cynics will say this is easier said than done, but, with C-level support, it is almost easier done that said, IF we remember that the rules, laws, models and processes of professional marketing work (if applied properly) and FMCG markets simply cannot afford to shortcut on any.

 

Do this and we it is inevitable that you WILL follow your company’s mandate/mission/vision and derived corporate objectives in collusion with Woolworths and Coles instead of in spite of Woolworths and Coles.

What is the Marketing Concept? What is the basis of all marketing management?

Is it not meet the customers’ needs with available resources?

Is pushing an imperfect satisfaction of needs, via advertising, personal selling, tricky copy and negative options, give-aways and incentives, going to imbed success in a brand?

Is a badly thought-out product or brand extension, timed well or not, a failure because of insufficient advertising?

Not necessarily.

Looking at the purpose of a marketing expert’s being: For all exponents of the marketing profession, there is one focus… The needs and wants of the markets (or the targeted segments in which you are interested).

IF the market NEEDS advertising, if the ACTUAL product (as opposed to CORE product) includes imagery and positioning, then the marketer’s responsibility is to deliver those needs. In delivering the needs of the target audience, a marketer maintains brand equity, and thus, the life of the brand/product.

If the marketer just invests in advertising without understanding the customer, life cycle is bound to prematurely terminate, brand decay will set in, and brands will die…. in response, of course to substitutability, imitability, comparative value and rarity.

This turns focus not to the science of marketing but the skills abilities and talent of marketing management personnel.

Does management “get it”? Do they really UNDERSTAND ‘marketing’ or do they perceive it hype, advertising, or selling? Are they CAPABLE of embracing and applying marketing science, or simply charismatic diplomats, climbing the corporate ladder? Are they EMPOWERED with funds, autonomy, flexibility and leadership support to implement? Do they have the ACUMEN to pull it all together and planning skills to imbed the direction for years to come?

[The answer, by the way, is that ego and corporate arrogance, stop people like us helping people like them 😦 ]

There are no specific strategic models for FMCG brands to manage lifecycle because any generalisation would be fictitious nonsense.

The secret for ALL marketers is market segmentation.

Until decision makers recognise that there is no singular ‘market’, but a unique combination of segments that make up an individual market, we are unimpowered.

“Markets’ are as unique as people, segments as unique as human characteristics. Noses vary, size, hair, eyes, teeth, skin… just as segments are different. Individual products must be made to fit the attractive/targeted segments.
Just as nose drops may be useless as skin moisturisers, some products or brands may not appeal to some segments.

Brands can and do survive anticipated life cycles as a result of disciplined marketing strategies based upon trend analysis and rational strategic response to changes in segments.

Brands fail when companies choose to deliver what is easiest for them rather than what is demanded by the market. You can’t maintain a brand without market satisfaction. You can’t go wrong if you achieve market satisfaction.

But we can delve deeper into brands than that… For example, several years ago “Marlborough” was the 7th most valued brand in the world. Tobacco giants could have brought out new products to extend the life of the brand… not cigarettes, but other “Marlborough man” themed products… capitalising upon this brand equity and developing it according the changes in the market at a core product level – where the core product for growing segments was not ‘tobacco smoke for inhalation’, but (as a result of long term brand positioning) became ‘virile and manly country & western masculine image’. [For more on “Core Product see: http://www.launchengineering.com/ModelsLawsRules.htm, for more on “Market Segmentation see: http://www.launchengineering.com/Market_Segmentation.htm%5D

In summary, the commercial reality is that lifecycle is almost completely a function of competency of management rather than some ‘cosmic inevitability’. If management can identify and respond the change, a brand can live forever.

Ultimately, it is the 5th “P” of Marketing, PEOPLE, (in this case executive acumen) that make the difference between brand immortality and brand decay.

Sometimes, it seems like people have forgotten that a marketing plan should be a clear and concise set of directions that, if followed correctly, ensure you achieve or exceed your goals.
So many marketing plans end up being a report of where the business is now, or a weak wish-list of what the writer thinks might be as good a guess as any.
While many businesses accept the importance of a marketing plan, few know where to start or the questions to ask to build this comprehensive and powerful business tool.
Partly this is because few marketing planners actually have a decent marketing planning template or marketing planning workbook on which they can craft and build a winning marketing plan. See this blog for more>> http://wp.me/pO33U-1r
With literally thousands of awful, limited, and distracting documents offered on the web, all promising they represent a decent marketing plan template, the problem is magnified. Discriminating planners find these are not written by marketing planners, or those whose marketing planning skills and talent have much to be desired. The documents offered appear to be plagiarised extracts from basic business textbooks, devoid of commercial marketing planning functionality.
Since rising to Marketing Manager level in the mid 80’s, I’ve learned, the hard way, how to put together marketing plans that work, and have written around 30 marketing plans since then: 3 were not implemented due to politics of weak management, every other one succeeded.
Since my current consulting firm, Launch Engineering, has been going, we’ve seen frequent occurrences where an aspiring entrepreneur, middle management, marketing executive, or a frustrated COO brings us their marketing plan built upon a generic marketing plan template they’ve wasted weeks of their valuable time trying to fit their business into: The structure of a marketing plan template they have acquired, having distracted them from the key, specific and individual issues that may make or break them.
After seeing this over and over we said to ourselves, “There needs to be a better option for marketing planners.” So we set about empowering marketing planners to identify the real issues and key variables to build proper marketing plans. We built a professional’s marketing planning workbook.
Sharing this with key clients across diverse industries such as banking, telecommunications, infant nutrition, tobacco, international air transport and fashion retailing, this marketing planning workbook has proven to be universally applicable for building marketing plans that are relevant and individual, while being concise and implementable.”
As a non-profit endeavour, we simply called it “the Ultimate Marketing Planning Workbook”, an Excel formatted document of over 30 individual worksheets that force the marketing planner to explore the pertinent issues, and dismiss irrelevancy. Marketing Plans evolve from the workbook’s output of isolating the key issues and identifying the tactics, resources, and strategies necessary to achieve marketing objectives.
Peers, colleagues and even a few clients says the tool is worth its weight in gold and that making it available at a nominal price doesn’t indicate its true value.
However, in an effort to enlighten struggling marketing executives, and raise the bar (so to speak) we decided to release it for only the fulfilment/processing cost.
Anyone who is less than 100% satisfied with their marketing plans will find using this workbook a dream.
Give it a try, go to: http://bit.ly/mktgplan

During my Feb 2012 presentation at the FMCG summit at MGSM in Sydney, I asked the group of about 60, “When did you do your last segmentation study?”.

I was appalled to find only 1 company had undertaken a segmentation study in the past seven years… SEVEN YEARS!!!!!!!! (Less frequent than 3 years is considered intolerable!)

There was once a time when FMCG marketers were recognised as leaders, gurus even, in the execution of marketing science: An FMCG marketer was the herald of super-normal profits, profit maximising decision making, and management leadership.

When segmentation is the most powerful tool in the arsenal of a marketer’s weaponry, and the professional standard slips to such a low, no wonder FMCG companies are crying poor!

But, are their marketing executives to blame? I wonder….

Could it be the declining quality of market research services in Australia has so declined as to undermine the anticipated value, insight or trend identification?

Could it be that senior management is so diluted in marketing training that those who control the purse strings – ignorant of how much they don’t know – simply are not allowing marketing departments sufficient budget for segmentation studies – denying resultant sustainable competitive advantage and brand equity investment?

Could it be that the pure-academic standards in the tertiary education of marketers has simply eroded the passing down of commercially important training and skills to the point where marketing graduates simply are not empowered with proper education in marketing anymore?

I sit, jaw agog, sometimes at the wasteful and poor marketing communications efforts in TV advertising spend and creative, at outdoor ads, online ads and other marketing communications execution that just denies justification, and I wonder… but with the revelation of such poor strategic marketing management helps me understand the woes of the industry and from where they come.