“Customers” are NOT identical. A “market” is only a corral of market segments. Until business leaders fully accept that fact, businesses will not do as well as they could, probably flounder at some stage, and ultimately fail as their competitors (who DO “get it”) out-manoeuvre them.

The Most POWERFUL tool in a business strategist’s arsenal is Market Segmentation

For years I have used market segmentation to successfully “breakthrough” and improve the direction of employers’ and clients’ businesses. Market Segmentation is the “secret sauce” which helps businesses find the best customers.

Multi-million-dollar outcomes have followed market segmentation. It simply is the single most powerful tool in the marketing manager’s arsenal of marketing tools.

Identification of market segments almost guarantees optimal decision-making

With superior segmentation, you can identify attractive market segments so you can target and position your marketing mix and best satisfy the needs and wants of your “preferred” primate target audience prospects. This helps you “marry” your capabilities and appeal to the potential customers who desire your unique offering. (Every offering is unique, but that’s another topic.) Market Segmentation secures sustainable competitive advantage and market dominance.

Better customer insight and segmentation

Using proven market research methods, Market Segmentation means you’ll best be able to deliver differentiation strategies that achieve brand loyalty and brand preference.

You can get insight into where your profits come from, how to improve them, and how to best spend your marketing budget to reap the greatest returns.

You get insight and direction for decisions regarding:

* Distribution strategies and channel management

* Product management strategies and brand management

* Pricing and discounting strategies

* Improving demand & identifying high return customers

* New product development

* Brand Equity movements and brand portfolio opportunities

And more!

Market segmentation studies help identify opportunities and threats, competitors and trends… all helping you maximise your competitive marketing advantage.

Are you doomed, or are you set up for success?

Outside of micro businesses (under $5M p.a.) if your business hasn’t undertaken a proper, professional segmentation study in the past three years, you’re cruising for a bruising.

Worse still, if you (or your business leaders) think “marketing” is a word that accurately describes “advertising” and/or “promotion”, you’re likely in for, or already experiencing, a world of pain!

Almost all of the most successful businesses in the world, certainly the most profitable and powerful companies, all undertake annual or bi-annual segmentation studies. It is typical to find businesses that have failed who neither understand the definition of marketing or undertake (proper) market segmentation.

Common Sense

When management meetings happen and someone says, “Everyone wants…”, “Nobody will…” or “Buyers prefer…”, you NOW you’re in trouble: Subjective opinion is no more than unsubstantiated assumption, and “assumptions are the mother of all mistakes”.

It makes perfect common sense to ask… to ask enough people to know, and then if you ask the right questions you get the right answers , and if you ask people what they want and they tell you… and you LISTEN… then it is an effort to go wrong.

Remarkably, this common sense escapes many operational executives who get caught up in micro-economic detail and “can’t see the wood for the trees”.

I wonder if this could explain why businesses fail, and why corporations don’t experience ongoing success and longevity.

Do you agree? Please comment and let’s discuss?

Remember these business quotes?

“There will never be a bigger plane built.” — A Boeing engineer, after the first flight of the 247, a twin-engine plane that holds ten people.

“There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.” — Albert Einstein, 1932.

With over 50 foreign cars already on sale here, the Japanese auto industry isn’t likely to carve out a big slice of the U.S. market.” — Business Week, August 2, 1968.

“There is no reason anyone would want a computer in their home.” — Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977.

Over my career, I’ve helped many an entrepreneur solidify and achieve his/her dreams, not because I am particularly smart, but for the following two reasons:

  1. Religiously applying strict business analysis disciplines in strategic planning and being harshly objective to the predictive outcomes. If the figures don’t “add up” then no amount of determination and “positive thinking” will turn a lemon onto a diamond.
  2. Believing in the figures even if they seem far-fetched… Sometimes you just have to trust that “shooting for the stars might just land you on the moon”

Nowadays I spend as much of my time helping bigger businesses overcome their self-imposed, limiting perceptions as I do developing new perspectives… with many huge companies refusing to open their minds to their true capabilities.

 

Warren Buffet says this is the “ABC’s of corporate cancer” … A for arrogance, B for Bureaucracy and C for Complacency… My take on it is the wrong people are making top-level governance decisions, which is why my Hierarchies of Marketing model is so important for growth focussed leaders.

 

Anyone wanting a copy of my book on the topic should connect with me on Linked In and request one. Now in its 2nd edition, some people even declare they experience an epiphany after reading it.

It takes a special type of executive to to believe in breakthrough opportunity
It takes a special type of executive to to believe in breakthrough opportunity

The Objective of the following is to empower business leaders to achieve breakthrough, profitable sale growth: Here goes…

Understand What “Marketing” is

The first thing a CEO MUST do is recognize the definition of the word, “Marketing”… Believing that “Marketing” is simply the “1 ‘P’”, Marketing Communications, or “P=Promotions” … maintaining a perception that “Marketing “ is simply advertising, promotion, publicity and tricks , fluff and ‘smoke and mirrors’ or ‘sales support’, just locks CEO’s into a world of pain.

A CEO MUST understand that “Marketing” is actually the complete function of “managing exchange”… combining disciplines that include:

  • Quantitative methods
  • Market analysis
  • Consumer and buyer behaviour
  • Motivation leaning & either psychological skills
  • Pricing optimization and strategic management
  • Distribution and supply chain control & Management
  • Sales Process
  • People
  • Segmentation, Targeting & Positioning, AND
  • Internal Politics

Understand the Hierarchies of Marketing

It is sheer suicide to allow a person who has been in one industry, working there way “up” over the years, to rise to a Marketing Leadership role, without having secured tertiary or specialised STRATEGIC management education.

Why this has happened in Marketing, is abhorrent. But imagine, promoting a nurse to brain surgeon, because he or she worked in a hospital for 25 years?

Imagine, promoting a receptionist to Senior Tax Counsel because he or she worked for a tax account for 20 years?

Imagine, promoting the stewardess of a Qantas jet to head pilot, because she’s been flying for 30 years?

Its is MORE stupid to hand over strategic decisions for a business to someone who’s expertise has been buying print, organising photos, copy editing brochures, or drafting advertising schedules… sheer madness!!!

Understand Segmentation

A “market’ is nothing more that a corral of heterogeneous segments.

As soon as I hear naïve commentary that starts off with “All people want” or “Everyone wants…” I shudder!

As soon as you start treating your customers as cookie-cutter copies of each other, you have definitely, absolutely undermined your sales and profit opportunities.

As soon as you confuse your corporate identity from your branding, you are sunk!

McDonalds has limited itself by lacking strategic competence at this level. So has Telstra – big time! Woolworths (operational giants, strategic dwarfs) have no idea what they are missing. Even Apple, debatably excellent marketers, are cruising for a bruising… watch THEM decline if they don’t ‘get it’ soon!

Mars owns the global canned pet food market because is recognizes and rends to the existence of segments – you don’t maintain 85% market share for 30 years without a GOOD reason! But even the mighty can fall.

The Hurdle for Business

The issue is REAL Marketing has been defamed into an ancient art form by the self-interested opportunists of the operational strain… people without qualifications, who lack understanding and knowledge, always push people away who threaten their power.

Snake-oil sales people, with fast tongues and greedy motives will put down common sense to play on emotion and fear. Comedy and doubt, to feather their own nests and ANY cost.

The solution lays within the grasp of so any open minded CEO, COO of CMO

Leaders of organizations MUST be operational. They must know their businesses.

The opportunity costs is they cant have the strategic competence of those with different skill sets.

One of the best CMO’s I have met in years recently told ne he enters a meeting hoping he’ll be the least expert of all participants and that he’ll learn the most… but many business leaders perceive they know it all or should appear to know it all… with outcomes synonymous with the fable of the Emperor’s New Clothes.

There are a significant number of strategically skilled consultants and experts across the globe who do understand strategic marketing in its complete sense, and who can contribute to decision making strategically.

GREAT CEO’s recognise their own weaknesses as well as their strengths. Greater one’s act decisively and do something about it.

Want some more insight? Download my free e-book, THE FOUR FACES OF MARKETING, here… http://j.mp/ALLmktg

Those of us, formally trained in Strategic Planning, can distinguish between ‘strategy’ and ‘tactics’. We also know how and when to alter strategy, the importance of monitoring the market, watching trends and being deeply aware of life cycle, segmentation, product categorization and other strategic marketing models that many business executives simply ‘glaze over’ to, whenever these topics are discussed.

It is clear that Apple has the best of the best operational folk money can buy, and an appalling lack of strategic nous.

This is demonstrated by two glaringly weak strategic activities:

  1. the regression to Type I (continuous) innovation in its new product development (phones & macs), and the debatable wisdom of its only recent Type II (dynamically continuous) innovation. (iWatch)
  2. Pricing Strategy that is devoid of strategy, ignorant of segmentation shifts, that clearly undermines Apple’s future and growth.

I’ll leave the nature of innovation to another day… but Apple’s PRICING STRATEGY is in dire straights!

Yes, price skimming and profit gouging works in certain circumstances, but even naive marketing graduates understand cascade down pricing strategy.

Apple MUST be shouting down commentary from within about ‘value-based’ pricing, about elasticity of demand, about market development theory, or even when confronted by competition analysis.

Some VERY WEAK senior management must be at the helm to maintain the strategies of last year, when it is in fact THIS year!

When you observe, “it has always worked this way, way change it”, or “If its not broken, don’t fix it” in the halls of power… you know the empire is crumbling.

But Apple’s Pricing Strategy right now is building a road for Apple to end up where it was in the mid 90’s…

Apple needs HUGE strategy, NOW!

SOMEONE, needs to go in and identify their true PRESENT capabilities, not past ones.

SOMEONE needs to REALLY grasp the needs and wants of TODAY’S market, and tomorrow’s market, not yesterday’s.

SOMEONE needs to align and engage the whole corporation with love and passion for NOW, not yesterday’s.

SOMEONE needs to bake some humility into the APPLE pie!

Think about this…

Apple has cost leadership strengths, economies of scale, and brand preference (marketing advantage) … Why the f^&* are they still price skimming when they could own the market by by pursuing price advantage?

Their insistence on maintaining their 20th century pricing policies, have created massive competition, made the industry easy for nee entrants, built sufficient margin for others to establish brand equity, and (effectively) brought on high competitive rivalry that didn’t need to be there!

I defy ANY APPLE EXECUTIVE to show me complete and hard evidence that their pricing strategy is nothing short of ludicrous in today’s market… and even if they COULD present a case, I’d probably challenge the validity of the research.

But, mark my words, if Apple maintains premium pricing you will see decay of market share, better and more potent competition, and Apple’s slow fading into insignificance and decline.

Are you betting everything, your future, your financial security, your professional reputation, your life savings… on your upcoming product launch?

You’re not the first to be going through this nerve-wracking experience.

Are you fearful of the disappointing, gut-wrenching possibility, no matter HOW unlikely, that having spent months (even years) creating and refining a product you believe will truly help people, finally offering it for sale, that it might gather dust when no one buys it?

Wouldn’t you feel better with some sort of safety check, or protection against making an error of judgement, to remove any possibility of a single but crucial, launch-ruining omission, that could turn your product launch from a triumphant success into the mistake of your life?

Its great that every thing looks hunky dory. I bet you’re sure you’ve considered all the issues… but, even if you are100% confident you couldn’t possibly have forgotten, overlooked, or failed to consider anything… Isn’t it worth just double-checking the plan that might change the very course of your life?

Then why not take five smart minutes and do a Pre-Launch assessment? It is a proven, valid tool that measures the factors known to have significant effect on the outcome of product launches. It exposes oversights. It reveals hidden issues. It identifies any shortcomings and it suggests possible improvements to your product launch plans so you nail success.

The executives of Launch Engineering, a marketing consultancy dedicated to the scientific application of marketing knowledge to product development & launch, have been developing, planning, marketing and launching new products and business concepts for over 35 years.

Now, they have digitised key findings into a simple online, do-it-yourself pre-launch analytical tool.., prelaunchchecker.com

Whether you’re trying to launch a new product for a big corporation, or a new business or even start from scratch, the unique pre-launch assessment gives you a disciplined, objective, academically sound, and commercially proven means of predicting your certainty of product launch success.

What makes the Pre launch evaluation so special is the sophisticated basis in which it was built… on the back of a huge University study that determined the key factors in successful product launch proven by then 40 years of commercial application. It is an unique method of making sure your product launch will be as successful as it possibly can, and a safety net that warns you before you launch a product that cannot succeed.

Let’s take a look at how the Pre-Launch Evaluation helps you identify and measure the variables so you make sure you have a winner, and launch it in the most optimal way…

The analysis addresses the key factors that are known to have a significant effect on the outcome of a product launch.

The scores that you give for each factor are than assessed according to the known significance, or value, of each and every key factor, so a mathematically generated performance indicator is produced to give an objective and non-emotional assessment of the likelihood of product launch success.

This final score definitively indicates probable product launch outcomes… AND has the bonus benefit of identifying the areas that need to be improved to improve the score and optimise the likely launch result.

Over the past 17 years Launch Engineering executives have used this method over and over again… and its NEVER failed!

To put it into perspective, its created breakthrough profits and income, and saved millions in avoidable losses.

Here, in more specific detail, is what this Pre-Launch Evaluation is all about:

* Works with any product category and industry type

* Identifies the significant factors while undistracted by issues of no or small relevance

* Presents a strong business case for investors or bean counters, cynics or worry-warts

* Assist effective marketing planning, particularly contingency planning as well as feedback and control.

* Fires off a warning cannon if the launch concept is faulty

* Based on the synergistic power of academic modelling AND commercial experience

Ready to get started? If you’re thinking it costs a fortune.. and that this is some sort of direct-marketing itch to squeeze you for money… its not!

In the contrary, it is a philanthropic attempt to save people from making boo-boos. Its our attempt the destroy the appalling failure rate of new products. We genuinely want to protect people’s lives, jobs, future, reputations, relationships and careers.

It ridiculous that the knowledge it there, and NOT offered to protect those many people who have lost their homes, their jobs, friends and family ties without the information that is available from a Pre-Launch Evaluation.

The reason we’ve digitised the Pre-Launch Evaluation is so people who are about to launch a new product and who desperately need it to work, people who cannot afford a failed launch, have a valid and useful safety fence.

Yes, its true our firm offers an advanced Pre-Launch Evaluation, where we send a crack team or senior consultants into a corporation to rake and study every facet and then develop a knockout marketing plan… but even the decision makers there can now see whether they NEED this, by first using the online DIY service.

If you want to dodge the product failure bullet, if you’re looking for peace of mind to confidently launch your big idea, if you want to glide through your launch with confidence, knowing that your dreams will soon be reality, then just check out prelaunchchecker.com.

If you’re serious about making your product launch a success, launching successfully and generating a real achievement that your peers and even your competitors will respect, you need to take action and get the odds on your side… If the fear of a failed product launch needs to be buried, or you just want to feel secure… you can resolve all concerns quickly, easily and efficiently.

At worst, you’ll sleep easier knowing your plans, hopes and aspirations will be a reality.

When you ‘nail’ a product launch, you’re everyone’s hero: Your suppliers revere you, your boss admires you, your bank manager congratulates you, and your staff worship you as you collect accolades for your marketing and entrepreneurial prowess…

(… Unfortunately, if you do fail, it the reverse.)

We want the success outcome for everyone, so spread the news and get everyone using the prelaunch checker evaluation from now on?

The direct link is prelaunchchecker.com… but you can also get to it from the launchengineering.com web site

Members of the Sales & Marketing Institute of Australia might remember my presentation, “Coles & Woolies aren’t the bad guys, we are!”, at the FMCG Summit in August, 2012.

In this presentation, I suggested…

  1. The fundamentals of solid FMCG haven’t changed – and won’t
  2. Loyalty data has become an information goldmine
  3. FMCG now beats to different & distinct checks & measures
  4. The Category Management business is in ‘re-jig’ – they are creating business manager experts in smaller categories
  5. Buyers don’t know where their categories will head UNTIL AFTER a category review – so there’ll be more hesitation before decision but the decision will be based upon shopper satisfaction
  6. Card data will never be completely shared because it gives retailers a new advantage
  7. There is always a trade-off between sales, profit & market share
  8. There is a new imperative on suppliers to be more effective & efficient
  9. Retailers now run ‘category laboratories’ , and do – they know more than FMCG marketers do
  10. The quality of the seller must rise to meet the quality of the buyer and visa versa

The point of the presentation was that FMCG marketers must remember that their hay-day came when they discovered segmentation, and conducted segmentation studies annually… long before cost-cutters and short sighted profit goals ate away at research budgets.

FMCG companies who are struggling MUST call out  “its time for a segmentation study” if things go astray… but MORE IMPORTANTLY… to plan a product portfolio, write a 3, 5 or 7 years marketing plan, or invest in new products, new plant, or growth without clear understanding of segments and market opportunities… is suicide by Russian Roulette!

I’m not ashamed to say that Launch Engineering does outstanding segmentation studies: One FMCG client increased business 50% in a year on the basis of strategic recommendations following his LE segmentation study…. and EVERY client that takes advantage of our expert researchers with added strategist recommendations, finds inspiration and confidence in their decision-making, post report.

If you’re in FMCG in Australia… its tough. You could make it a whole lot easier…

For more information or a confidential chat, feel free to share your problems and I’ll let you know if I can help… you’ll find my contact details at http://www.launchengineering.com

Too many marketing strategists believe their own BS! Pricing Strategy, Communications strategy, Online Strategy, branding strategy etc. isn’t genius… it is obvious, common sense that evolves out of the fact that perfect knowledge leads to perfect decisions.

I’ve had an extraordinary number of commercial successes in my career, record-breaking ones… NOT because I am one bit smarter, more intuitive, have more street cunning or am unusually lucky, but because I persevered long enough in learning my trade to be able to recognise the one, inalienable truth of business: If you genuinely know what the customer wants and can give it to them, they WILL buy!

The absolute secret, of all extraordinary business success, is knowing the customer.

Is it REALLY that simple?

Whether it is the individual or the segment – yes!

There are so many examples of this across the internet, in each of our careers, recorded, diagnosed, studied and reported by academics around the world, and demonstrable in every case study and high return annual report… so why do we complicate and confuse, cloud and cover this fact?

Think about it…

Pricing Strategy: In particular Value-Based pricing? Know the customer!

Communications strategy: In particular advertising & positioning? Know the customer!

Retailing: In particular store layout, ranging, staffing, location? Know the customer!

Manufacturing: Everything from branding, sizing, packaging, new product development, distribution strategy? Know the customer!

Why is the business community in denial?

When FMCG hummed a merry tune, the industry habitually committed to segmentation studies annually… but as operational executives with corporate political skills rose in a culture of corporate arrogance, costs were cut to carve out larger profits, ignorant to the fact they were really blunting competitive advantage and digesting brand equity.

In adequately training marketing personnel, briefing and sustaining market research of questionable quality, undermined the payback from segmentation studies and other market research.

Over the years, the team at my firm has written strategy for transport, banks, FMCG, commodities, utilities, government that has generated record-breaking results, unimagined sales growth, and extraordinary profits… why? Simply better understanding of the customer – EVERY time!