Cambridge Marketing Review - Issue 8 Spring 2014

CHANGING CUSTOMERS FEATURES

Making Sense of Big Data by Steve Messenger

The EU Data Protection Act - How do you process your customer data?

FEATURES

Peter Fisk: Marketing Mash-up

Forecasting the Future for Profit

Paul Fifield and John Greenhough: If It Aint Broke...

VIEWS

Lego’s Longevity

Strategic Digital Marketing

CIM’s Book Reviews

CHANGING CUSTOMERS

ISSUE

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MARKETINGReview

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Cambridge Marketing College has produced a set of handbooks available from Amazon now

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CONTENTS

CHANGING CUSTOMERS

FEATURES

VIEWS

9 MAkIng SEnSE Of BIg DATA: AS EASy AS ABC?Steve Messenger describes the current context and

challenges of Big Data.

14 ThE EU DATA PROTECTIOn REgUlATIOn: ChAngIng hOw yOU hOlD AnD PROCESS CUSTOMER DATA The aim of the Regulation is to harmonise the current data

protection laws across the EU member states. The current

situation is “monitor” but don’t panic.

19 nO lOngER ‘US’ AnD ‘ThEM’We all remember the days when adverts just simply told us

what to buy and where from. Big advertising corporations

spent time and money creating adverts for a specific group

of individuals and placed them in our favourite magazines

and between our guilty pleasure TV programmes. However,

times are changing, the push is becoming a pull.

23 MEASURIng ThE ThIngS yOU fEAR ThE MOST Marketing is consistently accused of being unable to

measure its own effectiveness. Unfortunately this view is

equally consistently justified by marketers who either refuse,

or are too afraid, to measure the impact of what they do in

a regular and transparent way.

28 fORECASTIng ThE fUTURE fOR PROfIT Markets are complex and multidimensional but it is possible

to forecast the future behaviour of a market with a high

degree of accuracy. This article looks at how using a unified

market model across the organisation allows marketers to

understand the complexity of their marketplace.

34 MARkETIng MASh-UP Peter Fisk explores the best new ideas in the world of

brands, innovation and marketing.

38 A DAy In ThE lIfE Of….AnnE gODfREy, CEO Of ThE ChARTERED InSTITUTE Of MARkETIng This issue steps into a day in the life of Anne Godfrey, Chief

Executive Officer of the Chartered Institute of Marketing.

40 If IT AIn’T BROkE…(AS ThE wEll knOwn SAyIng gOES)…BUT whAT If IT IS BROkE? During our research into the challenges of the new business

reality, several senior executives pointedly remarked to us

that the first big issue for senior management teams was

not finding new solutions but seeing the problems in the first

place. This article we focus on whether there is a problem.

48 STRATEgIC DIgITAl MARkETIng This article looks at the effect digital has had on the

marketing industry and highlights how important it is for

marketers to address digital marketing from a strategic

perspective.

50 MARkETIng BOOk REvIEwS By DAwn SOUThgATE Looking for a good book to get your teeth into? Then

explore these three books that have been chosen by Dawn

Southgate, Head of Information at the Chartered Institute

of Marketing.

52 lEgO’S lOngEvITy Nick Wake looks at the enduring appeal of Lego and

examines how the brand has evolved over the years to

remain relevant within the children’s toy industry.

55 ThE yIn-yAng Of BRAnDED COnTEnT MARkETIng Justin Kirby draws on his research for his new book ‘The Best

of Branded Content Marketing: 10th Anniversary Edition’, to

look at what content marketing actually means, and how to

develop a branded content marketing strategy.

7 MEET ThE EDITORIAl BOARD

8 UPCOMIng ThEMES

CAMBRIDGE MARKETING REVIEW - ISSUE 8 Q2 2014

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Publishing Editor: Emma Garland

Publishing Director: Andrew Hatcher

Chairman: Charles W. Nixon

Editorial Board: Charles Nixon, Andrew Hatcher, Anne Godfrey, Peter Fisk, Debbie Frost, Phil Ore, Roger Palmer, Theo Dingermans and Emma Garland.

Contributors: Charles Nixon, Andrew Hatcher, Lorna Brocklesby, Jonathan Davenport, Nick Milner, Kay Sharpington, Peter Fisk, Anne Godfrey, Dawn Southgate, Nick Wake, Paul Fifield, John Greenhough, Steve Messenger, Sarah Nagra, Kiran Kapur, Justin Kirby, Don Moyer, Melissa Nixon and Shane Minett.

Contact: Cambridge Marketing Review 1 Cygnus Business Park Middle Watch Swavesey Cambridgeshire CB24 4AA

Tel: +44(0)1954 234941 Fax: +44(0)1954 234950 Email: [email protected]

Issue VIII Spring 2014 ISSN 2047-962X

CONVENTIONS:• Wearemarketersnotmarketeers;wearenotcavaliers.• WepractisemarketingnotadvertisingorPR.• Whenwerefertoproducts,wemeanproductsandservices.

Otherwisewerefertoofferings.

Most Cambridge Marketing Review articles are accompanied by a word cloud from wordle.net. You can use our clouds to assess the themes of the article: the larger the word, the more times it appears in the text.

• FindoutmoreabouttheReviewandotherCambridgeMarketingPresspublicationsat:www.marketingcollege.com/blog/cambridge-marketing-review

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Feature in our next journalSubmit an article to us and it could appear in the next Review. It is a great achievement to add to your CV and can help boost your reputation. All ideas and thoughts on marketing related issues are welcome. Email: [email protected] for more details.

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welcome to the first issue of 2014.Lastyearsawthelaunch

ofourveryownMarketingHandbooks.These ten Handbooks, written by ourown tutors, who are all professionalmarketers, cover everything you needto knowabout thekeyelementsof themarketingmix.AspecialthankstoKoganPage for making it all possible. Thisyearwewillbebuildingon thesewithnew publications and the Cambridge

Marketing Review biweekly radio show on 107.9/1 FM whichlaunchedinFebruary.

WehavemadesomeinterestingchangestoCambridgeMarketingReviewtoo.WehavepackedinsomenewregularfeaturesandourupcomingthemesfortheyearhavebeensetbyourbrandnewEditorialBoard,whichmetforthefirsttimeearlierthisyear.YoucanfindoutmoreabouttheBoardonpage7.AndtokeepyouuptodatewiththeReviewonamoreregularbasis,wewillbesendingoutmonthlynewsletters,packedwithexclusiveonlinearticles,soyoucannowgetyourReviewfixbetweenissues.

THE ANNUAL DINNER Don’tmissouton thisyear’sAnnualDinneratSt John’sCollege,Cambridge onWednesday 9 July, with this year’s special guestspeaker, Gregory Roekens, CTO at Abbot MeadVickers BBDO.Gregory,whowasrecentlynamedasoneofCampaign’s topfivecreativetechnologiststowatch,willtalkabouthowtechnologicalinnovationsarecausingnewconsumerbehavioursandhowtheyarefuellinganewformofindustrialrevolution.Formoreinformationandtobookyourplace,[email protected].

THIS ISSUE BacktotheReview,thisissueisfocusedon‘ChangingCustomers’.It considers changes in customer behaviour, sophistication, andtolerance. The focus shifts away from B2B and B2C towards‘relationships’. How is your customer influenced? What newprioritiesdotheyhave?Howmightthesechangeassomeeconomiesrecoverandothersslowdown?Howdoyouresearchbehaviourand

EDITORIAL

From Emma Garland, Publishing Editor of Cambridge Marketing College.

EMMA GARLAND

Emma joined Cambridge Marketing College in August 2012 and quickly made her mark managing some of the College’s on-going publishing projects, including study guides, the Review and more recently the

College’s own Marketing Handbooks. She has over 9 years’ experience in corporate communications, working with listed stock-exchange

quoted companies and currently works for Soup Creative Ltd, a creative video production studio in Chester.

managesuperiorbuyerknowledgeandcynicism?Whatisthefutureforbricksandmortarandphysicalcustomerinteraction?

Thiseditionincludesanew,regularmarketingmash-upfromPeterFisk,aninsightfullookatthechallengesfacingAnneGodfreyattheCharteredInstituteofMarketingin‘ADayintheLifeof’;andanostalgiclookatthelongevityofLegobyNickWake.

Wehopeyouenjoythisissueandifyouwouldliketosubscribetofurtherissuesorwriteanarticleforus,pleasegetintouchat:[email protected].

Welookforwardtohearingfromyousoon.

EmmaGarlandPublishingEditor


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MEET THE EDITORIAL BOARD

The Cambridge Marketing Review Editorial Board is made up of professional marketers from around the world, with

wide-ranging areas of expertise. We are delighted to have thefollowingpeopleonboard,whohavealreadycontributedawealthofknowledgeandinsight:

CHARLES NIxON CharlesisChairmanandafoundingdirectorofCambridgeMarketingColleges.Hehasmanyyears’ofmarketingexperienceacrossabroadrangeofindustriesincludingtextiles,software,telecommunicationsandfinancialservices.CharleshasanMBAfromWarwickBusinessSchoolandisaFellowofCAM,CIMandtheRoyalSocietyofArts.

ANDREW HATCHERAndrewistheManagingDirectorofTheAppliedKnowledgeNetworkLtd.Hehasalonghistoryofassistingwiththeidentification,developmentandmanagementofinnovativesolutionswithinlargeandsmallcompaniesacrossthebusinessspectrum.AndrewisatutorattheCollegeandisalsoPublicationsDirectoroftheCambridgeMarketingReview.

ANNE GODFREyAnnewas appointed CEO at the CharteredInstitute of Marketing in August 2012.Previously CEO of the GTMC, Anne hashad leadership roles in a diverse range ofmembershiporganisationsincludingtheLawSociety,whereshewasdirectorofcommercialandmembershipservicesandtheCBIwhereshewascommercialdirector.

PETER FISK Businessandinnovation,brandandmarketingexpertandfounderofGeniusWorks.Peterisanexperiencedconsultantandcoach,awell-renownedkeynotespeakerandbusinessauthorofsixbooks.

DEBBIE FROST DebbieisDirectorofCommunicationsandPublicAffairsatFacebook,basedinSanFrancisco.DebbiehasanLLB(Honours)inLawfromtheUniversityofWarwickandhasworkedasHeadofInternationalCommunicationsatGoogle,aswellasEuropeanCommunicationsManageratNike.

PHIL ORE PhiliscurrentlyManagingDirectoratElmwoodAustralia(BrandDesign).Philhasawealthofexperienceinthetelecommunicationsindustrywherehe“re-invented”himselfseveraltimesfromanengineerthroughtosalesandfinallymarketing.

ROGER PALMERRogerPalmer,formerDeanoftheBusinessSchoolatBournemouthUniversity.Hehasvariedcommercialexperienceinthechemical,manufacturing,foodandpharmaceuticalsectors.HestartedhiscareerasaresearchscientistwithICIandaftertakinghisMBAheldpositionsas

MarketingDirectorofalargemanufacturingcompanyandthenChiefExecutiveoftheUK/Irelanddivisionofamultinationalpharmaceuticalbusiness.

THEO DINGEMANS Theo,basedinTheNetherlands,isanexperiencedCharteredMarketer,managerandselfemployedconsultantinMarketingandBusinessAdministrationwithover25years’experienceininternationalmarketingandinterim-managementinprofitandnotforprofitorganisations.

TheoisalsotheRegionalManagerforBeNeLuxforCambridgeMarketingCollege.HehasaKHODiplomainBusinessAdministration,theCIMPostgraduateDiplomainMarketingaswellasaMasterofArtsinMarketing.HeisalsoaMCIMandaCharteredMarketer.

EDITORIAL BOARD

8 CAMBRIDGE MARKETING REVIEW - ISSUE 8 Q2 2014

UPCOMING THEMES

THIS yEAR’S UPCOMING THEMESFollowingdiscussionswiththeEditorialBoardandothermarketingexpertsthefollowingthemesfor2014havebeenproposed:

2014 Q3 EDITION: MARKETING INFLUENCEThiseditionwill focusonwhatskills,knowledgeandbehavioursmarketingpractitionersneedtohaveinordertoincreasetheirinputtoand influenceonexecutive strategymakingandkeydecision-making.Itwillconsidertheneedforbetterfinancialunderstandingandskillssothatmarketingisrecognisedasessentialforgrowth;morein-depthunderstandingofstrategycreationandimplementation;theimportanceofHRandteamcompatibilities;trainingdevelopmentplanning;andstrategiceffectivenessandmeasurement.

2014 Q4 EDITION: AGILE MARKETINGThiseditionwillfocusonthechallengesandopportunitiesthatnewskillsandtechnologiescreateforfasterandmoreeffectivemarketingresponses to changing market/customer structures, attitudes anddesires.Itwillconsiderthenewcapabilitiesandmindsetsrequired;the integration ofmarketing approaches across technologies andmedia;andhowthesecanbeorchestratedtodeliverdynamicandeffectivemarketingresponsesinelementssuchaspricing,channelusageandproduct/servicecreation.

2015 Q1 EDITION: DIFFERENT/FUTURE MARKETSThiseditionwillfocusonhowdifferentmarketsdemanddifferentapproaches, dependent on industry, geography, growth stage,cultureandarangeofotherparameters.Itwillconsiderhow‘older’economies(Canada,Italy,andtheUK)areadaptingtothechangeandhownewereconomies(Indonesia,Brazil,andpartsofAfrica)are leapfroggingold ideas. Itwill focuson theneed foraglobalmindset and the potential to reshapemarketswith new strategicthinkingandinnovation.

If you are interested in writing an article, be it an opinion, a review or your findings on any of the above themes, then get in touch with us at [email protected].

We look forward to hearing from you.

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As brands fight the ever raging battle against their competitors, they are

under greater pressure to delve deeper into increasing volumes of what is now termed ‘Big Data’ in order to gain a more accurate understanding of the current and future buying behaviour of their customers. But how can this be done?As practitioners in the field, we havedeveloped a model for separating andthenanalysingconsumerdataacrossthreedimensions:attitudinal,circumstantialandbehaviouraltorevealan‘EffectiveNetPreferenceScore’(ENP).Thisresultsinatruepictureofthekeydriversofconsumers’motivationsandtheirpreferencesfordifferingbrands.Resultsfromourresearchandworkwithmajorbrandsprovethatbrandsdonothavetobeoverwhelmedbythesheer volume of customer data when there is in fact a simplesolution.

CHALLENGE: THE COMPLExITy OF BIG DATATheclassificationofBigDatainitselfisachallenge,andtheironylies in the fact thatnotmuchof it is that ‘big’. IndeedBigDatawouldbemoreaccuratelydescribedas“unwieldydata”becauseit is ”analogous” in nature, comprising pictures, video, randomTweets,Facebookpostsandotherinformationwhichisnoteasilyclassifiableorgrouped together. Inaddition,comparedwith thevolumesofconventionaldataavailable–forexampleasingleUKsupermarketchaingeneratesover30millionpiecesoftransactionalinformationeveryday–muchofthebranddatacollectedbySocialMediamonitoringplatformsonlygoesback30daysandfitsintooneExcelworksheet.

STEVE MESSENGER

MAKING SENSE OF BIG DATA: AS EASy AS ABC?

Steve Messenger describes the current context and challenges of Big Data. He illustrates how brands can gain competitive advantage by gaining deeper and more accurate insight into how specific drivers of consumer behaviour impact on current and future share of wallet, so that they can tailor their marketing programmes more effectively and profitably to individual

customers and segments.

“BIG DATA IS “ANALOGOUS” IN NATURE, COMPRISING PICTURES, VIDEO, RANDOM TWEETS, FACEBOOK POSTS AND OTHER INFORMATION WHICH IS NOT EASILy CLASSIFIABLE.”


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Thoughtherequirementformarketingdataanalysisiswidelyagreedupon,theactualtoolsandproceduresavailabletodaycanvaryduetotheircomplexity.Indeedcurrently,themainchallengewithBigDataisthatthetangiblepotentialadvantagesofsuchinformationarestymiedbythelackofcustomer/consumer-facingsystemstoanalysethedatainrealtime.Thisinturnmakesitdifficulttousetheinformationforanythingotherthangatheringgeneralviews.Thechallengeforbrandsisthereforetofindastructureandprocesstoextractthemostvaluableinformationfromthisdata,especiallyasitiswithinthisdatathatbrandscanfindoutmoreabouttheircustomersthaneverbefore.

CURRENT METHODS OF DATA COLLECTIONLoyaltyprogrammesareofcourseverypopularwithbrandsand,because of their benefits, they are popular with customers too.Recentresearch1fromSASandConlumino(2013)showsthatUKconsumersarekeentosignupforsuchprogrammes(andagreetothetrackingoftheirpurchasinghabits),withnearly95%sayingthattheyownedmorethanoneloyaltycard,and90%ofadultsclaimingthat they used loyalty programmes regularly. It also goes furtherthanthat:around40%ofBritishconsumerssaidthattheywouldbelesslikelytousearetaileriftheydidnothavealoyaltyschemeinplace.FromourresearchwehavefoundthatinEuropeasawhole,morethan112millionretailerloyaltycardshavebeenissued,andcumulativeinvestmentsmadeinthepeopleandITtosupportandleveragetheseschemesrunintomanybillionsofpounds.Brandshavebeenbenefittingfromloyaltycardschemesintwoways:asadatasourceofconsumerpurchasingbehaviourbutalsoasameansofdistributingandtrackinginreal-timethetake-upofMoneyOffNextPurchase(MONP)couponstostimulateadditionalspending.

However,sofartheopportunitytousethemtoincreaselongtermbrandpreferencehaslargelybeenmissed.Thisbegsanewapproachfrombrands,onewhichwillresultinamoreaccurateviewofcurrentandfuturespendingpatternsamongstcustomersbyidentifyingmoreaccuratelytheircustomers’truemotivationsandtruepreferencesfordifferingbrands.Thisinturnrequiresbetter

systemstointegratedatafromdifferingsources,distilitintothethreekeydimensionsweassertarerelevant,andthenrespondtotheimplications.

SOLUTION: THE NEW ABC MODELAnthropologists have known for a long time that it is themixofattitudes andcircumstances thatdeterminepeople’sdecisions. Inessencethecombinationofpeople’sviewson“What’spossible?”and“What’simportant?”willdeterminetheirviewof“What’sbest?”andultimatelythatcombinationwillbewhatdrivestheirbehaviour.

Conveniently,thekeyareasthatbrandsneedtofocusoninordertobeabletoleveragealltypesofdata,irrespectiveofsource,canbetaggedthe‘ABCofBigData.’

• Attitudes• Behaviours• Circumstances

A: ATTITUDESAs analysts and practitioners, we have begun by leveragingmethods of consumer understanding forged over decades in themarket research industry that help to classify attitudes into fivekeydimensionsandthenrefiningthesethroughextensiveresearchconductedwithmajorcompanies.Thesefivedimensionshavebeenproven to influence choice behaviour andwhen combinedwithanunderstandingoftheconsumer’scurrentcircumstances(whichnowmeanswheretheyareandwhattheyaredoing,notjustwhotheyareandwheretheylive)formthekeymotivationaldriversthatdetermineactualobservedbehaviour.


“BRANDS DELVE DEEPER INTO ‘BIG DATA’ IN ORDER TO GAIN A MORE ACCURATE UNDERSTANDING OF THE CURRENT AND FUTURE BUyING BEHAVIOUR OF THEIR CUSTOMERS.”

The five key attitudinal measures are:• Relevancy (Right Product/Service)• Identification (Right Brand(s))• Accessibility (Right Means)• Value (Right Price)• Confidence (Right Way)

In fact, all we are doing here is thinking like the user/buyer:• Will this do the job I need? (Is it a soft drink?)• Is this a brand I am happy to be associated with?

(Do I like its image/reputation?)• Is it obtainable? (If I believe it is only in pubs I am

less likely to look elsewhere)• Is it value for money versus the other options

open to me?• What is the risk it will not deliver its functional

promise? (i.e. quench my thirst?)

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Clearly,ifabrandhasahighproportionofconsumersagreeingwithallofthese,thentheyarelikelytobeprogressingtowardsachievingsalesperformancegrowthandmaximisingtheirmarketshare.Theyhavecreatedahigherlevelof‘BrandPull’or‘BrandPreference’that,otherthingsbeingequal,willleadtotheirbrandbeingchosenmoreoftenthanthecompetition.

Tomakethismorepracticalwecansimplifytheprocessbytakingaweightedscoreacrossthe5dimensionsthatenablescompaniestoratetheirbrandsonascaleofwhatcanbetermedEffectiveNetPreference(ENP).Thisthenbecomesasummarymeasureofcustomerfavourabilityorattitudetowardstheirbrandswhichcanthencombinedwiththecircumstanceinformationtopredictfutureindividualbehaviour.

MiningBigDatatoseehowwellbrandsaredoingonthesedimensionsisnowafeasibleoption.OurresearchandexperienceworkingwithmajorbrandsshowsthattherearestronglinksbetweentheENPscoreandshareofwalletattheindividualcustomerlevel,ashighlightedinthechartbelow.

B: IDENTIFyING BEHAVIOURAL DATABehavioural measures are straightforward: recency, frequency,weightofpurchase,shareofwallet,penetrationandothermeasuresarewell-known.Itisimportant,however,tousedatathatisreflectiveoftheconsumers’actualbehaviourinordertoprovethecasethatthemodelsaretrulypredictiveaswellasdescriptive.

Claimedbehaviourcansufferfrom‘selectivememory’and,dependingonthemarket,theanswersgivenmaywellbedifferentfromactualbehaviour,makingitmuchlessreliable.Whenitcomestoresearch,thedegreeofbrandloyaltymayalsobemuchgreaterthanconsumerswouldclaimwhendoing,forexample,abrandpricetrade-offresearchexercise.Suchexercisesarenotoriousforproducingpricesensitivityresultsbasedonpurerationalisation,withverylittleemotionfactoredin.Consequently,thepricesensitivitiestheyproducearenotborneoutinreality.

However,claimedbehaviour(fromwhateversource)canbeusedprovideditisrecognisedassuchandis‘calibrated’toactualbehaviourusing,forexample,actualtransactionaldata.

Share of Wallet vs. Effective Net Preference

Opportunities

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Effective Net Preference (ENP)

TherelationshipbetweenEffectiveNetPreference(ENP)scoreandshareofwalletatindividualcustomerlevel.


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Inotherwordscalibrationenablesbrandstouseclaimeddatafromresearchand socialmedia sites toobtain/extrapolateestimatesofwhattherealfinancialbenefitsorimpactswillbe,ratherthanhavingtobasethemallonlessreliable,purelyclaimed,behaviour.

Andasmentionedabove,theotherkeydifferencebetweenclaimedandactualbehaviouristhatactualbehaviourisdrivenbybothattitudesandcircumstances,whereasclaimedbehaviourismostlydrivenbyattitudes.Forexample,peoplewillaspiretobuy‘betterquality’brandsandconsequentlyinmanyresearchstudies,claimedpurchasingofmarket-leadingbrandsisoftenhigherthanreality.Whilstpeoplemayaspiretothesebrands,theydonotnecessarilyhavethedisposableincometobuythemeverytime,ifatall.Thisisanexampleofhow‘circumstances’combinewith‘attitudes’tocreatetheactual‘behaviour’thatisseenintransactionaldata.

Thetheoreticalmodel2underpinningthisapproachwasfirstappliedintheUSA(DickandBasu,1994,fromTheAcademyofMarketingScienceatNewYorkUniversity)andhasbeenproventobeveryaccurateinitspredictions.ItisbasedonanthropologicalscienceandisnodoubtoneofthereasonswhyGoogleisspendingsomuchmoneytyingtogetherseeminglyunrelateddatabases-thebetterthepictureyouhaveofpeople’sattitudesandcircumstancesthemorereliableyourpredictionsofindividualbehaviourbecome.


“ANALySING CONSUMER DATA ACROSS THREE DIMENSIONS: ATTITUDINAL, CIRCUMSTANTIAL AND BEHAVIOURAL TO REVEAL AN ‘EFFECTIVE NET PREFERENCE SCORE’ (ENP).”

The biggest challenge of all ismake sure that the technology isusedtoenhancebrandstrengthsnotunderminethem.Butthat isaseparatedebate.

ExAMPLES OF THE BENEFITS OF THE ABC APPROACH: THREE CASE STUDIES1. Weworkwithacompanythatprovidesairporttransfersbetween

centralLondonandoneofLondon’skeyairports.Byreviewingbehaviouraldata,wewereabletounderstandwhodidwhat,andwhen;attitudinaldata revealedcustomers thatpreferreddifferingmodes of transport andwhy; and the circumstancedatashowedthat,whenotherthingswereequal,peopleweremuchlesslikelytousetheserviceiftheycamefromGermany.Afterdiscussionwiththeclient,wediscoveredthattheclientcurrentlyhadnoGermanwebsite.This simply illustrates thebenefitoftheABCapproach:identifyingandunderstandingthedifferencethateachelementmakes.

2. RedRouteworkedwithawell-knownmobilephonecompanywhichwantedtouseathirdpartybrandontheirphones.WeinterpretedtheirBigDatatoidentifytheattitudesofpeoplewhowouldbe attractedby such a proposition; andhelped themtousetheircustomerdatabasetoidentifywhereaboutsinthecountrytheywouldbelocated.Storeswerestockedandpricesweresetaccordingly.Theyhadthemostsuccessfultake-upforanewphonetodate.Butthiswasonlyachievedbecauseoftheoverridingvisionthatattitudesandcircumstancearewhatdrivebehaviour.

3. Our third example is from our work for a major UK DIYretailer. We used data combining transactional information(from their loyalty card programme) with Big Data on bothattitudes and circumstances gathered from customer surveys

C: CHALLENGING CONSUMER CIRCUMSTANCESUnderstandingconsumercircumstancesremainsthefinalchallenge.The ability to respond to real-time customer circumstances isprobablystillafuturisticideaformostretailersandmanufacturers,althoughthemeanstomakeitarealityisdevelopingrapidly.Theuseofmobiletechnologyisfacilitatingthisbutformarketerstheonebigdangerlurkinginthisnewtechnologyisthatitdrivesmoreandmoremarketing funds towardsshort term,non-brandbuilding (infact,branddestroying)activitieslikepricepromotion.

“THE MAIN CHALLENGE WITH BIG DATA IS THAT THE TANGIBLE POTENTIAL ADVANTAGES OF SUCH INFORMATION ARE STyMIED By THE LACK OF CUSTOMER/CONSUMER-FACING SySTEMS TO ANALySE THE DATA IN REAL TIME.”

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andotherinteractions.Fromthisamodelofexpectedcustomervisitfrequencywasdeveloped.Thismodelprovedtobe82%accurate in predicting future customer visit frequency andspendthroughoutthefollowing12monthperiod.Itenabledtheretailertoidentifysomekeycircumstancefeaturesthatdroveupvisitbehaviour(suchashavingrecentlymovedintoanewhouseor their levelof exposure to above-the-linemarketingactivity)andthemixofattitudesandcircumstancesthatwouldindicatewhichpartsofthestorecustomerswouldbemostlikelytobuyfrom.Thevaluetotheclientofusingthisinformationwasverysubstantial,amountingtoover£130mperannuminincrementalsales.

CONCLUSIONWithpopularretailerloyaltyschemestrackingbehaviours,andBigDatagivingviewsintoattitudesandcircumstances,theopportunitytounderstandWhat?andWhy?hasneverbeenbetter.Everybrandcan now have an ‘ABC Kaleidoscope’ that combines the retailpictureofconsumerbehaviourwiththeBigDatapictureofattitudesand circumstances, and one which empowers brands to makebetterdecisions.AtRedRoutewearecurrentlyusingthesemodelsandmethodstohelpmajorbrandsmakethemostofBigData,tohelpthemtailortheirmarketingprogrammeseffectivelyandmoreprofitably.We are helping brands serve customers of today andtomorrow.

Thetwobigchallengesthatarecurrentlybeingaddressedarereal-timeanalysisandresponseand,morefundamentally,usingBigDatatoenhancethecustomerexperiencenotcheapenit.SeveralyearsofITinvestmentwillbeneededbeforethefirstofthesewillhavebeentackledeffectivelyandRedRouteisworkingwithbothretailersandshoppingcentrelandlordstohelpthemrealisetheopportunities.Forthesecondchallenge,thewayforwardisforclientstousetheABCapproachtotrackcustomer

Steve Messenger is a co-founder and Head of Data Analysis, Modelling and Insights at leading marketing effectiveness company, RedRoute International. Steve co-founded RedRoute International

in 2007 and the company’s clients over the years include Viking Direct, Office Depot, Heathrow Airport and Shepherd Neame.

With a wealth of market knowledge from experience working both client and agency-side, Steve is a guest lecturer at the Institute of

Promotional Marketing, a full member of The Marketing Society and a fellow of the Institute of Direct and Digital Marketing.

REFERENCES

SAS. (2013) Study: 95% of UK consumers appreciate customer loyalty programs. SAS press release, 13th September,https://www.sas.com/news/preleases/retail-high-performance-analytics.html accessed on 8th Feb 2014

Framework. Journal of the Academy of Marketing Science, 22, 99-113


sentiment,measurethecurrentEffectivePreferenceScorefortheirbrandsandthenusethetechnologytomanagetheirscoresupwards,notletthetechnologydrivethemtogivingwayever-increasinglevelsofdiscountjustbecausethecustomerseemstobeintherightplaceattherighttime.

“CLAIMED BEHAVIOUR CAN SUFFER FROM ‘SELECTIVE MEMORy’ AND, DEPENDING ON THE MARKET, THE ANSWERS GIVEN MAy WELL BE DIFFERENT FROM ACTUAL BEHAVIOUR, MAKING IT MUCH LESS RELIABLE.”

“EVERy BRAND CAN NOW HAVE THE ‘ABC KALEIDOSCOPE’ THAT COMBINES THE RETAIL PICTURE OF CONSUMER BEHAVIOUR WITH THE BIG DATA PICTURE OF ATTITUDES AND CIRCUMSTANCES.”

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There is a hype cycle around changesto legislation, particularly anything

thataffectsbusinesses.Thedraftlegislationisannounced;expertsandvestedinterestsstartscarestories,everyonepanics.Thereisthenalongperiodofnegotiationandwhenthefinallegislationisinplace,itisnotasbadaswewereledtobelieve.Ifyourememberthehypearound the socalled “CookieLaw” (partofThePrivacyandElectronicCommunicationsRegulations), you will remember that whentheregulationswerefirstdiscussed,therewerewarningsabouttheendofonlinemarketing.Theruleshavebeeninplaceforawhilenowandareembedded.Consumersareusedtoacookiestatementonawebsiteandmarketersstillusecookiestocollectinformation.

TheEUDataProtectionRegulationhasbeenthroughaprolongedhypestageofthecycle.Ithasgonefromhypetoquiet.TheoriginalEUproposalsweresetoutin2012andcausedconsternation.ThethenJusticeMinisterHelenGrantsaidthattheannualcostofcomplyingwiththedraftruleswouldbebetween£100mand£360mforUKbusinesses,publicsectororganisationsandcharities.Organisations,suchastheDMA(DirectMarketingAssociation),ledcallsforamendmentstothedraft(myfavouritewastheireye-catching“DataProtection2013-180daystosaveyourindustry”).

TheproposalswereamendedbytheEUinOctober2013andanewdraftcreated.PartlyduetotheeffortsoflobbyinggroupssuchastheDMA,theamendedproposalsaremoreworkableandlessexciting.Muchlesshasbeenwrittenaboutthese.

Abriefinternetsearchwilluncoverplentyofscarestoriesabouttheearlierproposalsandlotsofadvice(somenowunnecessary)onhowtoprepareyourbusinessforthesemajorchanges.

Verylittleisavailableonthenewdraft.Ifyoudoanyresearchonthis,noteverycarefullythedatethearticlewaswritten.AswithallEUlegislation,thereisalongprocessofnegotiationandmuchchangesbetweendraftsandthefinaltext.

WILL IT AFFECT ME?Yes,ifyouholdcustomerandenquirerdata.However,thelegislationwillnotcomeintoforcebefore2015.

KIRAN KAPUR

THE EU DATA PROTECTION REGULATION: CHANGING HOW yOU

HOLD AND PROCESS CUSTOMER DATA The aim of the Regulation is to harmonise the current data protection laws across the EU member states. Businesses which

are based outside the EU but target EU citizens will also be affected (such as US based companies). It would appear that the current situation is “monitor” but don’t panic. Originally due to come in mid-way through 2014, the rules will not now come into

place until 2015 at the earliest.

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IfyouaredesigninganewCRMsystemoranyothersystemofstoringcustomerdata,designthesechangesinsothatyoudonothavetomakeexpensivechangeslatertothewayyourcustomers’dataisstored.

HOW WILL IT WORK? There are a number of key issues and note that the fines aredraconian.Thefines in facthave increasedbetween thefirstandseconddrafts(possiblyasareactiontothe“Snowden”leaks).

Thefinesforbreachareuptoamaximumofthegreaterof100mEurosor5%ofglobalturnover(thiswas1mEurosor2%ofturnoverinthefirstdraft).

SOME KEy ISSUES:Thisarticle isbasedon thedraftproposalspublished inOctober2013.Therewill be further amendments.There aremany issuesaroundthedraftandthesearetheonesthatcaughtmyeye.1 Being accountable: this will entail establishing a culture of

monitoring, reviewing and assessing your data processingprocedures. The aim is to minimise data processing andretention, and build in safeguards to all data processingactivities.

2 Explicit consent: organisations will have to obtain explicit,freelygiven,specificandinformedconsentfromtheindividualswhosedata it isholding.Consentmustbeobtained throughastatementor“clearaffirmativeaction”.Consentcannotbegiven through silenceor inactivityon thepartof individual.Consent isalsonotgiven justbyusingaservice.Consent ispurpose-limited.Oncethepurposeceases,consentnolongerexists.Therehasbeenmuchconcernaboutwhetherthiswould

affectmarketingprofilinginformation,Thenewdraftsuggeststhatitispossiblethatprofilingformarketingpurposesmaynotrequirefullpriorexplicitconsent.However,moreclarificationisneeded.

TheintentionofthisconsentisbestunderstoodinthewordsoftheEUcommissioner,VivianeReding:“Peopleneedtobe

informedabouttheprocessingoftheirdatainasimpleclearlanguagetheycanunderstand.Internetusersmustbetoldwhichdataiscollected,forwhatpurpose,howlongandhowitwillbestored.Theyneedtoknowhowitmightbeusedbythirdparties,theymustknowtheirrightsandtowhomtheycanaddressiftheythinktheirrightshavebeenviolated.”

TheOctober2013draftalsointroducesaninterestingideaofusingstandardsymbolstoexplainwhathappenstodata.IunderstandthatthisideamaynotbetakenforwardintotheRegulation,butitshowsthelevelofclaritytheEUisaimingfor.

Herearesomeexamplesgiveninthedraft:3 “Privacy by design” requirement:thismeansthatwhenyouare

designingnewsystemsforholdingdata(suchasanewCRMsystem)ormodifyingyourcurrentsystem,youmustconsiderhowtominimisetheimpactonanindividual’sprivacy.Privacysettingsshouldbethedefaultposition.ItisnotclearifthiswillbearequirementtochangecurrentCRMsystems.

4 Data Protection Officer: any company processing personaldata of more than 5,000 individuals must appoint a DataProtectionOfficer.TheexactroleofthisDPOisnotdefined.

5 Right of erasure: thiswasoriginallydraftedasa“right tobeforgotten”. Generally, this means an individual can ask anorganisationtodeletepersonaldatastoredaboutthem“withoutdelay”.Thereisarightfororganisationstoclaimthattheyhave

alegitimate,legallyjustifiedreasontokeepthedataintheirdatabase,butthiswouldbeforveryspecificpurposes,suchasthearchivesofanewspaper.

In the language of the EU, there is a huge difference between a “directive” and a “regulation”.• A Directive sets out a goal that all EU countries

must achieve but each country can decide howto implement it into their own legislation – thusinevitablydelayingtheimplementationandgivingbusinessesplentyofwarning.

• ARegulationmeans itwill be directly applicabletoallEUmember states. Itmustbeapplied in itsentiretyacrosstheEUwithoutanychanges.

“PEOPLE NEED TO BE INFORMED ABOUT THE PROCESSING OF THEIR DATA: WHICH DATA IS COLLECTED, FOR WHAT PURPOSE, HOW LONG AND HOW IT WILL BE STORED.”


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6 Intra-group international data transfers:thismeanstransferringdataheldonEUcitizensoutsidetheEU,perhapsforstorageordataprocessing.Ifyourbusinesswishestodothis,youmusthavealegitimate

andjustifiablebasisfortransferringpersonaldatatojurisdictionsthatarenotrecognisedashavingadequatedataprotectionregulation.

ThereisconcernthatthiswillaffectholdingdataintheCloud,dependingonwherethatdataisstored.7 The new “European Data Protection Board”: willbe tasked

withproducingguidelinesonawide rangeofareas suchasmethods of verifying consent when processing children’spersonaldata.

WHAT SHOULD yOU DO NOW?TheUKInformationCommissioner’sOfficerecommendsthatyoustarttoreview3areasofyourdatainpreparationofthefullchanges:

(1) CONSENTWhateverisfinallyinthewordingoftheRegulation,itisclearthatorganisationswillneedtoensuretheyhaveexplicitconsent.Sotheancientruleof“quitacetconsentirevidetur”meaning“s/hewhois

silentconsents”doesnotapplytoholdingdata.So,startreviewing:1. Whatdoyoudowithdatathatyouhold?2. Doyouhaveexplicit,informedconsentfromyourcustomers

andenquirerstocarryoutyouranswertoQ1?3. Canyouprovethisexplicit,informedconsent?

Iftheanswerto2or3isno,thenstartsortingthisoutnow.InthewordsoftheICO,“Inthefutureyoumayalsoneedtobeabletoprovethatsomebodyhasknowinglygivenyoutheirconsent,sostartthinkingnowastohowyougatheranddocumentthis.”

RIGHT OF ERASUREIfanindividualrevokestheirconsent,orifyoudidnothavetheirconsentinthefirstplace,thenyouneedtobeabletoerasepersonaldataifyouareaskedtodoso.Makesurethatyoursystemscandothis.

(2) BREACH NOTIFICATIONItmaybecomecompulsorytonotifytheDataCommissionerifthereisabreachofdatasecurity.Startpreparingbymakingsureyouknowwhatinformationonindividualsisstoredwhere.Thenifthereisasecuritybreach,youwillknowwhoisaffectedandwhatdatamayhavebeencompromisedorlost.

€

No personal data is collected beyond the minimum necessary for each specific purpose of the processing.

No personal data is disseminated to commercial third parties.

No personal data is sold or rented.

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REFERENCES

Proposal for a regulation of the European Parliament and of the Council on the protection of individual with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) Available from http://ec.europa.eu/justice/data-protection/law/index_en.htmhttp://ico.org.uk/news/

blog/2013/one-small-step-for-eu-parliament accessed 14 February 2014http://www.itlawgroup.com/

resources/articles/212-draft-eu-

privacy-regulation-amendments-

approved accessed 13 February

2014

http://www.out-law.com/en/

articles/2013/October/data-

protection-reforms-delayed-but-

2015-deadline-gives-time-to-

get-new-rules-right-says-expert/

accessed 13 February 2014

http://www.europarl.europa.

eu/news/en/news-room/

content/20130502BKG07917/

html/QA-on-EU-data-protection-

reform accessed 12 February

2014

http://www.marketinglaw.

co.uk/article-preview/one-step-

forward,-two-steps-back-for-

eu-data-reforms accessed 11

February 2014

http://searchcloudsecurity.

techtarget.com/tip/The-

proposed-EU-data-protection-

regulation-and-its-impact-on-

cloud-users 7th February 2014

(3) PRIVACy By DESIGNThe Data Commissioner says “this sounds scary” but it is notveryclearwhatitactuallymeans.Forthemoment,whenyouaredesigningnewsystemsforholdingdata(suchasanewCRMsystem)ormodifyingyourcurrentsystem,youneedtominimisetheimpactonanindividual’sprivacy.

BE AWAREManyinthemarketingindustryareworriedabouttheimplicationsoftheRegulationandmanyissuesarestillunclear.Thelegislationwillbesubject tomorechangesbefore it isfinally implemented.BeawarethatyouwillbehearingalotmoreabouttheRegulationbetweennowand2015.

Kiran has worked predominately in Financial Services with expertise in customer relationship marketing and customer communications. As a

consultant, she has worked as project manager for companies including Liverpool Victoria, Barclays, London Life and Cazenove.

Kiran has taught a wide variety of courses at the College in Cambridge since 1999 and is the Distance Learning & Overseas Course Director,

and a CIM examiner.


CAMBRIDGE MARKETING HANDBOOK: LAWMarketingandtheLawbyKiranKapur(2013),publishedbyKoganPage.

Marketersshouldbeawarethatthereisalargeamountofregulationandlegislationthatisrelevanttotheirwork,andthatignoranceofthelawisneveranexcuse.However,manyfeelveryunsurehowthevariousrulesandregulationsaffectthem.

Thishandbookisanessentialanduniquelyaccessibleguidetothekeylegalissuesallmarketersneedtoknowaboutandnavigate.Writtenbyamarketer,ratherthanalawyer,itisdesignedtogivepracticalguidanceonallthenecessaryaspects.Itexaminesthekeyissuesthataffectmarketersinmarketingcommunications,includingbothtraditionalmediasuchasadvertisementsandsocialmedia.Legallanguageisveryprecise,andoftencomplicated,sothishandbookusescolloquiallanguageforclarity.

Eachchapterincludesclearsummaries,examplesandflowdiagramstohelpmarketersunderstandhowtocomplywiththelaw.

DISCLAIMERKiran Kapur is the author of The Marketing Handbook – Law,publishedbyKoganPage(2013).Iamamarketernotalawyer.Thisarticleisnotintendedtoprovidelegaladviceortobeasubstituteforlegaladvicebuttogivegeneralinformation.

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“WILL IT AFFECT ME? yES, IF yOU HOLD CUSTOMER AND ENQUIRER DATA.”


CHURN By Don Moyer

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People go to war for many reasons. Protectingfreedom,family,orcountryisgenerallyconsideredanobleone.Undercutting

acompetitorisnot.Thetoplineisapotentweapon—butonethatmustbewieldedwithfinesse,notmachismo.

Asastrategy,pricecuttingcanbedifficulttosustain;againstmoreefficientcompetitors,it’simpossible.Inhisfirst-ratebookCompetitiveSolutions:TheStrategist’sToolkit,R.PrestonMcAfeepointsoutthatpricewarsbetweenequalsproduceinjuriesonbothsidesandvictoryonneither.Solaunchhostilitiesonlywhenyou’resureyouhaveanoverwhelmingadvantageandcandrivetheotherguyfromthemarket.

Ofcourse,ifacompetitorattacks,you’llhavetoputupyourdukes.Butinpeacetime,itiswisertoinvestinareassuchasR&D,customerservice,andmarketing,whichjustifyraisingprices,notloweringthem.Afterall,cheap-unlikerichandthin-issomethingyoucanbetoexcess.

Don Moyer has collected his series of cartoons as a book, entitled 64 Drawings. It is available from Blurb at www.blurb.com/bookstore/

detail/949041

19CAMBRIDGE MARKETING REVIEW - ISSUE 8 Q2 2014

no longer does the customer expect one-way broadcast from an

organisation. Theyarelookingtodeveloprelationships and co-create contentwiththeir favouritebrands.This is ahardpillto swallow for somemarketerswho arebeingforcedtorelinquishcontroloftheirbelovedbrandidentitytotheirenthusiasticcustomers.

DIGITAL WORLDThe digital world has made a two-way conversation between brands andcustomersnotjustpossiblebutsomethingthatisnowexpected.Andthetypeofinformationsharedonsocialmediasitesisverydifferentfromanythingwehaveseenbeforeinmarketing.Ratherthanjustinformation about the latest product being launched or specialoffersavailable,customersnowexpectbrandstobemorepersonalandrevealmoreoftheiridentityandvalues.Todaycommunicationshouldnotjustbeaboutsharingknowledge,butalsosharingvaluesandnurturingrelationships.

Therearemanygoodexamples.H&Mhasdevelopedawonderfullyengagingpresenceonlineusingbackstagepictures,interviewsandgiveaways

DirectLinehasusedtheirFacebookfanstodeveloptheirmobileapplication.Ratherthanassumingtheyknowwhattheir

SARAH NAGRA

NO LONGER ‘US’ AND ‘THEM’We all remember the days when adverts just simply told us what to buy and where from. Big advertising corporations spent

time and money creating adverts for a specific group of individuals and placed them in our favourite magazines and between our guilty pleasure TV programmes. However, times are changing, the push is becoming a pull.

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customerswant,theyhaveusedtheircustomers’knowledgetocreateauseful,newpieceoftechnology.

Lippincott,abrandstrategyanddesignfirm,commissionedresearchtolookathowtobea“humanerabrand”.Theyfoundthatwherebrandswere‘human’:open,honest,excited,andevenflawedthiswastheresultofmorethanamarketingorsocialmediastrategy.Itencompassedthecultureoftheorganisation;howtheymakedecisionsandhowtheiremployeesact.

Brandsthatrankedhighlyas‘human’includedEmirates,VirginAtlantic,JohnLewisandYoSushi!YoSushi!hasevenchangedits4Psbasedonsocialmediafeedback.Ittookadviceontheproducttheyserved,thedesignoftheirrestaurants,howtheypromotedtheorganisationandevenwhoandhowtheyemployedstaff.

Openingupandsharingwithcustomersbuildstrustandinturntheywillsharetheirlikes,dislikesandwhattheywantfromyourproductorservice.Ratherthanpayinghugeamountsofmoneyforsurveys,focusgroupsanddata,useyourbrandadvocatesasasourceofmarketresearch.

Touseamorepersonalexample,lastChristmasIorderedanexpensive,engravedpenfromAspinalofLondon.On18December,despitehavingplacedtheordernearlyamonthearlier,Ihadstillnotreceivedmygift.Tomakemattersworse,theircustomerserviceteamkeptsendingmeinformationwhichconflictedwiththeadvicegivenontheirwebsite,andthenIreceivedanemailaskingmetoreviewmypurchaseonline…..which,ofcourseIdid:

“TWO-WAy CONVERSATION BETWEEN BRANDS AND CUSTOMERS.”

DANGERSOK,soyouhavesetupyoursocialmediaplatformsandyouhavestartedcreatingsomecontent.Great!Butrememberyouareinthepubliceye,peoplearewatchingyouand theyareexpectingyoutorespondifyouareusinganinstantresponsesitesuchasTwitter.

Backintheday,ifacustomerhadaproblemtheywouldcallyouandcomplaintoafewfriendsandfamily.Thatwasdamagingenough,butnowtheycansharetheirgrievanceontheirblog,yourFacebookpage,onTwitter,oronareviewsiteformillionsofpeopletosee.Soyouneedtobeontheballaboutrespondingtoproblemsquickly,openlyandconstructively.OtherwiseyoumightendupinthepredicamentBritishAirwaysfoundthemselvesinlastyearwhenHasanSyedcomplainedabouthisfather’slostluggageviatheirTwitterfeed.

Tomakemattersworsenotonlydocustomershavethechannelstoventtheirangerpublicallyaboutaproblem,theycanadvertisethisfact:Hasan,toaddinsulttoinjury,paid$1000outofhisownmoneytopromotethepostasanadvertisementonTwittertomakesureitgotmaximumexposure.IttookoverfourhoursforBritishAirwaystoreplybywhichtimethestoryhadbeentakenupbybloggersandsharedandretweetedaroundtheworld.Ithadgoneviral!

Iampleasedtosay,however,thatwithin24hoursIreceivedacallfromcustomerservicesassuringmethatmyorderwould

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bewithmeintimeforChristmas,andwhenImissedthedeliveryscheduled,theyevenofferedtorearrangedeliveryforme.TheymanagedtoturnaroundmyperceptionoftheircustomerserviceinonephonecallandnowIamtellingyouaboutit.Theimpactofabadreviewcanbeenormousbutitcanbeturnedaround.

CONTROLControlisnotsomethingpeopleliketogiveup,especiallymarketers.However,learningtoletgoandstopspoonfeedingcustomersallowsyou toco-createwithyouradvocates.Customerswant tochoosehowandwhentheyseeyourcontent,ratherthanbeingdictatedto.

Itmaybescarytorelinquishcontrolofyourbrand,butifsomeoneispassionateaboutwhatyoudo,don’tstifleit,embraceit.SaraRossolovesNutella,sheevenlaunchedWorldNutelladayandhasnurtureda40,000strongaudiencetoshareherrecipesandnews.However,ratherthaninvitingMsRossotowritearticlesfortheNutellawebsiteoraskinghertopromotetheproductwiththem,Nutellasentheraceaseordesistletter.TherewasahugebacklashfromherNutellaobsessedaudienceandsheevengainedcoverageforherWorldNutellaDayonnetworkssuchasNBCandCCN.

Inaddition,ifyouaregoingtomakethemostofsocialmedia,makesureyoudoitwholeheartedly.ShellRobshaw-BryanlovedRocketDogshoesandfollowedthemonFacebookandTwitter.Whenevertheyadvertisedacompetitionforfreeshoesshealwaysentered.Butwhenwinnerswerenotdrawnwhenscheduled,andpostsstartedtobedeletedshebecamedisillusionedandlostherfaithinthebrand.Abrandadvocatewaslost.Ifyouaregoingtoplungeheadfirstintoatwo-wayrelationshipmakesureyouhavethesupportandresourcestodoitproperly.

AgoodexampleofwhereanorganisationhaslettheircustomersdosomeoftheworkforthemisthePhilippinesTouristDepartment,whichdecidednottocreateanyofitsowncontentbutinsteadinvitedpeopletosubmittheirphotosandstoriesinresponsetotheirmarketingcampaign“It’smorefuninthePhilippines”.Theresultwasa16%increaseinvisitstothecountry.

WILLING TO SHAREAcommonthemeisthatcustomersarehappytosharewithbrandsifthereisgoingtobeabenefittothem.Mastercardresearchshowedthat21%ofcustomerswilltellyouanythingforareward.Thisdoesnothavetobemonetary;itcanbeexclusivecontentforfans.

Customersarealsohappytosharepreferencesiftheybelieveitwillleadtoabetterexperienceforthem.LayscrispscreatedanapplicationinconjunctionwithFacebooktochangethe‘Like’buttonto“I’deatthat”togetnewflavourideas.IntheUSAtheyhadover4millionsubmissionsofnewflavours.

SHARING; WHERE AND HOWAlthoughtheremaybeawillingnessforbrandstobuildtwowayrelationshipswiththeircustomers,knowingwhichplatformtousecanbeanotherhurdle.Therearemanysimilaritiesbetweenthem:halfofyourfollowersorpeoplelikingyouareprobablyalreadyyourcustomers.However therearedifferencesbetweenplatforms.Forexample, researchbyConstantContact (2011)showed thatmorepeopleinteractwithbrandsonFacebookthanthroughothersocialmediachannels.However,theyaremorelikelytomakeapositivecomment about your brandonTwitter thanon Facebook (ATYMMarketing,2011).

Interestingly,acrossbothplatforms75%ofcustomerssaythattheywouldnotstopfollowingorunlikeabrand.IfyougetsomeoneengagedwithyourbrandonFacebookorTwitter,theyarelikelytostaywithyou.

Ofcourse,FacebookandTwitterarenottheonlysocialmediaplatforms.Theymayhaveintroducedtheideathatcustomerswill

“THE IMPACT OF A BAD REVIEW CAN BE ENORMOUS BUT IT CAN BE TURNED AROUND.”


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shareideaswithyouandhelpcreateyourcontent,butsitessuchasPinterestandInstagramaretakingthistoanewlevel.AstudybyDigitasandCuralate(2013)foundthatonPinterest70%ofcontentwascreatedbyusersandonly30%bythebranditself.

BRICKS AND MORTARTherehasbeenendlessdebateaboutwhethertheinternethasrungthe death toll of the traditional bricks andmortar shop. Butwillanythingeverbeabletoreplacerunningfabricthroughyourfingers,talkingtoashopassistantorthatelationonceyouhavefinishedadayofshopping?Thekeyistointegratethetwoworlds,ratherthanforcingcustomerstochoose.

Somebrandshavealreadytakenupthemantlewithgreatgusto.AgoodexampleisBurberrywhichhasincludedRFIDtagsoncertainitemswhichtriggervideocontentofthegarmentonthefashionrunwaytoplayonlargescreensinthestore.

Althoughthisisarelativelyhighcostdigital/in-storeintegrationtherearethingsthatcanbedonemoreeasilyandcheaply.Forexample,drivingdigitalcustomersbacktothestoreswithin-storeloyaltyoffersorin-storeonlyproducts.Orevenmoresimply,offeringfreeWi-Fi.

IhavebeenintostoresthatencouragecustomerstosharepictureswiththemonInstagramordownloadtheirApp,butdonotofferWi-Fi.Notonlyaretheircustomersfarlesslikelytobother,thestorehasalsomissedtheopportunitytocollectkeycustomerdatabyaskingfortheiremailaddressinordertoconnect

totheinternet.Thisgivesyouthechancetoseethetouchpointsacustomerhaswithyourbrandwhethertheyarein-storeoronline.

So,thewaywedealwithourcustomersischangingbutitisnotunrecognisable.Edelman’s2013consumersurveybrandsharefoundthat91%ofcustomerswantedtobeinvolvedinthedesignanddevelopmentofproducts.Andmoreimportantly90%wantedtobeaskedwhattheywanted,nottoldbyorganisationswhatthenextproductwouldbe.Customersstillwantthebestdealsandinformationfromtheirfavouritebrands,buttheynowexpecttobepartoftheprocessandopeningupadialoguecanbringrealrewardsforbothsides.

Sarah Nagra is currently Marketing Officer at the University of Essex Campus Services. She previously worked for Suffolk Trading

Standards, which was winner of UK Public Sector Digital Award ‘Best use of social media’.

“IT’S NOT JUST ABOUT SHARING KNOWLEDGE, BUT ALSO SHARING VALUES AND NURTURING RELATIONSHIPS.”

“IT MAy BE SCARy TO RELINQUISH CONTROL OF yOUR BRAND, BUT IF SOMEONE IS PASSIONATE ABOUT WHAT yOU DO, DON’T STIFLE IT, EMBRACE IT.”

“IN ADDITION, IF yOU ARE GOING TO MAKE THE MOST OF SOCIAL MEDIA, MAKE SURE yOU DO IT WHOLE HEARTEDLy.”

REFERENCES

Image: http://econsultancy.com/blog/62450-how-h-m-uses-facebook-twitter-pinterest-and-googleImage: http://business.time.com/2013/09/03/man-spends-more-than-1000-to-call-out-british-airways-on-twitter/

Constant Contact (2011)

ATYM Marketing, 2011)

Digitas and Curalate (2013)

Image: http://www.insideretail.com.au/2013/11/26/walmart-burberry-learn-disney/

Edelman’s 2013 consumer survey brandshare


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A survey by Adobe called its ‘Digital Distress’ study

discovered that while 76% of marketers believe measurement is important, only 29% think they are doing a good job. What isevenmorepressingisthatforthoseclientscommissioning marketing services,almost three quarters highlightedaccountabilityastheirmainfrustrationwiththeoutcomes.Soitisclearlyanissueinallquartersandonethatshouldattractthespecificattentionofmarketers.

Marketerswilloftenhidebehindtheexcusethatthingsare“justtoohardtomeasure”,butinthedigitalmarketingworldofthe2010sthatisnotreallygoodenoughanymoreandtherearefewerandfewerplacestohide.

Itisoddinawaythatthefearofmeasurementisjustthat,asimpleandsometimesirrationalfearofbadnews,ratherthanbeingseenasanopportunitytomeasureorcoordinatesuccess.Thestartingpointforresolution,asoftenwithirrationalfears,istoconfrontthefearheadon,realisethatitisnotnearlyasterrifyingasyouthinkandultimatelyovercomeitwithseeminglysimpleandeffectivestrategies.

SO WHAT IS IT THAT MARKETERS FEAR? There is little research on this subject as youmight expect, butanecdotally it appears that marketers are afraid of being ‘foundout’.Theyareworriedthatthedeliberateinvestmentinmarketingactivitieseithercannotbeshowntohavedeliveredatangiblereturn,orworsestill,canclearlybeshownnottohavedoneso.

ANDREW HATCHER

MEASURING THE THINGS yOU FEAR THE MOST

Marketing is consistently accused of being unable to measure its own effectiveness particularly when it comes to attracting and retaining customers. Unfortunately this view is equally consistently justified by marketers who either refuse, or are too afraid, to

measure the impact of what they do in a regular and transparent way.

“WHILE 76% OF MARKETERS BELIEVE MEASUREMENT IS IMPORTANT, ONLy 29% THINK THEy ARE DOING A GOOD JOB.”


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Eitherwaythesenseofuncertaintydrivesafocusonface-savingtacticsandthedeliveryofamyriadofwhatareoftencalled‘vanitymetrics’–numbersandstatisticsthatarebasedonfactandmaylookimpressivebutwhichrevealnothingaboutthehealthorreturnoninvestmentoftheunderlyingmarketingmix.Proudlyreportingthenumberofhitsonawebsite,forexample,ispurevanityasitisobviousinmostcasesthatitisthequalityofthehitthatreallymattersnotthequantity.

SO GET THE TAPE MEASURE OUT!Thefirst step in solving thiscommon,andsometimesparalysing,problemistotakethebullbythehornsanddecidewhichmeasuresare really the ones that you fear the most.Which measures, ifaccuratelyandrepeatedlyreportedcoulddestroytheinfluenceofmarketingorworsestillloseyouyourjob?Conversely,byturningthewholesituationonitshead,whichmeasures,ifaccuratelyandrepeatedlyreported,couldpropelmarketinginfluenceforwardandgetyoutherecognitionyoucrave?

“PROUDLy REPORTING THE NUMBER OF HITS ON A WEBSITE, FOR ExAMPLE, IS PURE VANITy.”

“WHICH MEASURES, IF ACCURATELy AND REPEATEDLy REPORTED, COULD PROPEL MARKETING INFLUENCE FORWARD AND GET yOU THE RECOGNITION yOU CRAVE?”

The three most commonly feared marketing metrics seem to be:• Total Cost of Customer Acquisition (CAC)

and marketing’s percentage of the total cost of acquisition – how much does it actually cost to acquire a new customer (or keep an existing one) and what percentage of that cost can be attributed to marketing? This leads to difficult question Number 1: “Does marketing actually add any value to the acquisition of new customers?”

• Lifetime Value (LTV) of acquired customers and the ratio of LTV to CAC – How much revenue/profit does each new customer create over the period they remain a customer and how does this compare with the cost of acquiring them in the first place? This leads to difficult question Number 2: “Are the customers we are acquiring actually worth the effort?”

• Return on Marketing Investment (ROMI) – what identifiable profit (revenue is nearly always vanity) has specific marketing activities generated? This leads to difficult question Number 3: “Does marketing generate profit or is it just a cost?”

COST OF ACQUISITION (CAC)As with many of these measures, nailing down what needs tobemeasuredmaybehalf thebattle. In this case, thequestion isusually“whatcostsdoyouneedtoincludewhenconsideringhowacustomerisacquired?”

Figure 1: A well balanced business model where income value is greater than cost of acquisition.

Soitmaybeusefultoinvestigateeachoftheseterrifyingmeasuresinturnstartingwiththeeasiestwhichisusuallythecostofacquiringacustomer.


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Itmaybetemptingtoassumethatonlysomemarketingcostsareorientatedtowardsacquiringcustomersuntilweconsiderwhatisactuallydonetocommunicate,informandinfluencecustomerchoice.Inrealityitisbettertoconsidereverythingthatisinvolvedinthatacquisitionprocess.Thelistshouldincludeataminimumthecostof:• Salesstaff• Marketingstaff• Transport–cars,trains,flights• Entertainment• Communications–phoneandInternet• Salesdemounits• Technicalsalessupport• Websitedevelopment• Anyconsultants• Tradeshows• Officecosts• Administrativesupport• Computerhardwareandsoftware• Executivetime(whichisoftenrealandexpensive)At thefirst level it isnecessary tounderstandall thesecostsandto set themagainst all thecustomers acquired to get anaveragecostofacquisition.Laterstagesoftheanalysiscanstarttolookatwhichcustomerscostmoretoacquirethanothersandmorespecificmeasurescanbecreatedagainstsmallersegments.

LIFETIME VALUE OF A CUSTOMER (LTV)The lifetimevalueof a customer is, of course, highlydependentonthe typeofcustomeracquired;does thecustomerrepresentasingleorinfrequentbuyeratoneendofthespectrum,oraretheyamoreregularorevenasubscriptionbuyerattheother?Iftheyareasinglepurchasecustomer,theequationissimpleinthattheprofitcreatedfromthesinglepurchasemustequalorsurpassthecostof

acquisitionorelsethesaleisultimatelyloss-making.Themeasurebecomesmorecomplexoncethebuyerhas

thepotentialtobuymorefromyou,moreregularlyandoveralongerperiodoftime.Thismodelthenrequiresyoutolookatthevaluederivedfromtheongoingprofitstreamderivedfromthatcustomerovertimeoftenreferredtoasthe‘netpresentvalue’oftheprofitstreamofthatcustomerormoresimplyhowmuchiseachcustomerworthtodayassumingtheystaywithyouforafixedperiod.

Customer AcquisitionCost

=All Sales and Marketing costs incurred in a period

The number of new customers acquired in the same period

LifeTime Value of a Customer

= Lifetime Income Value of a Customer -- Cost of Acquisition of

that Customer

Cost of Acquisition

Lifetime Value of a Customer

Letslookatanexamplehere.ForAKNAssociates:Thecostofacquiring20customers(CAC)overthelastyearwas£127,500,or£6375percustomer.AKNalsoknowsthat:• Customersusuallystaywiththecompanyforanaverage

of5years.• Eachyearthecustomerspendsanaverageof£3000with

AKN• ItcostsAKN£400eachyeartosupporteachcustomerSoitiseasytoseethatineachyearAKN’sincomepercustomeris£3,000-£400=£2,600Thetrickyissueariseswhenwewanttoknowhowmuch£2,600ineachoftheupcoming5yearsisworthtoday–itsNetPresentValue.Luckilythereisawaytocalculatethiswhichinvolvestakingaccountofhowmanyyearsaheadthemoneyarrivesandatwhatratethevalueofthatincomeinthefuturereducesbyeachyear(thediscountrate).There isasimple functiononmostadvancedcalculators thatallowsyoutocalculatethisandinthiscaseassumingfiveyearsincomeandadiscountrateof10%,theNetPresentValueofincomefromeachcustomercomesoutat£9,856.ThisthenallowsustoworkouttheactualLifetimeValue(LTV)ofeachcustomerwhichinthiscaseis£9,856-6,375=£3,481.


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FromamarketingpointofviewaslongasthisLTVfigureispositivethenacquiringmorecustomersinthesamewayisasolidstrategyandmoremoneyshouldbeinvestedinmarketingasaresult.Evidencethatameasureisreallyworththeeffort!

Thisisamildsimplificationoftheprocessbuttheprincipleofworkingoutwhetheracustomerisworthgoingafterisahugelyimportantone.Onewarning,however,whichisthatlikeanyothermodelitsusefulnessisentirelydependentontheassumptionsthataremadetocalculateit,andthosethatbelieveasinglemodelcanreliablyandregularlyrepresentrealitycanfallintoaneasytrapwhichleadsontothenextsetofissues.

RETURN ON INVESTMENT (ROI)The measure that seems to be feared the most is perhapsunsurprisinglythemostcomplexone–ReturnonInvestment.OnthefaceofitROIseemslikeafairlysimplemeasureandcanbesummarisedasshowninthefigureabove.

Theproblemariseswhenitcomestoanalysingthe‘investment’thatisusedinamarketingcampaign.ROIhasitsrootsinmeasuringtheimpactofaone-offcapitalprojectsuchasbuyingnewmachineryorstock.Ingeneralitisacceptedthatmarketingcampaignsaretreatedasexpensesratherthanasinvestments–technicallymarketingcostsareaP&Litem,notabalancesheetitem.

Nowyoumaysaythatthisisjustsplittinghairsbutitbecomesimportantwhencomparingforinstanceonemarketingcampaigntoanother.IfthedecisionismadebycomparingtheROIforeachproject,sayanadwordscampaignversusaradiocampaign,theROImeasureonlyworksiftheamountsspentarethesame.

Return On Investment

=Gain from the Investment

-- Cost of the Investment

Return on Investment

Cost of the Investment

SoanothermeasuremayworkbetterandthatiscommonlycalledReturnonMarketing/MarginalInvestment(ROMI)andisusuallyidentifiedasthecontributionattributabletomarketing(oncemarketingexpensesareremoved),dividedbythemarketinginvested.

Return On Marketing Investment

=Incremental Revenue Attributed to Marketing x Profit

Margin

Return on Marketing Investment

Marketing Expense

--{ {

Solet’sassumeourAKNAssociateshasjustspent£20,000onaprogrammeofmarketing.Specificmeasurementoftheoutcomeofalltheseactivitieshasshownthattogethertheyhavecreatednew incremental revenue of £200,000 over a period of 12monthsata25%profitmargin.

SothesimpleROMIofthisactivitywouldbe{£200,000X25%}–£20,000=1.5 £20,000

Conversely,butfollowingthesameapproach,iftheprogrammecost£15,000andcreated£100,000innewincrementalsalesat12%profitmargin,thereturn-on-marketinginvestmentwouldbenegativeatpositiveataROMIof-0.2.

Calculatedas:{£100,000X12%}–$15,000=-0.2 £15,000

SothequestioniswhatdoesthisROMIfiguremeanforusintheend?Simply,whentheROMIindexispositive,theinvestment


Marketing Expense


inthemarketingcampaigniscash-flowpositive.ThismeansthatROMIcanbeusedtoestimatethepotentialbenefitfromincreasingspendonparticularmediaorcampaigntypesandcanalsobeusedtoforecasttheimpactofbudgetchanges.

“THE MEASURE THAT SEEMS TO BE FEARED THE MOST IS PERHAPS UNSURPRISINGLy THE MOST COMPLEx ONE – RETURN ON INVESTMENT.”

REALITy BITESNow,evenwith the requireddesireandenthusiasminjected, theability to create accurate and repeatable measurements in anyorganisationmaynotbethateasytoproduceandthe‘toohardtomeasure’mantracaneasilyfinditswaybackintothediscussion.

“IT IS BETTER TO MEASURE INACCURATELy (AT LEAST INITIALLy) THAN NEVER TO MEASURE AT ALL.”

Soasecondleapoffaithmaybeneeded.Thisleapisnecessarilyfoundedonthebeliefthatitisbettertomeasureinaccurately(atleastinitially)thannevertomeasureatall.Intheendifyoudonotmeasureit,whateveritmaybe,itwillinevitablycomebacktohauntyouwhensomeoneelsemeasuresitandholdsitupasevidenceagainstyou.Sodespiteallthemathematicstheremayneedtobeaseparateinternalcampaigntoencourageandpromotethevalueandadvantagetobegainedfromgoodmeasurement.

Ultimatelyallthewritingandreadingintheworldwillnotactuallymeasureathing,sowhatisneedediscommitmentfrommarketerstobeboldenoughtomeasuresomethingaccuratelyandrepeatedly.Iwouldgofurtherandsaythatweshouldallspendhalfanhourofourtimetryingtoworkoutwhichmarketingmeasurementwefearthemost–anyofthosementionedabovewilldo–andthenspendanotherhalfanhourworkingouthowtomeasureiteithercompletelyorifthatistoocomplexatleastpartially.

“WHAT IS NEEDED IS COMMITMENT FROM MARKETERS TO BE BOLD ENOUGH TO MEASURE SOMETHING ACCURATELy AND REPEATEDLy.”

Andrew is the Managing Director of The Applied Knowledge Network Ltd which develops new approaches to strategic planning

and implementation through software and training.

Previously, he was VP of New Ventures at Reuters in New York and worked as part of the company’s highly successful Greenhouse

corporate venture capital group. After a period in Singapore establishing a spinout online seafood trading company, he returned to the UK where he has since been involved in the creation of a number

of new businesses including Investing for Good (Social Investment) and the Working Knowledge Group (Enterprise Training).

Andrew was educated initially as a Mechanical Engineer and then later in business with an MBA in International Business from Cass Business School. He is the author of “Inventuring - Why Big Companies Must

Think Small” (McGraw Hill, Mar 2003)

Andrew Hatcher’s latest book, ‘Cambridge Marketing Handbook: Services’, offers a fresh perspective on the world of services

marketing, examining the transition from the information age to the Age of Awareness and what this means for the marketing of services.

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FORECASTING THE FUTURE FOR PROFIT Markets are complex and multidimensional but it is possible to forecast the future behaviour of a market with a high degree of accuracy. This article looks at how using a unified market model across the organisation allows marketers and their businesses

to understand the complexity of their marketplace and map the interactions between the core structural elements in their market. By applying theories such as Diffusion of Innovation and combining all available insights to create one picture of market

behaviour, businesses can invest in the right markets and target the right segments. As a result the organisation can benefit from increased sales volumes, reduced costs, time efficiencies and better company-wide strategic alignment.

FORECASTING THE FUTURE FOR PROFIT

To be an effective marketer, you need to understand your market.

If you really want to understand your market, you need a model. Overthepast30years, the collectionandavailabilityofmarketdatahasgrownrapidlythanksto technology and, particularly, theinternet.Asaresultthecomplexityoftheinformation available about the markethasgrownsubstantially.However,having‘BigData’andotherinformationaboutthemarketisnotthesameasunderstandingthemarket.Totrulyunderstandamarketand its dynamics, a marketer needs toknowhowallof thestructuralelementsinteract,bothnowandinthefuture.

WHAT IS A MARKET MODEL?A market model is a mathematicalrepresentationofthemarket,constructedfromhistoricdataaboutelementssuchasvendors,pricepoints,geographicregionsand technologies over time.Themodelshows how these different elementsinteractwith eachotherover time.Thisis thenused to forecast future trends intheseelementsandtheconsequencesforthemarket.

Thisinsightintothepresentandthefutureenablescompaniestopositionthemselvesmoreeffectivelyinthemarket,targetandmarkettothesegmentsthataregrowingorhavehighgrowthpotentialandgivethemselvesacompetitiveedge.Italsoprovidesawarenessofhowconsumerchoicesandneedswillchangeovertimeanddifferbyregion.

THE MODELLING PROCESSTogenerateaninitialforecast,statisticaltechniquesareappliedtothecollecteddatatocreateaforecastline.Thiscanbecreatedusingregressionanalysisandtimeseriesanalysis(includingBox-Jenkinsand Holt-Winters methods). However, the results from statisticaltechniques need to be altered to take account of the underlying

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KAY SHARPINGTON

JONATHAN DAVENPORT


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markettrends.Theartofmodellingliesinunderstandingconsumerand market behaviour, applying theories such as Diffusion ofInnovationandconsideringtheimpactofregionalmarketdynamics.Markettheoriessuchaspenetrationcurves,marketlife-cyclesanddisruptionoftechnologyshouldbeconsideredandintegratedintotheforecast.Thiswillensurethattheforecastincorporatesthelonger-termmarkettrends.Thecompany’sregionalmarketintelligenceandon-the-groundknowledgeofthemarketshouldalsobetakenintoaccountintheforecast,toensurethemodelisfullyalignedwiththecompany’sownviewofthemarketdynamicsanddirection.

SOURCE OF ESSENTIAL INSIGHTAmarketmodelcombinesallavailableinsightsdatatoshowafullpictureofmarketbehaviour,whichisessentialformarketingstrategyandplanning.Themarketmodelwillshowthemultipleinteractionsbetweenstructuralelements.Examplesinclude:whichcountriesandregionswillgrow,andwheregrowthwillsloworevendecline;behaviourofdifferentcustomersegments;competitorbehaviour;howtheaveragesellingpricewillalterandhowthiswillbedifferentfordifferingmarkets.

Therearevariousmethodsofcollectingrelevantmarketdata,eachofwhichaddressaspecificaspectofabusiness’futureperformance.However,inisolationnoneofthemgiveafullpictureofthelong-termmarketandshouldnot,therefore,beusedfordevelopingstrategy.

UNDERSTANDING CONSUMERS AND THE MARKETStatistics-basedmodelscanprovideaccurateshort-termforecastsinmaturemarkets.However,researchintechnologymarketsshowsthatpurelystatistical(quantitative)modellingtechniquescannotbereliedupontoprovideaccurateforecastswithoutintroducinganunderstandingofconsumerbehaviourtheories.Adoptionratesofnewtechnologycangrowanddeclinemorequicklythanstatisticaltechniquescanrespond.Whatisrequiredisanunderstandingofthecausesofgrowthatdifferentstagesofamarketlife-cycle.

Internal view: A company may choose its strategy based on internal information, such as recent sales or brand tracking, and therefore set targets such as ‘the previous quarter’s sales +10%’ or ‘launching product x in the next year’. This fails to take account of changes in the market’s growth rate or trends towards certain product types or features.

Historic view: Whilst historic data provides a useful starting point, it is not always a good predictor of the future. Looking at past information does not provide any significant understanding about the future direction of the market; this requires a different methodology.

Qualitative view: Purely qualitative descriptions of market behaviour rarely capture all the relevant information. Even when a description is very thorough, it cannot capture the interactions between variables in the way a market model can. A purely qualitative view will therefore not produce a robust outcome.

“THE ART OF MODELLING LIES IN UNDERSTANDING CONSUMER AND MARKET BEHAVIOUR, APPLyING THEORIES SUCH AS DIFFUSION OF INNOVATION AND CONSIDERING THE IMPACT OF REGIONAL MARKET DyNAMICS.”

“IF THE MARKETING DEPARTMENT PROVIDES ONE MODEL WITH A UNIFIED VIEW ABOUT THE MARKET, THIS PROVIDES THE BASIS FOR A COMPANy TO DERIVE SIGNIFICANT STRATEGIC AND ECONOMIC BENEFITS. THESE BENEFITS ARE AS VALID FOR SMALL COMPANIES AS FOR VERy LARGE COMPANIES.”

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PENETRATION CURVESMostmarketgrowthfollowstheformofapenetrationcurve(alsocalledalogisticfunctioncurveorS-curve).Figure1showshowtheseareconsistentacrossarangeofproducts.Intheearlystagesofpenetrationconsumeradoptionisslow,asmanyareunawareoftheproductorunabletoaffordit.Asmorepeoplebecomeawareofthenewtechnology,theadoptionrateacceleratesascustomerschoosetomaketheirfirstpurchase.Whenthemarketreaches50%penetrationtheadoptionrateslows,astheproductiswidelyknownbuttherearefewerpeopleleftinthemarkettopurchaseforthefirsttime.Asthemarketapproachesfullpenetration(wherethemajorityofthetargetpopulationhasboughttheproduct)therateofgrowthslowsandthemarketismaintainedbyrepeatpurchases.Eachoftheseconsumersegmentshasdifferentattitudesandpreferencesthatthemarketerneedstounderstand.

Inrealitythesesmoothpenetrationcurvesmaybedisruptedbyexternalinfluencesthattheforecastershouldtakeintoaccount.

Forexample,aswecanseeinFigure1,duringstronggrowthintheadoptionof‘autos’therewasaperiodwhenpenetrationdeclined.ThiswasduetotheGreatDepressionfollowedbyWorldWarII,whenmetalandfuelwereneededforthewareffortandthesaleofnewcarswasbanned.

DIFFUSION OF INNOVATIONTheDiffusionofInnovationtheory(Rogers,2003)claimsthatadoptionisdrivenbysocial influencesthataffectvariousconsumers(inB2Cmarkets)andenterprises(inB2Bmarkets)withorwithouttheirexplicitknowledge.

Rogersdescribesfivegroupsofadopterswithadifferentattitudetowardsinnovation.Innovatorsarethefirsttoadoptnewtechnologyandrepresent2.5%ofthetotalmarket.Thisgroupiswillingtoriskfailureofanewproductbecausetheybelieveithas,orwillhave,ahighutility.EarlyAdopterscomprisealargerproportion(13.5%)ofthemarketandunderstandtheutilityofnewtechnologybetter

Figure 1 Consumer product S-curves Source: North, S. (2012).

Figure 2 Diffusion of Innovation (Rogers, 2003).



becauseoftheexperiencesoftheInnovators.Innovationcontinuestodiffusethroughsubsequentgroupsinthepopulation(theEarlyMajority(34%),theLateMajority(34%),andtheLaggards(16%)witheachgrouptakingitsleadfromthepreviousgroup,andfromthechangessuppliersmaketoproductstomakethemattractivetothetotalpopulation.Figure2illustrateshowprogressthroughthesestagessignificantlyaffectsthemarketgrowthrate.Thegroupshavedifferentcharacteristics,sodifferentmarketingapproachesareneededforeachone.

DiffusionofInnovationhasbeenobservedtofollowlogisticfunction(orpenetration)curvesacrossmanydifferenttechnologiesincludingradio,television,VCR,cable,refrigerators,dishwashers,electrificationofhouseholds,telephones,cordlessphones,cellularphones,personalcomputers,broadbandandtheInternet(MooreandSimon,1999).CombiningmarketvolumedatawithdemographicsandDiffusionofInnovationTheoryproducesagoodmodellingapproachinthetechnologysectors.

TyPES OF MARKETConsumers and themarket behave differently depending on themarket’sstageofmaturity.Broadlyspeaking,therearethreetypes

ofmarket:growingmarkets,maturemarketsanddecliningmarkets(see Figure 3).The correct forecastingmethodologies need to beadopteddependingonthestageofdevelopmentofthemarket.

However,itmustberememberedthatonemarketmightbegrowingandmaturingindifferentregionssimultaneously.Furthermore,notallmarketsleavethegrowthstage–somefailtoreachmaturitystageandmovestraighttodecline(Moore,1990).

MARKET LIFE-CyCLE – DISRUPTION OF TECHNOLOGyThereisacontinuouscycleofinnovationanddisruptionacrossmostmarkets.Thelengthoftimethatamarketremainsinmaturitybeforedecliningdependsonthelevelofinnovationpresentinorpertinentto the market. “Incumbents lose their market leadership (i.e.dominantmarketshare)whenfacedwithdisruptivetechnologicalchange”(Danneels,2004).Thisoccurswhencustomersinamaturemarket stop buying its products and start to adopt the productsfromanew,substitutemarketinstead.Theshiftfromfilmtodigitalcamerasisonesuchexample.

DEFINING THE MARKETAcompany’stargetmarketisasectionofitslarger‘addressable’market,whichconsistsofallthesalesofaproductorservicebyallthesuppliers(i.e.thecompanyanditscompetitors)toallthecustomersinadefinedgeographyoveraspecifictimeperiod.Identifyingtoonarrowanicheinthemarketmeansacompanymaymissthewideropportunitiesavailable,lackawarenessofpotentialthreats,andhaveadistortedviewofthecompany’sactualperformancewithinthemarket.Conversely,definingtoowideamarketwillnotenableacompanytoseethefinerdetailofwhattheirtargetmarketisdoingandwillnotenablemarketerstounderstandtheircustomerssufficiently.Themarketmodelcanthenbeusedtotrackthebehaviourofthetargetmarket.

Figure 3: Market Life Cycle Source: Johnson, G., Scholes, K. and Whittington, R. (2008).

“IN BOTH SUCCESS AND FAILURE IT IS IMPORTANT TO ASK QUESTIONS ABOUT WHy THE MARKET BEHAVED AS IT DID AND FEED THIS BACK INTO THE MODEL.”

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IDENTIFyING THE STRUCTURAL ELEMENTS TO TRACK WITHIN THE MARKETThecoreelementsofanymarketmodelaretheproductorservicevolumes.Tocreateausefulmodel,thevolumescanbegroupedintocustomersegments,pricebands,technologygroups,diseasecategories,geographiesoranystructuralelement.

Themorefactorsthemodelincludes,thelargerthesizeandcomplexity.TakeasimpleexampleofaforecastmodeloftheUKPCmarketwithvolumesdividedintotwopricebands–under£400and£400andover.Ifthetwopricegroupsarethendividedintodesktopsandlaptops,thesizeofthedataisdoubled.IfthedataisthensplitintoEngland,Scotland,WalesandNorthernIrelandthemarketmodelbecomesfourtimeslarger.Furtherelementscanbeaddedtolookatsegments(students,householdsorbusiness),andtheshareof5othercompetitors(PCsuppliers).Ifalloftheabovefactorswereincludedover12quartersthiswouldresultina3,456cellmodel,beforeanysummarisation.

Despitethechallengeofbuildingandmaintainingamodelwithlotsofelements,thebenefitisaforecastthatexactlymatchesamarketer’sneedsoverthetimeframeofinterest.Itisclearthatevenwithasmallnumberofelementsitisnotpossibletoseeallthedatainteractionsandmarketdynamicswithoutamodel.

FORECASTING ACCURACyForecastingaccuracycanbe improvedbyaddingnewdataas itbecomesavailable.Thescientificmethod(hypothesis,experiment,knowledgeandrefinehypothesis)canbeappliedtomarketmodels(forecast, collect future market data, understand, re-forecast).

Regularly updating amodelmeans themarketer can refine theirunderstandingofthemarket.Thismayleadtonewvariablesbeingadded(e.g.movingfromcountrylevelforecasttoindividualsectorforecasts within the country). Measuring forecasting accuracyenablesthemarketertoidentifywhereandhowthemarketdynamicsdifferedfromtheforecast.Inbothsuccessandfailureitisimportanttoaskquestionsaboutwhythemarketbehavedasitdidandfeedthisbackintothemodel.Thiswillincreasetheaccuracyofthenextperiod’s forecast andhelp a company to understand current andfuturecustomerbehaviourbetter.Newhypothesesaboutconsumeradoptionratesandcompetitorbehaviourcanthenbescientificallytested in the marketplace, resulting in greater ongoing marketunderstanding.

BENEFITS OF THE MARKET MODELHavingideasaboutthemarketarenotthesameashavingaformalmarketmodelusedacrossalldepartments.Departmentaltargetsarebasedinpartonideas(whichmaybepersonalorinformal)aboutwhatthemarketisdoingorabouttodo.IftheMarketingdepartmentprovidesonemodelwithaunifiedviewaboutthemarket,thisprovidesthebasisforacompanytoderivesignificantstrategicandeconomicbenefits.Thesebenefitsarevalidforsmallandlargecompanies.

SAVE TIMEMarketdataisneededbydifferentdepartmentsatdifferenttimes.LongtermforecastsmayberequiredforBoardstrategy,InvestorrelationsorR&D,whilstshortertermforecastsareusefulformarketingpromotionsandplanningandtemporarypersonnelrecruitmentcontracts.Ifeachplanorbusinesscaserequiresatrustedindividualmarketforecast,theprocessisslowed.Asinglemodelthereforesavestime.

ALIGN THE WHOLE COMPANyWhenacompanyusesonemodel,itallowsalignmentfromtoptobottom.AmodelcommissionedbytheMarketingdepartmentcanprovidetheconcretedataandinsightand‘OneTruth’(a

Figure 4 The market model has many uses across the company.


“TO BE AN EFFECTIVE MARKETER, yOU NEED TO UNDERSTAND yOUR MARKET. IF yOU WANT TO UNDERSTAND yOUR MARKET, yOU NEED A MODEL.”


nick Milner, PhD is the Managing Director at Milner Strategic Marketing Ltd. Nick has had significant strategy and marketing experience across a range of enterprises from small start-ups

to companies listed on the London and Indian Stock Exchanges. He has 25 years of experience in building market models

and forecasting. Nick is a Fellow of the Chartered Institute of Marketing, a Freeman of the Worshipful Company of Marketors, a

Chartered Marketer and a Chartered Psychologist.

kay Sharpington is a Market Analyst at Milner Strategic Marketing Ltd. As part of the Market Analysis team she assists

with building market models, forecasting, customer analysis and competitor analysis. Kay is a Cambridge University graduate with experience in statistical analysis, regression analysis and

econometric modelling.

Jonathan Davenport is a Business Consultant at Milner Strategic Marketing Ltd. He leads the Market Analysis team,

directing the construction of market models, forecasting, customer analysis and competitor analysis. Jonathan is a Chartered

Marketer, with a strong business to business sales and marketing background, developed over a number of years working in the

energy and telecoms sectors.

REFERENCES

Dann Danneels, E. (2004) ‘Disruptive technology reconsidered: A critique and research agenda’ Journal of Product Innovation Management, 21(4), pp 246-258Johnson, G., Scholes, K. and Whittington, R. (2008) ‘Exploring Corporate Strategy’ 8th Edition. Pearson Education Limited

Moore, G. (1990) ‘Crossing the Chasm’ Harper Collins

Moore, S. and Simon, J. (1999) ‘The Greatest Century That Ever Was: 25 Miraculous Trends of the last 100 Years’ The Cato Institute: Policy Analysis, No. 364

North, S. (2012) ‘Speed of Adoption Risk’ http://theinnovationofrisk.com/speed-of-adoption-risk/

Rogers, E. (2003) ‘Diffusion of Innovations’ 5th Edition. New York: Free Press

toforecastmarketbehaviourwithahighdegreeofaccuracyusingamarketmodel.Thisaccurateunderstandingoffutureconsumeradoptionratesandcompetitorperformanceplaysanessentialroleinmarketingandstrategicplanning.Bycombiningallavailableinsightstocreateonepictureofmarketbehaviourthebusinesscaninvestintherightmarketsandtargettherightsegments.Asaresultofthisthecompanycanbenefitfromincreasedsalesvolumes,reducedcosts,timeefficienciesandbettercompany-widestrategicalignment.

company-wideacceptedview)aboutthemarket.ThiscanbeusedbytheBoard,Finance,Marketing,Sales,ProductManagementandDevelopment,Operations,InvestorRelations,andHRdepartments(SeeFigure4).Thismeanseachinteractionbetweendepartmentscanstartwith“whatarewegoingtodo?”insteadof“whatisgoingon?”Themodelallowsdepartmentalfigurestobecheckedagainstthemodelforfeasibility,asthemodelisbasedonthecompany’sownstrategyandfedintobyalldepartments.

FIRST MOVER MARKET ADVANTAGEDiffusionofInnovationtheorydescribesdifferenttypesofconsumerswithdifferentattitudestorisk,productmaturity,productfeatures,priceandotherfactors.Awelldesignedmodelwillhelppredictwhenthemarketisenteringdifferentstagesandhowconsumerbehaviourwillchangeovertime,allowingthecompanytochangemarketing,sales,productanddistributionplansformaximumeconomicbenefit.Firstmoveradvantagecancatchcompetitorsoff-guardandincreasemarketshare.

SHARE THE OUTPUT OF THE MODELTheleadershipteamcanuseextractsfromthemodelintheformofPowerPointpresentationstosharewithteamsofemployees.Detailedreports(sometimescalledDeepDives)onpartofthemodelcanbeproducedtolookatmarketbehaviourinindividualcountriesorsalesterritories,inspecificproductsectorsorofspecificcompetitors.Sharingsomeofthedatawithallemployeesandwiththemarket(viainterviews,articlesandpresentations)isnecessary;thisincreasesclarityofunderstandingandhelpstobuildcompanyreputation.

CONCLUSIONMarketsarecomplexandmultidimensional.Amarketmodelallowsmarketersandtheirbusinessestounderstandthiscomplexityandistheonlywaytomapfullytheinteractionsbetweenthecorestructuralelementsinthemarket.Byselectingappropriatelyfromthetoolsandtechniquesavailableitispossible

“A MARKET MODEL COMBINES ALL AVAILABLE INSIGHTS DATA TO SHOW A FULL PICTURE OF MARKET BEHAVIOUR, WHICH IS ESSENTIAL FOR MARKETING STRATEGy AND PLANNING.”

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MARKETING MASH-UP Peter Fisk explores the best new ideas in the world of brands, innovation and marketing.

CROWDED AND CONTAGIOUS

100 million viewers across the globe sat down to watch this year’s Super Bowl.

Withmarketer’seyes focusedon the$4million30secondadslots,youcouldbeforgivenfornotrealisingthat theSeattleSeahawkswon.Thisyear’smostrecalledads, byChrysler andCocaCola lookedbackandforwards.WhilsttheDetroitcarmakermadegotAmericansnostalgicwiththehelpofBobDylan,Cokecelebratedtoday’smulti-ethnicnation,where beauty lies in its diversity. Itwas a tellingmoment,whenMadison Avenue convention was outgunned by crowd-sourcedAtlantavision.

Buttherealwinnersthoughtdifferently.Marketingismuchmorethanadvertising,andmarketershaverealisedtheycanmakebudgetsgofurther,andengagepeoplemoredeeply.Onlinecompetitions,overmanymonths,createdtherealbuzz.Dorito’s“CrashtheSuperBowlContest”challengedsnack-lovingfanstocreatetheirownads,witha$1millionprize.Inthebusinessworld,softwarebrandIntuitofferedtheirspottoothers.LeadinginthecrowdvotingwastheNationalOrganisationtoReformMarijuanaLawswhichwassubsequentlydisqualified,creatingevenmorecoverageforthemandIntuit.

LIQUID AND LINKEDContentmarketing iswheremanybrands are now focusing theirimaginations. Beyond the superficial images and slogans of

PETER FISK

“BEyOND THE SUPERFICIAL IMAGES AND SLOGANS OF CAMPAIGN-BASED ADVERTISING, TODAy’S BEST CONTENT IS AUTHENTIC, RELEVANT, TOPICAL, COLLABORATIVE AND EVOLVING.”


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campaign-based advertising, today’s best content is authentic,relevant, topical, collaborative and evolving. Last year Oreodemonstratedthepowerofreal-timemarketing,tweeting“Youcanstilldunkinthedark”momentsafteranunplannedpowershortage.Thattakesempoweredandagilemarketing.

Themajorityofcreativeideasdonotcomefromadagenciesbutfromconsumerstoday,fuellingbothinnovationandcommunication,whilstexperiencesarecollaborativeandparticipative,ratherthandeliveredinstandardisedandpassiveways.BackatCoke,JonathanMildenhallandhiscreativeteam,havesparkedarevolutionwith“liquidandlinked”content,whichworksacrossaudiencesandplatforms,fuelledbystoriesandtopicality,personalandconstantlyevolving.

influence,andeverysecond,canmatter.ChefJetstoodamidsttheinnovationsin3Dprintingforits

abilitytoprintyourfavouritefoodondemand,particularlynowthatmulti-substanceprintingispossible.Itlookslikeamicrowave,butitcouldtransformshoppingandeating,dietandlifestyle.Timetobuyyourown3Dprinter?Notquite.Farbettertovisityourlocalbranchof3DHubs,theDutchcompanyislaunching“makerspaces”ineverybigcity,eitherbrandedshopsorindividualssharingtheirownprinters,creatingnewcommunitiesofentrepreneurs.Amsterdamleadstheworldwithover500locations.

IMMERSIVE AND INSTANTTheConsumerElectronicsShowisthemomenttech-companiesshowcasetheirlatestinnovations.Thisyear’seventinLasVegaswasdominatedbywearabletechand3Dprinting.OculusRift,thevirtualrealityheadset,hasbeenalongtimecoming,butissettoredefinethepossibilitiesofimmersivegaming,andmanyothersectorstoo.Inhealthcare,forexample,IntuitiveSurgicalhastransformedtheabilityofdoctorstoperformautomatedheartsurgery,faster,cheaperandwithmoreprecision.

Personalhealthcareislikelytotransformourlives.FromJawbonetoNike+wecanalreadytrackourfitness,butScanadu,withaclip-onmonitorthesizeofasmallcoin,willsoonallowustocheckourbloodpressure,andmuchmore,asoftenaswecheckourmobilephones.Smallandconnected“internetofthings”technologieswillchangeeverything.Geakisanintelligentring,slotsonyourfingerandcontrolsyourmobilephonethroughmovement.Everymarketerknowsthepowerof“timeandplace”today,harnessingbigdatatopinpointconsumerswhenitmattersmost.Whenconsumerstake2.6secondstochooseabrand,every

CHINESE AND CREATIVEFromAlibabatoZaoZao,Chinaiswhereourfutureisrapidlybeingshaped.JackMa’se-commerceplatformalreadyconnectsmostoftheworld’sbusinesses,makingsizeanddistanceirrelevant.VickyWu’spre-summerfashionsiteallowshugenumbersof“newmiddle”consumerstochoosefromahugeselectionofdesignsbeforetheyaremade,givingmanynewdesignerstheirchancetoshine.Xiaomi,theAndriod-basedsmartphonebrand,ledbyrockstarCEOLeiJen,soldoutthefirstbatchof100,000MiPhones(notiPhones)in83secondslastOctober.Inhisfirstyearofbusinesshesold7.2milliondevices,andXiaomiisalreadyregardedasa$10billioncompany.China’srealskillisincreatingnewbusinessmodelsfornewmarkets.OncetheChineselearntobuildemotionalbrands,AppleandGoogle,evenCoke,shouldbeworried.

FastCompany’s“MostInnovativeCompanies2014”rankingsareinspiringasalways.Googleleadstheway,largelythankstothemoonshot-thinkingroundthecornerfromtheGoogleplex,whereits<X>projectsaretakingshape.Nestwassnappeduptoshapetheintelligenthome,GoogleGlasslaunchessoon,whilstdriverlesscarsandintelligentcancertherapieswillfollow.

36

Peter Fisk is a bestselling author, keynote speaker and expert consultant. He is founder of GeniusWorks, helping companies to develop more innovative strategies for brands and marketing. He was recently nominated to Thinkers 50 Guru Radar, as one of the

world’s best business thinkers, and is visiting professor at IE Business School, Madrid. His new book “Gamechangers: Are you ready to

change the world?” will be published in 2014. Find out more at www.theGeniusWorks.com or email [email protected].

Whichisjustaswellforthesearchengine,becausebackinChina,Tencentisrisingfast.ItsQQsocialnetworkwillsoonreplacethediminishingFacebook,inawaythatbringssearch,networking,retailingandbankingtogether.WeChat,itsfast-growinginstantmessagingbrand,willmakeitfastandviral.Soifyouarelookingfornewmarkets,thecombinationofAlibabaandTencentcouldbetransformationalinhowyoumake,distribute,engageandsell.

“xIAOMI, THE ANDRIOD-BASED SMARTPHONE BRAND, LED By ROCKSTAR CEO LEI JEN, SOLD OUT THE FIRST BATCH OF 100,000 MIPHONES (NOT IPHONES) IN 83 SECONDS LAST OCTOBER. xIAOMI IS ALREADy REGARDED AS A $10 BILLION COMPANy.”

HOT COOL AND yOURSSochi’sWinterOlympicstookplaceunderwarmblueskies,andcostmorethananyothersportingevent.Maybeitisaforetasteofwhatistocome,likeinQatar.Thetaglinejustseemedtocapture

theover-hypedexcess.Notsurprisingly,bankandvodkabrandsleadthewayinRussia.Atatimewhenfootballclubsaretheplaythingsofbillionaires,andiconiceventsarethevanityprojectsofoil-richnations,sportsshouldrememberthattheyarebuiltonthepassionsandgoodwillofeverydayfans.Manyofthelong-termOlympicandWorldCupsponsorsarequestioningthevalueoftheirinvestments.Justliketheunrealisticextravaganceofthe$4m30secondslot,marketersarerealisingthattheycanengagepeoplemoredeeplythroughmorecreativeandeffectiveexperiences.

MostinterestingonFastCompany’slistwasthenon-profitorganisationwhichtooksecondplace.BloombergPhilanthropiesismakingabiggerdifferencetotheworldthanevenBloomberg,throughanewbusinessmodelforcharitiesthatengagescompaniesinsolvingbigproblems.LikeGoogle,itseemsthatbigbrandsarerealisingthatapurposebeyondprofit,abouthowtheycanmakelifebetter,reallydoesdrivenewthinking.Alsointhetop10innovatorsisAirbnb,thestart-uprent-your-roomwebsitethathasrecognisedthatfacilitatingtheconnectionsbetweenpeopleisfarmorepowerfulthanwiththebusinessitself.Astheflagshipof“collaborativeconsumption”itofferseverybusinessanewideaformakingmoney–utilising,sharing,renting-whilstofferingtravellersamoreinterestingplacetostay.

“THE MAJORITy OF CREATIVE IDEAS COME FROM CONSUMERS. ExPERIENCES ARE COLLABORATIVE AND PARTICIPATIVE, RATHER THAN DELIVERED IN STANDARDISED AND PASSIVE WAyS.”


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ANNUAL LECTURE WITH GREGORY ROEKENS GREAT HALL ST JOHN’S COLLEGE WEDNESDAY 9TH JULY 7PM

This year, The Marketing College’s annual lecture will be delivered by Gregory Roekens, the Chief Technology Officer of BBDO Abbot Mead Vickers. Gregory will talk about how technological innovations are causing new consumer behaviours and how they are fuelling a new form of industrial revolution.

Gregory is a recognised thought-leader and was recently named one of Campaign’s ‘top five creative technologists to watch.’

Drinks on the Backs will precede the annual dinner, to be followed by the lecture. Early bird tickets are £60 for bookings received before Tuesday 1st April.

To book your place call 01954 234 940 or email [email protected]

38

A DAy IN THE LIFE OF….ANNE GODFREy, CEO OF THE CHARTERED INSTITUTE OF

MARKETING This new feature will focus on an individual that has strategic or major tactical responsibility for marketing. This issue steps into

a day in the life of Anne Godfrey, Chief Executive Officer of the Chartered Institute of Marketing.

.

WHAT DOES THE CHARTERED INSTITUTE OF MARKETING DO?

CIM is a chartered professional body with 35,000 members around the

world. Wetrynottotakethenotforprofitdescriptorliterally!WeareanSMEwithaturnoverofabout£15millionandourrevenues are generated in almost equalmeasuresbymembershipfees,educationand training. We exist to support anddevelopsalesandmarketingprofessionalsthroughouttheircareers.

ANNE’S AVERAGE DAyThemorning startswithanecessarydiversion to the localCosta.Nothingquitelikecaffeinetosetyouupfortheday!Whathappensnextvarieshugelyandencompassescorporategovernance,changemanagement, organisational design, assessment of researchfindings,budgeting&businessplanning,stakeholdermanagement,preparation for speaking opportunities or just the day-to-daydecisionsinvolvedinmanagingateamandrunningamembershipbodythatisalsoahotelandconferencecentre.

Onagoodday,Iwillmaketimetowriteaprioritisedto-dolistandbeabletotickoffatleasthalftheactionsbeforeIleavesometimethatevening.OnabaddaythelistnevergetswrittenandIdotheCEO’sversionoffirefightingwithimportant,butunplanned,meetingsanddecisionpoints.Itis,however,neverdull.AsforwhatIachieve,thatdependsonhowsuccessfulIamatmanagingmyowntime,prioritisingactivitiesandlearningtosay“no”!

ANNE GODFREY

“A KEy CHALLENGE FOR MARKETERS IS THE ONGOING ‘DEMOCRATISATION’ OF THE CONVERSATION BETWEEN A BRAND OR BUSINESS AND ITS CUSTOMER OR CONSUMER.”


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WHAT ELEMENT OF THE MARKETING MIx IS MOST IMPORTANT TO yOU ON A DAILy BASIS?Iwouldsaythatcurrentlythemostimportant‘P’forCIMisproduct.Ourpropositionhastoberelevanttoanymarketingprofessional,inanysector,ateverystageintheircareer.Itthenhastobepricedappropriately,marketedeffectivelyanddeliveredefficientlyaroundtheworld.NosimpletaskforasmallbusinessbasedinCookham.

generation,marketingeffectivenessandconversion rates.Askmeagaininsixmonthsanditmaynotscaremequitesomuch.

WHAT’S THE BIGGEST CHALLENGE yOU SEE FOR MARKETERS IN THE NExT 2 yEARS?Akeychallengeformarketersis theongoing‘democratisation’oftheconversationbetweenabrandorbusinessanditscustomerorconsumer.Thishasbeenmuchtalkedaboutinrecentyearsbutfewhave trulyembraced the implicationsof this change.Webelievesuccessful organisations will be those who cope best with thisnewdynamicoverthenext24-36months,becauseit’snotjustthecompetitionthatmightoutsmartyou–it’snowyourcustomer.

“OUR PROPOSITION HAS TO BE RELEVANT TO ANy MARKETING PROFESSIONAL, IN ANy SECTOR, AT EVERy STAGE IN THEIR CAREER.”

“IT’S NOT JUST THE COMPETITION THAT MIGHT OUTSMART yOU – IT’S NOW yOUR CUSTOMER.”WHAT IS THE BIGGEST MARKETING CHALLENGE FOR

THE CIM, THE LEADER IN MARKETING EDUCATION?CIM’sbiggestmarketingchallengeishowtotargetadiverserangeofproductsandservicestoanequallydiversecustomerbase.Howdowe deliver integrated,measurable, marketing campaigns thatshowcasebestpracticetoanunderstandablydemandingaudience?Inaddition,asaleadingproviderofmarketingeducation,weneedtoremaincurrentandproviderelevantqualificationsandtrainingtoanevermorefragmentedprofession.Themethodsofdeliveryalsoneedtoreflectnewwaysoflearningandrangefromface-to-facetoblendedlearningandonline.

HOW DO yOU MEASURE THE MARKETING EFFECTIVENESS OF CIM’S OWN ACTIVITIES?CIMhasanumberofKPIswhichweusetomeasurethesuccessofourmarketingandbusinessactivities.These includemembershipnumbers,numberoftrainingdelegates,revenue&profitbyproducttype,engagementinsocialmediaplatforms,numberofattendeesatregional,sectoralandcorporateevents,awarenessofresearchandthoughtleadershipactivitiesandpresenceinthenationalandtradepress/media.Addtothatanexpectationthatourteamusesallofthemetricswedemandofprofessionalmarketersandyouhaveaveryinterestingenvironment.

WHAT MARKETING MEASUREMENT/METRIC DO yOU FEAR THE MOST?I think, at this stage in CIM’s development, that our customeracquisition cost (CAC) would be the scariest metric. We haverecently created an integrated sales and marketing departmentwhichisworkingwithourcustomerexperienceteamtomapthecustomer journey,assessour touchpoints,and improveour lead

Anne was appointed CEO at the Chartered Institute of Marketing in August 2012. Previously CEO of the GTMC, Anne has had

leadership roles in a diverse range of membership organisations including the Law Society, where she was director of commercial

and membership services and the CBI where she was commercial director.


Join the CIMMembereship of CIM provides you with the structure and resources to build your knowledge and develop your career as a professional marketer. Whether it’s through sharing knowledge, bringing you together with the right people or providing practical advice, we can help you take the next step.

Below are some great reasons to join:• The Marketer• Cutting Edge• Marketing resources• Consultants’ Directory• CPD and Chartered Marketer Status• Market Interest Groups

40

IF IT AIN’T BROKE…(AS THE WELL KNOWN SAyING GOES)…BUT WHAT IF

IT IS BROKE? This article is the first in a series of two. During our research into the challenges of the new business reality, several senior executives have pointedly remarked to us that the first big issue for their senior management teams was not finding new

solutions but seeing the problems in the first place. So, in this first article we focus on whether there is a problem. Depending on your verdict, you may be interested in the second which puts shape to the solutions.

It seems such a long time ago since the heady days when we all ‘earned’

more from the appreciation of our house values than we did from working. Then there was the realisation that theGood Times had gone. Mervyn King,thenGovernor of the Bank of England,informed us that we had moved fromNICEtimes(Non-InflationaryContinuousExpansion) into what a journalist soondubbed the NASTY (Nightmare ofAustere and StagflationaryYears) times.ChristineLagarde,managingdirectoroftheIMF,hasrecentlycalledit theGreatRecession,astructuraleconomicshiftofsimilarmagnitudetothatofthe1920s.

Butthestructuralchangeisnotjusteconomicinnature.Ithasalsoexposedstructuralweaknessesintheconventionalapproachtorunning,growingandmanagingourbusinesses.Tounderstandthesebetterweshouldstartbyunderstandingwherewearenowandthenrememberhowweallbehavedwhenthingswere‘NICE’.

WHAT DO BUSINESS LEADERS WANT?ToshinealightonthiswehavebeencloselyanalysingahostofCEOsurveyssince2008.Apicturehasemergedfromtheswirlingbusinessmist.Wehavesummarisedthekeywantsandchallenges,andsupplementedthesewiththecharacteristicsofthenewbusinessenvironment(seeFigure1).

Therewerenobigsurprisesintheresults–thechallengewastomanageasuccessfulbusiness,indifficulttimes,withexistingskills.Well,ifyouaskthequestion…

Aswithallresearch,takingrespondentanswersatfacevalueonlygivespartoftheanswer.However,ifwemarrythatdatawithwhattheyareactuallydoingaboutitapatternstartstoemerge.

WHAT HELP IS AT HAND?Perhapsanobviouschoicetosolvingbusinessproblemsistograbandtrytoapplyawell-respectedmanagementtoolortwo.Butwhich?

PAUL FIFIELD

JOHN GREENHOUGH


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Managersalsoratedtheirusageandsatisfactionofalargerselectionoftools(seeFigure2).NoneofthismakesgreatreadingformanagerslookingforanswerstothecomplexmyriadofissuessetoutinFigure1.

Strategicplanninghasbeenatthetopofthepackformanyyearssodeservessomefurtherinspection.ThisshowsthattheleadingstrategicplanningtoolwastheSWOTanalysisduetoitseaseofanalysisandapplication.Unfortunatelythough,strengthsandweaknesseswereusuallydeterminedbywhattheorganisationbelieveditwasgoodat(ornotsogood),ratherthanfocusingontheviewsofthepeoplewhoactuallymakethepurchasedecisions.

Whydosomanylaudedmanagementtoolshavelowsatisfactionandusage?

Tohelpanswerthatlet’slookcloserathowmanagersmanagedintheGood Times.

A CONSTANT STREAM OF BRIGHT NEW IDEASFromthestartofthelastgrowthperiodinthe1960saconveyorbeltofpotentiallyexplosiveideasweretheorderofthemanagementday.FromthescientificTime&MotiontothemoreesotericExcellenceandthesocietalTripleBottomLine,eachgatheredtheiradvocatesand,foratimeatleast,werehailedasthelongsoughtpanaceatoallmanagementills–aclaimthateachinturnfailedtosubstantiate.Butneverfear,abrighter,newerideawassoontotakeusallbystorm–andwouldsurely,thistime,provetobetheHolyGrail.AmidstagrowingfanfareBigDatacurrentlyholdsthemantle.

Takeatripdownmemorylaneandseehowmanyofthepopularmanagementideasofthelast60yearsyourecognise

According to a recent survey by Bain & Co. the top ten management tools are:

1. Strategic planning 2. Benchmarking 3. Customer relationship management 4. Mission and vision statements 5. Strategic alliances 6. Core competencies 7. Customer segmentation 8. Knowledge management 9. Change management programmes 10. Outsourcing

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“THE GREAT RECESSION HAS ExPOSED STRUCTURAL WEAKNESSES IN THE CONVENTIONAL APPROACH TO RUNNING, GROWING AND MANAGING OUR BUSINESSES.”

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(seeFigure3).Allwerepopular.Allwerewell-intentioned.Allgrabbedtheattentionofbusinessmanagers.Veryfewdeliveredtheexpectedbenefitsorprovedtobeverydurable.

WHy DID THEy FAIL TO GAIN TRACTION AND BECOME ‘FADS’?AssomanyBright New Ideaswerenotprovingdurablesurelysomethingwasmissing?Butwhatwasit?

Inseekingsomeanswerswehadsomeserious Unlearningtodo.Somehowweneededtoputalltheacceptedtheoryandaccumulatedwisdombehindusinanattempttoseethesituationafresh.Ifitsoundseasy,believemeitisnot.Thegoodnewsisthatwestartedtoseewhatwasgoingon.Herearesomeofourconclusions.1. All these tools were designed to try to solve, or improve

something, yet there was often a tendency to focus on thesymptomsratherthanidentifyoraddresstheunderlyingcause.

2. Itwasalsodifficultinmanycasestoseethedirectlinkbetweentheprocessandmeasurablefinancialoutputs,avitalcomponentforanysolutiontohavestayingpower.

3. Beingabletoimplementanewlydevisedsolutioneffectivelyisalsocriticaliftherubberistohittheroad,yetthepracticaldifficultiesassociatedwithimplementationorhowtoovercomethemwererarelygivenadequateattention.

4. Most of these management ideas also focused on just oneelement of the organisational mix (leadership, decision-taking, processes, skills, customer interface, etc.) as thoughimprovementsinthatareaalonewouldleadtoimprovementsin the overall system.However, organisations are not linearand strategic business issues cannot be solved effectively inisolation. Analysing them we discovered that few of thesemanagementideasattemptedtosolvemorethanoneproblem(orshouldwesaysymptom?)atatime.

5. Furthermore, our research to date strongly suggests that theeffectivenessofthewholebusinesssystem(itsabilitytodeliverresults) is only as strong as its weakest link. For example,improving‘ElementX’by50%willbestronglydilutedifthereisnoimprovementin,poorlyperforming,‘ElementZ’.

6. Thebiggestconclusionhoweverwasthatnoneoftheseventyfivemanagementideasthatweanalysedtookitsleadfromthemarket(thesourceofcashflow).Afewbroughtthemarketinatsomepointinthethinking,butatthatstageittendedtobeajustanother(evencursory)inputratherthantheleaddriver.Andmanymethodsprettymuchleftitoutaltogether,astheyfocusedonimprovingtheinnerworkingsoftheorganisation-asifthesecouldbeisolatedfromthesourceofcash.

Inshort,nowondernothingworkedallthatwellorstayedaroundforallthatlong.

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SO, HOW ARE ORGANISATIONS RESPONDING?Beingunabletohitcharideonthecoattailsofmacroeconomicgrowth,whatarecompaniesdoing?

Theprimaryresponseistocountertheuncertaintythatsurroundsthenew‘rulesofthegame’bydrawinginactivitiesandwaitingfortheGood Timestoreturn–theyalwaysdoaftera‘recession’don’tthey?Goodquestion.

WhethertheGood TimescomebackoritisGame Over,thebehaviouroffirms,especiallylargefirmswithbusinessandmarketsharetolose,hasbeentoharbourcash.Thishascreatedsomeofthemostpristinebalancesheetsseenforgenerations,butunfortunatelysayslittleabouttheperformanceorresilienceoftheunderlyingbusiness.

Itishasalsobecomepopulartotalkalotaboutinnovation,butitisnotsowidelypractisedbyestablishedplayers.AndasClaytonChristianson(ofdisruptiveinnovationfame)hasnoted,muchofthisis‘efficiencyinnovation’,whichhedefinesasreducingthecostofmakinganddistributingexistingproductsandservices,ratherthaninnovationthatdisruptsthemarket,createscompetitiveadvantageandhasthepowertotransformperformance.Efficiencyinnovationhastheadvantageofrecyclingcashandthereforehaslittleshorttermeffectonreturnoncapital(ROCE)andkeepstheall-importantbalancesheetlookingitsbest.Hehasalsospelledouttheeconomicconsequencesof

thisapproach:“Disruptiveinnovationscreatejobs,efficiencyinnovationsdestroythem.”

Asastrategy,waitingforthemacro-economicindicatorstoimproveisonlyviableifinvestorsarepatientandthebusinesscanguaranteeameaningfulshareofthebiggerpie.Inourviewthisisnonormaldownturnbutastructuralshift,meaningthatfutureimprovementsinGDPwillnotbesharedequally.Rather,wecontend,itislikelytobeskewedheavilytowardsthosethathaveadaptedtotheirrespectivechangingmarketlandscapesaswellasnewentrantswhohavepositionedthemselvestoexploittheopportunitygaps.

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“AN OBVIOUS CHOICE TO SOLVING BUSINESS PROBLEMS IS TO GRAB AND TRy TO APPLy A WELL-RESPECTED MANAGEMENT TOOL. BUT WHICH ONE?”

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Thesecond,morepromisingresponse,comesfrommanagerswhorecognisethattheGood Timeswillnotpermit,asapsychologistwouldterm,areversion-to-type.Thesemanagersknowthattheyneedtobedoingdifferentthingstoadaptsuccessfullytoadifferentandchangingbusinessenvironment.Theirproblemistheydon’tknowwhattodo.ArecentIBMsurveyofglobalCEOsshowedthattopbusinessleadersrecognisetheneedtotransformtheorganisationandevenitsbusinessmodel,butadmittheydonotknowhow.ThiswassupportedbyanotherstudyfromtheLondonBusinessSchool,whichmadeuncomfortablenewsforthemarketingprofession,for,whilstCEOsbelievedthebiggestchallengeslieinthemarkettheydonotconsiderthattheirmarketingpeoplehavetheskillstoaddressthem.

Ourresearchalsoshowsagrowingdissatisfactionwithfinance-driventechniquessuchascostcontrolandfinancialengineering,asconfidencewanesintheirabilitytodeliverthesustainableperformanceandresultsthatbusiness(andtheirinvestors)aredemanding.

Wearealsoseeingagrowingstressbetweencurrentactivitiesanddesiredresultsinrelationtothemarket-drivenperformancedriverssuchascustomerretention,loyalty,innovationanddifferentiation.Andyetsofarweseelittleevidencethatthisistranslatingintoarealappetiteorindeedanyeffectivemeanstoaddressthesechallengingissuesattheircore.

Tosumupthestateofplay,somebusinessesarestillmanagingtokeeptheirownershappy,buttherearegrowingconcernsabouthowlongthiscanbesustained.Forexample,asurveyofover1200globalexecutives(Bain&Co.,2013)revealedthat55%areconcernedaboutmeetingfutureearningstargets.

Ontopofthisitisestimatedthatupto30%ofUKcompaniesare‘Zombies’.Thatis,theyaregeneratingenoughprofittomeettheirfinancialobligationsandstayalivebutinsufficienttoinvestinwayswhichcouldgetthebusinessoutofitscashflowtrap.

Thentherearebusinesseswhosedifficultieshavebecomevisibleforalltosee.Let’sremindourselvesofafewexamples.

UNExPECTED CONSEQUENCES - CORPORATE FAILURES AND PERFORMANCE SHOCKSHealthy-lookingbalancesheetscanmaskallmannerofunderlyingissuessuchasperformancedifficulties,lossofcompetitiveadvantageandstructuralweaknessesinthemarketstrategyorbusinessmodel.Allthesethingsarebubblingawaybeneaththesurfacejustwaitingforatriggerthatwillgenerateaneruption.

Whentheseeruptionshappentheyalsoseemtosurpriseandshockthecompaniesthemselves.Everyfewweeksweseeanotherestablishedplayerhavingthevalueoftheirbusinessdowngraded,ofteninthehundredsofmillions,sometimesbillionsofpounds(seeFigure4)!

Nokiawasastand-outexample.Lessthanthreeyearsagotheyhadthehighestglobalmarketshare,andthen,alltoosuddenly,theywerepostingenormouslossesandlookingovertheprecipice.BycomparisonAppleatthetimehadasingledigitmarketshare,yetoverathirdofglobalprofitswithinthesector.

AndrememberYell?Thatiswhereyourfingersusedtodothewalking,butwalknomore.NowcalledHIBU,inanattempttore-inventthemselvesinthedigitalworld,theyarenotdoingmuchbetter.Anorganisationwhichjustafewyearsagowasworthnearly£4bn,hasbeenreducedtoaderisoryfractionofthat.Mediareportsatthetimedescribedthemasbeinginthedirectoriesbusiness.Foranyonewhounderstandshowmarketswork,thatverydefinitionlayattheheartoftheproblemitself.

ThentherewasBlackberry,orResearchInMotion(RIM),whomaybeoneofthebestexamplesofaninnovativecompanythatcompletelylostitscompetitiveedge.Fiveyearsago,RIMwastheonlysmart-phonecompanyofanysizeandithadnearlycapturedtheentirecorporatemarket.Butitmadeafatalmistakeinplayingtothestockmarket’sdemandforrevenuegrowth,andwhilstitwasdoingsofailedtoadaptitsofferforconsumeruse,ornoticealternativesuppliersrapidlygainingbuyerpreferenceinthebusinessmarket.

Inthetravelsectortherewerealsonumerouscasualties.ThomasCookforexamplejustmanagedtoavertcollapse.ItsnewCEO,MrMeysman,blamed“grandeegroupthink”forthebusiness’sdeludedstrategyofcompetinginthemassmarketwithonline-onlyrivals.Thefactthatcustomersweremuchlessinterestedinpackageholidaysofstandarddurationtothepopulardestinationsofyesterdaywasprobablyalsoacontributoryfactor.

CometdisappearedfromtheHighStreet,andHMVwentintoadministration.Theirexistingbusinessmodelshadlostcompetitiveadvantageandmanagementpracticesfailedtoadapt.

“‘EFFICIENCy INNOVATION’ DEFINED AS REDUCING THE COST OF MAKING AND DISTRIBUTING ExISTING PRODUCTS OR SERVICES RATHER THAN INNOVATION THAT HAS THE POWER TO TRANSFORM PERFORMANCE.”



Andlet’snotforgetTescowithitsfirstprofitwarningintwentyyears,anannouncementthatpromptlyknocked20%(£6bn)offitsmarketvalue.

Tescohavethebiggestmarketshare,butitisnotlovedbycustomersinthewayWaitrose,orevenSainsbury’s,are.ThenewCEO,PhilipClarke,blamedtheproblemsonadecisiontoconcentrateoncostsavingsratherthancustomers.Thecompanytoldinvestorsthatithadpushedtoohardoncostsfortoolongandtothepointwherecustomersbegantonotice.Inourwords,theyappeartohavebeencompletelyunawareoftheperceivedquality/valuebalanceofthosethatgaveitashareoftheircustom.

Arecurringthemeisthatcompaniesweremis-alignedwiththechangingpreferencesandvaluesofcustomers,andarebeingforcedtopayforit.

Whatdotheindependent,professional,cityanalystshavetosay?Inmanycasestheirconclusionsandrecommendationsareassurprisingastheperformanceshocksthemselves.TociteonetypicalresponsefromthespecialistretailteamatINGchewingovertheperformancedifficultiesatTesco,“WefeelthatdeeperpricecutsaretheonlywaytopreventTescocustomersfromswitching.Thismaybeanunpopulardecisionintheshortterm,butwebelieveitwillpayofflonger-term.”

Theirargumentcontinues.“Withoutthisstrategywethink

thecompanywillbeunabletoconvinceTesco-tiredcustomerstocomebacktothestore.”Theserecommendationsarebackedupbywhatseemstobetheonlyperformancetheoryintown–goodoldeconomiesofscale,orbiggerisbetter(rememberNokia?).“Ultimately,lowerpricesshouldleadtohighervolumes,highersalesandhigherprofits,whichinturncanbereinvestedinlowerprices.IfTescocontinuesonitscurrenttrackandmaintainsitspricepremium,wethinkthecompanywillbeunabletoconvinceTesco-tiredcustomerstocomebacktothestore.”

Ohdear,theyseemtohavemissedthewholepoint.

ARE THERE ANy COMMON FACTORS? WHAT IS BEING MISSED?Fromtheseandotherexamples,ourresearchhasbeenabletoidentifyanumberofcontributingfactors:• Internal dominance: Many organisations suffer from an

obsessionwithwhat happens inside the organisation ratherthan what is happening outside.This is not surprising afterdecadesofsingle-mindedfocusonekingoutmoreandmoreefficiencies toreducepriceswhichseems,eventoday, tobetheonlygameintown–thetroubleisitdoesnotseemtobeworking.Theideathatitistheworldoutsidetheorganisationthatprovidesall thethreats,opportunities–andall thecash

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flow–canbedifficulttograspifyouarelookingthroughaninternallens.

• BusinessschoolsandMBAs:Whenwelookatwhatbusinesseducationandthetrainingindustryhavetosay,wedonotfindtoomuchcomforthereeither.AGreenFieldanalysisof20MBAprogrammes(intheUSA,UK&Europe)identifiedthatatypicalsyllabuswas90%focusedoninternalissues(mainlyefficiencydrivers), andonly10%onunderstanding theoutsideworld.In addition,more andmore voices are being raised againstthe 1970s-inspiredMBAprogramme suggesting that it is nolongerfit-for-purpose.Attheheartofthiscriticismisthesiloapproachtocontentthatreflectsthecurrentstructureoflargebusinessesbutignoresthecustomers’needforvaluedeliveredbycollaborationacrossallfunctionalareas.

• Specificationforthe‘ideal’businessmanager:Thesearchfortalent(afad?)continuesapacewithmoreandmorerecruitmentandsearchagenciescreatingdescriptionsofthetypeofseniordecision-makers that organisationsmay need for the future.Andtheneedforthis‘talent’tothinkdifferentlyandbeopentonewideasisclearlycomingthrough.Unfortunately,inalmosteverycaseitisreportedthatthesespecificationsaredilutedbytheclient,andinthefinalanalysisorganisationsarecontinuingtorecruit‘moreofthesame’–thatis,peoplewhowillfitinratherthanstandout.

• Assumptionsaboutthemarket:Specificallythattheorganisationhasadeepandtrueunderstandingitsmarket,typifiedbyaclaimweoftenhear,“WhatIdon’tknowaboutmycustomersisn’tworthknowing”.Assumptionisthemostinsidiousofdiseases,itbearsnosymptomsandthemoreseniortheafflictedpersonthelesslikelyheorshewillbedisabused.Addthistothefactthatmostorganisationshaveremarkablylittleinformation(nottobeconfusedwitharecent,anddistracting,fad,‘BigData’)about current customer perceptions of value, and even lessaboutwhattheymightvalueinthefuturetodriveinnovationinvestments,andyouhaveatrulytoxicmixture.

MINDS SET Itiswellknownthatthefirststepinanyeffectivechangeprocessrequiresawillingnesstoletgoofthepast.Asweshallseeshortly,thiscanbeextremelydifficulttoachieve.

Firstly,byusingtheexisting(internal)lensitisverydifficult(ifnotimpossible)toseetheneworchangingbuyerrequirementsthataresocriticaltofutureprosperity.

Second,itoftenisnotpossibletoseeintothe‘mindoftheorganisation’dispassionatelyenoughtospotthethingsthatblockandconstrainitsabilitytorespondtochangingexternaldynamics.Inotherwords,theverystuffthatshouldbepermanentlyinthecentreoftheradarareoftennotbeingpickedupbytheradaratall.

Thirdly,themindsofseniormanagershavebeenmouldedbythebusinesspracticestaughtandpracticedfordecades.Forsolonginfactthatthemouldhasvirtuallyset.Onceset,themindwillrejectinformationthatdoesnotconformtoitsmodel.Forexample,presentedwithacompellingargumentforchangingthewaywebehave,manystudiesinbehaviouralandneurosciencehaverevealedasimilar,startlingtruth:eightoutofnine(88%)peoplewillnotchange–evenwhenfacedwiththelikelydemiseoftheorganisation.

Wehaveseensomeoftheconsequencesofinaction,sothestakesatriskarehighonallsides.

ENOUGH ABOUT THE BROKEN EGGS, LET’S GET ON WITH THE OMELETTEOurresearch,acrossa rangeofbusiness issuesandmanagementdisciplines, showed that many experts and commentators arequicker to identifying problems than develop effective solutions.This isnotourway.Over thepast fewyears,cognizantofall thepointsthathavebeenraised,wehaveinvestedheavilyindevelopingnewsolutionsandanewbusinessapproach.

ForthosewhoarereadytostartthejourneyouranalysissuggeststhatthereareseveralBig and Difficult Steps intheprocess:

“IT IS WELL KNOWN THAT THE FIRST STEP IN ANy EFFECTIVE CHANGE PROCESS REQUIRES A WILLINGNESS TO LET GO OF THE PAST. THIS CAN BE ExTREMELy DIFFICULT TO ACHIEVE.”

1. Let go of the Past: Why do these lists always start with the most difficult? If you cannot let go of the past, the first and most difficult step in any corrective activity, none of the other steps will deliver any benefit. Being guided through the Unlearning process can be uncomfortable, but the end result is liberating (you can see possibilities) and sometimes frustrating (when others cannot see what is now obvious to you).

2. Look in the Right Place: As we often quote, “An in-depth analysis of the candle will never


Forthcoming Masterclass: When the eggs are broken...it’s time to make an omlette!

If you think it is, and are ready to question some closely held beliefs, re-define the issues, and open yourself to new solutions we will be holding a Masterclass at Cambridge Marketing College on 10 April, 2014.

For more information, contact Lorna Brocklesby on 01954 234 940.

Dr Paul Fifield - Co-Founder Paul Fifield is a widely acclaimed strategist, writer and teacher.

Paul has a MBA & PhD from Cranfield and has devoted his career (and life) to being a rare breed: a business academic. Alongside his

consultancy, his recent academic posts include a Visiting Professor at Southampton University School of Management, the University of Bath and Paris’ College des Ingénieurs . He is passionate about the

idea that unconventional thinking has a great tradition of success.

John Greenhough - Co-Founder John Greenhough is an accomplished economist, strategist,

entrepreneur and investor. With a degree in Economics and a Masters from Lancaster University, he has always been fascinated

with overhauling tired business approaches. With a keen eye on numbers he has a unique talent in combining left- and right-brain

thinking to create and drive business models in new and commercial ways.

reveal the existence of the electric light bulb” (if anyone knows the source please get in touch). The solutions we all seek are not to be found inside the organisation or within the conveniently-defined sector classification. The new game, and its new rules, is there to be discovered by those ready to listen and tune in to the market - without hypotheses or pre-conceived ideas.

3. Mind the Gaps: The gaps that matter are those that exist between what the market values (and will pay for) and what is currently being delivered. However, identifying these gaps can be tricky because simple market research may fall a long way short of uncovering them– Steve Jobs did not conduct market research for a reason!

4. Effective Execution: One of the Great Lessons from the past is that having a great idea counts for little unless it can be effectively implemented, and closing these gaps presents other challenges. To paraphrase Einstein’s famous words (with apologies to the great man), “We cannot close our gaps with the same level of thinking that created them”. In other words, the skills, tools, techniques and experience that were brought to bear in the past are not the ones with which to address the present issues. We will need to look beyond our current capabilities…

5. New Breed of Manager: Good news, some help is at hand. Into the old choice between the corporate Professional Manager or Entrepreneurial Maverick we have uncovered a new breed of manager particularly well-suited and receptive to the challenges we face, and potentially well-placed to play a key role in developing and implementing solutions. More on this in the second part of this series.

6. All of the above must be Integrated: Not technically a separate step but another major break from the past. The organisation is a complicated system and none of the above steps can be implemented in isolation – that is simply not how it works. An integrated approach is the only way to break with the past and embrace the future while taking everyone in the organisation with you.

AND THE ALTERNATIVE?AsCharlesDarwinsaid“Itisn’tthestrongwhowillsurvive,orthemostintelligent,itisthosewhocanbestadapttoachangingenvironment.”

RiskManagementsingularlyfailstomeasurethebusinessriskindoingnothing,which,inaconstantlychangingenvironment,canonlymeanfallingbehind.WhentheNew Good Times cometheyareunlikelytobeanextrapolationofthepastandnew,youngerorganisations,unencumberedbylegacythinking,arelikelytomaketherunning.Itisalsosoberingtorememberthatcustomers,whetherB2BorB2C,careonlyaboutobtainingwhatevertheyperceiveasvalue–yourcontinuedexistenceisnotontheirshoppinglist.

SO, IS IT BROKE?Muchevidencepointstothefactthatmanyorganisationshavereachedawatershedmoment.Somemanagerswilltrytoadaptthemselves,theirthinkingandtheircompany.OtherswilldefendtheproblemswiththeimmortalwordsofHomerSimpson,“ItwaslikethatwhenIfoundit!”

PaulFifield&JohnGreenhough©TheGreenFieldOrganisationLLP,2014

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STRATEGIC DIGITAL MARKETING This article looks at the effect digital has had on the marketing industry and highlights how important it is for marketers to

address digital marketing from a strategic perspective. It’s not enough to simply address digital with tactics, marketers have to have a digital strategy.

CHARLES NIXON

A study by Adobe published this

year reported that 76% of marketers believe that their discipline has changed more in the last 2 years than it has in the previous 50. Whilst it is20 years since the firstbrowser allowed thewww to develop, the lack of bandwidth andpowerful handhelddevicesmeansthatithasonlybeensince2007thatDigitalMarketinghasreallytakenoff.Itisjust6yearssincethefirstiPhoneand3yearssincethelaunchoftheiPad,yettheimplicationsformarketinghavebecomesignificant.Add to this the riseofSocialMediawebsiteslikeLinkedIn(2003),Facebook(2004),YouTube(2005)andTwitter(2006)andtheworldofmarketinghasbeentransformed.

Inresponsetothischanginglandscapemarketershavehadtoadaptandtokeeptheirskillsuptodate.Theynowhavetoaddtotheirarmouryofcommunicationstools:webbasedadvertisingalongsideofflinepromotions;emailcampaignstointegratewithdirectmail;and,inordertodrivesufficienttraffictotheirwebsite,theyhavetohavetheseoptimisedforsearchengines(SEO).OntopoftheseactivitiestheynowneedtouseSocialMediaasanewchannelofcommunicationanddialoguewiththeirpotentialandexistingstakeholders.Howevertheimpactismuchdeeperandmorefundamental.ItisaffectingtheveryaxesofopportunitiesandimpactsoneveryaspectoftheMarketingMix.

DON’T RESPOND TO STRATEGIC SHIFTS WITH TACTICSWhilst there aremany aspects to digitalmarketing, themajorityapproach has been to look at the tactics and especiallycommunicationstactics.Yetdigitalmarketingshouldnotbeaboutchasingadubiousvanitymetriconthenexthypedsocialplatform.A strategic approach needs to be taken to integrate the digitalrevolutionintotheMarketingMix.

Businessesneedtore-evaluatetheirapproachtodigitalmarketing.Asthenoveltystartstowearoffandtherealityofatrulyconnectedworldtakesholdourmarketingactivityneedsafarmorestrategicapproach.


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THE FIRST STRATEGIC DIGITAL MARKETING COURSE WILL TAKE PLACE IN MAy 2014 IN CAMBRIDGE • MorningDayOne:TheImpactofDigitalWorld• Afternoon Day One: The New Marketing Mix & Changing

BuyerBehaviour• MorningDayTwo:StrategicIssuesandObjectives• AfternoonDayTwo:StrategicDigitalPlanningThe cost of the two day course is £695 + VATInclusive of materials and a follow-up consultancy hourForanapplicationformorfurtherinformationemailorcallCharlesNixononcharles@marketingcollege.comor01954234943.

Charles is Chairman and a founding director of Cambridge Marketing Colleges. He has many years of marketing experience

across a broad range of industries including textiles, software, telecommunications and financial services working for Arthur

Andersen, Mercury Communications, Extel Financial and Touche Remnant.

Charles is a former member of the CIM’s International Board of Trustees and is President of the CIM Cambridgeshire Branch. He

has an MBA from Warwick Business School and is a Fellow of CAM, CIM and the Royal Society of Arts.


In the mid-20th Century it was known as the 4 Ps; by the end of the century it had extended to seven. With the new millennium there were many attempts to add to it or to change it altogether. Whilst it can be criticised for many things, as a check list for guiding marketing activity the Mix is essential. However it does need refining and updating. The diagram above is central to the new course we have developed. Every aspect of the traditional mix is impacted by the digital revolution.

To address this Cambridge Marketing College’s new Award in Strategic Digital Marketing asks some hard questions:• Is the traditional marketing mix still fit for purpose

or does it need refining?• What skills does a modern marketer need? Is there

such a person as a digital marketer, or should digital be part of the ‘standard’ job description?

• What has happened to the traditional model of Buyer Behaviour? Has the Process element of the Mix taken on a whole new dimension?

• Is it still B2B and B2C or is it B2E (everyone) as digital media transcends the work / life divide?

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MARKETING BOOK REVIEWS By DAWN SOUTHGATE

Looking for a good book to get your teeth into? Then explore these three books that have been chosen by Dawn Southgate, Head of Information at the Chartered Institute of Marketing.

DAWN SOUTHGATE

Dawn first shared her book reviews

on Star Radio’s new specialist show, Marketing Review, hosted by Kiran Kapur, Course Director at Cambridge Marketing College. This twice-monthly radio showcanbeheardliveat7.00pmeveryotherThursdayeveningonStarRadio107.9/1FMorlistenedtoagainaspodcastsontheStarRadiowebsite:http://www.star107.co.uk/marketing-review.php.

WegaveDawnthedifficulttaskofpickingjustthreegoodmarketingbookstoreviewforthisissue.HeadinguptheCIMlibrary,wecanonlybegintoimaginehowdifficultitmusthavebeentoselectonlythreebooks!Shehaspickedsomereallyinterestingbooksthatweagreearewellworthreading.

THE BOOKS:

• 15 Essential marketing masterclasses for your small businessbyDeeBlick(2013)publishedbyCapstoneandtheCIM

• Delivering effective social customer service: how to redefine the way you manage customer experience and your corporate reputation by Carolyn Blunt andMartin Hill-Wilson (2013)publishedbyJohnWileyandSons

• Hit Brands: How music builds value for the world’s smartest brands by Daniel M Jackson, Richard Jankovich and EricSheinkop(2013)publishedbyPalgraveMacmillan.

15 ESSENTIAL MARKETING MASTERCLASSES FOR yOUR SMALL BUSINESS By DEE BLICKThisbookisuseful foranyentrepreneur,smallbusinessownerorpracticingmarketer.

Deeisasuccessfulauthorandmarketingguruandshehasbeenworkingwithsmallbusinessownersforover27years.Herbookprovidespracticalstepsonanarrayofmarketingtopicsincludingmarketingplanning,communicationsandcopywriting.Sheenliststhehelpofothermarketingexpertstogivethemostuptodateinformationandeachtopicisconsideredseparatelysoyoucandipintothebookatanypoint,althoughDeedoessuggestreading‘MasterclassOne’onmarketingplanningfirst.

DeealsoincludessectionsonimprovingyourwebsiteandtheuseofsocialmediatoolssuchasLinkedInandTwitter–


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emphasisingthatonceyourcompanystartsusingtheseroutestoyouraudience,youwillneedtomonitormorecloselywhatisbeingsaidaboutyou.

Therearecasestudiesandexamplesthroughoutthebookwhichillustratethekeyissuesandlearningoutcomes.Theseareparticularlyusefulforsmallbusinessownersandalsoprovidesomereallyinterestingexamplesthatcanbeusedforpresentationsorteaching.

DELIVERING EFFECTIVE SOCIAL CUSTOMER SERVICE: HOW TO REDEFINE THE WAy yOU MANAGE CUSTOMER ExPERIENCE AND yOUR CORPORATE REPUTATION By CAROLyN BLUNT AND MARTIN HILL-WILSONThisbookisverytopical.Itlooksathowtodelivereffectivecustomerservicethroughsocialmediaandattheimpactthatsocialmediacanhaveonyourreputation.Nowadays,asmanyorganisationswillalreadyhaveexperienced,customersmayusesocialmediaastheirfirstchoiceincommunicatingwithyou.ThisbookdevelopstheideaofFacebookandTwitterasservicechannelsandhowtoalignyourPR,marketingandcustomerservicearoundthem.

Thebookiswelllaidout.Thefirstcoupleofchaptersprovideanoverview;Chapter3setsoutthebuildingblocksandChapter4bringsinthe15competencesyouneedtoexcel.Chapters5to7helpyoudevelopabetterunderstandingofchannelsandChapters8and9aretheubiquitouschaptersoncrisismanagement.Thereareinterviewsthroughouttoaddillustrativepoints.

HIT BRANDS: HOW MUSIC BUILDS VALUE FOR THE WORLD’S SMARTEST BRANDS By DANIEL M JACKSON, RICHARD JANKOVICH AND ERIC SHEINKOP Thebonusbook Ihavechosen isHitBrands:Howmusicbuildsvalue for theworld’s smartest brands.This is an areawherewehavestruggledtofindgoodmaterialbefore.Thewritersareallfromwithin themusic and brand industries adding real life examplesthroughoutthebook.

Musicisapowerfultoolforbrandsandbrandscanbeapowerfultoolformusicians.Thisbookcoversthehistoryoftherelationship,looksathowmusiciansareusingsocialmedia,andconsidersmusicasidentityandasanengagementtool.TherearechaptersofcasestudiesincludingNescafe,BarclayCard,NokiaandnobrandmusicbookwouldbecompletewithoutCocaColateachingtheworldtosing.Thisisanimportantbookforunderstandingwhymusicispowerful,notjustthatitispowerful.

Therearesomefascinatingfactsinthebookincludingthetop8Twitteruserslistedas:LadyGagawith30.5millionfollowers;JustinBieberwith29million,althoughitcouldbeafewmoreorafewlessafterhislatestexploits;KatyPerry;Rihanna;Britney;andthenthefirstnon-musician,BarackObamawith21million,

followedbyTaylorSwift;andShakira.And,ifyouthinkthosenumbersarebig,thetopYouTubeviewswerePsywithGangnamStylewith1,238millionviewsfollowedbyLadyGagawithBadRomancewith505millionviews.How’sthatforreach?

Dawn Southgate, The Chartered institute of Marketing: Dawn has over 20 years’ experience supporting marketers with their information needs. She started at the CIM in 1990 prior to the

World Wide Web, when there was just one fax machine and also a telex machine.

Today’s world of information rarely makes it to print and CIM supply members with services to their desktops plus additional

services that can be accessed by members on-site. Her information team are available to assist in identifying resources and finding

answers to queries.

Do you have other marketing books you would recommend? Let us know your thoughts…Tweet us @C_M_Review


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LEGO’S LONGEVITy Nick Wake looks at the enduring appeal of Lego and examines how the brand has evolved over the years to remain relevant

within the children’s toy industry.

NICK WAKE


having recently celebrated a

significant birthday (which is the acceptable expression for turning 50) I am ever more conscious of the enduring appeal of those brands that were a big part of my early life and which still thrive today - possibly because many are not as visible as they once were. Asachildbetween, let’ssaytheagesof8 to14, thebrandsthatmatteredtome,asfarasIcanrecall,innoparticularorderwere:MyMitre footballboots,myCommandocomics,mySubbuteo,myBostikglueforfixingmybrokenSubbuteoplayers,myRucanor tennis racket,myChopper bike, Ribena (on specialoccasionsonly)andMilkyWays–thesweetyoucouldeatbetweenmealswithoutruiningyourappetite.AndofcoursetherewasLego.

Somefortyyearson,thereisnowaLegomovie–thelateststepintherenaissanceofabrandthatnearlywentbusttenyearsago.Atthattimesalesweredroppingoffacliffamiddirepredictionsthatthedigitalgenerationwasmoreinterestedinmanipulatingamousethansnappingtogetherbrightlycolouredplasticbricks.Thecurveoftheproductlife-cyclewaswellandtrulyindecline.ButinFebruary2014Legoisresurgentoncemore.AccordingtoarecentarticleintheObserver(16.02.14),therearenow86Legobricksforeverypersononearth,witharoundsevensetssoldeverysecond(morethan50sinceyoustartedreadingthisarticle),andallthetyresthatclipnicelyontothevariousLegomodesoftransportation,meanthatLegoisalsotheworld’sbiggesttyremanufacturers.LikeallthingsScandinavianatthemoment,Lego,whichoriginatesfromDenmark,isonaroll.

Thecharacteristicsofthiscolourfulcomeback-orthe8CsofLego’slongevity–mightbeclassifiedasfollows:

CHILDRENTheproducthasbroadappealforatargetaudiencewithenormousbreadth.And it taps into one huge advantage this audience hasover theoldergeneration: imagination.WithLegoyoucanbuildwhatever your imagination desires. It is stimulating, safe, multi-dimensional andalways fresh.And it seems that adults, likeme,whogrewupwithLego,arereturningtoitwiththeirownchildren.Theemergenceofthe“Afols”segment–adultfansofLego–marketitisreported,isasignificantfeatureofthebrand’sresurgence.

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COLOURLego bricks are instantly recognisable, not just because of theirunique shape, but also because of their colour. Lego is nowmanufacturedinarangeof51colours,33ofwhichareknownassolidsincludingtheonesthatareinstantlyfamiliar:brightred,blue,greenandyellow.InLegodigitaldesigner,thereusedtobeabiggerrangeof121coloursbutthesehaverecentlybeenreducedto52.Incolourtermsitlookslikeonceyougetbeyond50,eveninthedigitalage,youareintothelawofdiminishingreturns.

CONSISTENCyLikeallgoodbrandsLegoisremarkablyconsistent.Not justwithcolour, size, shape, but also with less tangible dimensions ofthe brand proposition. For example, Lego would not allow anycharactersinthenewfilmtokiss.UnlikeKenandBarbiewhowereallowedtoturnupthesteaminToyStory3,holdingplastichandsisashotasitgetsinTheLegoMovie.

CREDIBILITyThe credibility enjoyed by Lego is both inherent in its quality,durability and proven appeal. Its simplicity, means that, unliketechnology dependent entertainment, there is little that can gowrong.Credibility isalsoearned.When fans includeEdSheeranand Britney Spears, it is cool to be into Lego. Earlier this year,DavidBeckhamwasinthenewsforbuyinga£210TowerBridgeset because, itwas reported,building it helpedhimcalmdown.Lastyear,heenjoyedperhapshisgreatesteveraccoladeinalongandillustriouscareer,whenhewasimmortalisedinhisownLegocharacter.Mindyou,Iamnotsuretheresearchersweretotallyontheirgameonthisjob.Amidhismyriadofhairstyles,Idonoteverrecallhimbeingabouffantblonde!

CHARACTERISATIONCharacter development - or more accurately licensing – is nowplaying another huge part in the brand’s revival, though it wasarguablyalsoattheheartofitsneardownfallwhenthecompanyexpandedanddiversifiedtooquicklyinthelatenineties.

AccordingtoBrikipedia(ohyes)therearetwotypesoflicensing:inboundandoutbound:• Inbound licensing refers to properties that LEGO gains and

createslicensedthemesoutof,forexampleStarWars• Outboundlicensingiswhereacompanyisgivenpermission

to useThe LEGOGroup’s intellectual property, such as DKPublishingandbooksorMerlinEntertainmentsandLEGOLANDthemeparks.

InhisbookBrickbyBrick,whichchroniclesLego’sresurgence,DavidC.Robertsonpinpointsthatthecompanywasabletosalvageitselfandemergestrongerthanbeforebyreturningtoits‘corevalues.’Thisinvolved“makingretailcustomers(ratherthankids)theirprimaryconcern”andfurtherexpandingsafe-betlicensingdealsthatfeaturedHarryPotter,LordoftheRings,andSpongebobSquarepants.

COLLABORATIONWhentheboundariesbetweencompanyandcustomerbecomesosmallthatyourcustomersareco-creatingproductsforyou,thatisasmartandprofitableplacetobe.Legodothistremendouslywell.

Inthelate1990sthecompanyintroducedLegoMindstorms,whichcontainedsoftwareallowinguserstocreatetheirownroboticLegocreations.Legousersbeganhackingthesoftwarehoweverandsharedtheirnewcreationsonline.HowLegoreactedwasperhapsaturningpointinthecompany’sfortunes.Afterinitialnervousness,theydecidedtoembracethepirates.TobeginwithusergeneratedideaswerevettedbyLegostaffandiftheypassedthetest,thentheywereplacedintoproduction.AstimehasmovedonLegohassimplyacceptedthenewcustomercollaborationecosystem,themereexistenceofwhichisatributetothestrengthofthebrand.

“SALES WERE DROPPING OFF A CLIFF AMID DIRE PREDICTIONS THAT THE DIGITAL GENERATION WAS MORE INTERESTED IN MANIPULATING A MOUSE THAN SNAPPING TOGETHER BRIGHTLy COLOURED PLASTIC BRICKS.”

“LEGO IS REMARKABLy CONSISTENT. NOT JUST WITH COLOUR, SIzE, SHAPE, BUT ALSO WITH LESS TANGIBLE DIMENSIONS OF THE BRAND PROPOSITION.”

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Nick studied at the University of East Anglia in Norwich where he gained a 2:1 BA Joint Honours in Economics and Social Studies, with

German.

He is a Chartered Marketer with over 20 years experience of B2B and B2C in a variety of contexts including client side (7 years with

Whitbread), public sector (3 years with Sport England) and agency side (3 years with CPM Sales Promotion and 8 years with Grass

Roots).

Nick’s strength and passion is marketing communications – across all channels in all formats. He is now Director of Awaken Communications and tutors for Cambridge Marketing Colleges.

COSTLegohaspositioneditselffullsquareinthepremiumcategoryandthanks to all theCsmentionedhere is batting away the cheaperrivalswithimpunity.ItisnotonlyDavidBeckhamwhoisperfectlypreparedtopay£210foraTowerBridgeset,therawmaterialsforwhichcostlessthana$1akilo.InhisbookRobertsonpointsoutthatthecustomerispayingaround$75akilo.Thatissomeseriousvalueaddandahealthyprofitmargin.

CREATIVITyRatherlikelicensing,creativitycouldbecategorisedasinternalandexternal.Aftervideogames,books,TVshows,T-shirts,robotsandthemeparks,TheLegoMoviemightbedescribedasthevictorylapofarevivaldueinnosmallparttocreativity.

Externally,theemergenceofYouTubehasprovidedamateurmoviemakerswithawonderfulplatformforshowcasingtheiramateurmoviemakingtalents.Oneofthemostpopulargenresfordoingthisin,isLegoStarWars.

Creativity,itseemstome,isinherentintheDNAofthebrandwhich,atitscore,invitesitscustomers,youngandold,tobeascreativeastheypossiblycanbe,duringthenoblepursuitofbuildingsomething.Meanwhilemarketingworksbehindthescenestofindevermorecreativewaysofkeepingthecurvemovingupwards.

“THE COMPANy WAS ABLE TO SALVAGE ITSELF AND EMERGE STRONGER THAN BEFORE By RETURNING TO ITS ‘CORE VALUES.”



THE yIN-yANG OF BRANDED CONTENT MARKETING

In this first of a new series of articles, Justin Kirby draws on his research for his new book ‘The Best of Branded Content Marketing: 10th Anniversary Edition’ produced in partnership with the BCMA, to look at what content marketing actually

means, and how to develop a branded content marketing strategy.

JUSTIN KIRBY

As brands seek more media-

neutral solutions to the marketing challenges they face in a media landscape that continues to fragment, they are presented with a Heinz 57 of ideas about how content should be used and why.

Thisispartlytheresultoftheterm‘content’beingsoall-encompassing.Butitisalsoaboutagenciestryingtodifferentiatethemselvesasthelinesbetweenthevariousmarketingdisciplinescontinuetoblur.Hencetheconfusingarrayofrelatedtermsbeingbandiedaboutsuchas‘brandedcontent’,‘brandedentertainment’,‘contentmarketing’andeven‘brandpublishing.

Therehasbeenademandformoreclarityfromclientsandagenciesalike,whichiswhytheBrandedContentMarketingAssociation(BCMA)recentlycommissionedresearchfromOxfordBrookesUniversityinpartnershipwithIpsosMORI.Thefirstphaseincludedaliteraturereviewandresultedinthefollowingoverarchingdefinitionforbrandedcontent:

“Branded content is any content associated with a brand in the eye of the beholder.”

Thisgenericdefinitionforbrandedcontentisagreatfirststep.However,wealsoneedtoexplainthecontextintermsofthemarketingproblemthatbrandedcontentseekstosolve,andthestrategicconsiderationsinvolved.

Aspartofmyresearchforanewebook,BestofBrandedMarketingContent:10thAnniversaryEdition,thatIhaveproducedinpartnershipwiththeBCMA,IspoketoJanGodskwhoheads

“THE NUMBER OF BRANDS PUTTING BRANDED CONTENT AT THE HEART OF THEIR MARKETING CONTINUES TO GROW.”

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“HAVE BUSINESSES LOST ABSOLUTE CONTROL OF THEIR BRANDS?”

uptheirScandinavianchapter.Janisonthejuryofvariousinternationalcreativeawardbodies,andwaspartoftheCannesLionscommitteethatdefinedthebrandedcontentawardcategoryin2012.Janbelievesthatbrandedcontentandcontentmarketingaretwosidesofthesamecontentcoin,pointingoutthattheterm‘brandedcontentmarketing’hasbrandononesideofcontentandmarketingontheother.

Jandescribesaleftversusrightbrain-typesplit,wherethebrandsideismoreirrationalandbasedaroundtheaudience’sperceptions.Thatiswhytheterm‘brandedcontent’oftendescribescontentthatismoreentertainingandemotionallyengaging,andhelpsshiftbrandpreferencesandconsumerbehaviour.Thetermisusedfrequentlyincreativeadvertisingcirclestorefertostory-basedvideocontent.

Ontheotherhand,Janseesthemarketingsideof‘brandedcontentmarketing’asbeingmorerationalandproduct-focused.Thisringstrue,giventhatmuchofwhatisdescribedascontentmarketingisoftenmoreinformativeandusedclosetowhatGooglecallsTheZeroMomentofTruth(ZMOT)–whenconsumersstartsearchingonlinetofindoutmoreaboutsomethingtheywanttotryorbuy.Theintentisalsooftenmoresalesorientated,hencetheuseofcontentmarketingwithintheB2Barena,itscloselinktoSearchEngineOptimisationandthefavouredformatsofinfographics,slidepresentations,whitepapers,blogs,etc.

Journey’.TheoriesaboutemotionallyengagingcontenthavinggreaterimpactthanmoreUSP-focusedcontentwillalsobecomeincreasinglybothpre-testedandmeasured.Thiswillleadtoabetterunderstandingofwhatworks,when,whereandwhy,asthenumberofbrandsputtingbrandedcontentattheheartoftheirmarketingcontinuestogrow.

THE THREE CIRCLES OF BRANDED CONTENT MARKETINGIn themeantime,anotherwayof thinkingaboutbrandedcontentmarketinghasbeensuggestedbytheanalystandauthorIdilCakim.The Three Circles of Branded Content Marketing diagram hassubsequently been developed, below, as away of showing howsocialmediaandcontentmarketingcouldbecomemoreunified.

Thereisalsotheterm‘brandedentertainment’toconsider,wheretheproductisfeaturedmorepredominantlyalbeitinanentertainingcontext.Inthissense,thetermsitssomewherebetweenbrandedcontentandcontentmarketing,howeveritisusuallyusedtorefertoTVandfilm-typeformats,suchasAdvertiserFundedProgramming(AFP),andiscloselylinkedtoproductplacementandsponsorship.

Allthismaybeoflittleinteresttopeopleoutsidethemarketingindustry.Itmaysimplyreflectcurrentpractice,assomeexpertsthinktherewillbefurtherfragmentationwhenmorespecialistareasgetcarvedoutasthebrandedcontentmarketingapproachevolves.

However,Jan’syin-yangexplanationisausefulwaytostartlookingatthedifferentintentandoutput,aswellaswhereitmayoccurinwhatMcKinsey&Cocallthe‘CustomerDecision

AsDrDaveChaffeyofSmartInsightsexplains,socialmediaandcontentmarketinghavebecomethedefactowayofexplainingcustomerengagementapproachestoday,butareoftenconsideredseparately.ForDave,thisisamistakebecauseitcreatesaperceivedneedforasocialmediamarketingstrategy,ratherthanacustomerengagementonebasedaroundcontent.

Thismaysoundlikesemantics,butitisactuallyaboutdefiningtheproblemthatneedstobesolved,andasthevisualthinkerandauthorDanRoampointsout,“whoeverbestdescribestheproblemismostabletosolveit.”TheThreeCirclesdiagramthereforeactsasapromptforthinkingthroughthefollowingquestionsaspartofdevelopingabrandedcontentmarketingstrategy:• Whatkindofbrandedcontentiscreated(orco-created)bywho

andforwhom?• Howistheaudience’sengagementmanaged?


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• How is the content distributed i.e.where in the convergedlandscapeofearned,ownedandpaidmedia,andwheninthecustomerdecisionjourney?

• Howisthesuccessofthedifferentpartsandtheirsummeasured?

THE FUTURE OF BRANDED CONTENT MARKETINGTherearemanyotherconsiderationsthatexpertsaroundthegloberaisedwhen I interviewed them as part ofmy research.The fulloutputof those interviews formsan in-depth reporton the futureofbrandedcontentmarketingthatwillbeserialisedinforthcomingeditions of this journal. In the meantime, here are some editedhighlightstouseasasetoftriggersforthinkingthroughastrategy,ratherthanasatickboxchecklistormorestructuredframework.

Firstly,itisstillallaboutrelationships.Despitealltheadvancesintechnology,theanalystandauthorCharleneLithinksthatmarketingfundamentalswillremainthesame,“namelythattherelationshipwithcustomersandclientswillbebuiltonepersonatatime.”Shewarnsagainstbeingblindedbythelight,shinyobjects“toever,everforgetthattheserelationshipsareparamount”.

Whathaschangedthoughistheshiftingfromthe‘one-to-many’ofmasscommunicationto‘one-to-one-to-many’.AsChrisGorellBarnesatAdjustYourSetpointsout,themassesarenowthemedia:“Peoplenotonlydecidewhat,whenandwheretheywanttoconsumemedia,butalsowhetherornotthemessageispassedon.”

Thepointbeingthatbusinesseshavelostabsolutecontroloftheirbrands,whichleadsChristobelievethat“thebrandsthatwillthriveinthisnewworldwillbethosethatputtheneedsoftheconsumerattheheartofwhattheydo.Ifnot,theywillwitheronthevine.”

Theneedforcustomer-centricityisonlyoneconsequenceofthisshiftofcontrolfrombrandstothemasses.Anotherconsequenceistheincreasingneedtoalignbrandingwithabrandedcontentmarketingstrategy.

AstheveteranadvertiserturnedbrandconsultantRobertBeanexplains,thewallsthatbrandscouldoncecontrolhavenowbecomewindows.Theupshotisthatbrandshavetobeclearerthaneverbeforeaboutwhotheyare,whattheydoandwhytheydoit.Ontheonehanditisaboutaneedforauthenticityandthebuildingoftrust,becauseifabrand’spromiseandtheirdeliveryisnotalignedthentheirreputationcanquicklysuffer,particularlythroughsocialchannels.Ontheotherhand,itisaboutthealignmentoftheseexternalfactorswiththeinternalneedtohaveacorporateculturethathasbeenboughtintobythepeoplemakingtheproductsanddeliveringtheservices.BrandsthatdonotmarrytheseneedswillbequicklyfoundouttobewhatRobertcalls‘disorganisations’.Thatiswhyhethinksthatabrand’sculture,productorservice,andreputationneedtobealignedaround

whathecallsthe‘SingleOrganisingPrinciple’.Thisisakintoaclearsenseofpurpose,whichisalsoanimportantfactorofbrandnarrativedevelopment.

STORyTELLINGStorytellinghasbecomeanincreasinglyimportantmeansofengagingaudiences,particularlythroughsocialchannelswherebrandsneedtobeinvitedintoconversationsratherthanbuyingtheirwayin,iftheywanttoavoidbeingambushedby‘brandvandals’–thetitleofthenewbookbytheCharteredInstituteofPublicRelations(CIPR)President, StephenWaddington.This rise and rise of storytellingformspartoftheshiftfrompushtopullcommunication,whichiswhymycustomer-obsessedcolleaguesatTenthwavebelievethatthestrongestsocialbrandsarenarrativeones.

ThisThree Tenets of a Narrative Brand diagramisanotherprompt,thistimeaboutthinkingthroughhowmoreauthenticandnarrativebrandingcanbealignedwithabrandedcontentmarketingstrategy.

“IF THE 20TH CENTURy WAS ABOUT DOzENS OF MARKETS OF MILLIONS OF CONSUMERS, THEN THE 21ST CENTURy IS ABOUT MILLIONS OF MARKETS OF DOzENS OF CONSUMERS.”

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CULTURAL CONTExTAdrivingpurposeissimplythetangiblereasonwhyabrandexists.Forinstance,RedBull’spurposecaninsimpletermsbeexpressedas ‘adventure’. As Gretchen Ramsey, VP, Strategy at Tenthwaveexplains:“It’sthatflagintheground,thatrallycrythateverythingladders to and that is visible and visceral throughout the entireconsumerexperience.”

Gretchengoesontoexplainthattheclosesttenettotheconsumer,personalrelevance,isafeedcustomisedfortheindividualuser:“Thisincludeshelpful,personalvisualiseddata(thinkloyaltyprogrammingandsmartCRM),geo-context,aswellascompellingsocialgraphintegration.Personalrelevanceisatnascentstages.Aswelearnmoreabouthowtousebigdataintelligentlyforindividuals,thiswillbecomeastrongerneedforbrands,especiallyformodernCRM.”

Theculturalcontexttenetensuresthatthebrandisculturallyrelevantandworksinsynchwithsocietalshiftsthataremeaningfulforthebrand.ForGretchenthismeanscapturingmacroculturaltrends,suchaseconomicconfidence,andmicrotrends,whichcanincludefast-movingculture,suchaspopculturememesandrelevantnewsoftheday.Fromabrandedcontentmarketingstrategydevelopmentpointofview,UserExperience(UX)designpersonasorcustomerarchetypesshouldbedevelopedspecificallywiththeseculturalfactorsinmind–includingtheroletheywillplayintermsofacustomer’ssocialexperienceandconversations,andhowthebrandmightbeincorporatedintothese.

AnotherwayoflookingattheculturalcontextishighlightedinaremarkfromInternetpioneerJoeKraus:“Ifthe20thcenturywasaboutdozensofmarketsofmillionsofconsumers,thenthe21stcenturyisaboutmillionsofmarketsofdozensofconsumers.”

BarneyWorfolk-Smith,fromsocialvideosharingplatformUnruly,picksuponthiswhenhetalksaboutinteractingwithpeoplethroughwhathecallstheir“fracturedpassioncentres”.Putsimply,creatingcontentthatisusefuland/orentertaininglyengagingforthesefracturedpassioncentresisonewayofreachingwideraudiences,becauseiftheyfindyourcontentinteresting,theywillshareitwithothers.

Justin Kirby is an Internet veteran who has been writing about interactive technologies and digital marketing since the early 90s.

His books include Connected Marketing (2005), Best of Branded Content Marketing (2013), and the forthcoming Best of Branded

Content Marketing: 10th Anniversary Edition. He chairs and speaks at conferences around the globe, and heads up strategic content

marketing at Tenthwave, the new interactive agency from the US whose clients include Facebook, Google and eBay.


“PEOPLE NOT ONLy DECIDE WHAT, WHEN AND WHERE THEy WANT TO CONSUME MEDIA, BUT ALSO WHETHER OR NOT THE MESSAGE IS PASSED ON.”

CONCLUSIONIn conclusion, this introduction to branded content marketingaimedtoprovidesomeusefulcontextabouttheintentandoutputofkeybrandedcontentmarketingapproaches,aswellasthestrategicconsiderationsthatinformpracticalapplication.Inthenextissueofthisjournal,Iwilllookathowandwhybrandedcontentisgrowinginimportanceattheheartofmarketingstrategiesandhowitwilldevelopgoingforward.

The Best of Branded Content Marketing: 10th AnniversaryEdition ebook, Justin has produced in partnershipwith theBCMA, contains 13 case studies from around the globe –awardwinningexamplesofbrandedcontentmarketingthatprovide inspiration, and insight into how brands and theirpartnersaretryingtosolvetheircommunicationchallengesinamedialandscapethatcontinuestofragment.

Youcanfindmoreaboutthebook,andtheirongoingresearchintobestpracticeandthefutureofbrandedcontentmarketingontheBCMA’swebsiteathttp://thebcma.info/best-practices/ebooks/

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Cambridge Marketing Review - Issue 8 Spring 2014

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