The 4 P's: Product, Price, Promotion & Place

 I was recently doing some research and I came across a Blog that suggested 3 of the 4 P's were dead. I agreed with the writer that product is critical as a company is its product first and foremost. I than offered the following support for the other 3 P's being alive and well.

They are as important today as they were when they were born. As with all academic discussions vs. real business realities you can find exceptions but the reality is that the fundamentals that the 4 P’s are based on is still solid as they were when conceived in 1960 by Jerome McCarthy. 

 One of my biggest frustrations is the hype and exaggeration of the impact of digital media and marketing in all channels…it’s simply not accurate. Yes it is a new and growing media but it is far for the silver bullet for all firms and industries...it is simply to early to know and in some cases may never be more than a fad for some businesses.

 Many brands especially low tech consumer durables industries are heavily dependent on the distribution channel for their marketing. In this example the 4 P’s are absolutely critical and all 4 must be addressed. It is clear that the company must have a good product....it would be hard to debate this position! Price is critical as the consumer especially in low frequency of purchase categories (home improvement, auto's, etc) is evaluating price at the time of the purchase which is often on a few time in a lifetime. An in store promotion can impact that in the form of attention getting displays, packaging, value added incentives, sales person incentives, etc. Finally the place is critical to a brands image. Does the reseller project an image consistent with the brand and price, do they provide pre and post sales service, is it in a good location, are sales people trained an knowledgeable. 

 This is just one example of how all 4 of the P’s need to continue to be the foundation of any basic marketing education…fundamentals are becoming a lost art and skill and to many marketers are to quick to fall in love with the latest fad. Get the fundamentals right than you can experiment with new concepts.

What do GE, Baldwin Hardware, Brunswick, Coleman & Franke have in common?

They have benefited from my ability to craft a new strategy and business plan and get their organizations to rally around this new plan, rapidly reversing negative trends in sales and profit. This was accomplished in each case by:

 1.     Quickly analyzing company and competitors gaps in serving the customer

 2.     Building a plan to fill those gaps quickly and profitably

It always included:

1.     Reinvigorating product development

2.     Focusing the brand massage and marketing

3.   Building a Team and Culture to Win

This was combined with a focus and commitment to the customer through:

1.    Improved distribution strategy

2.   Customer service and supply chain excellence

If you are intrigued and believe this type of leadership could help your company please let me know...I would like to help!

CMO COUNCIL - MARKETING OUTLOOK 2011©: EXECUTIVE SUMMARY

As a North American Board member I am pleased to share an abridged version of the CMO Council’s 2011 Marketing Outlook. You can find the complete report @ http://www.cmocouncil.org/reports_resources.php

It’s been a long, tough road for marketing since the onset of global financial

upheaval in 2008. However, the state of marketing in 2011 is much more a

by product of an even longer path of transformation, as the role, mandate and

function of marketing has shifted, and the actual role of chief marketing officers

has changed, ushering in a new era for the function and office.

Key among the themes that will prove to be the hallmarks of the year: integration,

alignment and visibility. Marketers are looking to bind the individual tactical execution

elements that have come to represent a host of randomly selected activities into a fully

integrated multi-channel strategy around business goals that drive business forward.

While phrases like “campaign integration,” “multi-channel” or even “converged

channel” are more readily seeping into marketing conversations, through tough

times, marketers slipped backwards into an age of disconnected programs

and pilots, creating an uneven patchwork of executable tasks. Random Acts of

Marketing emerged as the fast-moving digital landscape forced many marketing

teams to deploy programs from fan pages to apps, only to realize that few, if any,

of those these points of engagement were connected.

Moving into 2011, several business and market forces are influencing marketing

budgets more than other factors. While 37 percent of respondents still feel the sting

of flat or tight budgets of years past, a growing number (24 percent) see a need

to improve digital media and online marketing effectiveness, likely in response to

increased spend and operational allocations made in that direction over the past

few years. Another high response on the list of budget influencers is the slower,

more complex selling cycle, which is increasing the need to better provision the

sales pipeline and to reach a more fragmented, difficult to reach market.

After supporting too many Random Acts of Marketing in past years that did not

effectively drive business forward, senior management’s most frequent mandate

among survey respondents was:

1.      Drive top-line growth and expand (or at least retain) market share.

Rounding out the top mandates from executive management are:

2.      Improved operational efficiency

3.      Advancing the go-to-market process.

Management’s interest in maintaining market share highlights the confusing

lack of “stress” among marketers over customer retention. In fact, of the top

five senior management mandates, two highlight the demand for marketers to

develop solid customer retention strategies to retain market share and minimize

churn. Perhaps more marketers should elevate retention on their priority lists.

To fulfill those major directives, marketers singled out several key operational

and organizational changes they plan to undertake in 2011.

1. develop and measure the new Scial Media medium
2. Ongoing effort to improve alignment and integration with sales.
3. Expand field marketing operations and further develop the sales support role.

Regarding budget allocation, marketers intend to put their money behind those mandates:

1. 50 percent will increase investments in new product and program launches (likely to spark new sales opportunities) 
2. 44 percent will invest in lead generation and qualification initiatives
3. 31 percent will invest in regional development.
4. 39 percent intend to invest in retention and monetization strategies directed at existing customer groups.

http://www.cmocouncil.org/reports_resources.php

Strategy from the Outside In

The premise of this book hits the mark! Congratulations to George Day and Christine Moorman for highlighting this all to common leadership mistake!

Strategy from the Outside In, by George S. Day and Christine Moorman examines influential strategy ideas (shareholder value, core competence, and six sigma) that have lured companies into a dangerous internal focus, viewing the world from the inside out. As a result, companies lose sight of the market which leads to poor results over the long run. Inside-out thinking distracts companies from the core purpose of a business: to create and serve customers. Fulfilling that purpose can be done only by approaching strategy from the outside in. In this refreshing look at creating enduring business value, Day and Moorman challenge companies to shift their perspective. They demonstrate that companies that adopt—and fight to keep—an outside-in view focused on customer value have grown revenue, profit, and shareholder value through both boom-and-bust business cycles.

http://www.amazon.com/Strategy-Outside-Profiting-Customer-Value/dp/0071742298

Does this resonate? Unfortunately I'm guessing yes and I’m sure all Marketers can relate!

Vigorously Articulating Marketing Strategies

Part 2 of Strategy & Commitment

Came across this article in The Korea Times by Park Young-ryeol, Professor of business at Yonsei University in South Korea where he highlights BMW's commitment to a premium strategy. This is a perfect example of knowing what your brand stands for and having the courage to commit in spite of economic pressure.


http://www.koreatimes.co.kr/www/news/biz/2011/10/123_96718.html

If you haven't read part one you can find it below.

Strategy and Commitment

Attached is a link to an article about the importance and connection of strategy to a companies long term viability. Below is the introduction to the article that highlights my leadership philosophy and the power of focusing on the market and building a team to win from my most resent assignment as GM of the Franke Luxury Products Group.

Introduction

Most companies will find themselves out of step with customers at some point. Some will maintain the course. Others (the successful ones) will adapt to their environment and find new paths to success. This case follows such a company. Increasingly out of touch with its customers and silo-ed internally, Franke Kitchen Systems USA used the Market Responsiveness Index™ (MRI) tool to take a hard look in the mirror, own its shortcomings, and transform the way it does business.

https://www.box.net/shared/ndqn0zi9lv2kn3pvumk1

http://www.marketculture.com/testimonials.html

The Fog of Leadership

“There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are unknown unknowns – the ones we don’t know we don’t know.”

Donald Rumsfeld, former United States Secretary of Defense on February 12, 2002.

In the political world many thought this was political speak for avoiding a tough question or simply amusing. It may have been one or the other or both but if you put it in the context of business leadership and really think about it…isn’t it the essence of the challenge? Knowing the difference and being honest enough to know when you don’t know is one of the biggest challenges for leaders.

What do you think?

Partnership is More than a Good Product...

What makes a manufacturer a good trade partner? Why do showrooms display and sell certain brands? Why do sales associates encourage or recommend manufacturers products? Why do designers and architects recommend a manufacturers product?

These questions are both simple and complex but are central to why we believe Franke has become a leader in the North American Kitchen industry. My personal belief is that large organizations or ones owned by investors often forget that people do business with people and relationships do matter. We believe a number of things are critical to making a relationship work:

1. Knowing who you are - and never wavering from that no matter what challenges you face
2. Providing solutions not just products
3. Doing what you say you are going to do
4. Knowing that value is Not price

These four points over simplify the Franke business plan but they are the basis for how we view our role in the supply chain. Knowing Who You Are – this is often the most difficult question and challenge for a company. What do we stand for? What are our goals? And how do we accomplish these goals? In the current economic environment it is very tempting to cut prices, stop investing, lay off staff, import products from low cost countries all in an attempt to be able to sell more. Yes we want more, just like you do, but we believe price and lower quality is a slippery slope – the race to be the cheapest and selling on price alone is a very difficult business model to sustain. It is also nearly impossible to be the “cheapest” and still be a good partner to the trade. There are lots of companies that can sell you something cheap but is it a product that you are proud to represent?, Are you comfortable that your customer will be happy? Will these companies help me and my customer if something goes wrong?

This is where Franke believes that Providing Solutions not Just Products is critical and something we pride ourselves in. A few things come to mind when I think about solutions. Our patented Integral ledge and the custom accessories for every sink that make our sinks the center of the kitchen not just a sink. A smooth silky finish on our Stainless Sinks and our exclusive Fireclay finishes that are second to none. We also believe our approach to providing integrated solutions for managing the water in the kitchen is unique. With our world renowned sinks as the foundation we integrate it all by providing faucets, filtration, heating and waste management solutions. All are from a trusted source that give the customer piece of mind in a solution minded approach.
That is where we believe Doing What You Say You Are Going to Do comes in. We believe in offering unique solutions and we invest in putting actions behind these words. Franke has had a long history of Investing in innovative products including the D bowl sink, the Vision sink, Orca and most recently the Peak sink family. We also believe that partnering with only the finest showrooms/dealers and not selling to everyone shows commitment. Our Reseller Agreement program reflects a commitment to selective distribution. One of the programs we are most proud of is our industry leading MAP (minimum advertised price) policy. This is probably the best example of our commitment to the independent designer/showroom/dealer and the value they provide. We believe having a trained staff, design and selection assistance, product displays and a walk in establishment are critical to providing service. We believe the partners who make those commitments to Franke should in turn be supported with an environment where that commitment is rewarded. Franke does not believe in overly distributing our product/brand and we only want to work with trade partners that value and share this customer-centric approach.

This brings me to my final point. Value is Not Price and value is ultimately up to the customer. We strongly believe that there are enough customers that want stylish, innovative, quality products. We also believe that products that make kitchen work easier while maintaining a stylish aesthetic is desired by many. Finally, we believe that customers want service. Some would argue that good service has become so rare that those that are committed to it will be able to make it a competitive advantage.

That’s how Franke defines Value – stylish, quality product that has value added features and functions all provided by a team that puts the customer first. If we continue to work together – designer, showroom and Franke we will have a great story and point of differentiation that any customer would value!

Thanks and we hope you agree.

Charles Lawrence
General Manager
Luxury Products Group Franke Kitchen Systems

Differentiate or Die!

The folks at kaon Interactive recently published a whitepaper on this topic. It is an Old topic but my experience is that we often ignor the basics and focus on the flavor or trend of the month.

A few of the hightlights from the whitepaper include: Three Sources of Competitive Advantage: Cost Leadership, Market Focus & DIFFERENTIATION.

The Target Customer MUST know what is different about your product/service but more importantly the "why" that difference is important MUST be obvious

I Hope this simple refresher is helpful to someone.