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Archive for the ‘Strategy’ Category
Most companies, especially small firms with less than 20 employees, can’t afford to hire a full time marketing director. Often times they are relegated to using agencies, independents, or they simply manage their own marketing.
I can’t tell you how many businesses I have worked with in the past with a president or CEO who knows his customer, knows what he or she is thinking, and how to sell them products and services without question. “So why do we need a marketing director?”
Thus, I always find it interesting when I come in for market research or other consulting purposes and find that the core customer or target market hasn’t changed.
These businesses already find themselves in a slump and immediately want to believe that this is as a result of the economic conditions, changing markets, or new competition…
What is a brand to do when it finds itself caught in a place where it needs to change, or it will die? More to the point, what do those who are charged with care and maintenance of the brand to do?
Evolve.
Interesting article in this months QSR Magazine, about the most recent CEO of Caribou Coffee, Michael Tattersfield. Suffice it to say that under the watchful eye of Mr. Tattersfield, Caribou has revived itself from a company in trouble, to a company that has seen 500% growth in its stock price last year alone.
What does he claim is the secret to his success? Well, among other things, brand evolution.
“Eighty percent of coffee is consumed at the home or office, and we weren’t in that category significantly,” he says. In 2008, when Tattersfield joined the brand, Caribou’s commercial interests were performing well, with its products available at just more than 2,000 stores. “If we really wanted to build the brand, we knew we needed to evolve from a branded retail coffeehouse to a branded coffee company,” Tattersfield says. “That’s one of the key decisions we made as an organization to invest in this and grow it.”
Today, Caribou-brand coffee is available at 7,000 stores, including Costco and Sam’s Club.
What I find interesting is that brands can, and quite possibly should, evolve. Many marketing gurus suggest that this is nothing but a veiled line extension strategy.
You’ve heard the idiom, “long, (tough, or hard) row to hoe“? Well, marketing can be a bit like that.
Expecting immediate results, even from a well-funded campaign, is unrealistic. There are ways to literally bring people right through the front door, but are they sustainable? Short term results are fantastic, don’t get me wrong, but sustainable revenue does the successful company make.
To get to sustainable revenue, you must plow the entire field. It takes time and money.
So when you find yourself plowing the field where your business will grow, you really should think about putting a bit of money in before you plant the seed with the new customer. Make sure they know a bit about you before you walk through the door for the first time.
So what does competitive strategy really mean?
Differentiation! Plain and simple.
You may sell the same product or service that many companies do in your marketplace. If you are the only provider of said product or service in your marketplace and you have no real competition, you are an extremely lucky business person. But you won’t be for long.
We are already seeing a overflow of companies providing the same thing and beating the heck out of each other on price. Squeezing every nickel and dime out of customers until the quality of service reaches the lowest it can possibly go, and you find yourself arguing online with some guy on eBay for $1.55 in postage.
It really is all about how you twist it. Michael E. Porter, the Bishop William Lawrence University Professor at the Harvard Business School in Boston, Massachusetts says, “The essense of strategy is choosing to perform activities differently than rivals do,” and “A company can outperform rivals only if it can establish a difference that it can preserve.”
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