SEPTEMBER 2004
SPECIAL FEATURES
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NATIONAL PRESIDENT
Member research shows upward trends
By Roger James FAMI CPM,
AMI National President
AT the time of writing this column we had just released the AMI's Marketing Metrics position paper, with very positive responses from other marketing-related organisations. I believe the developments from this project augur well for closer co-operation between our respective organisations.
However, as the professional body for marketers, we still need to focus on a program of continuous improvement in terms of benefits offered. But based on the results of our recent member survey, I am pleased to report that the trends are positive.
The survey results are drawn from 683 responses from all around Australia. In this first report on members' views of the Institute, I want to look at changes from 2002 to 2004.
The results showed consistent positive trends. For example, there were questions about members' perceptions of the possible main roles of the AMI. Of the nine benefits listed, all showed higher scores for 2004 and six showed statistically significant increases:
- Learning about marketing techniques and trends.
- Professional development.
- Professional accreditation.
- Social activities.
- Professional marketing.
- Marketing Update
We also asked members about the importance of different roles for the AMI and their satisfaction with those roles. Importance scores were almost identical to those from 2002, but satisfaction scores all showed statistically significant increases covering:
- Accreditation of marketing professionals.
- Improving the status and perception of marketing as a profession.
- Education and training to improve skills.
- Information services for other marketers.
- Representation of the profession.
Finally, we asked members about their overall satisfaction with membership. Here the results also showed a significant increase in satisfaction.
Read the full article by Roger James | top of page
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MARKETING RESEARCH
Will the ageing population be the death of marketers?
By Ian Walkley, managing director of Colmar Brunton Research Services.
EVEN though we have known about the impending demographic shift in the age of our population for many years, we are only starting to debate what it will mean and whether there will be significant problems for our society.
Marketers have not really given the issue much consideration, apart from the occasional question about “... how do we sell to old people ...”, which usually results in the reply “... but most of them don't buy much ...”.
What we do know is that, over the next 40 years, the proportion of Australia's population over 65 will increase from around 12% to more than 27%. At the same time, our birth rate will continue to decline and the growth of our workforce in the 15-64 age range will slow to almost zero.
As we stand now, our society is heavily skewed towards the marketing of youth and marketing to young consumers — all done by marketers who are often in their 20s and 30s. Imagine if in TV commercials the ‘Brand Power' woman, the McDonald's staff or the Flight Centre captain were wrinkly 80-year-olds — would we have the same level of confidence or interest in the products?
Marketing for older people has tended to focus around specific products designed for them and often the focus is around giving discounted prices. This sort of marketing is not greatly exciting for the youthful marketer; nor is it very creative. I would question whether businesses will be able to afford to give seniors' discounts when the population of seniors represents one in four customers. So, the focus for the older market must be on something else.
I would suggest that good, old-fashioned customer service would go a long way towards meeting the needs of older people. This includes being courteous and helpful and maintaining high ethical standards regarding resolution of customer problems.
Read the full article by Ian Walkley | top of page
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DIGITAL MARKETING
Branding moves to the Internet environment
By Tim Martin, managing director of Interdigital Pty Ltd
ONE of the key reasons that Internet online display advertising is becoming less efficient as a response mechanism is that click rates are declining. Given that display advertising on the Internet is generally bought on a cost-per-thousand-impressions (CPM) rate, it is becoming more important for advertisers and media buyers to attribute value to the 99% of the media spend that does not result in a click.
Search engine marketing (placing paid search listings on Google or Overture) has quickly become the best form of online direct response advertising because the targeting capabilities and conversion rates are excellent.
Brand advertising, however, uses display (image) creative and is bought on a cost-per-thousand-impressions. Placements are generally browsing environments such as news, entertainment and lifestyle. These are much less targeted to viewers' specific needs and conversion rates are correspondingly low.
Perhaps the simplest way to quantify the value of brand advertising is the cost-of-exposure-in-seconds. A recent DoubleClick report provides a useful basis on which to create a simple model for valuing advertising exposure with the following parameters:
VED = value of the duration of exposure in dollars per second per unique visitor.
TDI = display time plus interaction time in seconds.
CPI = cost-per-impression (CPM cost divided by 1000) in dollars.
UV = number of unique viewers of the site.
Let's work through an Australian example by placing a rich media ‘island' advertisement on ‘The Age' website. Assume that the frequency has been capped to 1 and the ad is not interacted with or clicked on. Using a CPI of $0.10 ($100 CPM ratecard from Fairfax Digital website), a TDI of 62 seconds (being the average page duration sourced from Red Sheriff May 2004 Site Ratings), then we end up with a VED of $0.002 per second per viewer.
Read the full article by Tim Martin | top of page
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MARKETING BASICS
Reduce the marketing ‘fact gap' to improve performance
By Sonia Johnson, consultant and director of marketing at Inside Info
IN many outstanding companies, marketing executives and managers collaborate successfully because they have access to the information they need, when they need it, to monitor performance across products, channels, regions and customer segments.
Yet there you sit, frustrated because you may have just wasted the morning hunting down a piece of information as basic as your top 10 customers, your worst-performing channels, or last year's revenue by region.
Difficulty in accessing and analysing key business information on an as-needed basis is more than an annoyance; it has a direct impact on productivity, decision quality and the overall success of the business.
Too many marketers are making decisions and plans based on gut feel and experience only, rather than combining these with sound and verifiable information — this is the marketing ‘fact gap'.
So take a stand if you want things to change! Here are four solutions that may work for you.
1. Increase visibility into performance. As a leader, know what is important to measure. Ensure focus and urgency on delivery of results by having a view of your areas of responsibility, knowing exactly how you are tracking to achieve your KPIs at any point in time.
2. Take back control, be cost conscious and let marketing lead. Be proactive and take responsibility for the resources your team needs to be successful. Ensure you drive the business requirement if you need the information, not the other way around.
3. Increase speed to market. Make sure you have the tools to respond quickly to external or internal market changes and competitive threats as they occur. Know in detail: customer performance; product performance; sales, channel and region performance; and competitor performance.
4. Empower your team to be creative and share ideas. Think outside the square by looking at different ways to achieve results.
Read the full article by Sonia Johnson | top of page
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MARKETING COMMUNICATIONS
Creating winning customer value propositions
By Sarina Sorrenti AFAMI CPM, director of engage consulting group
A value proposition is more than a statement of offer or a buy-line. It is a statement, decision and commitment to deliver a specific combination of resulting experiences, including a price, to a group of target customers, profitably and better than the competition.
A value proposition articulates a headline — the essence of the offer:
- Who are the customers we are targeting (including decision makers).
- Our customers' business values (what is most important to them and not us).
- What products/services we provide (the offer selected with trade-offs that demonstrate a competitive advantage).
- How we deliver the products/selected services (direct, indirect, face-to-face, online).
- Benefits realised from a customer perspective (status, security, trust, growth, etc).
- Pricing to ensure a win-win for the customer and supplier.
- Communication processes (relationship management, conferences, etc).
The value proposition theory has been useful in supporting profitable sales and growth. The biggest sign of an organisation getting its mind around this is when it stops using price as an excuse for not winning sales. When salespeople start to talk in terms of customer business outcomes, the customer's customer metrics and maintaining a healthy gross margin, the mindset change takes place.
The 10-step process I have used with companies to improve their marketing and sales effectiveness includes:
- Reviewing market research on an organisation's competitive positioning.
- Conducting ‘day-in-the-life' case studies.
- Developing overall value propositions.
- Developing customer segmentation.
- Developing aligned customer value propositions.
- Coaching and mentoring sales staff.
- Educating internal departments in developing and delivering customer value.
- Integrating value propositions into internal processes and systems.
- Integrating value propositions into all external marketing communications.
- Developing measures of value proposition success.
Read the full article by Sarina Sorrenti | top of page
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CULTURE AT WORK
Looks can be culturally deceiving
By Joost Thissen, managing partner, Culture Resource Centre
THE headquarters of a United States multinational organisation was recruiting a new manager for the Asian region of a multicultural marketing team, based in Japan. The team members came from all over Asia. The organisation appointed a US-Japanese manager; this woman manager was born in the US to Japanese parents and looked to be the perfect fit for the job.
Within a couple of months, serious miscommunication arose between the manager and team members and productivity started to fall. The team members complained that the US manager was too direct in her approach, and that she was not taking into account the cultural differences and sensitivities within the team.
Over the next few months three of the eight team members resigned from the company and two members applied for other roles in different departments. Within six months, the US-Japanese manager returned home. Although the manager looked Japanese, she had American business values that in her Asian team were counterproductive.
Grouping people together because of preconceptions about appearance might prove to be a costly mistake in your business dealings. Sometimes it can cost you business; the US multinational suffered immensely both in expatriate costs and in losing valuable team members to the competition. Sometimes it can cost you a relationship, or your credibility.
While the process of generalising and grouping people or characteristics might be helpful as a starting point, it can also be fraught with difficulties. There is much we need to learn about cultural differences before we can confidently generalise about ‘culture' and avoid costly or embarrassing mistakes.
Read the full article by Joost Thissen | top of page |
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