Market bubbles, busts and waves have a common element – hype.
When emotions, rather than fundamentals are driving the marketplace it is time to take pause, and stock.
Now is that time. Clearing the inventory of current marketing, price, merchandise and promotional strategies is sage advice.
Reassurances that high prices are founded on solid foundations, all too often are devalued when those pillars turn to quicksand.
It is reassuring to some when commentators and analysts have “skin in the game”. However, when rewards and revenues are determined by transactions, counter-balancing information and intelligence sources should be used.
The current sets of global, national, regional and sectional markets are, to varying degrees, being artificially stimulated. Record low interest rates have primed stock markets around the world, residential property prices and new motor vehicle sales. They have equally influenced the movement away from liquid funds (cash) and investments in government bonds.
Quantitative Easing in the United States of America (best termed as “printing dollar bills”) has contributed to a lowering of the value of that currency and to “hyping” of others, including the Australian dollar.
Each of these factors and influences is contributing to the environment in which individual entities operate. Little or no control can be applied by business owners Boards of Directors and management teams.
Little wonder that many feel as though they are like a cork bobbing around in a volatile ocean of competing forces.
Therefore, most benefits will be derived from focusing on those aspects over which control and influence can be exerted, and exploited.
In the contemporary global digital, on-line and connected world “hype” is transparent. It is readily and promptly identified and dismissed, along with associated products, services, brands, companies and individuals.
Establishing value in the minds of existing, prospective and, yes, past clients is quite another thing, and in relative terms, can be achieved promptly, effectively and inexpensively. No hype is required.
Determining, and applying relevant buying criteria can and does effectively reposition the product, service, company or brand into a favoured competitive presence. Competitors are simultaneously repositioned to less-favoured profiles.
Take for instance Volvo motor vehicles. For a long time they enjoyed a “premium” standing on the issue of safety. However, one consequence was a market skewing of customers to older, conservative age groupings.
In recent times Volvo, now under Chinese corporate ownership, has entered and won V8 motor racing events in Australia. That has caused great anguish among the ailing Holden and Ford brand names.
It is fair to say that Volvo has added more “grunt” to its marketing, advertising and product range. The impact and consequences are self evident. Sales have increased.
A similar set of lessons are being learnt, albeit slowly, within the taxi industry. The global introduction of the UBER mobile booking application is revolutionising hire transportation, including taxis, limousines, and public transport, ferries and buses. Look out for the pending arrival of driver-less autonomous vehicles!
The internet, social media and digital technology have democratised the market place. Centralised government control, policing and protection are simply not possible, and for many, not desired.
Taxi networks, and individual drivers, will need to hone, and in some instances, introduce, set-price policies and personal “safety” measures to satisfy the expectations of customers.
Long-established practices and rules are today redundant. Consumers are applying new criteria in their purchase decisions. Moreover, they now have at their disposal a comprehensive network of information and intelligence on which to make informed decisions and value judgements.
The recent “reporting season” of Australian public listed companies projected one clarion-clear message from the airlines.
Qantas reported a loss of close to $3 billion for the past trading year. Virgin Australia, a much smaller entity, recorded an annual trading loss numbered in the hundreds of millions.
Both airlines have increased their passenger-carrying capacities and have undertaken deep price- discounting.
Qantas may well have retained its 65% market share of domestic Australian travel; at what cost? The hype of enjoying such a dominant market share cannot be banked. That is just one of the dividends that the airline must address.
The advertising theme and promise of “We can’t be beaten on price” has become one-dimensional. Other criteria are needed to attract attention, patronage, loyalty and an appreciation of value.
Accountancy practices, legal firms, plumbers, home builders, real estate agents, financial planners and engineering companies are fast learning the need for, and the benefits of developing, promoting and applying new selection criteria which are devoid of the unnecessary and ineffective hype.
It is often difficult to fulfil the promises of “Bigger, Better, Faster and Cheaper”. Besides- who cares?
Educating prospective and existing clients and customers on what bases value judgments and purchase decisions should be made is relevant, rewarding and appropriate.
The time to act has arrived.
THE FIRST STEPS
Introducing multimedia, omni-channels, digital marketing and social media to communication strategies is no longer an option. It is imperative.
However, to achieve optimal impact and to achieve increased revenue generation, it is essential that the messages have no (or minimal) hype, and a relevant, compelling set of purchase criteria.
In this instance, it is the content, not the channel that needs refinement.
Barry Urquhart of Marketing Focus is a consumer behaviour analyst, business strategist and former university lecturer and organisational behaviourist.
He is an internationally recognised and respected conference keynote speaker and business development workshop facilitator.
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