1. SCENARIO PLANNING ANALYSIS
Mining resources are finite, ideas and innovation and infinite.
In that one sentence is an overview of the reality and the opportunities of, and for, Australia.
Critical analysis of scenario planning details reveal some substantive and important elements.
Many of the aspects also relate, and are pertinent to individuals, sectors and regions.
Significant policy reviews are required. Business models that are outdated and outmoded (often created and implemented prior to the evolution of the digital marketplace) need to be refined, developed and enhanced – if not replaced.
In many instances, supply chains can be reconfigured, sharpened and shortened – to be more effective, efficient and productive.
Inequitable duopolistic frameworks should be addressed and redressed. Legislative inadequacies need to be overcome and the status quo of market power and strength be subjected to objective and authoritative analysis. Retrospective Federal and State legislation may be needed to be introduced with a measure of anti-trust laws, to effect greater and more balanced competition and client choice.
Myths surrounding macro-groupings, like “small business”, need to be shattered. Australia has learnt that its politically-based foreign relations flounder because of references to “Asian Countries”. Individual nations, including Singapore, Indonesia, Malaysia and Vietnam must be recognised, respected and responded to.
Likewise small businesses!
The grouping is not a huge integrated monolithic block of trading entities. Each has unique and differing circumstances, needs and participants. Therefore, each of the three key issues for business, industry, small organisations, needs to be studied within the context of an objective, detached and structure framework.
These key issues are:
- Capital – adequacy and access
- People – recruitment, retention, training
2. IMAGE INSIGHTS
Shallow, two-dimension images are the blight of many companies, product ranges, localities, sectors and individuals.
The depth and breadth of the expertise, resources, advantages and benefits that reside within an entity and its skill –set are difficult to project – and be comprehended.
Business opportunities are lost. So too are sales, revenues, profits and sustainable potential relationships.
There is an answer … which is inexpensive, highly impactful, and compelling.
Within the two-second attention span of most prospective clients and customers a 3-dimension image registers, resonates and elicits appropriate and immediate responses, a tenet can be deployed on-line, on websites, in corporate literature, signage, on fleet motor vehicles and within premises.
Most importantly, the subject has control and influence over the dimensions and attributes that establish the image.
Wordit is a potentially powerful communication tool. The image of Marketing Focus and Barry Urquhart presented below is an example. Conference participants expand their outlook about the relevance and capacity of a conference keynote speaker, business strategist and consumer behaviour analyst.
We encourage you to use the same application.
3. SMALL BUSINESS, WHAT DOES IT MEAN?
Some clusterings are meaningless. Indeed, they can be counterproductive, and offensive.
‘Asian countries’ is a tag-line which is rejected by Singapore, Malaysia, Indonesia, Vietnam, the Philippines and other Asian countries. They expect, and demand, that their individuality and sovereignty to be recognised and respected.
In another example, the grouping of entities in the term “Small businesses” serves little purpose, does not define entities and overlooks unique circumstances and specific needs.
Spokespersons for “small businesses” find it difficult to impact political agendas and politicians, who find it difficult to determine whom exactly they represent. So often the interests and expectations of those who constitute subgroupings are in conflict and are countervailing forces.
“High net-worth” individuals is another misnomer, often used by bankers, and financial planners. I have yet to meet someone who describes himself or herself as being, ‘a high net-worth individual’.
The term ‘small businessman’, is often used as a defence mechanism, seeking sympathy and, usually, financial support.
Coming together to achieve common goals and to attain mutually rewarding outcomes is laudable. However, little positive purpose is served by embracing clustering terms and agitating for action for the benefit of, say, small businesses. Many compete for the same customers and for larger shares of the “same cake”.
Crumbs, it seems so logical to maintain a tight focus, distinguish and differentiate oneself, act in harmony with others of like-mind, but avoid being grouped into a single monolith block or mind set.
4. NOT-SO-HAPPY RETURNS
The percentage and trend-line of purchase returns from on-line transactions are disturbing, and costly.
An average of 7% is more than three times and more the rate of returns of personal shopping in-store (2.1% nationally).
It is rendering many strategies marginal, if not unviable. Budgets and business models are being recalibrated.
On-line operations are a complex, often perplexing scenario. Multi-channel marketing has evolved to being almost mandatory.
Non involvement by most entities, in an overwhelming majority of sectors does not effect a loss of sales. Rather, it is management ceding sales, revenues and profits to competitors and substitutes.
Compounding the increasing percentages of on-line transactions and on-line returns is the fact that 38% of consumers will not buy on-line unless the products ordered are delivered freight-free.
The most recent available statistics reveal that some 49% of businesses now have extended their offerings to include cost-free returns.
It is an expensive practice, accelerated by the fact that, psychologically, those consumers who transact with automated on-line systems have little or no bond-ship – emotional relationships, if you will – with the business. Thus, the consumer is less emotionally-bound, and is more readily inclined to return products. Strategies are available to counter that reality.
In summary, as on-line services improve and are enhanced, the cost of doing business is increased, margins are squeezed, all the while, consumers tend to be less loyal, more demanding and inclined to exercise their rights of return … with little return to the business.
5. CHANGE – NO SMALL THING
Change is a big deal, particularly in the current marketplace.
Whether it is self-generated or imposed by external market forces, change demands attention, consideration, detailed analysis and the formulation, documentation and implementation of an integrity strategy.
Incremental change, and its consequences, dictate the need for respect. The scale of change differs little in importance from the frequency of that change.
In many, if not most instances, all change is significant to consumers. Accordingly, marketing, communications, promotions, merchandising, selling and service initiatives need more than “tweaking”.
Success in the introduction of change is not difficult. It is a consequence of detailed planning and respect for the impact on, and perception of existing, prospective and past clients.
Sadly, there is a long history of negative and sub-optimal outcomes as a result of change – big and small.
Clearly, a majority of unsuccessful change initiatives are derive from the management, and more disturbingly, marketing offices of companies, including manufacturers, distributors and retailers.
Greater knowledge, better education, unbounded creativity and originality, and a marketing degree, do not guarantee success and market acceptance.
Imposing and enforcing change on consumer perceptions, preferences and buying patterns is fraught with danger and difficulty. In such circumstances considerable time, money and resources need to be invested in the education and re-education of those in the primary, secondary and tertiary target markets.
Instant success is a rarity, if not a myth.
LESSONS TO LEARN
It is refreshing to learn, and reassuring to the owners, managers and marketers of small businesses that major global corporations, brands and product managers are prone to falling short in successfully implementing change.
The frequency of mistakes, shortcomings and outright failures is high. The scale of the consequences appears to be a differentiating factor.
CHEERS …… TO TEARS
For some 15 years the largest selling beer brand in Australia was Victoria Bitter, “VB”.
The brilliance of the advertising which featured the voice of the late John Meillon resonated with Australian drinkers and teetotallers alike.
A national market share of between 12 and 14% was enjoyed for an extended period of time, until someone decided to introduce a low-alcohol option. That weakened the presence and profile of the brand.
VB has slipped the ladder of success to approximately 3-4% market share.
The biggest selling beer brand in Australia is now full-strength XXXX, once a regional Queensland-based offering.
For global consumers the labelling may imply that it targeted to illiterate consumers. Not so. Although it could be a strikingly adroit strategy to impact among the 60%+ of the world’s population who sign documents with an X!
KING OF THE ROAD
For decades the Holden 6-cylinder Kingswood was Australia’s own family motor car. Annual sales regularly exceeded 150,000.
Given the vagaries of oil supplies, and attendant price hikes, in the 1980s and beyond it was noted that a trend was emerging with the increasing popularity and sale of smaller, 4-cylinder European cars.
The decision was made – by whom I do not know – that the Holden Kingswood would be superseded by the Commodore, with the brand name Holden being removed or de-emphasised.
Sales plummeted to around 80,000 per annum. It was a costly lesson. Most changes come with consequences, some larger than others.
Holden never recovered and will cease production of motor vehicles in Australia by 2017.
Glad Wrap is a constant in many Australian kitchens.
A recent change in the packaging and introduction of a new cutting device hurt sales, – and a number of customers. Revenue bled, so too consumers, who could not effectively use the innovative cutting device.
Appropriately, the new packaging was promptly withdrawn, to the delight (and well-being) of many consumers.
The change to McDonald’s product range with the introduction of All-Day-Breakfast was hardly a resounding success. It seems consumers were happy to move on from breakfast mid-morning. McDonald’s franchisees found the extended hours of a breakfast offering was inefficient and impacting on profitability and productivity.
In recent times, McDonald’s, and the broader fast-food sector, have been experiencing falling demand, sales and squeezed profits.
The best change seems to be good, rather than fast … consumer driven, rather than management rushed. The margins for effort, like profits can be, and are increasingly thin.
CHANGE ACTION PLAN FUNDAMENTALS
- Identify, isolate and analyse the demand factors for change
- Ensure customer drive, and acceptance
- Differentiate wants from demands – the former can create fads
- Formulate, document and implement an integrated change strategy
Recognise and respect that to consumers, all change is BIG
Barry Urquhart of Marketing Focus is a respected consumer behaviour analyst, business strategist and high impact conference keynote speaker.