Marketing Focus – Essays on Management & Marketing

Seeking out, analysing and reacting to the multitude of cues that abound in the economy, marketplace and competitive sectoral segments can be, and is, exhausting, frustrating – and often futile. 
Deliberating about, and conducting informed “right” decisions are beyond the scope and capacities of many.
Much of the available information, perspectives and projections is short-term, variable and incomplete.
The margins for error can be wafer-thin, influencing a tendency to avoiding the making and implementation of key strategic decisions, and implementing them. 
Another substantial influence is the need and drive to generate immediate increased cash-flows.
Many of today’s market forces are not seasonal or cyclical in nature. Rather, they are strategic and structural, with evolving trends that have been evident for 10, 20 or, indeed, 30 years.
Considerable time has elapsed during which little analysing, forecasting, planning and action have been undertaken to address, redress and capitalise on the emerging changes and circumstances. Acting now may be too late.
Interest rates are at historic lows, tempting and enabling increased investments in business hardware, including premises, warehousing services, inventories and displayed merchandise.
It is time, and there is sufficient time, to invest in, and reap the rewards from business software, like training, planning, marketing, logistics and networking.
Take the cue from the rack, and avoid the role of being a big-shot. Take the time, effort and discipline to make a few big shots.
It is possible, and timely, to sink a few.
Barry Urquhart 
The labelling of Heinz’s Little Kidz Shredz, and the resultant legal action being undertaken by the ACCC (Australian Competition and Consumer Commission) spotlight the profound inadequacies of Australia’s labelling laws and regulations.
A target consumer audience of 1-3-year olds is doubtless attracted by the prime colours of the packaging. Parents, the paying customers, could well be influenced by the declaration of “99% fruit and vegetable”.
Not evident in the texts is the fact that 68.7 grams of the 100-gram gross offering is sugar content.
Arguably, not relevant to many adult purchasers (as buying agents for toddlers) is the apple juice concentrate in the content – a source of additional sugar.
A question raised during a recent interview with Neil Mitchell on his top-rating Radio 3AW morning program in Melbourne was about the desirability for, or ability of supermarkets in particular, and retailers in general, to display such merchandise in dedicated categories.
Again, the deficiency of Australia’s labelling laws comes to the fore.
Is, or could, the particular product be considered a confectionery, a sweet, a snack or a health food? Each command a different space on supermarket shelves.
Collectively, confectionery is a collection of sweets. Sweets have “the pleasant taste or flavour characteristics of sugar, honey, etc.”
Confused? Stand in line.
And what of the socially responsible parents who are responding to the various state government-based mass advertising campaigns espousing the virtues of a 5:3 diet. That is, a daily intake of at least five vegetables and three fruits.
A label declaring “99% fruit and vegetables” seems to be compliant to those ideals.
The significance of labelling and branding should be recognised and respected by all. Individually and, collectively they make decision-making easier and faster.
An extension of both is appropriate categorisation.
Sadly, the execution of effective labelling and branding is generally found wanting; so too, category selection.
In part it explains, and puts a differing perspective on the phrase, category-killer.

Consumers today feel beholden to few.
Loyalty is rare. Relationships tend to be conditional and transactional – that is, one transaction at a time, but with little assurance of repeat purchases or referrals.
The exception seems to be with banks. Australian people are numbered among the two most indebted populations in the world. It is good news for individuals that you are not alone.
For those with housing loans, mortgage-stress commonplace – with up to 40% of borrowers reporting self-declared emotional stress.
The classification is a moving feast. At the time of the 1987 share-market crash the bench-mark for mortgage-stress was between 18% and 23% of gross incomes being committed to monthly loan repayments.
In subsequent years, with interest rates peaking at around 17% per annum, mortgage-stress graduated to around 28% of gross household incomes. The use, and tolerance for debt were becoming progressively more familiar.
Following the onset of the GFC (Global Financial Crisis) in August, 2008, many debt factors were locked in, and mortgage-stress baselines rose (arbitrarily) to around 32% of incomes.
The repayment burdens were made somewhat tolerable with the decline in official and bank-issued interest rates to historic lows, of less than 2% per annum and 3.5%, respectively.
It was clearly an artificial marketplace. Such low interest rates should be stimulatory. In general, they were not. However, debt-induced pain was marginalised.
In more recent times, the mining sector downturn impacted immediately, broadly and persistently on employment, income, confidence, and, in the “mining states” of Queensland and Western Australia, property values. Debt/equity ratios were compromised and bank demands for more capital – to mitigate risk factors – were more evident and common.
For those fortunate not to experience mortgage-stress, financial-stress became a reality. Discretionary purchases were less frequent, dining out was more selective and budget-constrained.
A marked imbalance between supply and demand arose. Inventories were progressively and rapidly reduced.
Economic headwinds were being experienced by businesses, families and individuals. It seemed everyone was pushing uphill.
Freeze-frame life. That is the overriding state of the broader global, national, local economies, market places and sectors.
Rises in official and market place interest rates during the coming months seem inevitable.
For a collective large number of consumers and small businesses, a 0.25% increment will induce pain, to differing degrees of tolerance. Failures and failings will result.
A further increase of just 0.25% in interest rates will have an accelerated, if not exaggerated effect.
The consequences will be arresting, beyond attention, and reflected in pauses and falls in demand, turnover and profits.
Perhaps the immediate future has the characteristics of an endurance course: “Touchy” competitors, stressed participants, stretched resources, strong headwinds, new interlopers and obstacles, and a clear lack of leadership, vision and direction (read: governments).
There will be winners and losers. Early starters will have a competitive edge.
A measured pace will be prudent, enabling a front-running position, and avoiding being lost in the pack. Taking timely lessons from the winners in the Tour de France seems appropriate.
In the race for market leadership, past favours and relationships will count for little. Debts (other than financial) and obligations will be forsaken.
This will be a handicap event, with the biggest handicap being debt.
Cometh the moment, cometh the winner.
What a wonderful web we (consumers) weave. 
An insightful statement, a challenge for all those who seek to service consumers, and a task to ensure that motivations, needs, wants, perceptions and buying habits are recognised and understood.
Within context, sticking to the knitting is pertinent, albeit with a somewhat refined and refocused application. Widespread current under-performance is and materially influencing reviews of operations, the recalibration of marketing strategies and evaluations of just how little is known and understood of primary, secondary and tertiary targeted consumers and clients.
The importance of emotions and subjective expectations has been long-recognised by marketers.
Price alone is neither a virtue, nor an effective or sustaining magnet for consumer and client visits or, sales, revenues and profits. For example, some 42% of consumers purchasing wine, when hosting guests, have their selection influenced, if not primarily determined by the price range.
A self-declared lack of product knowledge and inability to assess value are instrumental in such people narrowing their choices to an acceptable price range, so that they avoid the embarrassment of offering inappropriate and inadequate wine.
Thus, it is not about price, bargains or discounting, but rather, a perceptive sense or measure of value.
Many Australian wine brands suffer from an absence of or deficiency in the brand marketing of locations such as Champagne, Burgundy and Arras in France.
The wine bottle label text description of the content is important and influential. Imbibers of wine like to talk about the wine, its attributes and qualities. Therefore, references to the taste, smell and the presence of vanilla, orange and leather are catalysts for extended conversations, and reflect positively on the knowledge of the host. Sensory suggestions indeed.
However, the overriding challenge for vignerons, distributors and resellers is to have specific wine brands, categories and bottles put figuratively and literally into the hands of consumers.
It is estimated that more than 85% of the thousands of vineyards scattered throughout Australia do not trade profitably, and are economically unviable. For more viable and lucrative investment options, see this blog post about how you can trade fx and make big money.
Making great wines, even good tasting ones, is secondary to stimulating the senses of consumers.
Marketing honey highlights the importance of sensory suggestions and consumer perceptions.
“Manuka” honey has several laudable aspects, including medicinal benefits, great taste and unique, eucalypt aroma.
New Zealanders are claiming territorial, intellectual property and botanical rights to the product. Shades of the lost opportunities with Kiwi fruit!
Seemingly, little respect has been assigned to the historical probability that the seed pods of the Manuka trees were carried across the Tasman Sea by the prevailing trade-winds.
The sensory suggestions being promoted by Australian honey producers and retailers for Manuka honey are being challenged by New Zealanders.
The basic product, and its composition, have been lost in an emotional, assertive argument which is largely determined, and influenced by sensory and suggestive properties.
It will doubtless be difficult for consumers to discern, sense or distinguish differences in the taste, texture and colour of New Zealand Manuka honey, that emanate from New Zealand, compared to those which are from the eastern states of Australia.
Sensory suggestions will have a key role in the marketing, rather than the legal success related to this product.
Global sales and consumption of beer have been consistently and progressively declining. Craft beers have been the exception. It seems that consumers, Australians and New Zealanders in particular, have developed a taste and appetite for smaller volume craft beers.
National brands including Victoria Bitter, Fosters, XXXX and Swan have suffered waning interest and demand.
Until the 1990s beer tastes in Australia were predominantly regional in nature. The top-selling brands in Queensland were related to Castlemaine, for New South Wales it was Tooheys, South Australians supported West End and Western Australians favoured, among others, Emu.
In more recent times the craft nature of imported Corona, with its conspicuous lemon slice adornment, has enjoyed strong sales and sustained growth.
Similar to coffee and the marketability of individual baristas, craft beers promote, and are accepted as offering unique tasting – sensory appealing – brewer-customised products. Those are the facts…… – – or the prevailing perceptions and sensory suggestions.
The marketing of gluten-free food is another matter entirely. Few senses are stimulated because of the absence of gluten in food, beer and whisky.
Interestingly, sales growth for this sub-category is consistently strong. It seems fashionable, with certain supposed health benefits. The latter point has recently been challenged.
The biggest challenge for coeliacs, who are gluten-intolerant, is to ensure food providers, restaurants in particular, comprehend the nature of the condition and the dramatic consequences when the need for exclusion of any trace of gluten is not adhered to.
Cross-national and cross-cultural interactions have been shown to have unfortunate outcomes.
Enquiries about, and demands for food to not contain flour can be, and have been, misinterpreted to relate to the absence of flower/s.
Removal of floral adornments does not equate the need for an absence of flour in the ingredients.
Phonics can be so deficient, and it is hard to swallow heart-felt apologies because of unintentional misunderstandings.
Consumer demand, preference, satisfaction and loyalty are products of adroitly applied and reinforced sensory suggestions.
Recipes, ingredients or physical characteristics (beyond labelling and gluten-free offerings) have important, but secondary roles.
The composition and packaging of value, quality and relevance is a complex art-form. It can be founded on, or enhanced by sensory suggestions. 


Barry Urquhart of Marketing Focus is an internationally respected business strategist, consumer behaviour analyst and conference keynote speaker.

Barry Urquhart
Marketing Focus

M:      041 983 5555
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