Showing posts with label Marketing-B2B. Show all posts
Showing posts with label Marketing-B2B. Show all posts

27.7.09

Why You Need Marketing More Than Ever


by Alyssa Dver

A good marketer is hard to find - and worth paying for

"I consume; therefore I can market." Many people underestimate what marketing is and can do for a business. It would seem strange for someone to say, "I use a computer; therefore I can program." Nevertheless, many technology experts seem to regard marketing with apathy, if not out-and-out suspicion.

Techies often identify marketers as accomplices to the function that shall not be named: sales. Both sales and marketing are often viewed by engineering types as unnecessary, intellectually restricted, and just plain evil. Maybe that is because marketing is seemingly void of scientific explanation and often unclear in its cause and effect. However, consider that without sales and marketing, software is quite literally invisible bits.

So, let's briefly discuss what marketing really is and why it is important to software businesses.

First, here's a practical definition of marketing:

Marketing identifies, attracts, fosters, and retains qualified sales leads.

The continuity implied here is that marketing is responsible for finding precisely who will buy the software, enticing them to consider buying it, and then helping them consummate the purchase. As such, the objective of marketing is:

To profitably find prospects and then help them make efficient buying decisions.

The words "profitable" and "efficient" are key, because they imply that marketing doesn't count if it uses too much time or too many resources. So how does marketing avoid wasting time and resources?

To begin with, it must obtain a body of knowledge that will help to make defensible marketing plans. More specifically, that body of knowledge starts with marketers understanding the demographics and psychographics of buyers, users, and influencers. This helps narrow down the target segment and make it easier to position the product to reach the target audience with relevancy.

Next, marketers must thoroughly understand the buying process: who is involved, what steps occur, and how long the process takes. Marketers use this knowledge to effectively support the prospects' buying cycle and, ideally, shorten and optimize it.

Third, it is imperative that marketers know where prospects feed - that is, where they get information. This means they must know the media, events, and other places in which information about your type of product might be shared (formally or informally). Examples might be associations, conferences, meet-up groups, blogs, and LinkedIn groups, as well as which thought leaders influence target buyers. This information obviously affects the places and methods used to educate and market to the target audience to let them know about your software and its applicability to their lives.

Clearly it's important for marketers to be knowledgeable about competing vendors, but many of them don't make the most of that intelligence. Marketers should know not just the obvious offerings, the ones that are similar to yours, but also the products that yours might replace in function and/or budget.

And certainly, in terms of competition, pricing is not just a tool for profit management; it also works for positioning a product and sometimes even to help qualify appropriate buyers. (Sure, we all want to drive a Mercedes, but we aren't all qualified.)

The most amorphous area of expertise is predicting market trends and future marketing opportunities. Marketers should be able to assess major technological, social, and economic trends in their target markets and consider how much these may affect the business, whether positively or negatively.

One of the more challenging aspects of marketing is figuring out the balance between push marketing - generating awareness of the company and product with the target market - and pull marketing - retaining qualified leads and bringing them closer to the buying decision. Sorting and assessing which programs will generate desired results is not an easy task for any marketer, especially when budgets are limited and time is of the essence.

Why Do They Call It a Campaign?

Once all of these areas are known (which may be easier said than done), marketing's strategic plan and the tactical execution of that plan become based less on guesswork and more on math. For example, knowing what the close rate is per number of generated, qualified leads will allow marketers to better plan programs with which they can fulfill the needs of the sales pipeline and then measure the effectiveness of the programs as they are in process. Depending on the campaign (and the marketer), measurement may not be all that easy (or even possible).

To help manage the innate invisibility of marketing, lead tracking systems can help. Even simplistic ones done with Excel or ACT! can be better than using nothing. Knowing what leads are coming from where, and what happens to them when they go off to sales or a partner, can make or break a marketer's career. He or she may be generating terrific buzz and activity, but that may be moot if there is no way to demonstrate it in terms of marketing's cost-effectiveness, let alone its ability to deliver enough qualified leads.

Perhaps the toughest aspect of marketing today is filtering out the noise and figuring out what works for a specific business. Twitter is great, but not in all cases. Search Engine Optimization (SEO) might not even apply to a business, and if it does, what's the right amount of sizzling Flash and boring old (but searchable) HTML on your website?

And speaking of websites, I contend that writing something pithy and captivating is much harder than writing something that is lengthy and educational. Whitepaper or brochure? Demo or narrated PowerPoint? You get the picture. Making defensible, measurable, and yet creative decisions is what makes marketing something not everyone can do - or at least do well.

Marketing is a professional discipline, and, like any other, it requires schooling, degrees, professional training, and ongoing personal education as new technologies and techniques emerge. Moreover, marketing isn't about any one tactic, such as social media, SEO, or direct mail. This is why experience helps, and makes all the difference when resources are scant and the marketing department may be, at best, one full-time person.

Knowing how to write a well-crafted press release for SEO, as well as attracting target readers, is no small thing. Writing the proper survey questions so that the answers are clean and not accidentally skewed is not an intuitive talent. Just try pitching media or crafting a positioning message if you have never done it - it's kind of like writing unintentional, self-referencing code.

So before we throw marketing under the SaaS, Agile, or Web2.0 buses, let's just keep in mind that marketing never was, isn't, and never will be easy& even for really smart marketers. Given the challenges of doing more with less, the answer isn't to cut marketing or use an inexperienced intern. You always get what you pay for, and if you cut corners on marketing, your customers probably won't pay at all. Marketing isn't a necessary evil; it's a scientific art form that can help make scary code attractive to the right buyers.

Formerly a CMO for a public company, Alyssa Dver is chief executive of Mint Green Marketing, which consults for companies ranging from large multinationals to small startups. She is the author of No Time Marketing and Software Product Management Essentials.

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5.6.09

Positioning Strategy


An exasperated CEO stood up in the board meeting and exclaimed, “Is that all you marketing know how to do, compete on price?!”

In today’s marketplace where everybody’s competing for the same shrinking budget and differentiation is hard to come by, marketers often think of price as their only lever.

That’s just incompetent marketing, plain and simple.

There are lots of ways to differentiate a product. You can even create the perception of differentiation, if you’re creative enough. It’s called product positioning and it’s something of an art.

Here are Five fundamental product positioning principles that will help you destroy the competition:

  1. Find a product attribute that captures the customer’s imagination. It’s so easy to get trapped in the same old box of features and benefits. If you can’t differentiate that way, look at the problem with fresh eyes and fresh data. Find a new attribute that can get customers excited and focus your positioning around it.
  2. Market share gains are expensive. There’s simply no way around this. Market share comes at a heavy cost and your product planning and positioning must reflect that or your P&L will suffer and you’ll end up back at the drawing board. The cost is a function of how entrenched the leaders are and the perceived “switching cost” for customers.
  3. Reinvent the “customer experience.” Nothing matters more, and it’s not just for Internet and B2B. Just as with product attributes, you can shake up the competitive landscape by rethinking the customer experience in new terms. What’s important to customers changes as a function of time and market conditions. Take advantage of it.
  4. Only target up, not down the totem pole. Publicly and to customers, always position your product relative to the market leader. It elevates your product in terms of customer perception. That said, train your sales force (and other internal groups) on features - benefits versus all competitors. That’s a whole different story.
  5. Infrastructure (or ecosystem) as a competitive barrier. This is an important and often ignored aspect of product planning and positioning. Many products and services, especially in technology, require related companies and industries to support them in some way. If you get enough support for your product, it can be an extraordinarily effective competitive barrier that you can use in positioning.

Here’s a great example that utilized four of the five principals. When Toyotaentered the luxury automotive sector with the Lexus brand, it 1) made “ergonomics” and “quality” the new “performance” and “luxury,” 2) initially undercut the competition to gain entry and early market share, 3) created a low-stress and more respectful showroom experience, and 4) targeted Mercedes andBMW - up the totem pole.

Apple also uses positioning strategy extraordinarily well.

Samsung has done a great job with their product positioning. They focused on their strengths of innovations in technology and design to overtake Sony in consumer electronics.

Subway Sandwiches "EAT FRESH" have done a good job with their positioning. They're leveraging on their 'fresh, natural food' strength to edge out the competition in the fast food market.


on the other side in today’s marketplace, positioning has multiple problems:

1) Positioning is immeasurable: You can’t say “our positioning has improved our sales by 5 % or as a result of our positioning strategy, our brand is 12% better than competitions. Furthermore, it is impossible to measure the ROI or benchmark positioning.

2) Positioning is only suitable for mass markets. Yet branding today is about segmentation and communicating and engaging with those segments via relevant channels and with messages that resonate specifically with those segments or niche markets. Does this mean that a company should develop different positioning for different niches?

3) Positioning is suitable for mass markets with limited competition and limited consumer access to media and information. Today, consumers can get any information they want on anything from anywhere.

4) The wikipedia definition is a top-down, company knows best, hierarchical marketing approach. Yet we live in a C2C environment in which consumers define brands.

5) Positioning is one-way. The company knows best and you must listen to us. We tell you how our products are positioned. Bu today, if you are not entering into 2 way conversations with consumers you are about to join the brand graveyard.

6) Positioning was developed for the US mass market of the 1970’s. But we’re in a globalized world now, with much more competition and more knowledgeable consumers.

7) Positioning is competition, not customer driven. The basic premise of positioning is that you want to be number 1 or number 2 in a category in a prospect’s mind. If you can’t be number 1 or number 2 in an existing category because of competition, you make your own category. In today’s congested marketplace, the investments required to develop a new category are enormous. Furthermore, besides the difficulty and expense of creating your own category, you are also letting your marketing be driven by the competition rather than consumer demands for value.


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Positioning (marketing)

From Wikipedia, the free encyclopedia

http://en.wikipedia.org/wiki/Positioning_%28marketing%29




25.5.09

Developments in business-to-business communications


Richard Jeans, Philip Kitchen and Gary Howells report on research which shows the stress and complexities facing business-to-business marketers

Richard Jeans,Philip Kitchen and Gary Howells

In November 1996, Carey, Howells, Jeans & Spira (CHJS) and the department of marketing at Strathclyde University carried out a survey to investigate how company executives in business-to-business markets are approaching communications. This survey repeated an earlier, 1995/6 study by CHJS, and where relevant comparative data are presented here.

All respondents were in business-to-business communications, with budgets between £200,000 and £5 million or more, and in businesses ranging from computer hardware to agriculture and legal services. (Exhibit 1)

The research was a postal survey, with respondents having the option of using a web site. A sample of 1,000 achieved a response rate of 8.5 per cent by the cut-off date, giving a sample of comparable size and character to the previous survey. Because this is a new sample, however, there are some differences in the detailed make-up of the two surveys' samples, so that direct comparisons should not be pushed too far. This article summarises the findings, which are available in full from CHJS.

OVERVIEW

Both surveys show business-to-business marketing departments being pressed to work harder with fewer people, and to manage budgets that have to cover an increasing number of activities. While the leading activities in terms of budget allocation are the 'traditional' priorities - brochures, trade press, PR, direct mail, exhibitions and databases - there is clearly growing interest in new media, and the balance of expenditure is beginning to shift, even though no one seems very sure of the likely return from the newer activities. Exhibitions and seminars, which are highly valued but labour and time-intensive, seem most likely to lose out.

The growing range of activities used by business-to-business marketers (15 different categories of activity are used by at least 50 per cent of the sample) is clearly a factor in the drive towards integrated communications, which is seen as a dominating force by the vast majority. Integration is being driven by a variety of functional and structural considerations, but it is wanted, too, because it is seen to deliver real benefits in control and impact.

This is important to these marketers, because they believe that branding is a vital feature of their marketplaces - even though they are not always convinced that their companies and colleagues necessarily buy into and understand branding as well as they do themselves.

It is clear, however, that they see themselves as able to lead their companies towards a brand-based future. With very few exceptions, they see marketing as at least on a par with other functional departments in their company, with over 40 per cent saying marketing is valued above average.

THE SAMPLE

The 85 respondents included a substantial number of companies in the it field, which - very broadly interpreted - accounted for no less than 62 per cent of the total number of respondents. The spread of communications budgets is shown in the pie chart: while the majority are quite small, over 20 per cent of the sample were spending £2 million or more.

THE STATUS OF MARKETING AND COMMUNICATIONS

Only 15 per cent of the sample felt that marketing was little valued by their senior management. For the vast majority, marketing was rated on a par with (43 per cent) or superior to (also 43 per cent) other functions, with 25 per cent saying that it is seen as critical to success. There has been little change since the previous survey in these figures, but a slight movement in marketing's favour is visible overall.

In spite of this, there seems to have been a decline in numbers employed in the marketing department, with - in particular - an increase from 40 per cent to 50 per cent in those with five or less people in the department. Nonetheless, about a quarter of the sample in each survey have 16 or more marketing employees. The same trend is reflected, too, in the numbers specifically employed on marketing communications. Here, more than three-quarters of the total have five or fewer specialists, and there has been some contraction in larger (ten or more) departments.

BUDGETING FOR COMMUNICATIONS

A significant difference from the 1995/6 survey appears in the description of how the communications budget is set. There seems to have been a marked shift from task or objective-related methods towards more rule-of-thumb budgeting. Both percentage of forecast sales (30 per cent) and last year plus inflation (13 per cent) have increased, while objective/task has fallen back from 60 per cent to 49 per cent. In other words, it looks a little as if, although marketing has retained or even enhanced its importance, the methods it is allowed or encouraged to employ are becoming less sophisticated. This could, however, be an effect simply of structural differences between the two surveys' samples.

In relation to sales, budgets are mostly (68 per cent of responses) between one and two per cent, though one in six spends five per cent or more. Compared with 1995/6, the overall levels look slightly lower.

COMMUNICATIONS TARGETING

Respondents were asked to state how their budgets were allocated, in percentage terms, between different categories of audience. Given a wide and diverse spread of answers, the results were translated into rank orders, and weighted to reflect the allocations and budget size. This provides the basis for comparability - and intelligibility. In both surveys, customers, either existing or prospective, are far the most important targets, which is hardly surprising. It looks, however, as if other categories have, overall, become rather less important. This may reflect either an increased focus or the pressure on budgets - or both. Exhibit 2 shows how the various audiences are catered for in these terms.

It looks as if employee communications, historically a Cinderella area, may again be suffering more than most.

HOW THE MONEY IS SPENT

Interpretation of the data on where the money goes is complicated by different questionnaire structures - on a prompted list - between 1995/6 and 1997. In particular, the leading category this year, brochures and literature, was not listed last year, so it is likely to have been 'buried' within other categories, or ignored altogether, in the earlier survey.

Using the same weighting technique as for the target audience, there is less sign of a clear 'winner' among a long and varied list of about 20 items. Five items stand out this year as the most important, some way ahead of the next group. These are: brochures/literature, trade press, PR, direct mail and exhibitions. These five, less brochures and including database marketing, were the top five in 1995/6, though the order was different. In relative terms, it looks as if database, direct mail and exhibitions have all slightly lost ground in importance, while the trade press has clearly gained.

Lower down the list, the business press (defined as the Economist, Financial Times, and so on), sales promotion, distribution support and house journals have all apparently lost ground since 1995/6; while seminars, the Internet, and CD ROMs have all improved their relative standing.

The extended list obscures the overall significance of broad categories, such as media advertising, direct marketing, new media, etc. If we combine these, we get a ranking as shown in Exhibit 3.

A rather different pattern is shown, however, if we look at respondents' expected changes in budgets over the next year. The activities that are most likely to see increases in spend among the majority of respondents are - in order of the balance of increase over decrease - the Internet, database marketing, direct mail, PR and CD ROMs. With the exception of CD ROMs, which are used by only just over half the sample, these are all mainstream activities, used by 80+ per cent of the sample.

Light is shed on these data by respondents' rating of the different activities in terms of their perceived return on investment (ROI), which they were invited to rank on a five-point scale from 'little or no return' to 'excellent return'. The top-ranked activities in terms of perceived ROI are, in descending order: PR, database marketing, direct mail, brochures/literature, and (all equal) seminars, telemarketing and trade press. This rank order has barely changed since the previous survey, suggesting that it embodies some quite widely held conventional wisdom: the only significant difference is that distributor support has slipped down the table, and this may well reflect sample make-up differences. These data sets are summarised in Exhibit 4.

EXHIBIT 4: 1997 RANKINGS OF COMMUNICATION ACTIVITIES

Spending priority

Increase in budget

Return on investment

1 brochures 1 internet 1 PR
2 trade press 2 database mktg 2 database mktg
3 PR 3 direct mail 3 direct mail
4 direct mail 4 PR 4 brochures
5 exhibitions 5 CD ROM 5 seminars
6 database mktg 6 distributor support 6 telemarketing
7 seminars 7 house journals 7 trade press
8 distributor support 8 trade press 8 distributor support
9 house journals 9 brochures 9 sales promotion
10 national press 10 sales promotion 10 exhibitions

In general, firms can be seen to be moving budgets in the direction of areas where they perceive higher rates of ROI, together with the enticing but so far unproven, in ROI terms, new media of the Internet and CD ROM. This should lead, over time, to a distinct shift in the balance of budgets. Interestingly, in spite of their perceived good ROI, the 'traditional' but labour-intensive business-to-business activities of exhibitions and seminars, important as they are in marketers' budgets, are the two areas which do least well in terms of net numbers intending to increase spending.

BRANDS, BRANDING AND CUSTOMER CAPTURE

Asked to agree or disagree with a number of statements about the importance and significance of brands to their company and its employees, respondents attributed a high degree of importance to brands in the marketplace. They were, however, a good deal less sure that their companies or their companies' employees understood or were committed to the company's brands or to branding generally (Exhibit 5).

EXHIBIT 5: NET AGREEMENT* WITH STATEMENTS %
Having branded components in a product makes it easier to sell

+75%

Strong corporate brands can command a ten per cent price premium for the same product and hold market share

+63%

Branded products are more important than they were three years ago

+52%

Strongly branded existing products have raised barriers to entry for competitors

+44%

There is little agreement within my company about what 'brand equity' means

+43%

Most employees appreciate the impact of our corporate brand on the marketplace

+14%

In five years' time earnings from branded products will be more than new products

-5%

Most employees understand the importance of brand portfolio

-13%

My company spends adequate resources on developing its corporate brand

-15%


*(strongly agree/agree) minus (strongly disagree/disagree).

In particular, these marketers were clear that their company's investment in branding was less than it should be.This is reflected in their responses to two further questions. They put product features well ahead of company image as the main challenge they faced in converting prospects into customers; and they rated product quality some way above brand strength as the key reason why the market buys their product. Overall, product quality, brand strength and product features clearly outweighed both price and service/support.

INTEGRATED COMMUNICATIONS

In answer to a direct question, 95 per cent of the sample agreed that business communications should be integrated. A number of factors were suggested as acting to encourage the acceptance and use of integration. The biggest single influence was seen to be the support of marketing management, closely followed by creative synergy and - virtually the same thing - the idea of 'one brand, one voice'. These were all very highly agreed to, with minimal disagreement. The same was true of top management support, but here there was a significant group who neither agreed nor disagreed. There was weaker but positive support for the importance of centrally-controlled budgets, and sales management support, while the least strongly agreed factors were the two agency-related ones: the range of agency services and the fact that the agency had affiliated above and below-the-line services.

Apart from these functional drivers of the trend, there was strong agreement about several of the possible benefits. Integration was seen to deliver communications consistency, greater control over the whole communications activity and - for most - increased impact. Slightly less strongly accepted were easier measurement and evaluation, the possibility of faster solutions, and - weakest of all - reduced costs.

There are, too, some barriers in the way of the development of integration, and these produced a more mixed reaction, with quite a degree of polarisation: for some people, it is one thing to buy into the concept, it is another to get it to work.

No one felt very strongly about any of the factors suggested, and there was a high level of 'neither agree nor disagree', suggesting that there is still room for further experience to aid judgment. The biggest perceived problems lie in organisational structure (presumably within the marketer's company), and lack of specialised expertise. No one saw centralisation as a serious problem - no surprise - and on balance people did not see costs or inflexibility of programmes as barriers to integration. Opinions on ease of measurement, dependence on a single supplier, and the need for more generalists were balanced.

CONCLUSIONS

Business-to-business marketing seems to be in quite robust shape, even though faced by the pressures on manpower and budgets that all managements have to wrestle with. Within a complex range of activities, which are becoming increasingly integrated, there are signs of a shift towards 'new media', but the weight of money remains, at present, concentrated on the traditional, proven workhorses. Budgets are evidently being focused increasingly on brand development, though there is an undercurrent to suggest that not all managements, outside the marketing department, are yet completely sold on the value of branding.

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