One company profile is not more “right” than the other; they are just different and may be appropriate for different target customers. For example, a closer look at two different style magazines will make this very obvious. Let’s compare People StyleWatch and Vogue.
At a fast glance, the cover of People StyleWatch appears very busy. I assume that this is a strategy to give the impression of being the one magazine in which you may find everything. On the cover you are informed that the magazine will include information on where to shop for the best bargains, secret beauty tips will be revealed and you will be educated in how to shape your body the best way.
The cover of Vogue has a more unadorned appearance and gives an impression of that this magazine will only convey the best of the very best. This magazine will bring you a selection of the top brands, how to look good in every life situation and articles on stylish celebrities that you can identify with. The strategy here, I assume, is to attract an audience with a greater purchasing power.
These two magazines are true to their profile; every cover, issue after issue, year after year will give a similar expressions. As a result the reader audiences of these magazines differ. Bearing this in mind, it is important to analyze your brand with regards to who you are, what you supply and for whom, and what your benefits are. Most important of all is to generate a company profile that conveys this and stay true to your profile for long-term customer identification for your brand in the target group.
Thursday, September 29, 2011
Effects of price adjustments
This is the time of year, at least in the western part of the world, when we are looking over our price lists for the upcoming year. We either increase our product prices to cover for increased costs or decrease our prices in order to be more competitive. Either way, it is important to know how a price adjustment will affect your profit.
Imagine you have a product with a list price of 1000 EUR, a cost price of 800 EUR and of which you sell a volume of 100 units. This will generate a turnover of 100000 EUR with a profit of 20000 EUR from that particular product. A decrease in the list price with 10%, by adjusting your list price downwards or giving a discount, will affect your turnover in that way that you have to sell 12 more units to reach the same turnover. However, for you to gain the same profit on this product you have to double your sales.
If you instead decide to increase your list price with 10% you can sell 9 units less and still obtain the same turnover. With a 10% list price increase you only need 2/3 of your current sales to gain the same profit.
You can go in for being the cheapest on the market and hope to by this way generate a greater sales volume. This strategy will make a smaller business very vulnerable. In tough times of decreased sales due to customer budget austerity, a small business will be left with significantly reduced profit. For a small business it is of more importance to keep good margins in order to cope with sales fluctuations.
Whatever strategy, it is important to keep in mind how a price adjustment will affect your turnover and profit.
Imagine you have a product with a list price of 1000 EUR, a cost price of 800 EUR and of which you sell a volume of 100 units. This will generate a turnover of 100000 EUR with a profit of 20000 EUR from that particular product. A decrease in the list price with 10%, by adjusting your list price downwards or giving a discount, will affect your turnover in that way that you have to sell 12 more units to reach the same turnover. However, for you to gain the same profit on this product you have to double your sales.
If you instead decide to increase your list price with 10% you can sell 9 units less and still obtain the same turnover. With a 10% list price increase you only need 2/3 of your current sales to gain the same profit.
You can go in for being the cheapest on the market and hope to by this way generate a greater sales volume. This strategy will make a smaller business very vulnerable. In tough times of decreased sales due to customer budget austerity, a small business will be left with significantly reduced profit. For a small business it is of more importance to keep good margins in order to cope with sales fluctuations.
Whatever strategy, it is important to keep in mind how a price adjustment will affect your turnover and profit.
Wednesday, May 4, 2011
Message for success
I am not very interested in cars and do not know much about car brands. Marketing from the automobile industry towards me must therefore be crystal clear. In fact, I am a potential customer. By comparing two car brands with their backbone in the Swedish automobile industry, Volvo and SAAB, makes the importance of a distinct message to succeed very obvious.
With Volvo, I get a family car with an emphasis on safety. I know that from many years of a distinct and consistent marketing message from Volvo. But what do I get when buying a SAAB? Do I get a war machine like SAAB Jas 39 Gripen? Do I get a truck like the ones formerly produced by SAAB Scania? I have no associations to SAAB cars. Who is driving a SAAB? Is it a car that brings me high quality-to-price ratio or is it a car that makes me feel luxurious when driving it? I don't know. To me it's just a car that takes me from A to B. However, I want more than that. I want my car to be an extension of my personality. A sporty outdoor lifestyle would perhaps fit well with Jeep, whereas a Porsche gives more a feel of career and performance.
Personally, I drive a Toyota Yaris. It's small, economic, fun and it never gives up - just like me. ;-)
With Volvo, I get a family car with an emphasis on safety. I know that from many years of a distinct and consistent marketing message from Volvo. But what do I get when buying a SAAB? Do I get a war machine like SAAB Jas 39 Gripen? Do I get a truck like the ones formerly produced by SAAB Scania? I have no associations to SAAB cars. Who is driving a SAAB? Is it a car that brings me high quality-to-price ratio or is it a car that makes me feel luxurious when driving it? I don't know. To me it's just a car that takes me from A to B. However, I want more than that. I want my car to be an extension of my personality. A sporty outdoor lifestyle would perhaps fit well with Jeep, whereas a Porsche gives more a feel of career and performance.
Personally, I drive a Toyota Yaris. It's small, economic, fun and it never gives up - just like me. ;-)
Thursday, April 14, 2011
Everybody wants a reference
How usual is it to chose a carpenter right out of the phone book? Not very usual, I assume. Instead you start by asking around for references. Your customers probably do the same to find their way to your business. So why not start taking networking seriously?
Compared to an advertizing campaign, word of mouth (WOM) is a cheep way of marketing your products. Compared to cold phone calls it most certainly is more effective. Some companies rely entirely of WOM. Aussie Haircare is one example of the power of WOM. The initial marketing of their hair styling products was carried out largely through referral marketing in various online communities.
One way to network is to join forces with other professionals with similar or complementary products to your without being competing. For example, if you are an instrument supplier you could ally yourself with a supplier of consumables suitable to use with your instrument. Another way is to network within a society where your potential customers may be members.
In advance your networking event, prepare a short presentation about yourself, your company, who your customers are and your advantages compared to the competition. When you are asked about what you are doing, don’t just tell what you sell. Instead, explain when your products are needed and by whom. This way you facilitate for your reference to remember what you have to offer and when your products or services are needed. In this way, your reference will more likely come to think of you when he or she meets one of your potential customers.
Compared to an advertizing campaign, word of mouth (WOM) is a cheep way of marketing your products. Compared to cold phone calls it most certainly is more effective. Some companies rely entirely of WOM. Aussie Haircare is one example of the power of WOM. The initial marketing of their hair styling products was carried out largely through referral marketing in various online communities.
One way to network is to join forces with other professionals with similar or complementary products to your without being competing. For example, if you are an instrument supplier you could ally yourself with a supplier of consumables suitable to use with your instrument. Another way is to network within a society where your potential customers may be members.
In advance your networking event, prepare a short presentation about yourself, your company, who your customers are and your advantages compared to the competition. When you are asked about what you are doing, don’t just tell what you sell. Instead, explain when your products are needed and by whom. This way you facilitate for your reference to remember what you have to offer and when your products or services are needed. In this way, your reference will more likely come to think of you when he or she meets one of your potential customers.
Tuesday, April 12, 2011
Less is more
A company that is often mentioned when talking about successful marketing is IKEA. Independent on world location, IKEA stands for Swedishness and has a well communicated company history and traditions. The distinctiveness in their marketing communication has subsequently built them a strong brand.
Branding should be based on corporate identity, profile and image. You can’t be everything for everyone. Important to consider is what you are (products, facts) and for whom (when are your products needed), how you will communicate your identity (profile) and what marketing channels you will use for this communication (where are your customers susceptible for your message).
Company profile needs to reflect the company’s values, be communicated from inside the company and out and be well implemented internally in the organization. Branding needs to be credible, consistent and long-term.
Keep the message simple and clear. It is said before but worth mentioning again and again; less is more.
Branding should be based on corporate identity, profile and image. You can’t be everything for everyone. Important to consider is what you are (products, facts) and for whom (when are your products needed), how you will communicate your identity (profile) and what marketing channels you will use for this communication (where are your customers susceptible for your message).
Company profile needs to reflect the company’s values, be communicated from inside the company and out and be well implemented internally in the organization. Branding needs to be credible, consistent and long-term.
Keep the message simple and clear. It is said before but worth mentioning again and again; less is more.
Tuesday, April 5, 2011
Walk the extra mile
On my way back from a meeting in Germany I became aware of the fact that the airport in Munich was hit by an electronic meltdown and hence all luggage was let behind. Subsequently, upon arrival to Stockholm I took a taxi home without my bag. Although I knew that this was nobody's fault, I was annoyed by this obstacle. However, my luggage was on the next flight to Stockholm and deliverd to my door the same evening. They could have chosen to wait until the day after and delivered my bag during office hours, but they didn't. Due to this excellent service I will continue to fly with Star Alliance also in the future.
In my work, I frequently care of visitors from various parts of the world. For dinner I often take our guests to Domtrappkällaren, a local restaurant in Uppsala. Usually the waiter gives a short presentation on the history of the facilities and on the food to be served. While waiting for the dishes, small appetizers are served in advance what's ordered. Complimentary as a little extra. I have chosen to return to this place with my company again and again.
Companies that have chosen to walk the extra mile and to give that little extra to its customers tend to increase the number of regular customers. These customers tend to be more tolerant and understanding when they run into troubles with your products. To a greater extent will they also stick with you as a supplier during more difficult times.
In my work, I frequently care of visitors from various parts of the world. For dinner I often take our guests to Domtrappkällaren, a local restaurant in Uppsala. Usually the waiter gives a short presentation on the history of the facilities and on the food to be served. While waiting for the dishes, small appetizers are served in advance what's ordered. Complimentary as a little extra. I have chosen to return to this place with my company again and again.
Companies that have chosen to walk the extra mile and to give that little extra to its customers tend to increase the number of regular customers. These customers tend to be more tolerant and understanding when they run into troubles with your products. To a greater extent will they also stick with you as a supplier during more difficult times.
Wednesday, March 16, 2011
Authenticity and transparency
Consumers tend to have an increased interest in authenticity with an increased need for transparency. With the increased range of products, it is hard for the consumers to decide what is authentic. Marketing is not working as it used to. Therefore we need to change our focus on marketing from “what consumer needs” to “what consumer wants”. Distinctive brands need something more – sensory marketing. Advertizing campaigns has become less important. Instead, quality-to-price ratio has increased in importance. There is a shift from lowest price competition to quality-to-price ratio. Also the story of tradition and origin is important. Advertize with your heart, not your brain.
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