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Marketing in Turbulent Times
Working in and through the
RECESSION15 May 2010
Julian Rawel MSc, BA, Dip M, FCIM, Chartered MarketerDirector of Executive Education
www.bradford.ac.uk/execed
Rule 1 – Do you really understand marketing?
The management
process responsible for
anticipating and
satisfying customer
requirements profitably
(Chartered Institute
of Marketing)
• “Advertising, sales promotion,
selling, PR, direct mail”• “What the marketing
department does”• “A process which
increases costs”• “An irrelevance
to what I do”
Xwww.bradford.ac.uk/execed
Rule 2Its your customers who count
DO YOU KNOW• Which customers make you
money?• Which break even?• Which lose money?
• Do you understand Pareto?
• Are they Strategic? Significant? Profitable?
• Are you Consistent? Clear? Credible? Competitive?
www.bradford.ac.uk/execed
Rule 3The key is to keep
your existing customers
1. Focus on profitable customers – the 20%
2. Research what matters to them…
3. …and what does not…yet still carries cost
4. Ensure that your value proposition is recognised by your customers
5. Deliver exceptional service
6. Show you understand their issues
www.bradford.ac.uk/execed
Rule 3The key is to keep
your existing customers
1. Focus on profitable customers – the 20%
2. Research what matters to them…
3. …and what does not…yet still carries cost
4. Ensure that your value proposition is recognised by your customers
5. Deliver exceptional service
6. Show you understand their issues
WHY DO CUSTOMERS DEFECT?• 1% Die• 3% Move• 4% Float• 5% Change on
recommendation• 9% Change on price• 10% Serious complainers• 68% Because of an
attitude of indifference shown by owner, manager or employee
www.bradford.ac.uk/execed
Here’s an example of RECESION customers
TYPE OF CONSUMER CHARACTERISTICS TACTICS
SCRIMPER Maintain lifestyle but at a lower cost
•Cornwall, not Corfu•Cava, not Champagne
CRASH DIETERS Drastically cutting spend •Weekend break•Or just ignore
OSTRICHES Continue to spend •Offer added value•Don’t be greedy
TREATERS Cut back on traditional treat but will buy a nice alternative
•Tempt them with an irresistible holiday
VULTURES Sniff out the bargains •Sell on perceived value
www.bradford.ac.uk/execed
Rule 4 - Don’t immediately cut your marketing communications budget
• Marketing budgets easy to alter (plunder) in short term
• If marketing is seen as a cost…maybe you should cut it anyway
• Take advantage of your competitors – they are bound to reduce theirs!
• In this way – you can increase share of voice which should lead to greater share of market
• “We believe communications becomes even more important during difficult times…having a strong brand will stand us in good stead in terms of how consumers ..allocate their limited funds” Emirates – Senior VP Marketing
www.bradford.ac.uk/execed
Rule 5 - Go after the competition
• When you have found out your best 20%...• …find out the 20% of your key competitors…and
pursue• In a recession don’t underestimate offence…• …Offer better product/better service
www.bradford.ac.uk/execed
Rule 6 – Your employees should be active
advocates…not RECESSION terrorists
• Generate internal loyalty not fear• Don’t give up on training/development• Loyal, motivated employees give better service…• …and up/cross sell
www.bradford.ac.uk/execed
Rule 7 - Leverage the RECESSION –
it has become its own brand
UK DUBAI?
Domino’s Pizza home delivery
Tesco – long term “inflation busting prices”
Premier Inn – “In hard times our prices soften the blow”
Shell – “keep your tyres at the correct pressure and you could gain extra miles from the same tank of fuel”
www.bradford.ac.uk/execed
Rule 8 – Use price tactically
• Added value or reduced prices?• Stealth increases• Easy payment terms
www.bradford.ac.uk/execed
Rule 9 - You can tighten up on marketing Show the FD that every £ is worthwhile -
Talk investment, not spend
Streamline processes •Go for the key 10/20%•Cut out unnecessary print – leaflets not brochures/on line brochures/email only where you can get through•Ensure your web site works•Reduce approval bureaucracy
Word of mouth •Customers should be a key sales tool•Develop pro-active referral strategies•Positive WOM can increase marketing efficiency by 40%
Don’t fudge creativity •Creative communications motivate
Manage agencies tightly •Keeping in contact with the customer does not mean the most expensive TV programme
Manage your marketing headcount
•But don’t replace the marketing manager with expensive consultants
Integrate your marketing communications
•Manage channels together
Rule 10 – Brands count
A perceptual monopoly (Anon)
“A brand is a product or service made distinctive by its personality in the context ofthe target market and by its positioning relative to the competition.”(Hankinson & Cowling)
www.bradford.ac.uk/execed
How a product becomes a brand
The Core Product
The Expected Product
The Augmented Product
The Potential/Intangible Product
Brand
Image
Perception
www.bradford.ac.uk/execed
How do customers choose a brand?A combination of…
Although customers say they want rational product features, emotional benefits can often make the decisive difference
… a State of Mind … and Feelings
rational emotional
product performance and evaluation
functional benefits
psychological benefitse.g. trustworthiness, reliability
social benefitse.g. being seen as an innovator
www.bradford.ac.uk/execed
The Relationship Marketing Ladder
Prospect
Customer
Client
Supporter
Advocate
Partner
Emphasis on winning new customers (customer
catching)
Emphasis on developing & enhancing relationships (customer keeping)
www.bradford.ac.uk/execed
Rule 11 – You decide!
www.bradford.ac.uk/execed
Rule 12Let us help you
with your marketing!!
Bradford University School of ManagementHeaton Mount, Keighley Road,
Bradford, BD9 4JU, UK
[email protected] Tel: + 44 (0)1274 236879
www.bradford.ac.uk/execed
