Friday, 25 April 2014

The Test of entrepreneurship in the marketing organization.

Two top marketing executives, Rick Jones and Gupta Preedy,are despatched to India from Ingenio Enterprises Ltd.a Europe based footwear manufacturer. They were sent to scout for marketing opportunities.India,an emerging markets giant, is a nation of a little over one billion inhabitants; a fast rising market with more than 400 million said to have been lifted from poverty into the middle class in the last 20-30 years of sustained economic growth, driven by developments in the internet, communications and technology as well as outsourcing of IT talents to some of the world's TECH giants.Bangalore and Pune are some of India's growth poles.
This said, grinding poverty as the down side to this illustrious story goes, sees to the rest of the population below the poverty line of $1.25 a day, according to the World Bank estimates.

Upon arrival, Rick Jones and Gupta Preedy immediately come face to face with Indian poverty as observed in the number of Indians without footwear; one half of the population wore shoes and the other half were without shoes-they either walked bare-footed or wore rubber made slippers worth about one Rupee. The two marketing executives are faced with the conundrum of the glass cup: is it half empty or half full?. Or perhaps it is a perception, reality gap which often colour how marketers see markets overseas.

Is The Glass Half Empty Or Half Full.

Gupta Preedy saw a huge marketing opportunity in both segments of the population-shoe wearing and none shoe wearing-to be serviced with low cost but durable footwear. The key insight is in tailoring the marketing offering bearing in mind the twin objectives of demand, affordability and willingness. In Preedy's estimation, value lay at the bottom of the 'poverty pyramid'(C.K. Prahalad; 'Fortune At the Bottom Of The Pyramid')
However, Rick jones saw a different picture- there was no marketing opportunity, hence the company, he suggested should look for value elsewhere.
Kotler defines a market in the following words that,"a market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want"(Kotler,P;1991:63)

Now from the perspective of the marketing organization, leaders need to nurture the entrepreneurial spirit to be able to generate business for the company through what is called the "causal process "which begins with a desired outcome(identifying a marketing opportunity in the Indian footwear market for instance) and focussing on the means to generate that outcome(investing in indian footwear market through one or more business combinations).
Astute marketers as identified in the case of our two 'bunnies', one of which abided by the 'lemonade principle'(Sarasvathy,S;2001:245)  highlights the acknowledgement and appropriation of contingencies by leveraging on surprises identified, rather than  avoiding them as was done by Rick Jones.The right course of action is to overcome them or adapt to them, provided the pay -off will be greater than staying away.A risk- management framework for assessing new marketing opportunities must be embedded in the marketing organization, either to minimise risk ab nitio or to provision for an exit strategy with minimal cost in the event of market failure.

Furthermore, astute marketing entrepreneurs rather see surprises as opportunities turning the unexpected into a viable,valuable and profitable venture, where the less acute in thinking sees nothing.A case in point from an organizational point of view,is the Nigerian telecommunications market which prior to 1999 had fixed lines of less than 500,000 telephones to a population of over 100million users;an industry totally owned by the national government. Reform of the sector has seen telephone lines growing to over 120million active users between year 2001 and 2013,a phenomenal growth.What should interest readers was the attitude between two sets of executives who back in 2001 conducted a risk assessment of the market.One came away with the decision to invest in the market despite adverse economic and country risk reports, the other decided not to invest.The risker taker is currently the market leader with a share of about 52% of the Nigerian market.

The marketing organization must develop in its executives,the entrepreneurial mind-set to make sense of opportunities when they see one in the context of the search for new marketing frontiers for their products or services,in what authors, Hisrich,Peters&Sheperd, "Entrepreneurship", suggest effective marketing entrepreneurs should continuously 'rethink current strategic actions, organization structure, communications systems ,corporate culture,asset deployment, investment strategies, in short every aspect of a firm's operation and long-term health'.

The marketing organization(as situated within the organization structure) is being given a new flip of new horizons for organizational growth into new markets, lineal or geographic. Developing the entrepreneurial mind-set requires the ability, to acquire what the authors call 'cognitive adaptability'; it is an ability to be dynamic,flexible,self-regulating and engage in the process of generating multiple decision frameworks that focusses on sensing and processing changes in the business environment and acting on them.And this to my mind is the crucible of entrepreneurial marketing: sensing ,seizing and acting.
Decision frameworks are organized prior knowledge about people and situations that are used to help someone make sense of what is going on;this is reflected in the marketing entrepreneur's ability to reflect upon, understand and control one's thinking and learning.This is most acute when a firm especially goes foraging into new markets abroad away from known marketing boundaries into uncharted waters like our hypothetical Indian footwear market.

Organizing The Marketing Organization.

The marketing organization that develops a passion for customers,organizes its activities around market segments instead of products and develops a deep understanding of its customer base qualitatively and quantitatively is the creative one.It is the one that creates an environment for innovation and letting marketing staff take the lead and responsibility for their actions ,if even they fail at it sometimes; imbuing employees with the entrepreneurial spirit and letting them take decisions and own the rights therefrom. This leads to the creation of new sets of skills and competencies,the motivational drive to excel in customer relationship management.

The marketing organization must look out for new trends and be prepared to optimize them.A lack of trendiness led to Motorola being 18 months behind in its migration from analog to digital telephony,thus giving its competitors such as Nokia and Ericsson the huge head start they enjoyed.
Food giant,Nestle took a while in recognizing that the future of coffee drinking laid in coffee houses,letting Starbuck steal the coffee show.CoCa-Cola,a behemoth noted for innovation was also caught unawares with beverage trending towards fruit flavoured drinks(Snapples),energy drink(Gatorade) and designer water (Avian).

Readers would wonder why erstwhile market performers will be caught off trend by competitors that ordinarily should not.This is because they are risk-averse,lacking in internal entrepreneurship such that gives executives the opportunity to engage in risk-taking within a risk-management framework.
Our risk taker,Gupta Preedy challenged marketing orthodoxy and the company's obsession with protection of existing markets as is exemplified in Rick Jones's assumption that no market existed for his company's products because half of India was shoeless.Gupta Preedy on the other hand,saw differently;he identified correctly by seeing the whole of India as his firm's market for its products.
Ingenio needless to say decided against going into the Indian shoe market as it saw through Rick Jones's crystal ball.
It is iterative to say that firms foraging across marketing borders should see beyond numbers. Number crunching honchoes would point to power point graphs and spredsheets and say no;nevertheless intuitive marketing executives look beyond this taking into cognizance Prahalad's exhortation of tailoring offerings to suit the pockets of the teeming  of consumers at the bottom of the pyramid thus unlocking the marketing value in dollar terms that lies beneath the western model in other worlds. Spredsheets matter it should be stated, but taking a position matters more in the market place as positioning goes beyond graphs. Marketing entrepreneurship is.


Monday, 21 April 2014


The product branding of a company is the totality of customer experience with it and its products or services. It is the overall dialogue that takes place between the company and customers when a purchase and use of its products or services is made,
This dialogue is represented in its use of logos,mission statements,slogans,pay-offs,taglines,advertising,communications(public relations,publicity);the product itself and packaging,merchandising,etc,etc.

Companies such as Cocacola have over the years dialogued so effectively with their customers,to the extent the Cocacola name has become synynmous with the fizzy drink industry,thus developing a folksy relationship with its billions of customers in a way unimaginable round the world.
The Xerox company and DHL, all have developed along this brand trajectory. Photocopying has become in everyday lexicon,simply Xeroxing a copy of document and instead of sending a document by courier, your are likely to hear,"send it by DHL",even when it may be sent by United Parcel Service or any other courier company competing with the brand.Iconic brands enter our everyday lexicon and endure through time,basically because of the halo effect built around them.And what is meant by the halo effect?

Creating a brand halo is about building around a product an association that is more ethereal than real,through the play on emotion,perception,innovation and communication.And in building attitudes towards a product,you generate emotions in two specific areas: 1) actual product or service and 2) customer experience of the totality of the company's operations;in other words,all the activities performed towards bringing a product or service to customers.

Brand halo is created through the play on emotions,perception,innovation and communication as earlier stated;all four must play on the five senses of sight,sound,smell,taste and touch.Creating an emotional atmosphere for the brand must involve therefore,appealing to all the senses,requiring the use of a media mix,for example,television for creating the appeal to sight(images with strong colors,aesthetics,surround effects) and sound that compels a customer wanting to taste or touch the product.Television has the ability to create that sense of urgency to induce trial in a well executed advertising compaign;while the outdoor medium will remind of what was seen on television;newspaper will give more technical details of the product such as automobiles,equipment,packaged holidays and tours,holiday destinations,and many more.

The human emotional make up is built on logic cum rationality as well as emotions.Whereas logic appeals to rationality,logical analysis,consciousness and awareness,which all occupy, the left compartment of the pathway in the brain, the emotional side appeals to creativity,imagination,impulsiveness as well as reflectiveness.This dwells on the right compartment of the brain.To be sure,rationality is lineal;processes data one piece at a time when stimulated.Emotionality on the other hand,takes the parallel path in data processing.James Hammond,author of "Branding Your Business",states that people buy on emotion and justify with reason.He further suggests that companies build strong brands when their customer's experiences exceed already determined expectations,which in turn evokes strong memories when they go back for repeat purchases.Exceeding customer expectations the first time,in my view is like a bank deposit of favourable images of a brand which a company accumulates when customers repeat their dialogue with the company's product or service.

For example,in automobile advertising,observe how campaign themes appeal to the soft side,namely emotions through the emphasis on design, exquisite interiors,class and the fulfilment of maslowian emotional needs of self-esteem and actualization-the acquisition of expensive "toys".The logic rationality side dwells on the type of wheels;is it alloy or ordinary?(Alloy remember commands more money and is class);engine capacity;emphasis is also on performance(torque) and the economics of fuel consumption;thus suggesting the emotional duality of the human make-up psychologically,and his behaviour as a consumer.
Building the bank deposit of customer expectation is through brand advertising of a company's product or service over the long term,which appeals to the emotions of the customer.Branding and its adjunct marketing activity must be seen as an investment,the same way finance will see investment in new machinery or the building up of inventory.

Saturday, 12 April 2014

Appointment to positions in the organization and leadership.

Reading through a text on leadership, i came across an assertion by the author that appointment into a position in the organization is not synonymous with been a leader. He further asserted that to become a leader out of the position requires one to work to earn the appellation of leader. And what does one need to do to qualify for the tittle? Well, it is counter-intuitive to say that a leader must inspire confidence in his followership for him to achieve the desired organizational goals. You must project yourself into the minds and consciousness of your sub-ordinates for them to see where you are headed with them and the organization. The outcome of such a projection will determine whether one is a transformational leader or a transactional one.

Burns(1978) characterizes for instance  the transactional leader as a manager whose remit is solely the upholding of policies and procedures(gatekeeping),dispensing of rewards, good or bad(politician),and the management of the organization by exception rather than the rule.
Transformational leadership on the other hand, is one he characterizes as charismatic, based on personal relationships;creativity ,good communication, futuristic, empathy and selflessness. It is one based on group think as opposed to the former which is individualistic in disposition.

But Sun Tzu has to my mind the definitive model on the subject in the manner of Confucianism. He stated: " Leadership is a matter of intelligence,trustworthiness,humaneness,courage and on intelligence alone results in rebelliousness .Exercise of humaneness alone results in weakness. Fixation on trust results in folly. Dependence on the strength of courage results in violence. Excessive discipline and sternness in command result in cruelty(Kim Jong Un;North Korea, (italics mine)).When one has all five virtues, each appropriate to its function, then one can be a leader.While it may be okay to "want to be told what to do", in the conventional sense of leadership,we should rather apply critical thinking to the supposition that all persons appointed to positions are automatically leaders.This assumption is tepid.I choose Noam Chomsky's critical path of questioning followership,moreso when such persons are not by any shadow of the doubt,SME's,meaning Subject Matter Experts,in their appointed positions.They must prove themselves;they must earn their spurs to gain the respect that positions and power draw attracts. Positional leadership bereft of earned respect is transactional