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Friday, September 13, 2019

The World Economy in a Snap Shot

You may want to check out this snap shot of what the world economy looks like. It is important to remember that this map is based on one set of criteria and if you change how the world economy is measured you change the entire map.
https://www.visualcapitalist.com/the-86-trillion-world-economy-in-one-chart/

Sunday, September 8, 2019

The Importance of Checking Stats for Marketing Strategy Performance

While we would all love to aim once and shoot to reach a goal often the fluid nature of the business environment does not afford such sureties. The market is always, evolving and changing by the minute. Therefore plans must change as well if they hope to be viable and successful a few years down the road. The problem is that some businesses might not know how to correct their strategies for market misalignment.

The primary way to determine if your strategies are working is through feedback. Feedback allows for decision makers to understand more about a situation through information about the performance of the product/service. Such knowledge is gained through market research, customer feedback, web page statistics, and even our competitors.

Metrics give us insight. Metric means that some type of measurement is being used in the feedback process. A metric might be how many apples your business sold or how many visitors walked through your door on any particular day. Metrics can be almost any type of measurement that is quantifiable.

When you collect multiple metrics you can use them for deeper understanding. You can also get very specific with your metrics and complete secondary analysis by taking two important metrics and determining new values. For example, store visitors and purchase volume tells you the percentage of people who frequent your store and then buy a product.

It is also possible to collect  information on how much money is spent at each purchase and the total amount of purchases a day. Knowing that allows you to determine if more customer engagement or better placement of products increased the total sale amount.

I think you might be seeing my point that depending on what type of data you have available can determine what type of analysis you can complete.

Thus, if you are starting a new marketing campaign you may want to determine in advance what type of metrics you will utilize. Sometimes software can do this for you  (i.e. Google Analytics) while at other times you need to calculate your own.

Use gained information to curb and adjust your strategic approaches. For example, if the metrics show that two months before Christmas your sales volume jumps 10X you may want to purchase more product in advance and hire more staff.

Here is an article by Forbes on 3 Common Metrics.
https://www.forbes.com/sites/forbestechcouncil/2019/08/22/keep-it-simple-three-marketing-metrics-to-measure-for-small-to-midsize-businesses/#273cba3c47ee


Sunday, September 1, 2019

Determine the Value of Your Product Through Price and Feature Comparision

Product value is inherent in the cost, design and utility of an item. Value is somewhat subjective because it is influence by the fluctuations in market demand. If you are selling a product and desire to to figure out its $$$ market value then you will have to do some type of market comparison. Be advised that are lots of different ways to evaluate a product and you would do well to go exploring. A simple evaluation of how your product compares to other products on the market can tell you an awful lot about its opportunities for success.

The market and what customers are willing to purchase makes a key difference in the overall ability to sell the product for a reasonable value. As those who sell products on Amazon know, if your product isn't close to the lowest then you are not likely to make a lot of sales. The instant price comparison makes differentiation between locations difficult.

You Can Compete Beyond Low Price

Most consumer gravitate toward the lowest price and others toward convenience. People who have an interest in certain features are going to keep their eyes open for them on the market and are willing to pay a premium when they find them. Determine if you are going for low price or a more value oriented approach.

Let us say that you are selling a hammer handle and claim that it is the strongest handle on the market. That will have some value to people who use and buy hammers for industrial purposes. There will also be those willing to pay more for quality because they use these hammers a lot.

One of the ways to do this is to compare products that have similar advantages to see if they are selling higher than others. You will need to benchmark the average and then see the improved price differential when compared to other hammers. Perhaps this is $3 on the market. That will give you some indication that hammers that are strong sell at a higher price range.

How do you find this online?

You can conduct your own analysis by searching around stores, Amazon, Ebay, Alibaba and other sites to see the price. You may be able to then adjust the value from this benchmark based on how it compares. If your product offers improved quality then you may want to add to the price and highlight the value.

The same type of comparison can be conducted with specific features of products. It would require a lot more information and data to complete but is beneficial for putting dollar signs to specific features. Those features have value for consumers and the market will determine how much people are willing to pay.

Be Flexible with Your Price

While you may want to start high in price and claim your product is the best it isn't likely to go far unless you can vividly show its exclusivity. Otherwise, you may follow a market entry strategy where you lower the price of your product in order to speed up production and introduce the product to the market. When demand rises you can charge a higher price in the future.

Saturday, August 24, 2019

Marketing Communication Strategies

Communication is one of our most fundamental roles in life. We communicate all the time without even knowing it. From subtle facial expressions to long-winded rhetorical prose we are expressing a need in the world. Marketing is about offering solutions to those needs. Reaching the audience that needs those solutions occurs through the marketing channel. Having an integrated marketing approach with a strong mix has the potential to improve sales multi-fold.

You have a great product, know your customer and know which channels to use. You know that your core customer base has a problem so you are designing an advertising campaign so that it highlights the problem solving features of your product.

To gain the most exposure you want to reach your target audience by using three different channels. Each channel will have its own advertisement. While you want each advertisement to be different they should highlight the same core features of the product.

A few considerations for you before you get started....

1. Multi-channel marketing works well when there are central brand features that apply across all of them.

2. Each advertisements should focus specifically on the audience it intends to reach. The greater alignment between the advertisement and message, the more likely sales will occur.

3. Keep your messages simple so consumers don't get confused across channels.

4. Be aware that each channel has a slightly different audience.

5. Subtle meanings and pictures can change the intended message.

6. The technology consumers use will change how the information is seen.

Saturday, August 17, 2019

Using Channels to Determine Pricing Strategy

Pricing is an important part of selling products and services. Select a price too high and your product sales slack while if you are too low you can increase sales but with the risk of long-term damage to the brand. Evaluating price can get complex when we consider the multiple ways pricing strategies determine value. Common evaluation include cost, comparison, and value offered. Few people think of how the channel can have a serious impact on total price. Taking into account the channel and the target you hope to reach, it is possible to further tweak your price outcomes.

Why must you have a pricing strategy?

As a business owner you want to ensure that you are putting yourself in the most lucrative spot for maximizing your wealth. All businesses evaluate the work of their offerings in some way. For small business it might be relatively simple but for large businesses it can be increasingly complex. Having some type of strategy helps you limit your own bias while improving accuracy.

How does the channel influence strategy?

The marketing channel you use should be based on our core customer demographic. First research your customer and then find your channel. The core group of purchasers within this channel will be the one who determine your value. Such customers already are interested in the product and would raise its value. The rest of society doesn't matter much if they don't make purchases. Thus, product value and customer profile and channel influence each other.

What is the value of a product?

The value of a product is its relative worth to the consumer. Its not only about money because money is only an indirect measure of value. Instead, think of value in terms of its use to the people who need it. If it has no use or is abundant (or scarce) the value will change. A products core value is more associated with its functional value while relative value is more associated with market factors.

There is no perfect way to evaluate a product. What you essentially want to answer is "what are my customers willing to pay for this product so I can earn a profit?" The low cost option isn't always the best option. At times it may make sense to raise your value through other means such as warranties and add ons.


Tuesday, August 13, 2019

Segmentation of Populations and Strategy Based on Psychographic Motivations

Consumers are motivated by all types of needs and activities. They buy volleyball nets, order name brand clothing, purchase large houses, and much more. Their choices are often based on psychological factors about how they see themselves and the world around them. Tapping into these psychological motivations and impressions offers a glimpse into the inner world that pushes consumers to make decision on a neural/subconscious level.

Jane's Psychographic

Consider Jane a college student who loves biking. She joins biking teams, searches the Internet for biking attire, purchases bike parts off off Amazon, and tries to sneak away to bike anytime she can. She became such an enthusiastic biker that much of her life revolves around biking.

This is where psychographics becomes very important. Jane is a lover of biking and she perceives herself to be an athlete. She may actually be past her prime to professionally compete but nevertheless pushes her practices to the maximum everyday! What type of products might she be interested in?

She may need shoes, pants, knee braces, supplements, bike parts, insurance.....etc....etc.....etc... Her beliefs about herself impact where she spends her time and money. Tapping into their inner needs will give you a pretty solid indication of what they want out of life and their products.

Understanding and Segmenting Customers

You can gain insight into customer desires and beliefs by asking them what they believe. Surveys, direction discussion, complaints, etc... give you some hint into what someone wants. It is this customer feedback that allows you to align products and services to their needs.

When you are dealing with a large population of people there will be segments. Some will be Democrats and some Republicans. A few might like the Packers and others the Lions. There are people who love the outdoors and others who prefer the excitement of their televisions.

Look at Customers from Multiple Data Points

Gather as much background information about your customers as you can. You may not be able to do it all at once but you are certainly able to gather at certain points. The goal is not to overwhelm people with information gathering, or slow down transactions of sales but to instead gather over time as your relationship blossoms.

Sometimes you can gain information from face-to-face conversation (works better in small businesses), purchase history, purchase amount, zip code, etc.... Think of creating a profile that allows you to not only understand a particular customer but also your core demographic. The amount you want to collect will depend on the life-time value of that customer.

Pick the Strategies Based on Customers Needs

After you have collected enough information about customers and had a chance to analyze them you should consider using that information to make better strategy. Use the channels your customers are mostly likely to be reached and in which you are most likely able to get them to take an action. As new information becomes available you should continue to change your strategies for maximum return.



Tuesday, August 6, 2019

China Comes Close to Passing the U.S. in Doctors, Patents and Scientific Discoveries

The U.S. is losing its intellectual advantages when measured against other emerging nations like fast growing China. Intellectual capacity fuels our economy with new products and services and when this declines economic positions change. China's intellectual capacity seems to be racing at breakneck speed to match U.S. superiority in PhD candidates, scientific publications and patents. To retain the nation's current economic position there must be renewed interest in the development of educational and Ph.D programs to push innovation to the forefront of scientific discovery. Patching holes in the brain drain seems more pressing when we compared to intellectual outputs in other nations.

We live in a complex society that insists on increasing amounts of technology and knowledge to manufacture new products.  According to the article Do We Need More Scientists? in National Affairs there was a serge of investment into science in the 1950's when the USSR launched Sputnik, (Teitelbaum, 2003).  In the 1970's and 80's research institutions warned of the consequences of not having enough scientific capacity. The Dot.Com boom of 1990's again saw shortages of U.S. scientific ability widen and we began to recruit heavily from overseas to narrow that gap.

The U.S. is in a difficult era where significant amounts of our manufacturing shifted to cheaper international locations. Compounding the problem further, our schools are wobbly and don't consistently produce the skill levels needed to foster adequate scientific development. Attracting investment in manufacturing and development rests in part on our ability to develop useful intellectual capacity.

To more clearly discern if we have enough intellectual capital we can look at a couple of markers that include the hiring of doctors from overseas, Ph.D. graduates, scientific publications and patents.

H-1B Visas

Intellectual capital and our ability to general new ideas has always been central to innovation. New ideas are build from study and research that converts into knowledge of the past and ideas on how to solve problems for the future. The U.S. imports intellectual capital through a visa program based business skill needs. H1-B visas, while not always Ph.D. levels, do provide an indication of need for further scientific and technology oriented skills.

According to the Pew Research Center, since 2009 the demand for H-1B Visas have skyrocketed and meet quotas within the first weeks of application dates (Ruiz, 2017). From 2000 to 2018 the U.S. saw business submit work visa applications increase from around 110,000 to 200,000 respectively. Approximately 90% of applications are from the STEM related fields such as computer, math, science, engineering, etc...  Of these applicants 5% are Ph.Ds and 4% are Master Degree holders.

Work visas are a strong indicator that we have such a high demand for certain types of skill and knowledge that we import it.  While many of these recruits have something of value to provide our country they should be used more as a cushion between increased demand and lack of supply. Chronic short-falls in talent should concern stakeholders of industry-education misalignment.

Ph.D. Graduates

OECD reports 68 thousand U.S. PhD (.03 % of population) candidates graduated in 2014 out of 214 million citizens (Gray, 2017; OECD, 2016).  In the same year, Germany had 29k Ph.D. graduates (.035% of population) divided by 81.2 million population.  In contrast, in 2014 China is way behind the long curve by graduating 53,853 new Ph.D graduates (.004% of population) out of 1.364 billion people (Mei, 2018).

When we compare Ph.D graduates of the two countries over a given time-frame we can gain a deeper insight into the nature of the problem. China has a large population of relatively uneducated low-skilled workers. They have increased their PhD. institutions. We can see this change in comparing graduated during a certain time frame. The U.S. graduated 47K Ph.D students in 1998 and 67k in 2014 (OECD, 2016)  China over the same time frame  graduated 7.5 K in 1998 and 53K in 2014 (Mei, 2018).
Scientific Publications

Another way to look at growing innovation is through the eyes of scientific publications. Doctors often publish much more than any other educational group and indicates the presence of scientific activity. Reviewing publications will tell you a lot about which countries are creating and developing some of the most thought provoking advancements. It is those advancements that make the biggest difference.

 The Organization for Economic Cooperation and Development indicates that U.S. is growing in scientific publications but China is increasing its intellectual capacity at a much higher rate (OECD, 2016). Between 2003 and 2012 China went from 90K to 400K (+77.5%) highly cited papers. Comparatively the U.S. went from 390K to 590K (+51%) highly cited publications during the time period.

You can see from the chart that it is possible China may have surpassed the U.S in scientific publications. If not yet it wont be long! It is important consider that scientific publications lead to scientific discovery. It also provides some understanding of intellectual and innovative capacity. Much will depend on the quality of the publications for development. 



Patents

Patents help gauge improvement in the protection of intellectual discoveries and innovative products. They often include new products, additions, technologies, and discoveries. In 2014 The U.S. had 615,243 patent submissions and out of these 326,032 patents were granted as original (U.S. Patent and Trade Office, 2016). Comparatively, China in 2014 submitted a whopping 964,859 patent applications and was awarded 246,895 patent grants (WIPO, 2019).

While the U.S. is still producing the most patents in the world, the Chinese are trending up quickly. For example in 2008 the U.S had 185,224 patent approvals and in 2014 that number increased to 326,032 (U.S. Patent & Trademark Office, 2016). Comparatively, China in 2008 had 2,329 patent approvals and in 2014 earned a whopping 246,895 patent approvals (Wipo, 2019).
How can we Improve U.S. Intellectual Capital?

1. Rethink Education. Education is vital to today's success as an individual and as a nation. We are not graduating enough people with STEM skills and must rely on importing that talent from overseas. The need to use education to prepare Industrial Era factory talent has been replaced by Big Data Era demand for higher order thinking skills. Our schools will need to set the preparation work in the early stages of life and foster them throughout people's lives.

2. Cultural Adjustments. We should think of science as an essential aspect of our lives. Move scientific thinking from the periphery of learning to its center. Exposure brings awareness of the influence of science to the general public. When people are exposed to science in popular media, formal education and within their daily lives more critical ways of viewing the world occur.

3. Adjust the Labor Market and Incentives. Most students don't like math, logic, and all the different components that make their way into fields of science. While we may not be able to control how people feel we can better ensure that those with science degrees can find jobs. Companies that import new talent through the H1-B visa programs should first consider American talent before engaging in international recruitment.

Mei, Y. (2018). Transformation and trend of doctoral education in China and Poland (1980s-2010s) A comparative study. 21st Century Pedegogy, I (47-60). https://www.degruyter.com/downloadpdf/j/ped21.2018.1.issue-1/ped21-2018-0008/ped21-2018-0008.pdf

OECD (2016). OECD Science, Technology and Innovation Outlook 2016.  Retrieved June 27th, 2019 from https://read.oecd-ilibrary.org/science-and-technology/oecd-science-technology-and-innovation-outlook-2016_sti_in_outlook-2016-en#page149

Ruiz, N. (April, 2017). Key facts about the U.S. H-1B visa program. Pew Research Center. Retrieved https://www.pewresearch.org/fact-tank/2017/04/27/key-facts-about-the-u-s-h-1b-visa-program/

Teitelbaum,, M. (Fall 2003). Do We Need More Scientists? National Affairs, Retrieved
https://www.nationalaffairs.com/public_interest/detail/do-we-need-more-scientists

U.S. Patent and Trademark Office (2016). U.S. Patent Statistics Chart Calendar Years 1963 - 2015. Retrieved
https://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm

WIPO (2019). China-Statistical Country Profiles. World Intellectual Property Organization. Retrieved July 1st, 2019 https://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=CN

Permission to republish with proper attribution. Dr. Murad Abel








Saturday, August 3, 2019

Your Marketing Plan Will Break---or Make Your Business!

The marketing plan is like a compass that helps you navigate the marketing world to a destination where higher Return on Investment and increased performance is realized. It is difficult to have much improvement without understanding the market and the internal resources of the company. One of the reasons why you conduct a solid marketing plan is that it helps YOU understand the market in a way that improves decision making.

In terms of investment and money it is not wise to put money where you don't know how to obtain a return. Conducting research helps you find methods of creating value but doesn't often go into how precisely that is going to happen. A thorough business plan will help understand the particulars and reduce the risk of loss.

Common marketing plan sections include.....

  • Section I: Executive Summary
  • Section II: Situation Analysis
    • Background on Organization
    • Market Needs
    • The Market
      • Market Demographics
      • Market Trends
      • Market Growth
      • Macroenvironment
    • The Company
      • Mission
      • Product/Service Offering
      • Positioning
      • SWOTT Summary:
        • Strengths
        • Weaknesses
        • Opportunities
        • Threats
        • Trends
      • Historical Results
    • Competition
      • Direct Competition
      • Indirect Competition
  • Section III: Marketing Strategy
    • Value Proposition
    • Critical Issues
    • Financial Objectives
    • Marketing Objectives
    • Target Market Strategy
    • Messaging
    • Branding
  • Section IV: Marketing Mix
    • Product
    • Pricing
    • Promotion
      • Advertising
      • Promotion
      • Direct Marketing
      • Public Relations
      • Social Media
    • Place
    • Service
    • International Markets
    • Implementation Schedule
  • Section V: Financials
    • Sales Revenue
    • Product Sales Revenue
    • Channel Sales Revenue
    • Profitability
    • Return on investment
    • Break-Even
  • Section VI: Controls
    • Implementation
    • Keys to Success
    • Market Research
    • Contingency Planning
  • Section VII: References
  • Section VIII: Appendices 
  • Section IX: Tables 
  • Section X: Figures 

Looking closely at the categories you will notice the many different aspects of the market covered such as local and/or international markets all the way through to contingency plans. Completing a solid plan will tell you an awful lot about what you should be doing and what you should not be doing. The detail and in-depth investigation will often make the difference between millions of dollars earned and millions of dollars lost!

Sunday, July 14, 2019

Changing Your Business Structure for Online Success

Online businesses and ground based businesses have some similarities but are not the same. One focuses on moving physical products to local customers while the other deals more with information. Depending on the type of business both may utilize physical systems but one conducts most of the transactions online and that naturally adjusts business structure.

Online businesses must utilize outside pay vendors to create their shopping carts and handle online payments effectively. Most of the interactions with people are virtual. No cash, little face-to-face, and lots of shipping.

You will also find that virtual businesses use storage in much the same way as physical businesses but may or may not have these products present. They could be shipping them from a remote Amazon storage facility instead of having them on hand for visiting customers.

If you have a brick-n-mortar business you will need to be realistic about what you want to accomplish. If your businesses is small you may at a minimum require a website with your contact information. Adding product descriptions and e-commerce can make a difference.

Any plan to move online should consider the logistics of your business and who your core customer is. As an example, if you are a neighborhood store being online beyond a simple web page and on Google maps may not be helpful. If you are a large super center you may have additional options.

One of the best ways to determine your online business model is to look at other businesses that have done well. If you are moving online look at businesses that have done the same thing. Starting a new business? Consider being completely online. Design your business for a virtual presence.



Saturday, July 13, 2019

2 Factors that Influence Writing for Online Channels

Keep Your Messages Short and Simple
Advertisement is critical to businesses survival and emerging media impacts the success of marketing campaigns. People believe that the same writing that works within a print advertisement will work equally well with online media. The technology changes the message and thus writing specifically for the channel and its followers is vital for sales success.

There are two major components that we should look to 1. the media limitations and 2. group language. Media has natural limitations on word length and picture size that can impact the overall message. Likewise groups have differences in perceptions that impact their language. Tapping into both will improve your ads substantially.

Have you ever tried to post something on Linked-In and found out part of your message was cut out? The same can be said for Facebook and Twitter. There are limitations and each media type will need a special written advertisement to maximize its benefits.

Not learning how to simplify can be costly as messages are cut off, jumbled on a cell screen or seem too complex to be read quickly. Writing specifically for the abilities and limitations of each media channel can make a big difference in whether someone reads the advertisement and takes some form of action.

Imagine if you are reading a lot of text on an older cell phone. You may just skip right over most of the relevant stuff because of the cost of effort and jump to the easy to comprehend information. You are leaking customers unless you ensure that the information can be easily understood.

Likewise, as the online world becomes increasingly complex people gravitate toward groups that of similar interest. Make sure you understand what language these groups use and in what context. Doing so allows you to look like you have genuine interest in the topic and can speak with some authority to group members.