Regardless of your position in the marketplace; whether you are a market leader, a follower, a challenger or a niche marketer; you need to recognise that over time successful marketing strategies begin to wear out and will need to be replaced. They will lose impact.
It is imperative that you continually adapt your strategy to meet new competitive challenges and to match shifting consumer needs. Many extremely successful brands, from Kodak to House of Fraser have suffered from over-reliance on their long-standing strategies ignoring the fact that the consumer base has moved on to other new, sparkling concepts.
House of Fraser maintained a department store model based on concessions whilst the fashion brands they relied upon built direct selling through websites and brand-specific stores.
Kodak, despite inventing the digital image sensor, failed to invest in the digital camera and continued to invest heavily in 35 millimetre colour film.
Blockbuster video tried to retain the model of DVD and cassette rental in an age of downloads and Netflix. Similarly HMV, which has failed twice, ignored the rise of music streaming services such as Spotify and iTunes.
Often management are unwilling to change what they see as successful strategies. They only see the need to change when it is already too late.
The following effects can contribute to strategic wear out:
- Changes to market structure
- The entry and exit of competitors from the market
- Changes in your competitors’ strategic positions
- Competitive innovations
- Changes in consumer expectations
- Changes in the macro and micro economy
- Changes in legislation
- Technological change – including change which at first appears unrelated to your market
- Changes to distribution and supply channels
- Lack of internal investment
- Poor cost control
- A tired or uncertain management philosophy.
Perhaps one reason that businesses hold on to outdated marketing strategies is that the process of creating new ones can be painful. Managers may feel the move away from tired and trusted methods is a black mark against their personal record. Often, changes to marketing strategy can only be achieved through a change in personnel at board level.
However, there is a law of marketing gravity. Regardless of how big or powerful an organisation is in the marketplace, sooner or later its marketing programme will decline. Marketing gravity is entropy, that all things break down and become dust.
Four principles are often evident in firms retaining outdated marketing philosophies and strategies:
- Marketing Myopia: That you ignore the impact of your actions on your brand. You apply the rules of marketing whilst ignoring the spirit of marketing. So marketing planning becomes an annual chore. Marketing is only a sales support activity. This is the decision by British Airways to redesign the tailfin of their aircraft in an attempt to be more exclusive and ‘international’; the redesign blurred BA’s distinctive image as a national flag carrier and by trying to focus on only high end and executive customers, they restricted the size of their potential market limiting earning potential.
- Marketing Arrogance: You ignore the effect of your actions on your brand. This is the attitude of Gerald Ratner when he may a supposedly humorous after dinner speech about the jewellery sold in his shops being ‘crap’; a speech which hugely damaged the Ratner’s/H Samuel brand. This is the manager who operates on hunches and that they know what the customer wants without carrying out any research or analysis.
- Marketing Hubris: This is believing in your own PR to the detriment of your brand. Microsoft believe it could operate free from the constraints of other brands. Richard Branson used to believe Virgin could ignore traditional strategic planning and could do things differently. Both Microsoft and Virgin have reversed these positions. Branson now says that the strategic planning process is crucial and central to the success of his brand.
- Marketing Silliness: This is putting common sense aside in an attempt at being creative. We all see TV advertising which is glossy, has startling imagery and artistic flair; but when we are asked what the product or service on offer is, we cannot identify it.
It is also the case that ‘dead cats only bounce once’. Once a strategy has worn out, you will likely only get one attempt to revive it and gain lost market position. if that attempt fails, your market share and position will drop dramatically. We live at a time where many traditional high street retailers are facing oblivion as the internet and home delivery services drive down margins. To respond, these retailers need to focus on strategies which create unique value for consumers. Increasingly, to get footfall, these firms will need to create experience beyond that of traditional high street shopping. Too many of these retailers are relying on consumer inertia or consumer ignorance. An example is high street banks and utilities firms which often only rely on consumers reluctance to switch to other providers; expecting that consumers will stick with what they know rather than try the new.
You cannot simply stick with what has worked in the past. The future will be different.
You cannot stand still. You must always look for the next strategic step. Break away from the past and create strategies for the future.