What is Marketing?

In previous blog entries, I have discussed at length the modern definition of marketing.  However, I still feel that many SME’s still don’t get it.  They still see marketing as a subsidiary of sales or as only the management of promotional activity.  Worse, I still see many advertisements for marketing jobs which expect marketing professionals to be experts in graphic design or website management.

I decided to look at a few university websites to see the course content of their marketing courses.  What I saw on the university sites were course syllabuses containing marketing theory and management practice.  Not one course included modules or subject streams on graphic design or web management.

The conclusion is simple, if you need a professional graphic designer, advertise for a graphic designer.  If you need a website technician, advertise for a website technician.  Do not expect a marketing graduate to have such professional expertise.

Another common feature of marketing job advertisements is the prominence of social media management.

Now, social media is no doubt an important part of a firm’s promotional mix.  However, it seems that many businesses view it as a cheap option for their promotional activity.

social media is not a cheap option.  It is a promotional channel like any other and requires a similar amount of effort and resources.  In fact it could require additional resources to provide the same outcomes as other, more traditional marketing channels.

The jury is still out on the effectiveness of social media as a sales channel.  Some firms may feel they are getting good results but there has been little research done to measure social media’s effectiveness as a sales channel.  What marketers do know is that social media can help your website become ‘sticky’.  It can help as a signpost to your website, it can generate electronic word of mouth and it is a useful tool for developing brand advocates.  However, there is little evidence to show that it is a more effective channel than traditional promotional strategies.

One thing marketing is not is the generation of propaganda.  This week, the UK Conservative Party released three promotional messages.  One relating to the extension of the plastic bag levy to small shops; a second regarding the banning of charges for consumer credit; and a third relating to manufacturing output.

The first two messages passed off the policies as Conservative Party policy.  In truth they were the implementation of EU directives.

The third message stated, in a congratulatory manner that UK manufacturing output had passed 2008 levels.

For me this message caused significant cognitive dissonance.  In the normal run of things, UK manufacturing output in 2018 should be far higher than in 2008.  New technology alone should have meant an increase in manufacturing output compared to 2008.   There are indications that rather than investing in new equipment and additional capacity, UK firms are holding cash at bank: building a safety net to see them through post-Brexit turbulence. What the message actually indicated was that UK manufacturing had suffered a lost decade.

The Conservative message also took the manufacturing figures in isolation.  When you look at the UK economy in a wider perspective, there are still some worrying statistics.

The UK construction industry is effectively in recession and last year saw a 3.6% reduction in output.  Carillion, the UK’s largest civil engineering and public service outsourcing firm is in serious financial trouble.  There are rumours that it may enter administration tomorrow if a deal cannot be agreed with its pension fund and creditors.

Many UK retailers have reported poor trading figures over the Christmas period.  House of Fraser, for example, is talking to its landlords about reducing store rents.  Other firms such as Argos have struggled in what should be their strongest sales period.

Consumer debt is also rising.  Household debt has now passed pre-credit crunch levels and the Bank of England has told banks to tighten lending requirements.  Inflation is increasing whilst wages are stagnating.

UK exports have risen since the EU referendum predominantly due to the fall in the value of the pound.  However, the cost of raw materials has risen dramatically. At one point factory gate inflation was running at 18% where commodities were traded in US dollars.  Part of the reason CPI is rising is that many manufacturers are having to pass that factory gate inflation on to domestic UK consumers.

The UK government has been careful to prioritise statistics relating to the volume of exports not the level of earnings from those exports.  I strongly suspect that UK firms may be selling more abroad but that their earnings from those exports has not grown.

it will be interesting to see if the modest rise in the pounds value in recent weeks impacts export growth as British goods become more expensive abroad.

Many Brexit supporters point to the rise in the pound and the value of stock exchanges as signs that the impact of leaving the EU are being overstated.  However, there are other reasons that have caused these effects.

The first is that the US bond market is currently a bear market.  Investors are switching their strategy from government bonds to shares.  The second reason is that the dollar is lower than it should be and the cause of that is Donald Trump.

Trump has two major economic policies, the lowering of tax rates and vastly increased infrastructure spending.  These two policies conflict with one another.

Much of America’s infrastructure is in dire need of renovation or replacement.  For example, nearly all of America’s dams are long past their expected life span.  To increase infrastructure spending trump needs additional federal income.  Big tax cuts are not going to provide that additional income.  Trump will have to significantly increase the level of US government borrowing to carry out his proposed infrastructure projects.

Higher government borrowing means lower bond yields and as a result constrains the value of the dollar. Hence the bull market in shares.  There is a real risk that stock market levels are a bubble; and bubbles burst.  There is a real risk the bull may become a bear.

So, given the above factors, the promotional messages from the Conservative Party are political propaganda not marketing messages.

So if marketing is not the dissemination of ‘propaganda’, what is it?

Marketing is not advertising, it is not web or graphic design.  Marketing is the development of a consumer focus throughout all aspects of your business from product design to after-sales service.

In previous entries, I have shown how, over the last century, manufacturing has moved from a product focus, to a sales focus, to a consumer focus.  How business went from concentrating on manufacturing as many goods as possible; to a prominence on selling as many goods as possible; to a modern focus on satisfying the needs and desires of target customer groups.  Modern marketing is the last of these.  It is not a subset of sales or advertising; it is the development of corporate strategies and should be at the centre of your corporate planning.

Some academics have complained that putting marketing at the centre of business planning is little more than an ideology; that marketing constrains innovation and that it leads to dullness.  I suspect that such views come from studies of firms that aren’t doing it right.

Surely the aim of any business is to maximise income and to survive in the longer term.  If you are producing goods and services that people don’t want, neither of those goals will be achieved.  By putting the expectations of your consumers at the centre of your planning, you are more likely to meet those goals.

Look at the number of proposals on Dragon’s Den that are rejected because the entrepreneur has not considered the expectations of prospective customers?  How many are told the dragons will not invest as they see no market for the product.

Those stating that marketing is a source of dullness infer that the use of market research in planning leads to copycat products and dull marketing campaigns.  But that is marketing done badly.  Good marketing is looking for difference; not copying your competitors and attacking head on but finding strategic gaps and exploiting them.

Done properly, marketing should torment and tantalise the intended target segment and as a result create insatiable desire.

In response to those advocating consumer focus as producing dullness, the concept of retro marketing was developed.  This concentrates on four elements:

  1. Create exclusivity:  Hold product back and delay consumer gratification e.g. Apple watches exclusive deal with EE.
  2. Create secrecy:  Use teaser advertisements and hold back information e.g. The Harry Potter series of books held back titles and cover artwork until the day of launch.
  3. Amplification:  Get consumers talking about your product e.g. Cadbury’s drumming gorilla
  4. Entertainment:  Create a sense of fun
  5. Tricksterisation:  Use panache and audacity e.g.  Britvic used advertisements which looked like public information films.  Then a big orange man jumped out and slapped the subject of the film with the tag line, “You’ve been tangoed”.

Using such tactics, the motivation to use ‘Me Too’, copycat promotional strategies can be avoided.  That is true marketing.

 

 

 

Brand language and communications

Increasingly promotional activity and communicating brand messages is not a verbal medium; it is a visual medium.  The requirement to create visual messages; combined with the ever-shortening attention spans of viewers; makes promotional advertising and the communication of brand messages more difficult.  Consumers are bombarded with commercial messages.

This means that if you are to successfully communicate your brand message, you must carve out a distinct territory.  A unique and successful brand message does not appear out of thin air.

Creating brand territory is not as simple as just repeating the same phrases over and over again.  It is the development of a brand language which expresses your corporate ideology.  It is a favourite practice of politicians to come up with a single phrase which encapsulates their whole campaign; for example Donald Trump’s ‘Make America Great Again’, Theresa May’s ‘Strong and Stable’ or Tony Blair’s, ‘Education, Education, Education’.  Politicians are trying to create a shorthand which uses a single phase to draw the attention of the widest possible electorate.  However, for a commercial branding strategy, such shorthand leads to excessive repetition which can clog up the brand message.

Often there is such an urge to create an image of unity and common spirit in a brand message across different campaigns that brand messages become a code.  Code is artificial language.  it isn’t human or natural.  When creating a brand message you want to communicate personality, your culture and your brand values.  You want to announce products in a way which charms customers.  If you resort to a shorthand, impersonal code, these factors are missing.

Rather than creating a code, you need to build a glossary of terms which apply to your brand.  Such a glossary helps decentralise your message whilst keeping your chosen language within your identified brand prism.

The process is similar to the creation of the style guides used by newspapers and other publications.  The style guide for The Economist runs to over three hundred pages and the Yahoo style guide is even longer.  These documents specify the agreed spelling of certain words, page layout and appropriate punctuation.  They define how these publications look on the page.

A brand charter, or expression guide, the promotional equivalent of a journalistic style guide.  They will include agreed phrases and even where on a page the brand name and logo are located but they will also specify the dominant features of style such as colours used, text fonts and image requirements.  For internet and television promotions they will show agreed gestures and jingles.  Graphic layouts and narrative structure codes will be included.  Think of a Coca Cola television of cinema advert, they will nearly always show someone drinking from the traditional glass Coca-Cola bottle (the bottle shape is a registered trademark) even though the majority of Coca Cola sales are now either in metal cans or plastic bottles.

In mature markets advertising is a challenge. There are no guaranteed results and often defined goals are not easily measurable.  Such goals are not SMART (Specific, Measurable, Achievable, Realistic or Time Bound).

As a result many brands are switching away from traditional advertising forms and mediums.  For example the wine brand Jacob’s Creek has stopped using traditional television advertising and instead has switched to the sponsorship of television programmes.  Jacob’s Creek was built on an award-winning product, in-store promotions, support to the retail and distribution trade and customer tasting sessions at the point of sale.  The switch from traditional television advertising to programme sponsorship is a better match top the brand image and ideology.  Another tactic being employed by Jacob’s Creek and other brands is the increased use of product placement in films.

For top of the range brands, a common branding tactic is an association with opinion leaders.  For example, eBay is arguably the most successful internet sales and auction site.  eBay’s position was not built on television advertising (although recently they have started to use that promotional channel).  EBay developed its brand position through the use of online referral and public relations.

There is an old maxim: “Half of my advertising budget is wasted but I don’t know which half”.  Statement is nonsense.  Wasted promotional activity is easy to identify.  It is advertising activity which:

  • Is not sufficiently creative and individual
  • Which misses its target audience
  • or which is shown where the promoted product is not on sale.

Of these three reasons, the first is the most important.

Often, the failure of promotional campaigns is blamed on the advertising agency.  However, the client employing the agency can be equally at fault.  often promotional campaigns fail because the specification provided to the agency is not clear in identifying the required brand message of the goals to be achieved.  Often the fault is the quality of the brief, not the quality of the agency.

Brand propositions must be incisive.  They cannot be bland.  it is unlikely that even the most creative advertising agencies can transform a bland brief. A promotional brief that is full of statistics and has a dearth of actionable ideas is likely to fail.

You must radicalise your advertising targets.  Your brief shouldn’t just describe your target customers, it should reflect them.  Your promotional messages should be given through radical characters not plain people.  For many years Cillit Bang was advertised using a fictional character ‘Barry Scott’.  Barry became as famous as the product.  Many thought him to be a real person and not an actor playing a part.  The Barry Scott character was carefully designed to reflect the ideal consumer of the brand and to exaggerate defined characteristics.

After using the character for many years, Barry was dropped from Cillit Bang’s advertising and there was a distinct fall in sales.  So much so, the character was brought back and once again fronts their advertising.

Creative and radicalised promotions are difficult for brands which consumers have known all their lives.  Oxo has recently reverted to having a OXO family, a promotional strategy it first used in the 1970s.  However some mature and established brands do manage to present radicalised messages.  One need only think of the Cadbury Dairy Milk promotion with the drumming gorilla.

If you are looking to promote a brand over the long-term or to reinvigorate a mature brand, it is important to present a radicalised message and the development of a comprehensive brand charter.

The psychology of marketing communications

Over the years, psychologists and researchers have carried out numerous studies into how advertising works.  All recognised that for a marketing message to work, it must be meaningful to its recipients.  Messages must be targeted at the right audience; be capable of gaining their attention; be understandable; be relevant; and be acceptable.

With this in mind, researchers set out to develop an agreed model of the advertising process.  Unfortunately, no single model has been agreed and there are a number of  theories which compete to have prominence.

Petty and Cacioppo (1983) developed the elaboration likelihood model which has helped to explain how cognitive processing, persuasion and attitude change occur when different levels of audience involvement are present.  Elaboration refers to the extent that the recipient has to develop and refine the information they receive for decision-making to occur.  If the message recipient is highly motivated or has a high level of ability to process the information, elaboration is said to be high.  If the recipient’s ability to process information is poor or their motivation is weak, elaboration is said to be low.

Thus the ELM model identifies two cognitive processes in the minds of recipients; a central route where the recipient is active and involved and a peripheral route where the recipient is passive and unengaged.

With the central route, a message will persuade using the quality of the argument proposed.  For example, when you buy a house or a car, you will be highly involved. In such a situation consumers would be expected to read brochures and reviews prior to purchase.  They may want an opportunity to try out the product e.g. a test drive of a car.

Under the peripheral route, the recipient should not be expected to process complicated information or to engage in significant cognitive processing.  Communications using the peripheral route should use cues to attract the attention of recipients.

Peripheral cues could involve the use of a celebrity to advertise products.  For example, Walker’s use of Gary Lineker to sell their crisps or Nespresso using George Clooney to advertise their coffee machines.  The aim is that when consumers see Lineker, they think crisps; they see Clooney, they think coffee.

In high involvement transactions the presence of a celebrity is at best of minor significance to the consumer’s decision to purchase.

So the first decision of an advertiser is to choose a form of promotion which matches the level of cognitive processing expected of consumers.

An advertisement which seemed to break the rules of the ELM model was Jaguar’s use of Tom Huddleston, Sir Ben Kingsley and Mark Strong to advertise their cars.  Purchasing a car is a highly involved process, clearly using these celebrities would have little impact in the consumer’s decision to purchase a Jag.

Competing with the ELM model are eclectic models of advertising.  Four eclectic models have been developed each of which has a digital and an analogue component.  These four models represent the four key ways in which advertising works.

  1.  The Persuasive Framework – Analogue – this framework assumes that advertising works rationally and that a ‘brand works harder for you’.  This framework assumes that consumers purchase items using a rational sequential decision-making process such as AIDA (Awareness, Interest, Desire, Action).  Consumers are persuaded to purchase through the development of unique selling propositions (USPs).  The persuasive framework is used heavily in the promotion of blockbuster movies.  Studios raise awareness of coming releases by using press interviews, film festivals and conventions.  They create interest by releasing videos of stars on location filming and through releasing teaser trailers.  They create desire through the release of longer trailers, star-studded premieres and star interviews.  Finally they issue a call to action through television advertising which encourages consumers to book cinema seats in the weeks before a film is released.  The onset of digital media has added a further element to the persuasive framework; that of encouraging consumers to search for further information e.g. the use of scanning codes in advertisements, e.g. Shazam, so that if the consumer scans the advertisement with their mobile phone, they are directed to the products website.
  2. The Involvement Framework – Analogue – Involvement-based advertisements work by drawing the audience into the product by eliciting emotional forms of engagement. A consumer’s passage to the brand occurs because ‘it means more to them’.  This could involve the use of shared values, aspirational values or by personalisation the brand e.g. the use of celebrities.  The digital element of the involvement framework encourages people to play.  This is about content creation and giving the impression that consumers are helping to control the brand.  So Brompton Bikes allow consumers to effectively design their own folding bicycle by offering 1200 different product options which can be combined to individualise their cycles.  The involvement digital framework also includes opportunities such as blogs, social media and crowd-sourcing.
  3. The Salience Framework – Analogue – This part of the model relies on advertisements being different and therefore standing out from that of competitors. There is a danger that being too different can actually put consumers off.  For example, some consumers are put off by the Go Compare advertisements (with the fat tenor) because they find them annoying. The Digital element of the salience framework is to attempt to create viral content which is shared and discussed by consumers.
  4. The Sales Promotion Framework – This element only has an Analogue element and works in that consumers believe that they will be rewarded by their purchase. Advertisements are aimed at generating sales and shifting product.  Sales promotion advertisements are invitations to consumers to engage in price promotions or to get additional benefits (e.g. free servicing on a car).

Jones, Macdonald and Ehrenberg (1991) advocate a strong and weak theory of advertising.

The strong theory of advertising assumes that messages work in that they are capable of affecting a degree of change in the knowledge, attitudes, beliefs and behaviours of consumers.  This theory argues that advertising can persuade a consumer to buy a product which they have never previously purchased and that long-run purchasing behaviour can be developed.  The strong theory operates through the use of psychological techniques which alter the behaviour of passive consumers.  Often this involves a hierarchy of effects model.

Increasingly, academics looking at the psychological effects of advertising are finding that the strong theory of advertising does not reflect consumer practice – despite the fact that it is so prevalent in modern advertising practice.  Ehrenberg (1997) argues that consumer purchasing works on the basis of an Awareness – Trial – Reinforcement framework.  That for a consumer to purchase, they must be aware of he product, to repeat purchase they must have tried the product and that to get them to continually purchase you must reinforce the consumer’s decision to purchase.  In recent years, a further step has been added to this model: Nudge.  This is the use of cues to nudge consumers into a certain form of activity.  One nudge example is the promotion of Five a Day, the government programme to encourage consumers to eat five portions of fruit and vegetables a day to increase the amount of roughage they consume.  Therefore for nudge to work, advertisements should increase the level of reinforcement to get habitual consumers to increase their consumption.

This is the Weak Theory of Advertising.  it agrees with the strong theory that advertising is capable of improving people’s knowledge of products.  However the weak theory argues that consumers are not passive and only respond to advertisements where they have some prior knowledge of the product.  Consumers need to have some awareness of a products characteristics before they respond to advertising.  Therefore that amount of information which is actually communicated is limited.  There simply isn’t enough time in the standard television advertisement (lasting roughly 30 seconds) to impart lots of information.  For example, who actually reads the statutory small print in a television advertisement for unsecured loans?

As the time allotted to such advertising is short; and because consumers can switch off their cognitive ability to import information; advertising should be used to reinforce existing attitudes.

Those advocating the weak theory of advertising argue that the strong theory is wrong to assume that consumers are passive.  Under the weak theory, consumers should be treated as active participants in the message and that they are capable of high levels of cognitive processing.  They argue that the strong theory of advertising assumes consumers are unintelligent and apathetic.

As you can see, there are a number of competing psychological theories as to how advertising works in the minds of consumers.  I think the most prominent thing to take out of this research is that you must match your promotional activity to the type of product you are trying to sell.  If you are selling cars of mortgages, a focus on technical specifications may be appropriate, the use of a film star to promote them may be a waste of time and money.  If you are selling snack foods or leisure goods, you need advertising which is either fun or glamorous.