It started off innocently enough.  Back in the 1980’s when the first Special Economic Zones were established there were only a handful of places you even dared talk about as “consumer markets” in China.

As a modicum of affluence appeared in Shenzhen, Guangzhou, Shanghai and Beijing, companies began making more concerted marketing efforts on a market by market basis.

Deng Xiaoping’s “Southern Tour” in the fall of 1992  unleashed (or ratified) individual efforts across China focused on the pursuit of wealth.  Soon, some people were talking about more markets than they could count on two hands.  Impressive.

Somewhere along the line in the run up to the turn of the century, discussion of “Tiers” emerged to facilitate sharing of information and depth of market penetration.  Where you only spending media in Tier 1?  Was your product showing up in Tier 3?  This was merely shorthand for talking about the big four markets, the other provincial capitals, and the rest.

The problem is that the rest is actually some amalgam of 361 official cities, 2,811 couties, and 34,171 townships.  Over the first decade of this century, some MNC’s were actually seeing their brands reach every corner of the country.  Others were managing points of sale across hundreds of cities.

Despite the blunt tool, business executives were stuck with tiers to discuss their market coverage.  These conversations could be quite frustrating.  We might all agree on Tier 1, and maybe had an 80% overlap for Tier 2, but then your Tier 3 was different from mine.  You had a tier 4, I had a tier 5.

The reocognized disconnect was that each company’s “Tier” definition was different.  And if I needed to create a market expansion plan to grow from 30 markets to 100 markets, which 70 were supposed to be my priority.   Some efforts started to appear that attempted to index all the markets in China by certain economic statistics, but if you’ve ever worked with Chinese economic statistics you know how you felt about that.

Well, I think the new decade is finally bringing around some sound thinking about how to talk about China market coverage without putting up a list of 600 cities:  Clusters.  Most recently advanced rather publicly by McKinsey, the concept was already in practice as executives looked at the total market and preceived newly defined regions that did not adhere to provincial boundries or other traditional market maps.

The cluster approach won’t surprise any practioner.  Afterall, who would ignore a neigboring market that absorbed your media, was easy to distribute to, and spoke the same dialect as your sales team?  Just because it was indexed 40 spots lower?

Talk of Clusters recognized not the indexing of cities, but the interconnectedness of markets that emerged in the wake of rapid infrastructure development, personal car ownership, and the reach of the internet.  Manageable in number (less than 30) these geographicly defined areas offer scalabilty and reach to brands that need efficiency.  Tackling 31 provincial capitals at the same time offers none.

With Clusters, executives can dismiss with talk of cities.  They can focus on reachable populations within defined geographies.  The market becomes manageable again – almost intuitive.  Distribution centers, media spend, and trade marketing investments scale up better.  Focusing on three or four clusters is naturally simpler than focusing on 50 or 75 markets.

Clearly, I’m a fan of clusters.  I recommend you adopt it in China.  Like all good ideas, this one isn’t new, but it sure feels good when you use it in a new location for the first time.

As my colleague Connie wrote last week, analytics can help companies like Capital One, Amazon, and Caesars grow by providing incredibly rich data on how to reach consumers.  These companies, along with a few others, have used their data to better segment consumers, allowing them to offer more targeted offers and product recommendations, which encourages the consumers to buy the products.

But not every company is maximizing their use of data.  One common problem is that individual employees aren’t using the data correctly.  As this quarter’s Executive Guidance says, only 38% of employees are Informed Skeptics, or employees who make good decisions based on data by combining the knowledge gleaned from the data with their own personal judgment.  Instead of balancing the qualitative and quantitative, almost half of employees (43%) trust empirics over their own judgment, while 19% ignore the data.  MLC members, to learn how your employees can become part of the 38% of Informed Skeptics, read the Executive Guidance here. Read More »

In my post about MasterCard’s Plan on a Page, I mentioned that a majority of CEOs say that marketers lack credibility.  This inability to prove their worth particularly hounds marketers when economic downturns force companies to tighten their budgets.

The problem is a “bottom-up” approach.  Marketers spend a lot of time collecting data to show progress against marketing-specific targets.  And  they typically start with data that is easy to track.   But the volume of likes and re-tweets isn’t likely to convince a CFO that money is being well-budgeted. Read More »

I’m in Boston this week attending the Direct Marketing Association’s annual conference, billed as “The Global Event for Real Time Marketers”.  There’s certainly no shortage of hype and hyperbole. My early observation, about four days into the five day conference, is that marketers may be getting a bit ahead of themselves in terms of their ability to evolve in the direction of real-time.

Here’s the cynical interpretation of what is evolving in the marketing space right now.  All this talk of Big Data, smarter commerce and real-time marketing is science fiction for most marketing functions. With some exceptions (high tech, some retailers and some areas of financial services), the marketing ecosystem in which we operate isn’t structured to support real-time, hyper-targeted, Big Data-driven marketing.  It’s still 5-10 years off.

And the hype around all of this is being driven by an unholy trinity of bankers/VCs, the entrepreneurs in social, mobile, and location tech they represent, and vendors selling data and analytics solutions.  It’s not a conspiracy at all – it’s just that each of these parties have huge financial incentives to drive the hype.  And so they do.

But consider the barriers facing a typical large enterprise marketing organization that wants to achieve the vision of real time, data-driven marketing laid out by the unholy trinity: Read More »

Clear, aligned, succinct – not the words typically associated with marketing plans.  In fact, 57% of MLC members think strategic planning is the marketing activity with the greatest chance for improvement.

Marketing plans are often 20 to 100 page documents that cover every team’s goals and strategies, from the promotions team to the social media team.   Though comprehensive, these longwinded plans are too confusing to help individuals understand how their goals align with those of the broader organization.  Without alignment, marketers cannot create results, even when all the right elements are in place.

To tackle this problem, Marketing at MasterCard ruthlessly streamlined its annual marketing plan to one single page – the “Plan on a Page.”  MLC members, see an example of a completed Plan on a Page here or download this customizable marketing plan template.

Keep it sweet and simple.

We took a look at how MasterCard built their “Plan on a Page.”  A sampling of the Plan’s key traits:

Simplicity –the single-page rule limits the plan to the few goals that matter most.

Clarity – the plan links day-to-day tactics to high-level strategies (to help marketers understand how to achieve strategic goals).

Measurability – each goal, strategy, and tactic is tied to a clear measure of success.

The “Plan on a Page” not only saves planning time but also improves cross-functional understanding and alignment around strategic goals.  It also lends legitimacy and discipline to the marketing division, which is great because 73% of CEOs say marketers lack credibility!

All of that makes this simple marketing plan pretty sweet.

MLC members, read more about how a “Plan on a Page” can help marketing deliver greater bottom-line value.

By Ana Lapter

Businesses are once again in the mood to grow revenues.  Unlike the pre-recession era, the source of growth, however, will no longer come from streamlining and automating processes, or from adopting systems for better management of structured data.  Since the majority of businesses have been improving processes and data management for some time, there aren’t too many gains to be had there.  Rather, the next era of growth will likely come from from understanding changing customer preferences and acting quickly on those insights.  In other words, your company needs to get smarter about using information, as compared to processes, to more effectively drive customer insight and quickly translate that knowledge into usable plans and strategies.

It’s not that organizations don’t have this data; you do. But the problem is how to effectively use all the information that companies gather about markets and customer preferences.  Over the past few weeks, I heard the words “analytics” and “customer insight” in separate conversations with eight senior marketers, while discussing the key analytic competencies that their teams need to strengthen or develop to move forward.

Here is my list of things to avoid when building an analytics-driven Marketing organization: Read More »

Over the past few years, marketers been faced with a seemingly exponentially-increasing set of information channels through which to communicate.  Every day a new website or social network or mobile app seems to pop-up, leaving marketers scrambling to figure out if they need a presence on it.  This change has been a bit slower for B2Bs who have largely been able to stick with more traditional channels…for now.  But we all know this won’t last forever and B2Bs will have to reconsider and reconfigure their own marketing mixes to include new sources.

As part of our B2B research this year, we surveyed over 2,000 B2B customers across a wide range of industries.  A major part of this study was the channels these customers use and are influenced by when researching business purchases.  Not surprisingly, the sales conversation and the supplier website were the two most influential sources.

More interesting to us was how the various channels grouped together when we plotted them in a 2 x 2 matrix with influence on the vertical axis and variability of influence on the horizontal (see below).  For those who aren’t familiar, variability or variance is a measure of how far a set of numbers are spread out from each other.  So two sources might both rank a “6” in terms of influence, but Source A may get that score because everyone rated it a 4, 5, or 6 in equal measure (low variance), whereas Source B may get that score because some people rated it a 2 and some people rated it an 8 (high variance).  This suggests that some suppliers use Source B really well and others really poorly.

You see three clumps of channels in the matrix:

Emerging: Circled in green, these are newer sources that haven’t yet hit the mainstream.  They currently have low influence and low variability because very few B2Bs are using them at all.  While this is good news for some B2Bs who are worried that they haven’t yet figure out social media, it also suggests the chance for first mover advantage.  Do something truly innovative with social media or blogs and you can own the space as the definitive source.

Tried-But-Not-True:  Circled in tan are three very traditional marketing channels with low-to-medium influence and variability.  These channels have been around for a long time and are used by virtually every supplier – yet it seems no one is employing them with much success.  Customers generally don’t rate them very highly, perhaps suggesting it is time to shift some resources away from these channels (or at least relegate them to pure awareness-building tools).

Opportunity: Highlighted in the blue oval, this group is a mix some newer channels with some more traditional ones.  Characterized by medium-to-high influence and high variability, these sources are ones that many suppliers are using well, but many are not leveraging to their full potential.  Note the interactive/conversational nature of many of these channels.  Additional resources here could net big returns.

At this point, this data is more food for thought than justification for a total marketing mix overhaul, but hopefully it can provide some guidance to B2Bs trying to figure out which channels they should prioritize.  One caveat, so far, we haven’t found much in the data about the impact of channels on any critical post-purchase outcomes (i.e. those who do research in a particular channel or set of channels are no more or less satisfied or likely to recommend than anyone else).  Ultimately, it is more what you say than where you say it.  But in a few years the dynamic might be different.

MLC members, want to learn more about the research that led us to these results and, more importantly, the innovative practices the Council has uncovered to help you solve the most pressing B2B Marketing challenges?  Register for our Annual Executive Retreat, “Responding to Heightened B2B Customer Uncertainty.”

Consider the following two vignettes:

• In the book “Winning,” Jack Welch describes a tactic he used at GE to force himself to always enter a business situation with a fresh perspective.  Every time he travelled, he got off the plane imagining that the Jack Welch of yesterday had had no idea what he had been doing.  He felt that this ritual of taking a critical eye to past decisions helped him enter every situation as an opportunity for improvement.

• In a recent issue of Bloomberg Businessweek, Laura J. Soave, a marketing executive at Fiat discussed details of Fiat’s ‘Return to North America’ marketing launch, adding that “My ultimate goal would be not to spend one dollar in traditional advertising.”  Instead, she says that she will focus on social media and other grassroots approaches to target likely buyers.

Now, consider the following:  If you were starting the marketing function within your business today, how would you choose to allocate your media mix?  In other words, if you had a zero-based planning process (rather than one based on the previous year’s plans), what would you choose to spend your money on? Read More »

Running a brand campaign, specifically on TV and outdoor, can greatly benefit an organization if done right. So how do marketing teams measure whether the money spent on the ad campaign was worth it? One executive poses this question in MLC’s Marketing Org & Ops Forum, asking “How can we best measure the ROI and what metrics are normally used to measure the brand campaign success, internally and externally?” Read More »

Do you feel like the biggest change to your 2011 marketing plan is changing the title from “Marketing Plan – 2010” to “Marketing Plan – 2011”?

While you might not exactly be “carbon copying” your previous plan, determining which elements to include in your plan, as well as how to ensure you’re planning around your customer, your products, and your partners requires huge effort and a significant amount of experience and knowledge. Each step of the process requires a comprehensive understanding of various marketing concepts and tools to ensure the strongest possible marketing plan. Read More »