Thought Leader

The Parable of the Three Stonecutters

2017-04-08T03:01:00.000-07:00

The idea of leadership is often related to management roles or senior positions. The thinking is management training, and postgraduate qualifications can help acquiring leadership qualities. In fact, many MBA programmes are promoted that way. The curricula taught in these courses are developed around administrative tasks and business processes. It is true learning them will help in running a business or heading a section, but will not make you a leader.

The notion of a leader is the same as that of a shepherd. A shepherd, almost always, is mentioned in the context of looking after his or her sheep. We often refer to ‘the shepherd leading the sheep’ or ‘the sheep following the shepherd’. Likewise, a leader is one who has “followers”. If one claims to be a leader, the obvious question to ask is ‘who are you leading’ or ‘who is following you’.

Social media websites have modelled the idea of leadership. For example, your Twitter account offers a simple indication of leadership in the number of “followers” and “followings” you have. The number of friends on Facebook seems to give people a sense of connectedness until that becomes ridiculously large like 500 and 800 friends. If you had initiated the majority of friends on Facebook, which is somewhat the natural thing to do but you are merely following others.

As you can see, leadership is a trait that is evident in the way we deal with others. When people who lack this quality take up leadership or management roles, they become taskmasters and box-tickers. Let me explain how to spot a leader with my rendition of the parable of the three stonecutters, popularised by Peter Drucker. A famous builder built a palace for a king with cut stones. The king liked his work so much that he wanted all the official building to have the cut stone finish. The builder received more contracts from the king and his business flourished. He wanted to appoint one of the stonecutters to oversee the rest. He got a friend to help him find the right stonecutter. The friend went to the site and came across the first stonecutter and asked, “what are you do?”. The first stonecutter said, “I am cutting this stone” point to the stone in his hand. The friend replied, “I can see that, and you are doing a good job”. After a space of silence, not able to get anything more, the friend carried on to the next stone-cutter working a short distance away. He asked the second stonecutter, “what are you doing?” The second stonecutter replied saying, “I am earning my wage for the day”. The friend replied, “Oh, I see” which started the second stonecutter off ranting and raving about his work and family. At the least, the friend learnt something about this stonecutter. The friend carried on looking for the next stonecutter. On seeing the third stonecutter, he went up to him and asked, the same question, “what are you doing?”. The third stonecutter replied without taking his eyes off the stone he was working on, “building a castle”. Having heard a rather different answer from the previous two stonecutters, the friend asked, “what do you mean?”. The third stonecutter placed the tool down, with glee replied, “Our King deserves a castle and the best one in the world. We will fly our flag over the castle, and that will make us proud of our king and land”. The decision was obvious; the third stonecutter was made the head of the stonecutters.

The third stonecutter was made the head because he had the big picture before him. He was passionate and interested in the well-being of others. What differentiated him from the rest was his outlook. A simple question “what are you doing?” identified the leadership trait in him. The second stonecutter was self-centred, none would want to follow him. The first stonecutter knew his job well but was short-sighted as far as the big picture was concerned, perhaps he would be a good player to have on the team. In life, we come across all three types of stonecutters taking up leadership positions. Imagine having each of them as your boss. The first stonecutter would be a taskmaster, focused on ticking boxes. Working for him will be stressful. The second will be toxic to the environment – find a new job. If you have the third stonecutter as the boss, every day will be a pleasure going to work.

Next time at work, ask yourself “what are you doing?” to find out whether you are cut-out to be a leader.

Reliability and Validity - What are they?

2014-07-27T20:07:00.000-07:00

Two fundamental virtues to look for when using information in making decisions - they are reliability and validity. Both are closely related yet different in what they represent. Here is a simple explanation of the two using a common example

Consider a weighing machine that a doctor uses to weigh patients to decide the dosage of medicine to prescribe. The doctor needs the scale to record the exact weight every time patients stand on it. Let’s assume the scale sometimes registers weights that are less than the actual weight of patients and at other occasions more than the real weight, perhaps because of not being calibrated to start at 0 Kg each time it is used. A patient seeing the doctors at two different times would have two weights recorded on the scale. You can see how the scale can mislead the decisions the doctor makes concerning dosages for this patient. The scale is consistently failing to measure the correct weight of this patient. Once the doctor is aware of that, he or she would discard the scale, knowing it is no longer reliable. Reliability, therefore, is about consistency to record the exact measurement every time the scale is used.

Validity relates, to the measurement being what it is meant to be. In the case of the example used here, validity is recording the actual weight of the patient standing on the machine. The doctor on recognising the lack of calibration in the scale ensures the scale started at 0 Kg the next time it is used. Assuming all other things are working as they should, the scale would record weight that is valid. It can happen that the scale is off by 5 kg every time it is used, perhaps because of the spring not positioned correctly. The scale consistently produced the same weight each time the patient stands on it but is off by 5 kg. You can see the scale appears to be reliably but the weight recorded is not valid. Thus having reliability does not ensure validity to be assumed, they need to be separately established.

Tool kit for examining reliability and validity

It is up to individuals to be fully satisfied with reliability and validity before relying on the information. Without being too scientific, reliability and validity can be assumed when similar results can be obtained from different sources within a given time frame. Below are few questions to ask when examining reliability and validity, particularly when the information is from a small group of individuals as in the case of surveys, website visitors or customers who fill in a satisfaction form. The providers of the information must provide answers to all the questions and individuals must be satisfied with the answers. To help know if the answers are satisfactory, the nature of the answers deemed acceptable when it comes to reliability and validity is mentions against each question.

What is the margin of error reported? The margin of error places a range around the figure or estimate. A narrow range is indicative of precision. As the range gets wider, the precision becomes fuzzy, which should raise concerns.
What is the sampling technique used? The sample technique needs to be probability-based to allow generalisation of the findings.
What is the sample size? Results based on small samples (perhaps less than 500) should be treated with caution, particularly when results are reported for subgroups.
What is the sampling frame used to draw the sample? The sampling frame must relate to the target population of interest.
What is the methodology used? The methodology must support probability based sampling techniques.
How representative is the sample to the population? The results must include a demographic makeup of the sample, showing comparison to the standards such as the Census data.
What is the response rate? A low response rate is indicative of poorly conceived methodology been used.
How credible is the source? Assess the reputation of the organisation responsible for the information.
What is the wording of the question used to collect the information in the case of surveys? Question working must be established through scientific investigation.

What makes you happy? Implication for individuals and policy makers

2014-03-23T18:22:00.001-07:00

There is a general acceptance that “wellbeing” is a more comprehensive indicator of progress than traditionally used economic indicators. The challenge however is to estimate wellbeing in a precise manner. One approach is to ask people how happy they are (“Taken all together, how would you say things are these days? Would you say that you are very happy, pretty happy, or not too happy?”). The assumption that “happiness is well being” set me on a path to investigate “happiness”. This research was carried out in collaboration with 3Di, a leading digital advertising sales network that operates one of the largest permission database in New Zealand. Over 1200 people from the 3Di's permission database were approached and asked to describe happiness in one word. They were then asked to state the three most important things that contributed to happiness.

Prior to discussing the results, I would like to add a note on the methodology that was used to collect the data. It is true that describing something like happiness in one word is difficult. However, the regular use of search engines to find information on the World Wide Web has trained us to do just that, that is, to come up with a word or set of words to convey what we want. After few tries we are successful in entering the precise word or set of words that gets us what we want. A similar approach was used in this study and almost everyone answered the question without any difficulty. Considering the range and nature of words collected it appears that they were based on the respondents’ personal context.

The top five descriptors of “Happiness” were contentment, family, satisfaction, love and peace (see in the Word Cloud 1). The word “wellbeing” was mentioned but very few times in comparison to the top five ones.

Word Cloud 1: Describe happiness in one word

Four of the words (contentment, satisfaction, love and peace) are abstract in nature; in contrast, family is a concrete entity. In considering the top five words together, it could be argued that “family” was the context for the four abstract entities. Thus it appears for many in New Zealand, happiness is centred on their family. This was confirmed in the responses given for the three most important things that contributed to happiness (see in Word Cloud 2).

Respondents were asked to indicate three most important things that contributed to happiness. The responses were ranked by its frequency to produce three lists corresponding to the three most important things. In the first list family and health ranked first and second. The remaining responses were emotions that are generally associated with happiness (see in Word Cloud 2). In considering family and health alongside the emotional variables, the implicit suggestion that could be drawn is that relationship and individuals are the building blocks of happiness. The presence of the qualifying adjective “good” suggests the recognition of quality in the relationships (e.g. “good family”, “a good wife”, “good relationship”).

Word Cloud 2: The most important thing that contribute to happiness

In the second list “family” still dominated, placed at the top of the rank (see Word Cloud 3). The qualifying adjective “good” continues to show up suggesting quality matters. “Friends” were mentioned more times which strengthens the suggestion that relationship is an important factor. It is worth mentioning in this second list, material objects like money, job, and financial status also gained prominence.

Word Cloud 3: The second most important thing that contributes to happiness

Money topped the third list. Family, friends and health were the other most frequently mentioned responses. Considering that family held the top position in the previous two lists and is the second most frequent response in the current list, money need to be seen in the context of family. This observation was evident in the words used to qualify money in many responses (e.g. having enough money, enough money to pay the bills, money for home and recreation).

Word Cloud 4: The third most important thing that contributes to happiness

The observations made in this study have implications at both the individual and community level. At the individual level, relationship and health of individuals are fundamental to their happiness. Relationship building is a skill that is learnt through childhood, teenage years and young adulthood. Hence the formative years need to focus on acquiring the relationship building skills. It is now recognised that long term consequences of health are triggered right from conception, therefore the environment and habits from birth to adulthood are key factors of one’s health.

At the policy level the focus needs to be on developing and maintaining infrastructure to support families and their health. The inference about economy drawn from the position given to money is that economic activities ought to be directed at supporting a lifestyle that offers quality family life and good health.

Thank you for reading this posting so far, at this point I would like to solicit your help and contribution...please read on.

The results presented here are from my research carried out to discover happiness. My aim is to delineate the factors of happiness, for which I am requesting your help. If the results presented resonate with you, I would like to hear how you would interpret them, either based on your own experience or with the knowledge of science behind the facts of life you may have. Please click on the comment link below to write your views, explanation and/or suggestions in the space below. Any help you can give me will be greatly appreciated. You can comment anonymously but if you are comfortable to identify yourself I would like to enter in to a discourse with you on happiness and perhaps share with you what I have discovered about happiness in my journey so far.

Teach marketing using experiential education

2014-02-20T17:29:00.001-08:00

One of the challenges of teaching marketing is demonstrating to students how it operates in the market place. We address this challenge by using experiential education in which students are taken placed in the big wild world. The video shows how we do that at the University of Otago.

Why businesses should be serious about Parento’s 80/20 principle?

2014-01-26T15:59:00.001-08:00

The 80/20 principle was derived from the way wealth was distributed in Italy. Pareto the author of this principle observed that 80% of the country’s wealth was in the hand of 20% of the population. Subsequently this 80/20 split was noticed in all walks of life. For example, 20% of the inputs generated 80% of the output; 20% of the workers contributed to 80% of the production. 20% of the functions provided 80% of usage. Parento’s principle offers two suggestions, one is that any desired outcome can be produced by focusing on a small number of key entities and the second is that the key entities must be prioritised to receive most of the resources.

Parento’s principle just as well applies in business, that is, 20% of customers provide 80% of the business. The challenge for managers is to identify that core group of customers that contribute to 80% of the business and service them to their full satisfaction. Once this core group is identified, the principles of relationship marketing can be applied to develop and maintain ongoing relationship, which is the essence of Service Dominant Logic (SD Logic), a revisited concept of marketing. Furthermore, generating new business through retaining customers is less costly than acquiring new ones (click here for a second opinion), which is a further incentive for employing relationship marketing.

Most businesses tend to focus much of their resource on reaching the widest possible market. This is done for two possible reasons, one to attract customers (new & old) and two to derive the full value of money spent on advertisement. But if customers who have the potential to yield 80% of the revenue are in the business’ own database then the resource spent to reach the widest possible market is incorrectly targeted and could end up not yield the intended ROI.

The essence of relationship marketing is selling deep to existing customers. This is achieved by 1) having one-on-one interactions with customers, 2) creating marketing touch points to deliver additional value and 3) maintaining a high level of satisfaction. In addition to other infrastructure, businesses would need to set up an interactive website and access to a platform for conducting surveys. One-on-one interaction requires fronting up in person and the website and surveys to be used for generating data to inform the creation of touch-points specific to the business and customers.

Who is killing marketing

2013-09-26T22:49:00.002-07:00

This posting was promoted by the allegations against marketing and marketers. For example, an article posted on the Harvard Business Review blog claimed marketing to be dead; a report by Fournaise stated that CEOs think marketers lack business credibility. My observation of SMEs and entrepreneurs is that marketing is the last thing on their mind. Here I present my defence to reveal the truth and nothing but the truth about marketing and marketers.

The Four-Ps ideology has dominated marketing since the industrial revolution. Its popularity, however, has reduced marketing to managing a set of promotional activities. Consequent to the overt focus on management, marketers are less involved in participating in making strategic decisions. What is alarming is that professionals from other functions are making marketing decisions. For example, the establishment of the World Wide Web saw the development of new forms of marketing, such as search engine marketing and social media marketing. The rules for these forms of marketing are dictated by IT professionals who lack marketing knowledge.

Another reason why marketing is somewhat downgraded is the tasks required of marketers. In many organisations, they are employed to manage marketing activities such as promotions, advertisements, and social media campaigns. Incidentally, there is an industry now providing such marketing activities. Consequent to this industry’s aggressive marketing directed at organisations, many have outsourced marketing to outside agencies. Perhaps this could be the reason why many CEOs are questioning the relevance of their marketers (Fournaise 2011).

In many organisations marketing decisions are made by separate teams. For example marketing strategies tends to be decided by the management and the implementation is outsourced. This leaves the marketing manager to act as a coordinator between the management and outside agencies. While marketing decisions are made by separate teams yet when things go wrong, the blame is conveniently put on the marketers.

To answer the question by which this posting was started, to a great extent the structure of the organisation is responsible for what marketers can and cannot do. In a competitive market, organisations that don’t have a marketing team or restrict the role of marketers will hit the ceiling very soon. It is therefore up to the management and owners to decide what they want to make out of marketing.

Marketing in the present time is a mindset that must permeate throughout the organisation. In a sense, everyone from the person manning the front desk to the CEO is a marketer. As such, marketing is more relevant now than ever before. Here is a fact about marketers; they have green fingers for growth. In good times marketers bring in the harvest; on troubled waters, they sail the boat to safe shores. Grow them to see the business grow.

Is the process of SEO as simple as the search engines would like us to believe?

2013-08-15T22:36:00.000-07:00

Siobhan Kelly

In answer to the question I posed, the quick answer is no. Let’s take Google’s search engine results ranking algorithm as an example. It is based on over 200 factors and is constantly being updated, meaning it is virtually impossible to gauge the exact ranking factors taken into account by Google and adapt a website accordingly. Although the search engine providers are not transparent regarding the nature of their ranking algorithms, they do give suggestions regarding SEO best practice that upon implementation, will supposedly give your website a fighting chance of ranking highly within the search engine results page (SERP). Due to restricted practitioner knowledge within this field and the private nature of search engine algorithms, the search engine providers hold on to the power to educate search engine optimisers and control their implementation of SEO.

In order to further knowledge in this area, through academic research I have attempted to develop a general process of SEO that could be followed by marketers implementing a search engine marketing campaign. In order to do this a number of white hat SEO techniques were applied to a start up market research website in order to test the effectiveness of individual techniques at improving page rank within the SERP.

The website has a number of different products within its portfolio: snapShuttle a survey tool, snapDemand a market analysis tool to estimate market demand, snapShare a market analysis tool which monitors brand performance , snapView a market research tool to provide an overview of the consumer within the market and snapAcademic a data collection tool for students and scholars. These product portfolio pages have been optimised using different techniques (meta-tag keywords, title tag keywords, adding keywords to copy, and have just begun backward linking) to test the consumer and search engine response.

What's interesting is that although the website has been indexed by Google, it still hasn't surface on Google's search engine results pages as of yet (has been over 1 month now). Google’s webmasters tool provided insights into how Google saw the pages. One observation was that the keywords that were used to create the web pages (from using Google Adwords own Keyword Tool) were not the ones that Google now perceived as main keywords upon indexing the pages. This is important to note as keywords form the building blocks of brand communication in digital marketing. Hence it is important for marketers to sync their keywords with Google.

Another observation that needs our consideration was the difference in the keyword density between the web pages used in this study and the web pages that feature at the top of the SERP. The top ranking webpages had an over 100% increase in keyword density, which in itself suggests more is better. However, the general search engine advice is against keyword stuffing. Perhaps further empirical research is needed in order to establish the optimal keyword density.

Results from my research thus far lead to the simple conclusion that SEO is in no way, shape or form a simple process with set rules and guidelines. It cannot be implemented on a one off occasion, but must be constantly refined and redeveloped as a consequence of regular algorithm updates. Furthermore, it is difficult to test the effectiveness of singular SEO techniques as in order to be effective in improving ranking many techniques must be implemented simultaneously. All the same marketers cannot afford to ignore SEO as digital marketing gains prominence.

Great Life Index: A measure of wellbeing

2011-11-21T11:22:00.000-08:00

Wellbeing is the quality of life experienced by individuals. Like body temperature, it is maintained at a set level by a built-in mechanism called homeostasis. In most western countries homeostasis for wellbeing is between 75-80%. Factors affecting wellbeing include physical, economical, emotional, psychological and environmental. When these factors are at its optimal in a community, people experience a sense of security, trust, connectedness, and there will be plenty of employment opportunities.

Maintaining a high level of community wellbeing is critical to buffer the affects of misfortunes such as economic downturns and earthquakes. When the magnitude of misfortunes is too large to bear, a breakdown occurs in the community, as observed in Egypt and more recently in Libya. In these countries, the rulers were directly implicated for the breakdown. In both cases, the rulers and their allies were removed by their people.

In democratic countries, local bodies and governments are appointed to maintain the wellbeing of its citizens. They achieve this by formulating legislations and developing infrastructure to support and promote the factors of wellbeing. Thus, wellbeing is a measure of how the political system is faring in a country. Wellbeing measurement can be used by citizens to make an informed decision on Election Day to oust or instate individuals and parties from the government through a democratic process.

Wellbeing is also related to success at an individual and collective level. Businesses that maintain a high level of wellbeing amongst its employees will experience success in good times and, more importantly, survive hard times. Managers therefore need to ensure the above factors are upheld within their organisations. As it is related to success, wellbeing measurements can also provide inputs for making strategic decisions and justification for investing into infrastructure.

While wellbeing is about individuals, politicians, bureaucrats and corporate heads have a major role in creating an environment in which it is maximised. When everyone does their little part, the community becomes vibrant and attractive to investors, immigrants and visitors. For these reasons, there is a move in many western countries for independent organisations to monitor wellbeing. In New Zealand, the Great Survey Site, in partnership with the Department of Marketing, University of Otago, has commenced to produce wellbeing measurements using an itemised rating scale. The mean rating produced by the scale will be referred to as the Great Life Index. This index is based on the Great Survey Site panel consisting of over 200,000 New Zealanders. Preliminary tests of the scale were carried out during the 2011 Rugby World Cup that included four separate surveys, one in the week following the opening ceremony, two during the round robin games and the last one in the week following the final game.

Great Life Index for all five cities was 5.0, out of a maximum of 7.0 points. After the earthquakes in Christchurch, one would have expected wellbeing for this city to be lower than the others. This however was not the case as there was no statistical difference between Christchurch and the other cities. There may have been a departure from wellbeing homeostasis at the time of the earthquakes. However, at the time of this measurement, it appears that homeostasis was restored. This observation highlights the resilience of the people of Christchurch. The high wellbeing index observed for this city is an indication that it will be restored to its original glory.

In the week that followed the Rugby World Cup, radio talk shows, televisions programmes and newspapers were overflowing with the All Black’s 8-7 victory over France. The jubilation in the country was evidently seen in the victory parades at Auckland, Wellington and Christchurch. One would have thought the happy mood in the country to be reflected with a spike in the wellbeing measurement. But wellbeing in the week following the final was no different to those of the previous weeks. This observation confirms wellbeing’s homeostatic nature of not being affected by external changes. The Rugby World Cup was good for New Zealand, but its affect on wellbeing appears to be limited. This could be because a single event like the Rugby World Cup may not be sufficient to affect wellbeing. It could have an indirect affect in conjunction with a smart political and economic system. In that sense, such events are more a means-to-an-end as far as wellbeing is concerned.

Perhaps it is meeting the emotional and physical needs of people at a satisfactory level that influences wellbeing. In which case, a simple evaluative measure of wellbeing like the Great Life Index could force political parties and corporations to be competitive, which in turn would result in a smarter political and economic system that enhances wellbeing.

Branding – a marketing imperative

2011-04-19T11:10:00.001-07:00

If we fail to brand, the market will brand us. The way the market brands us may not be what we want. Hence, it is imperative to be proactive about branding our business. A carefully designed brand can rationalise our price, differentiates our offerings and define our target market. These are just few benefits of branding. More important, a brand is the intangible asset of a business. Therefore it is sensible to invest into ones brand and be strategic from the start.

We tend to relate branding to logos, ads, celebrities etc. While these may be essential, they are a means to an end. The end here entails to what the business stands for, similar to a candidate in an election. Therefore branding ought to commence with a clear definition of the business philosophy or world view – read an earlier posting on marketing philosophy. A brand developed in the context of the philosophy will provide identity that relates to the market place.

If we can see brand as an asset – intangible – we will be prepared to set resource aside for branding. Let me explain the idea of intangible asset this way. When you eventually decide to sell the business, you would tally up the stock in hand, liabilities, and physical assets to come up with a figure that is the worth of the business. You will then account for the goodwill (intangible asset) of the business in the market, but you need evidence to justify the amount. The cliental could be used to demonstrate goodwill and justify the amount charge. Very often this may be a limited listed because of Pareto's 20/80 rule, (80% of the business comes from 20% of the clients). If you have developed a brand, then the size of the brand in terms of brand equity could justify a larger amount. Next time, will write on a branding approach based on Collective Intelligence that all businesses, small and large, can use.

Do you have an online presence?

2011-01-30T23:26:00.001-08:00

The analysis of the search results for the super city election (refer to the previous two postings) suggests that candidates who did not come up on Google Insight were not in the contest. For these candidates, offline activities alone were not sufficient to win the election. What we can learn from the election experiment is that if you are not online then, you are invisible to the market. While this may sound daunting; unfortunately, this is going to be increasingly true in the years to come. The moral of the story - if you don't have an online presence, start making one now.

Establishing online presence is not done overnight but is developed over time. A website is one of the tools to make that appearance. Alongside having a website, participation in social media networking sites and active blogging are online activities that help in establishing the online presence. These activities take time and, more important, incur a cost. The online presence becomes evident as these tools become established.

Next time will write about relevance and popularity, two imperatives of Internet Marketing.

Auckland Super City Election: A measure of brand performance

2010-10-24T22:26:00.001-07:00

Following from the previous posting, I have reproduced the search results of the two candidates ("John Banks" and "Len Brown") for the electioneering period ending on 9 Oct 2010.

Google search results for "John Banks" and "Len Brown"

In this period, Len Brown was searched 252 times (55%) and John Banks 210 (45%). While these estimates are not suggestive of the election outcome (Len Brown = 49%; John Banks 35.7%), they clearly revealed who was the leading candidate. Based on the search results, the leading candidate became evident somewhere in the middle of the electioneering period. Compare to Digipoll announced on Sept 16 (Len Brown = 29.8% and John Banks 27.8%) the pattern produced by Google search was much clearer. Making predictions out of search results may be a far cry, but they seem to be able to tell who performed better, at least for this election.

The other candidates were not searched sufficiently to appear on Google search results. Was that indicating how they performed in the election? When considering the election results, perhaps yes. From this small experiment, can we safely conclude that if you are not online then you are not in the competition"? What do you think? Have your say by commenting below.

Now, think of the two leading candidates as brands. Google search results provide a simple measure of which brand is performing better, provided the brand is online and Internet Marketing is the primary marketing strategy. Send me a note if you want help with Internet Marketing.

Auckland Super-City Mayoral Election Trend Based on Google Search

2010-10-05T05:12:00.000-07:00

This is a graph produced by Google Insight for search occurring on Google for the two main Auckland super city mayoral candidates - John Banks and Len Brown. Apparently none of the other candidates are featuring on Google search. It seems that John Banks and Len Brown are the two real contenders for the super city top job. What the graph is showing is the search result for the two candidates by their names. While we cannot say who will win based on the search pattern, we can deduce that more people are interested to find out about Len Brown. As this is happening at this stage of the election, it has to be to decide whom to vote. If the marketing teams of these two candidates are doing the right things, that is, having the right contents about them on the Internet then searching by name could eventuate in a vote in favour of that candidate. We will know if that is true when the results are announced. For now, we at least know who the true contenders are.

Imperatives of Marketing

2010-09-15T18:54:00.001-07:00

When opportunities are missed or lost to competitors, little do we realise it is because of poor or no marketing. In the current environment, marketing is absolutely essential for the success of a venture - be it for making profit or for the common good. When we fail to see the significance of marketing as a business function, we also fail to invest in to the infrastructure required for marketing.

When running a business, we place ads in the local newspaper, dropping flyers around the neighbourhood. These are often referred to as marketing. They are some of the activities we do in marketing but by themselves they don't make up the marketing of a business. To get marketing right, we need to see marketing as an essential business function, just like accounting. We may not know much about accounting but we soon learn what is needed. If learning is not possible, we would outsource the accounting tasks, because of the tax man. Wonder why we fail to attach the same imperative to marketing when the success of the business is dependent on it. This is so ironic – we do things when there is a stick but refuse, when it is a carrot.

To prove the imperative of marketing let me relate to you the famous Pepsi Challenge by McClure et al (2004). In this study, 67 respondents were given two separate taste-tests of a cola drink while their brain activity was measured with functional magnetic resonance imaging (fMRI). In the first test, respondents were asked to name the drink after tasting. Most of them said what they tasted was Pepsi. The brain scan showed activation of the ventromedial prefrontal cortex, an area associated with rewards. In the second test, the brands were presented in their cans. Coca-Cola was observed to activate the lateral prefrontal cortex and hippocampus, the areas responsible for emotion and affect. Surprisingly no such activation was observed for Pepsi. The study revealed two brain systems at work when choosing a cola drink; one, based on sensory stimuli and the other on emotive stimuli. The system activated by emotive stimuli (lateral prefrontal cortex–hippocampus) seemed to generate a greater attraction to market offerings. This study provides compelling justification for marketing, in particular branding.

If you have not thought about branding for your business, talk to an expert soon.

More imperatives coming, return after a while or RSS : )

Tribalisation of markets

2010-05-04T15:11:00.001-07:00

It’s been a while since I posted anything on my blog. I just did a lecture on Tribal marketing to my Internet marketing class. While it is fresh in my head, thought I continue from my previous posting on Tribal marketing.

Tribal marketing is a segmentation exercise based on emotions. It is an incredibly powerful approach for creating tight-knit communities loyal to the emotive cause. Three elements are fundamental for Tribal marketing to be effective. They are 1) chieftain, 2) signs and emblems, and 3) meeting places. Notice I am using tribal terminologies. The nice thing about Tribal marketing is that these elements get established as tribalisation occurs. What’s important is that marketers recognise the elements as they get established and promote them within the tribe.

The role of marketers in Tribal marketing is that of facilitating individuals to get together to form a community. A website can serve in this task. The community grows by members recruiting new members. If the segmentation and targeting are done correctly, the growth of the tribe will be exponential. When the community reaches the size to have chieftains, you will have a stable market. At this stage, you will also notice signs and emblems and meeting places getting established. One example of tribal marketing in New Zealand is Vodafone’s One Tribe - http://www.vodafoneonetribe.co.nz/. Trademe uses many Tribal marketing principles. It will be interesting to find out if that is their marketing strategy.

If what I said so far sounds interesting, recommend reading Tribes: We Need You to Lead Us by Seth Godin.

Next time, will blog about how to achieve business objectives using Tribal marketing – Ciao till then: )

Tribal Marketing 101

2009-07-25T02:51:00.001-07:00

Tribal marketing requires a philosophical shift to the way we view our environment. To establish this foundational requirement of tribal marketing, I will first write about marketing philosophies. I can hear, “not one of those boring lectures”. Read on, particular if you are struggling with your business; this will change you in to a success story.

In the marketing literature we observe an evolution of marketing philosophies starting with the product orientation, followed by the sales orientation and then the market orientation. We are currently experiencing a domination of services within the marketing orientation. Academics call it “Service Dominate Logic”. The name is charming not because it is catchy but for the fact it ousted the Kolterian view of marketing. No more marketing dogmas that prevent us from thinking “outside the square”, what all marketers should be doing. In fact, that is what I teach my marketing students – to think outside the square. Presto - see what we have because of thinking outside the square - experience marketing, relationship marketing, service marketing and tribal marketing.

Most people fail to see the value of these philosophies. Many put them aside, thinking they belong to academia – not so. In simple terms, the philosophy determines the way a business is set up, that is, the wealth creating activities the business undertakes and the infrastructure required to support the activities. Infrastructure, as we all know, has a direct implication on our financial investment in the business. For this reason, the philosophy we hold is foundational to our business plan. Let me give you an overview of the marketing philosophies.

The marketing age commenced with humans starting to engage in activities intended to accumulate wealth. This age can be broadly divided into pre industrialisation period (prior to the 1920s), industrialisation period (1920 to 1960) and post industrialisation period (1960 to the present time). The way the philosophies became evident to scholars suggest they belong to each of periods within the marketing age, that is, product orientation to the pre-industrialization period, sales orientation to the industrialization period and market orientation to the present period. If this view is taken then product and sales orientations are redundant. That is a wrong understanding of the marketing philosophies. I believe they co-existed right through the marketing age at varying levels. By this, I am suggesting that there was (and is) one philosophy that dominates each of the periods. This is true at an individual level too in that a business can have one dominating philosophy while still keeping others. For example, a business can be totally marketing oriented to its customers but product oriented to the investors. The business will need to develop its infrastructure to facilitate the two orientations to the two stakeholders. Another example is a business can adopt marketing orientation for its regular products and product orientation for its innovations. By mixing and matching philosophy we can maximize opportunities to utilise our infrastructure to the fullest, thereby registering a higher return on investment. This is fundamental to productivity, that is, maximisation of wealth for unit cost of investment. The thrust of this piece is not on the philosophy but rather on businesses having a philosophy. I believe small and medium size businesses in New Zealand and in other emerging economies must mix and match philosophies to their advantage. The philosophies must then direct their marketing activities.

Perhaps I should mention couple of reasons why we fail to think about our philosophy. One is, we take over an existing business; in doing this we basically inherit the dominating philosophy by which the business has been operating. This happens in a lot of family businesses and big corporations. This also happen with business operators who buy into a franchise arrangement. Little do they realize that they are spending their investment to adopt the philosophy of another. In such cases, any subsequent shift in philosophy needs to be championed by the new owners or managers. It primarily comprises of making radical changes that usually receives the disapproval of the vast majority, hence the shift has to be championed. Another reason for failing to think about our philosophy is, for a vast number of us, we are struggling to meet our basic needs. Consequently our sight is fixed at the immediate future with no time to strategise the future.

Returning back to Tribal marketing – there is tremendous success in this novel way of marketing. However, to implement tribal marketing a radical change to our view of the world is required. If I have got you to read to this point, I know that I have captured your interest. I will blog again with an account of how to tribalise, which will delineate its philosophical requirement.

Tribal Marketing

2009-05-21T07:22:00.000-07:00

The Distiller is a bunch of highly talented entrepreneurs who are eager to encourage and mentor one another. Visited these fellows at http://thedistiller.org/. I visited their den recently…see photo below...you guessed right, it’s the presidential plane…they hire it for their think-sessions.

The only connection to earth is the telephone on the wall that dials 111 automatically as you pick the handset up…just incase too much thinking blows the fuse. Two things that they take on their mission are Coca Cola and Dominos. Coca Cola spends $40 million on marketing in New Zealand…what a price to get into these think tanks.

They will take anyone with a smart idea on the thinking mission. Jason of pocketsmith standing in front, next to me, is the captain. Get in touch with him to join the next mission. Scott president of OCOM and wannabe entrepreneur and Jaroslav of VirtuosoOnline ia a budding entrepreneur who went on the last thinking mission. They returned a bit tipsy from zero gravity…went home leaning on one another.

I went to speak to them about Tribalisation and living well, a notion drawn from the life of people from the Mediterranean region. Like the Mediterranean diet, known for good health and wellbeing, their tribal way of life is storming the commerce world.

Vargo and Lush wrote the first article on Service Dominate Logic (SD Logic). The articles reach journals still are conceptual. I believe academics are working hard to produce a SD Logic version of the 4Ps. The Kotlerian 4Ps framework was conceived under the product dominate logic. Can we cut and pasted this framework to the service dominate logic? You be the judge.

Being true to SD Logic, the variables of value to marketer ought to be from market, that is, variables pertaining to customers or the market. To be consistent with the SD Logic notion, the word “market” should be replaced with the word “society” or “tribe”. A SD Logic marketing framework called Tribal marketing is emerging in the literature. Variables of this framework are derived from the structure and activities of the tribal way of life of people in the Mediterranean region. My attempts to understand Tribal marketing caused me to re-discovering myself and the relationship I have with my own tribe. Without saying anything further, you can see that developing and maintaining relationship is a essence of Tribal marketing.

Will talk about relationship next time...

Drive to the conditions

2009-03-18T19:54:00.000-07:00

Recently TVNZ announced cutting something like $25 million before the end of the year. The reason given was s drastic drop in the advertising revenue since the start of the crisis. My immediate fear was whether businesses are pulling down shutters - I don’t think so – we are a small nation but we are a very gutsy nation. Perhaps businesses are driving to the conditions, which is good but that needs to be strategic. I suggest businesses include more Internet Marketing - Search Engine Marketing (SEM) and Search Engine Optimisation (SEO) - in their revised marketing plan. This is one media that allows two-way communication, because of which ROI on every dollar spent can be established. Pay per click (PPC) system of paying for online advertising gives businesses control over their advertisement expenditure. It however needs good marketing knowledge, familiarity with the working of search engines and Internet marketing skills.

Will the economic crisis break or make us?

2009-03-18T19:52:00.000-07:00

In this posting I like to shift the focus to the economic crisis. I think most people in New Zealand started the year confidently. But with increasing news of job cuts and bankruptcies, confidence is ebbing out for everyone. Economists are warning this would be the worst economic crisis. The million dollar question – what can pull us out of this crisis? A young man called in on a talk back show gave this suggestion – instead of viewing money as currency, he suggested viewing it as a language. He did not elaborate much on air, but when I received the third letter informing of a price increase for services supplied to my house, what he meant became obvious. All blamed the economic crisis for the price increase. Image the letters in the hands of one who has lost his or her job - that was bad language.

One or two premium corporations generously announced that their top managements will not be taking a salary rise this year - money that they or their firm have not yet earned – that is poor language. What is good language – CEOs and Directors could decide to contribute five or perhaps two percent of their salaries toward securing the jobs of two, three or even more of their employees’ jobs for the next twelve months. I can image the employees responding to such gesture by volunteering to give up a day’s wages or share the security with fellow workers. That’s hard core branding exercise when the story hits the media – excellent language skill.

It’s all about changing our attitudes, and if we do change, we will come out of this recession better off then we went in.

Web Analytics

2009-02-18T18:26:00.000-08:00

I often come across people saying “I don’t like my website” or “my website suck”. Perhaps they are referring to the look and feel of their website in comparison to other sites. Eventually, they go and change the look, in the process, alter the structure of the site altogether. Very soon the new website also starts to “suck”, if you know what I mean. Perhaps people get bored with their website too quickly, or it could be that they never think of their website in terms of return on investment (ROI) – I will write about ROI another time. When we alter the structure of a website, in a sense, we trash a lifetime of information that could have helped in improving the website.

If you are ever thinking of improving your website, first perform a web analytics to find out what your customers or visitors are doing on the site. The information will serve as a base for future development. If you have never used Web Analytics on your website, then you must start using without further delay...please read on.

In plain language Web Analytics is the collection, analysing and interpretation of data relates to website activities. There are two types of Web analytics. In this posting, I will write about the one using the web log file.

The Web log file is a simple text file located on the web server. The file is written in ASCII, hence, can be viewed using a text editor. Every time someone requests a web page, the server enters a line in the log file…something like…

142.134.25.73 - - [24/Aug/2004:11:20:39 -0600] "GET /download.html HTTP/1.1" 200 231

While it is possible to make sense of what the above entry implies it is not something that any of us want to be decoding. Webaliser, a free program, can be used to analyse web log files to produce traffic report to and through the website. Usually, most Webmasters use it to generate traffic report. Rather than me writing here about what’s possible and what’s not with a web log file, read for yourself a short article explaining that at http://www.webalizer.org/simpleton.html .

In my next posting I will tell you about Tag based Web Analytics…catch you soon.

Search engine marketing

2009-02-11T22:20:00.000-08:00

Search engine marketing, abbreviated to SEM, is a marketing activity aimed at making your website appears in the search engine result pages (SERPs). This may be either to rank top in the natural list or in the list of sponsored links. Marketers achieve such ranking through search engine optimization (SEO), paid placement, in some case paid inclusion.

Search engine marketing is become a powerful function to position and target ones business to potential customers. Targeting can be fine tuned to such precision that your message is landed on the desktops of individual target member. Promotions through Search engine marketing is cost effective and the results can exceed that of other conventional media.

Tools needed to carry out Search engine marketing are publicly available. Its a matter of knowing and learning to use. I will endeavour to write about these tools here.

Watch this space...

Marketing tools to survive the recession

2009-02-11T20:32:00.000-08:00

We are finally in the economic gloom and doom times that everyone been talking about. Bankruptcy and redundancy are regular topics on talk back shows and in the media. All the same, we continue to need goods and services, as such businesses still have the scope to carry-on, provided they drive to the conditions. Marketing activities must carry on. I suggest using the Internet for marketing your business as this media is cost effective at the same it can enhance efficiency and productive of the marketing activities.

Adoption of the Internet in marketing has been slow but I envisage it to rapidly increase as managers begin to see the advantages, particularly during this present time. Search engine marketing is gaining popularity amongst big corporations. Generally these corporations tend to outsource this function to specialist. However the technology is now freely available for anyone to employ Search engine marketing in the business. In this blog I will elucidate the benefits of this new marketing function. Over time, I will write about tools that can be used for undertaking Search engine marketing activities.

WATCH THIS SPACE