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This year, management has enhanced its vocabulary with words and phrases such as “downsizing,” “career regression,” “fiscal consolidation,” “asset realignment” and “negative career development.”  They were developed by some MBA-types to say that a company down like the economy and entire industry, had missed its projections, fired people and made cutbacks.

There’s a new business climate and sense of urgency in every sector of industry and commerce.  The “good old days” are gone forever.  It wasn’t that many years ago that nearly anyone could make money in business and consumer PC/CE marketing.  Almost no one could fail. 

To put it another way … in a hurricane even turkeys can fly.

Well, the hurricane has passed.  It has changed the landscape.  Our emphasis on product innovation has placed us at the mercy of a constantly changing customer base. Profit margins for “brands” are being driven down by the high cost of marketing (PR, sales literature, advertising, promotion, etc.), defensive product line extensions and the competition.

In this new environment, management is confronted with the need to survive in conditions that they often don’t understand, and generally cannot control.

The New Marketing Strategy

When many think they have a marketing problem, the first thing they do is a barrage of news releases, an editorial tour, a brochure or a corporate ad campaign. 

Wrong.

The power of the market has shifted.  Those recommendations are a disservice to management.  Instead of recommending the communications activity that worked in the past, you need to help the company do something dramatically different, like targeting new or different prospects…determine precisely who your best/most profitable customers have been and their relative health…identify/nurture new market segments…refocusing the distribution/channel strategy…finding new applications for existing products–anything to create a new model.

In other words, a new look at strategic marketing is needed.  Strategic marketing can’t be bogged down in the preconceived concepts of what works, what doesn’t.  Everything that is done and said needs to focus on the customer.

Some people will run with the idea and fail because they missed the point.  The new goal isn’t to sell something more to a customer.  That kind of thinking dooms hundreds of firms every year, and it can destroy you. 

Today you have to be flexible enough to move from one customer relationship endeavor to another … quickly.  There can be no sacred rules.  What worked before may not work this time around.  Stretch yourself and try new tactics. 

The people who are going to succeed today and tomorrow are those who look at product development, product usage in new and different ways.  Simple product line extensions and slight improvements over existing products will not make it in today’s demanding marketplace.

We’ve all seen this type of “new” product/service fail to attract customer interest.  They are easily copied.  They do nothing to enhance product differentiation.  They don’t increase profits.

Shorter Product Cycles

Instead of relying on their production facilities for answers on what should be sold, management needs to look outwardly to anticipate what the consumer wants/needs. 

They need to determine how to develop, produce, deliver it…almost instantly.

Today success is further complicated by the fact that product life cycles have been rapidly declining from five years to two years to six months or less.

PC/CE firms now operate on the 3-1-2 schedule. 

They develop the product in four months, move it into/through the channel in two months and clear the channel in three months to make room for the next product/solution. 

Your notebook/netbook computer is obsolete before you take it on its first trip.  There is absolutely no opportunity to build an individual product’s identity or following.

Market research and new product development are an integral and ongoing part of your organization’s activities.  The new product development/roll-out process has to work with pure precision to ensure maximum results. 

As firms becomes more customer-oriented, marketing and communications have to focus on developing greater and closer ties with customers.  Emphasis needs to be placed on customer services including training, product support and maintenance.

New Relationships

The lines between manufacturers, distributors and dealers are becoming less distinct.  People who can’t or won’t recognize and accommodate the change will find themselves on the outside looking in.  Firms that succeed are those that are able to establish, build and constantly reinforce their relationships with their customer base.

In the past, we’ve given a lot of lip service to niche markets.  Closely identifying with customers, their needs, their demands enhances sales and profits. 

Niche Considerations

Savvy management teams of organizations will:

Identify and prioritize niche markets based on the company’s investments and the potential return on that investment

*    Realistically focus on opportunities where the company has expertise rather than “gee really glamorous” niches that look good but…

Determine what products and services will be needed by the niche markets that are best for the company

Tailor product/service capabilities to meet the niche market’s needs

Develop totally new marketing and communications strategies, as well as distribution avenues, to economically reach the niche market

Develop and refine feedback mechanisms to more rapidly determine the degree of acceptance of the products/services and to forecast changes within the niche market

Niche marketing will mean a whole new way of doing business and has to be constantly refined and redefined.  No organization is able to do everything.  Instead, enter into strategic alliances to meet the unique needs of the smaller niche markets.

The Small Business Niche

In the past, everyone wanted to sell to the Fortune 1,000. 

Then they realized that there were over 40 million small businesses/home businesses (SOHO).  There have been more than one billion + personal computers sold to date.  Most are found in SMB (small, medium business) and SOHO environments that are in hundreds of niche markets.

The illusion of a single SMB and SOHO market is much like seeing a mirage … it’s never as satisfying as the real thing.

Better, Cheaper Isn’t Enough

Being better, cheaper, or faster isn’t as important as customer service and support.  It means being closer to customers to provide faster and better solutions to problems.  It also provides better, more customer inputs and feedback for tomorrow.

Standard organizational charts are a thing of the past.  Engineering and R&D are no longer able to make the decisions on the new products because product and service inputs must come from all fronts. Manufacturing has to develop the ability to change output as quickly as the market changes.  Sales and marketing has to more closely coordinate activities and input from customers and prospects with others in the organization. 

Communications is becoming the tie that binds.

The Winds of Change

The hurricane has passed.  The turkeys were either dashed on the rocks by the high winds, or they are once again walking around looking up at the skies.  The skies are ruled by the hawks and eagles who can pinpoint their targets from a distance.  They strike quickly, silently and with deadly accuracy.

At the same time the healthy hawks and eagles have to be able to react quickly and decisively to the unseen, ever-present, wind conditions. 

But at least they won’t have to worry about bumping into a turkey that had no idea of what to do when it was airborne.