By Mubarak Sooltangos
Some times ago, I walked into a 100% fancy jewellery shop in Bagatelle with my wife, and from what I saw and realised, I decided there and then to write a paper on marketing. I am a business professional and I breathe marketing day and night, because it is at the heart of business. I may be a bit directive in sometimes using the word “you”, but this is at times needed to forcefully take a message across. Additionally, I cannot help not to mention some autobiographical notes relating to my own business career, to be able to quote real life examples, where I know the causality, the process and the effect.
There were three sales girls in the jewellery shop wearing their uniform, namely a body-close black short with a white T-shirt. To any normally constituted man, they looked attractive and almost inviting to have a second and third look. It is clear that this attire had had a bit of marketing thinking behind it by the shop owner, to attract customers, and viewed superficially, it had done its job. Except that I am not a purchaser of jewellery, and that my wife did not even have a cursory look at the attractive ladies. It is a perfect case of not being mindful of what a target market is, and therefore using an inappropriate communication (because the look of the sales girls is a communication), and firing in the wrong direction.
If anything, this marketing exercise can be negative, because to a susceptible wife seeing the interest of her husband in the girls, they become an enemy to her, and can create a mental block against entering the shop next time she is accompanied by her husband. Cynics would say the husband would make every endeavour to bring his wife again to the shop. Yes, it is sometimes relaxing to have a good laugh.
A more correct approach would have been to present the sales girls as real ambassadors of the products which they are promoting, in a manner to create a sort of aspiration in the female customer to rise to their level of elegance. By this I mean the sort of look of the sales girls at MADO perfume and make-up shops, that is, a temperate but elegant look in a dark blue or black dress, distinguished, but not flashy and loud, with attractive make up which catches the eye of the lady customer at a glance. MADO has a select, upper middle to upmarket female customer base, likely to be seduced. In the case of the fancy jewellery shop, it would also have been a plus to make the sales girls wear the shop’s proposed jewellery, and change them regularly, to show how they look in a real-life set-up, in the eyes of an observer and potential buyer.
Every decision in business has to be motivated
This is a case study in marketing which shows that, like everything in life, and also in business, every action should be based on a philosophical foundation and well thought strategy. There are always exceptions and often we do not have time to think over an action and must act almost instantly, especially in defensive situations. This is called impulsive decisions, motivated by an impulse to act quickly.
Successful businessmen always have a mix of well-reasoned and impulsive action side by side. For example, a sudden change in a commercial environment, like an unexpected and substantial reduction in import duties on an imported product (which I have actually witnessed and handled successfully several times) can leave an indolent CEO to wait for the depletion of his stock in hand at old prices to avoid losses and to practice a lower price at the next arrival of goods. It can also, conversely, drive the aggressive CEO to reduce his price overnight and advertise the new price the next morning. Against the loss that he will incur on his old stock, he has the benefit of attracting the new customer who wants to enjoy immediately the price advantage linked to this duty cut, of creating goodwill in the eyes of customers, or sometimes insist on cash payment for the product at a reduced price and of having the first mover advantage over his competitors in liquidating his old stock very quickly, generating cash and placing new orders immediately.
Successful businessmen always have a mix of well-reasoned and impulsive action side by side.
The virtues of quick decision-making
Impulsive decisions in business cut both ways and can bring huge success as well as catastrophes. But on balance, CEOs who take quick decisions are winners. Ideally, this should preferably be based on an acquired culture of acting promptly in all situations. Not all quick decisions need to be impulsive. They can be quick, yet reasoned decisions if the CEO has trained himself to observe, diagnose and research appropriate decisions quickly.
First of all, quick deciding CEOs allow their staff to start working immediately on their problems or their new business ideas instead of leaving them in a quagmire or stalemate situation that leads to frustration. As a pragmatic, I would say that seven good decisions out of ten taken quickly are still a very good ratio of success.
Second, quick decisions give a first mover advantage over competitors who spend a lot of time procrastinating and thinking about risks rather than positive outcomes, and listening to people in their organisation who are problem finders as opposed to solution providers. There is better: even if a decision is not subject to a close deadline and does not require an immediate implementation, the smart CEO quickly and almost impulsively, as a second nature, often thinks of a possible decision or course of action, then gives himself time, until the deadline to churn the matter in his mind, bounce the ball with his managers, i.e. accountants, engineers. marketeers, sellers or lawyers as the case may be, and also importantly, take market information where this is most of the time readily available, namely with the sales force down the ladder, to refine his idea.
CEOs who surrender to academics
The CEO who systematically lets himself be driven by his subordinates in any way where his deciding power is diluted, the worst of which being by a majority decision in a committee made up of managers of different skills and specialties, is always a follower. I will never feel tired of repeating this: a CEO, especially in strategic matters like investment, marketing philosophy, vertical integration and choice of activity mix, should hold all strings and take his decisions alone or in a very closely intimate and restricted circle, after having consulted all the specialists he wants around him. These people in strategic matters are for consultative and not for executive functions.
What is a competitive edge?
At the core of marketing skills there is the imperative to find the competitive edges in your product, to package them intelligently for communication to your target market, and to use the language and the media that your customer relates to. There are several key words in this statement, and each one is equally important: competitive edges, packaging the selling points, target market and communication.
With few exceptions, all leader or respectable products have competitive edges: Mercedes Benz has design, robustness and security, Omega has durability and dependability, Toyota has value for money on several counts, DHL has, over and above rapidity of service, reliability linked to its parcel tracking possibilities for the customer, Bonne Maman fruit jams have variety, consistent quality and their legendary jar cover. These are all strong competitive edges. Some big brands have weak competitive edges and yet are world leaders, like Tic Tac and Kit Kat.
Some among the absolute stars have no competitive edge whatsoever and yet are monuments. An example: there is no differences between a Gilette and a Christian Dior after shave lotion apart from the highly subjective element called fragrance. Comparing the fragrance of Gilette to Dior is like comparing a Mona Lisa to a Van Gogh, where there is absolutely no benchmark. Christian Dior’s Eau Sauvage after shave lotion sells at eight times the price of a Gillette of the same product volume, and the Gilette after-shave suffers from no measurable or visible flaw, like being medically harmful to the skin or having a feel-good factor which has a shorter life.
Quick decisions give a first mover advantage over competitors.
Another commercial monument not having a decisive competitive edge is Coca Cola. Compared to Pepsi Cola, it has equivalent taste which can switch customer preference either way, is equally fizzy and has exactly the same visual attributes. These two products may have, in the minds of people, a slightly varying sugar content, which I personally have never noticed, but this cuts both ways with some drinkers preferring a sweeter and others a less sweet beverage. For decades Pepsi has been lagging behind by a distance, while selling at the same price. Why?
The notion of brand image
If leader brands sell equally well on strong, weak and inexistent competitive edges, where is then the real secret to successful selling? It is a virtual, incorporeal and sometimes volatile element called image. If some leader brands can sell on weak and inexistent competitive edges, there is not a single branded product which can sell above others without a strong image, unless it sells exclusively on low price, in which case, if the product is highly successful, it does not even need a brand identity.
For a successful product, its image is its positive perception in the mind of a customer that it somehow stands out. By communicating the competitive edges of a product, this creates an image, sometimes called a brand character. By being consistently faithful to its promise of offering competitive edges, the image is maintained, if necessary, supplemented by varying degrees, intensities and standard of communication via advertising. After a time, communication can be slowed down and sometimes even stopped, when the product has acquired high visibility in public (either on the road, on shop shelves, in people gatherings), and an unbeatable customer loyalty, which keeps the image and the remembrance of the product at all times in the minds of customers.
Image can also be created out of nothing for a product which has no competitive edge, provided it is of acceptable quality. The image of Tic Tac rests on its visual attributes only. It has a unique flip top box and a dispenser where the box lies slanted and not straight. This visual image cannot, and need not be communicated by advertising, but the dispenser is present at cash tills in all snack and grocery shops in the world and this ensures visibility at no cost. When you realise that Tic Tac compels you to buy 50 pieces when you have an urge only for a few, you will know the power of a brand which has image. The image of Orangina and Toblerone chocolate are also exclusively built on their packaging which stand out and which are not necessarily expensive to produce.
The Coca Cola miracle
The image of Coca Cola is built on even thinner ice. Its manufacturer sells a drinking sensation which is not palpable, not explained but extensively advertised. The genius in this is to be able to sell a sensation which the customer cannot even describe. If a customer survey was carried out on what this sensation exactly is, there would be as many replies as there are drinking sensations in the world for any carbonated drink. This means that drinkers of Coca Cola enjoy a sensation which is different for every other drinker. The genius does not lie in producing a sensation, because even the Coca Cola manufacturer would not be able to explain what this sensation is and even less how it is produced. The genius is in the selling of the illusion of a sensation which cannot be described and which is not common to all customers. Hats off.
How image can be destroyed
This is how image is built, but it can also be destroyed over time or sometimes instantly. If a good product enjoying a sound image enters the funny game of having lapses in quality, poor customer service, unavailability of after sales service or spare parts, frequent and reckless price increases and frequent out of stock situations or loss of visibility, it stands to lose its image rapidly. The damage can be rapid.
For example, when Parker Pens introduced a cheaper version with the same visual identity but destined to the mass market, it lost in a few years its appeal to the high-end market because it no longer gave them the opportunity of making a statement that they were special and affluent people. Parker was displaced in the uppermost end market by Mont Blanc with a different message. It was that of appealing to a yet much more affluent and select market which would never be accessible to any Dick, Tom and Harry. Mont Blanc was priced at twice that of a luxury Parker, and evidently brought hefty profits. Recently somebody told me that Parker has since fought back and is again market leader in the high-end segment. True, but it reigns on a market which no longer exists and in which there are not even mid-market brands. Who uses a pen in our present era of computers?
For a successful product, its image is its positive perception in the mind of a customer that it somehow stands out.
An image can also be instantly destroyed. The image of China as one of the biggest food manufacturers, even if it was based on price, is broken with coronavirus and will take years to recover. If ever China had an image as a tourist destination, it is presently nil. In Mauritius, Everyday Milk, produced by Nestle, the food giant, which outrageously dominated the milk powder market for seventy years was destroyed in 18 months and suffered the ignominy of having to be removed from the market following the outbreak of mad cow disease in UK some 25 years ago.
Good products with no image
At the other end, there are countless very good products in the world, with palpable competitive edges which never acquire an image allowing them to become meaningful players on the market, for not communicating their selling points. Volvo is an example: on the basis of its good quality it should be in the league of Mercedes, BMW and Audi, but it lags far behind.
In Mauritius, I have had the privilege of creating and launching Dairyvale Yoghurt 18 years ago. To me, it beats by a long distance the market leader Yoplait on taste and the visual look of the product in its container and it has quality consistency. After my retirement, my successors have enhanced the packaging and introduced the Greek Yoghurt version which is a delight to the palate. However, it enjoys a hardly perceptible image and from what I can deduce from the supermarket shelves, it must be lagging far behind the market leader in sales. Consumers have never seen or heard any communication of its brand attributes, which are concrete and convertible into sales with image creation and effort. It is a real tragedy and a missed opportunity.
The world belongs to brands
The following is a universal truth: the world belongs to brands, not to companies. Try to figure out why the Unilevers, the Nestle and the Procter and Gambles of this world never use their company names as brand names, and you will see this reality. As for image, just realise that a Walkman did not need a Sony name in front of it, that a Mini never needed any Austin or Morris, that an Iphone today does not need any Apple, when at the other end, a Galaxy needs to be preceded by the Samsung name to be recognized as a phone, and when Huawei, the market leader, is just a generic product with a name that says nothing and that you will never buy for your wife if you have some means. Something will irresistibly attract you to Iphone, and this something is called brand image, which is rarely the product of accident or luck. This will tell you why Apple, with a 22% market share for its Iphones in the mobile phone market is the first trillion dollar company in the world.
Finally, remember that the brand Frigidaire was once a generic name for refrigerators, that a housewife in UK some 50 years ago never vacuum cleaned, but Hoovered her carpet, and this will always carry the message that brands, with carefully built images on concrete or sometimes no visible foundation, will rule the world for many years to come and will always be cash cows.
Building image in real and varying situations
I have personally built a career on image building leading to market leadership in practically everything I have sold, some of which I have introduced on the market. Here are a few names of my real winners in the image league in my business leader days: Sony, Zanussi, Kelvinator, Casio, Barilla, Flora, La Vache Qui Rit, Ceres, Red Cow, Biscuits LU and Shell Gas for domestic use. It was done in a manner not to bring merely volume sales, but hefty profits.
After a few years in the business, my Group CEO at that time, Antoine Seeyave, told me that winning market share, increasing gross profit margin and bottom line at the same time was a rear feat in business by any standards. I hasten to say that he was closely associated with this remarkable achievement. Although he was not in the day-to-day operations, he constantly had a helicopter view of what I was doing and helped in strategic decision making.
It was sheer pleasure juggling with innovative marketing tools on a purely instinctive basis because I had never read a business book in my life, and I joined production and trading business with no previous experience at all. This apparent weakness in fact served me well, because it allowed me to manage businesses without à priori, with no preconceived ideas and outside the beaten track. What drove me were observation, cartesian analysis mixed with allowances for human subjectivity, understanding human psychology at all levels, common sense and an ability to make people work hard, while being motivated not by money, but by being inculcated with a winner attitude. And knowing Antoine, I am sure he cherishes up to now the indelible memories of the transformation of his business into a quality player which forced admiration as well as fear from competitors. This ongoing image building allowed us to sell whatever we introduced on the market at prices 10-15 % above competition, while paying the same price as them for our procurement.
My landmark successes
SONY TV SETS
I have three landmarks of which I retain up to now a legitimate pride. The first one was to obtain the manufacturing license of Sony Television sets, and from a position of down the line follower on the market, to attain market leadership in 18 months and relegate the market leader, JVC, to a rank of follower, followed sometime later by an exit from the market. The second one was to rise, with Red Cow powdered milk, from 3% market share and force out of the market Everyday Milk (a Nestlé Product) which had dominated the market with a share of above 70% for 70 years.
If being able to beat JVC as a dominant market leader with a newly introduced Sony was by all means a remarkable success, it was made relatively easy with the appeal of the Sony worldwide image as undisputed world market leader, with a product quality known to be head and shoulders above other brands, and this mitigated the effort needed to displace JVC. The success was achieved on the basis of an image building exercise which, among other things, consisted of communicating an image and a viewing pleasure only, and avoiding to enter into a war of comparing non meaningful product attributes like the number of broadcasting systems (Pal, Secam, NTSC etc) on which the Sony TV set was less impressive.
The success of Prodigal chicken was built on creating conspicuous and palpable competitive edges while the product attributes were being researched with this objective in mind. In our product development exercise, we surveyed, not the chicken market, but specifically the competitor Chantecler product, with qualitative research in focus groups rather than quantitative research using the large national chicken market. Having identified the strengths and weaknesses of the competitor product, we then set out to engineer our own chicken, emulating and improving these strengths and eliminating the weaknesses, while adding extra competitive edges, like a more select polystyrene holding tray, more brilliant PET transparent cling film, as opposed to cloudy PVC bags, to show the product in a better light, and a visibly more upmarket logo design, resting on a high quality sticker background using royal blue as base colour and gold and silver outlines to produce a visual perception reminiscent of a luxury product in the Christian Dior category.
The rest was to communicate these competitive edges, under the new blockbuster brand name Prodigal through smart advertising using the visuals and the language which appealed to our target market and which helped to create the upmarket image we wanted. The cherry on the cake was to be able to launch this product at a price of 10% above that of the market leader and beat it. The whole team, collectively engaged, each one contributing with his specific skills in this historic feat has every reason to derive legitimate pride in this. It was a successful image building enterprise using all possible techniques: observation, market research, inquisitiveness, scientific product research, wit, deep thinking, consultation, creativity, cost benefit analysis, communication, qualitative sensitivity analysis, customer psychology and above all intelligent product positioning which appealed to a target market capable of and willing to pay a higher price. This is a real-life case study worthy to be published in any business book, anywhere in the world.
RED COW MILK
The victory over Everyday milk is more worthy still, because it was the demise of a powerful brand of an even more powerful multinational (Nestle) in front of a brand having no international presence, namely Red Cow, coming from an only reasonably known Australian producer, but which had undeniable product quality. Nestle had built its brand image on an intensive communication on its UK origin, which at that time was synonymous with quality. Fate had it that mad cow disease broke out in UK and suddenly the UK origin label turned into a negative brand attribute.
Our response was complex and multi-faceted, buy imagined and engineered in a matter of weeks. This arduous exercise involved a changing of product packaging from expensive tin boxes to attractive but cheaper plastic sachets, a change in product content from 900 grams to 1 Kilogramme per pack to be in line with the market standard, a repositioning of the product from infant milk to everybody’s milk, which enlarged the target market from infants to the entire population, cutting through all cross sections, a price reduction to be price competitive and finally, but very importantly, a prominent map of Australia and an equally prominent “Product of Australia” statement on the packaging.
The impact was as instant as it was damaging to Nestle and also left the five or so other competitor brands, which were all above Red Cow in market share in a complete paralysis, by not being able to present a credible alternative to Nestle at such short notice. Red Cow literally swallowed Everyday milk, visibly gaining market share at a staggering pace, which helped to keep competitors stunned, and, from a meagre 3%, Red Cow reached 60% market share in a bare 18 months. Nestle removed its product from the market some 24 months later.
This is also a case study in its own right, and illustrates a victory of immediate response, complete change in product strategy going from product presentation, product positioning, target marketing and communicating competitive edges on the packaging itself. The market was presented in record time with an alternative offer to Nestlé, which met all its expectations in terms of undeniable product quality, even better than the existing market leader, health safety considerations and price, supported by a sales logistics which ensured national presence in all food and grocery outlets and no break in product availability. If you are thinking of the victory of a David over a Goliath, it has all the possible resemblances.
I take this opportunity to pay a deserved public tribute to all my staff members, who were not only actively, but more importantly, wholeheartedly involved in this chain of successes, from marketeers, accountants, technicians, sellers, administratives, creatives to service staff.
The present image of all these brands which I have created and steered to success and which remain close to my heart saddens me, but this serves to prove that, in business, there are no alternatives to brains, persistent hard work, staff loyalty, staff motivation and self-belief in oneself, all of them working in communion in the search and accomplishment of a dream. In my business model, money occupies a low place down the hierarchy, as I have never believed in things like product hoarding to dictate prices, dumping, price wars, coercion of suppliers or customers with money power and putting weaker competitors out of the market by luring their suppliers with bigger orders.