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Archive for the ‘Seeking Kindred Spirits’ Category

Marketing Mix Clutter Part I: Too Many Spices in the Pot

Monday, December 20th, 2010

Many CPG companies have experienced this exact situation. They know how effective their media mix is at driving incremental volume, yet not much thought is given to planning the timing of these activities in the future.

The result:  Deep promotional offers, such as BOGOs, sometimes overlap with campaigns from a multitude of vehicles, both conventional and unconventional.  At first look, this might not seem to be a problem. “Isn’t more advertising better?” someone might ask.  It depends.

Advocates of the 360-Degree marketing approach (formally known as Integrated Marketing Communications) believe that in order to best influence consumer behavior, said consumer should be totally immersed in the advertising message.  This is accomplished by coordinating efforts in Advertising, Promotion and Trade into one seamless, harmonious plan.  The operative word here, however, is “coordinating.”

We are not trying to say that an immersive experience is ineffective. Rather, in some ways the elements in your marketing plan are like a blend of ingredients in a favorite meal: their proportions need careful, selective coordination in order to balance each other and add to the efficacy of your mix. Too much or too little of an element can ruin the mix.

We’ve found that even though promotional activities may be very effective in driving volume on their own in a given space of time, they don’t always work well when used all at once. Net-Net, simultaneous execution of all vehicles (both trade and media) often dampens the impact from each individual vehicle. The result is that the overall interaction between the elements in the mix is less harmonious, which, interestingly enough, defeats the purpose of the 360 approach.

Why does this happen? There can be several factors involved. Sometimes, this has to do with field and account managers who are responsible for trade* but have difficulty knowing when other media activities are planned. Sometimes they also do not know how much volume is being driven both by the brand as well as any halo impacts from other campaigns within the portfolio, which makes it difficult to plan at a higher level of accuracy.

What can be done? Here’s where MFA comes to the rescue, proverbially speaking.  Check back next time for our second installment:  Marketing Mix Clutter, Part II

*in-store promotional activities

-Written by Shyam Venugopal, Daphne Smirniotis and Roger Pier

Can Strategy Really be a Fad?

Friday, February 19th, 2010

- by Brian Cusick

Recently I read an article in The Wall Street Journal entitled “Strategic Plans Lose Favor,” which suggests that in our recessionary economy having a “strategy” is actually a hindrance towards making good decisions. Furthermore, strategy as we once knew it is a thing of the past. I think this idea warrants a blog post because my interpretation of the evidence presented by the WSJ leads to a rather different conclusion. I can see that strategy consulting, as we once knew it, may very well be losing favor. But if strategic thinking is on its way out then we are all in for a much slower recovery than anyone had imagined.

The gist of the article is as follows (at least per my interpretation): Business leaders found in 2009 that they can’t rely on long-term strategic plans because turbulent times create a need for more frequent course correction. Furthermore, they can’t stick to rigid forecasts when trends change drastically. This situation is characterized with the phrase, “…strategy is dead…” In its place will be fast decision-making and on-the-fly thinking. The days of “rigid forecasting” are over. What’s wrong with that? The problem that I have is as follows: the clash between quick thinking and strategy isn’t really a clash but an indication of bad strategic planning. Bad strategies are those grounded in aspiration, generalization and theory—they produce inadequate forecasts that are no more than disguised corporate growth targets. As a result, they do not adjust along with market changes (remember, a target is a goal, a forecast is what’s actually likely to happen).

When strategic planning is based on objective, quantifiable relationships between market forces and business results and when forecasts are used to produce what is likely to happen and not what is desired, strategy and planning enable quicker thinking—they don’t prevent it. Market based strategy that combines business knowledge, available data, analytical techniques, and user expertise provides the guardrails and framework to make the right decision quickly. These strategies free leadership to take smarter risks and allow teams to focus on new ideas.

I am not suggesting that the referenced companies did or did not have “good” strategies. In no way is there enough information contained in the article to make that judgment. I am, however, suggesting that the proposed link between flexible thinking and strategic planning is shortsighted at best and most likely destructive.

I would urge business leaders, regardless of industry, not to dismiss the evidence put forth by the WSJ but to think honestly about how important objective and realistic strategic planning really is. In the end, strategy based on quantitative holistic analysis will be strategic, practical, and self-correcting.