Black Swan and Marketing

I was reading this post by Steve Deming in his blog at Forbes.com:  The Dumbest Idea In The World: Maximizing Shareholder Value.  Both Steve Deming and Roger Martin are two of my favorite management thinkers.

A snippet from that article:

“Although Jack Welch was seen during his tenure as CEO of GE as the heroic exemplar of maximizing shareholder value, he came to be one of its strongest critics. On March 12, 2009, he gave an interview with Francesco Guerrera of the Financial Times and said, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal”

So what we are seeing in recent times is not just a failure of the value creation models of the past that executives live by, but even celebrated theorists and practitioners alike are now admitting they were wrong – some openly like Jack Welch.

This is again beautifully told by Taleb in Black Swan.What we call here a Black Swan is an event with the following three attributes. First, it is an Outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.

What does all this mean to a Marketing manager?   Make products customers would use, you would use and let the market decide.  Don’t waste your energy in things like managing analyst expectations – not just financial analysts, but also “industry analysts” and looking at the fancy market prediction reports.  There are far more powerful mediums where you could get social worth for your products and services by going directly to the users – that is where and for whom, value is created. So talk to them directly

Marketing Myopia

Marketing myopia is a term used in marketing as well as the title of an important marketing paper written by Theodore Levitt. Little I felt the importance of it till the Kingfisher airlines/ fiasco.

At some point in its development, every business can be considered a growing business, based on the apparent superiority of its product/service. But in case after case, businesses have fallen under the shadow of mismanagement. Kingfisher airlines just took 6 days to undo the efforts it took to build the brand in last 6 years. The efforts the marketing team had put in creating the brand Kingfisher evaporated overnight with thousands of passengers stranded at various airports.

One thing I fail to understand is that why customer should be the scapegoat for Mr.Mallaya and his so called efficient team’s inefficiencies?

 King of good times making fliers to go through bad time……..Not Justified

Customer Service

India.the backstage of the customer service to the world often ignores its own customers. The customer service is the most challenging and often the most ignored factor in the race to the top by most of the corporate's. This can be felt the moment you enter the brand showroom vis-a-vis the brand service centre. The world changes from the time you move from store to service center and though every brand claims,customer service to occupy numero uno in the priority list they conveniently ignore it during the investment planning.

Long live the Indian Customer

Personalized In store Advertising

The increasing importance of in-store advertising is gaining momentum with every brand trying to win at the last mile. Mainstream news sources have been talking about how companies are running from traditional media such as network television, etc., and moving their spending to in-store activities. This is an understatement. The real problem is that there are not enough viable vehicles to absorb the movement of advertising dollars. I’m very bullish on this and I believe very strongly that in the next 2-3 years, we’re going to see the emergence of a number of new ”consumer-specific” advertising vehicles. I’m not sure exactly how these will appear or where, but I do know that there will be a lot of money spent developing new advertising mediums.

In the words of the vintage broadcast networks, “Stay tuned. We’ll be back shortly.”