Marketing 101: Developing Marketing Information

Next in our discussion of Marketing Information Systems, we're going to explore Developing Marketing Information.  Marketing Information Systems rely on multiple types of marketing data.  As a Marketing Manager, you need to stay on top of creating and maintaining these data sources that are vital to your ability to make strategic marketing decisions.  You can obtain the data you need from internal databases, marketing intelligence, and marketing research.

Internal Data Sources
Internal Data is usually your first stop when doing marketing research.  Internal data consists of your collections of electronic data.  This data contains consumer and marketing information, and it is usually created from existing data sources inside your own business.  This data comes from numerous sources.  Your accounting department keeps records of sales, costs and cash flows.  Your operations department will have data on production schedules, logistics, and staffing.  Your own marketing department will have information on your customers, their transactions, their demographics, psychographics, and buying behaviors.  Your customer service representatives will have data on customer satisfaction, and any service issues that they deal with.  (Side note: if you do not have anyone devoted to customer service in your business, seriously think about hiring someone)  Your sales department has tons of valuable information. They will have reports on your resellers, activity of your competitors, and your channel partners will have data on point-of-sale transactions.  All of this data can be found inside of your Marketing Micro-environment.

Internal data is usually faster to get ahold of, and much cheaper to use, but there are potential issues to be aware of.  First, your own internal data may be incomplete, and it might not contain the data you really need.  Second, often that data is not in the right form you need to use it.  For example, sales data usually will need to be converted from existing financial reports into a format that can be used for evaluating your customer segments, your sales force, or your channel performance.  Third, data ages quickly.  In fact, it ages immediately.  It is always old.  Data is only as fresh as that date it was collected.  Keeping data current takes a lot of man power and time to update.  There must be a staff person dedicated to this task at all times.  Fourth, managing your data requires data backup, higher end PC's for transforming data, and more advance reporting techniques depending on how you want to look at your data.

External Data Sources
Eventually you will run out of usable data inside your own walls. Inevitably you will have to do some additional research, depending on the data requirements you have, and the reports you are looking to create.  It's time to do some Marketing Intelligence.  Marketing Intelligence is the systematic collection and analysis of publically available information about your competitors and other developments in the marketplace.  Marketing Intelligence aims to improve your strategic decision making, helps you assess and track your competitors actions, and can give you an early alert of new opportunities and potential threats coming from outside your own walls.

The practice of, and the "art" of Marketing Intelligence, has grown exponentially as more businesses are "spying" on their competitors.  Common Marketing Intelligence practice has grown to include interviewing competitors staff, benchmarking competitor's products, doing research online, attending trade shows, and even some occassional dumpster diving.  There is also a wealth of publically available information online.  You can monitor publically published information - such as product reviews, SEC filings, pubically available financial records, annual reports, business publications (corporate magazines that go to partners), press releases, advertisements, and competitor's websites.  It is also possible to acquire information from competitor's suppliers, your own resellers, and competitor's major customers.  All of this information provides a wealth of information about your competitor's strategies, markets, new products, and other company happenings.

In my next post I will cover a number of free and paid database services that you can use in your marketing intelligence endevors.

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Marketing 101: Managing Marketing Information: An Overview

Now that we have finished our overview of the Marketing Micro-environment, it's time to begin looking at Managing Marketing Information.

Why do we care about marketing information?  Marketing Information allows the Marketing Manager to do their job; it allows them to make real strategic decisions involving a business's brand, it's products, and the messages communicated to it's Publics.  Marketing Information provides a business with data about it's customers needs, the marketing environment, and it's competition.  A Marketing Information System provides data to key partners and suppliers in the Marketing Micro-environment.  Marketing managers usually need more information, they need the right information.

Over the next few weeks during out discussion of Managing Marketing Information we are going to cover:

- Assessing Marketing Needs
- Developing Marketing Information
- Marketing Research
- Analyzing Marketing Information

Assessing Marketing Needs
A good Marketing Information System balances the information you would LIKE to have with the information you NEED to have.  Remember, you don't need more information, just the RIGHT information.  Your responsibility as a marketing manager is to interview your staff to find out these needs.  Sometimes they may ask for more than they need, and they may not ask for what they really need because they don't know they need it.  Some managers won't ask for certain types of information because they feel they should already know it.

Sometimes it's not possible for your business to provide the information you need, because it is not available, or it is not capable because of your current Marketing Information System's limitations.  Always consider that the costs of obtaining, processing, storing and delivering marketing information can quickly become prohibitive for many business's.  You must decide if the benefits of having more information are worth the costs of providing it to your staff.  However, this can be hard to assess.  Remember that information doesn't itself have value.  What gives data value is how you are using it and the results it is providing your business.

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Marketing 101: Microenvironment - The Company

In this continuing Marketing 101 series, I think it's time to begin looking at the Marketing Environment.  The Marketing Environment consists of the factors and forces outside marketing that affect marketing management's ability to build and maintain successful customer relationships with target customers.  Within this environment we have the Macro-environment and the Micro-environment.  Let's start with the Micro-environment.

The Micro-environment consists of the factors close to the business (usually involving business relationships) that affect its ability to serve its customers.  We can break the micro-environment down into specific segments:

- The Company
- Suppliers
- Marketing Intermediaries
- Customers
- Competitors
- Publics

Let's start with The Company.

The Company
Inside the Company (think your business), marketing managers must work closely with other company departments.  They simply cannot work within a realm of isolation.  They have to depend on, and take other groups, into account.  These groups can consist of top management, finance, research and development, purchasing, operations, and accounting.  The reality is that these other departments have a direct impact on the marketing department's plans and actions.  In order for these plans and actions to succeed, the "marketing concept" contends that all of these functions must be "thinking consumer", and they must all have bought into the the strategic marketing plan in order to work in harmony to provide customer satisfaction and value.

Top management can directly assist and fast track your plans, or they can stop them in their tracks.  Finance has a direct influence on your budget, and whether money is available for your strategic plans.  R & D has direct influence on product development (think what you are selling).  Purchasing, operations and accounting all influence staffing, media execution and how well you stay on budget.

So the key question is: how is The Company?  Have you taken a hard look at the relationships you and your department have?  How does the rest of the Company perceive you?  Have they bought into your strategic marketing plans?  Are there any conflicts, or relationships that need to be restored?

Take the next few days and sincerely evaluate The Company.

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Strategic Marketing 101: The SWOT Analysis

My next post discussing the basics of marketing is the SWOT analysis.  A SWOT analysis is an essential part of any Marketing Plan.  It's best to include it early on in your situational analysis.  It may seem like a simple summation, but it's a great 30,000 foot view of the state of your business and the outside environment.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Strengths
Strengths are any characteristic of the business that may give it an advantage over it's competition.  Strengths can include internal capabilities, resources, and other positive factors that can help the business serve its customers and achieve it's goals.

Weaknesses
Weaknesses are characteristics that may place the team at a disadvantage relative to it's competition.  Weaknesses include internal limitations and negative factors that may interfere with the performance of the business.

Opportunities
Opportunities are external chances to improve profits in the environment.  They can be favorable factors or trends that the business may be able to exploit.

Threats
Threats are external elements in the environment that might cause problems for the business or project.  They are unfavorable factors that can challenge the performance and profitability of the business.

The goal of a SWOT analysis is to match a company's strengths to attractive profitable opportunities in the market, while eliminating or overcoming any weaknesses and minimizing any threats.  The identification of SWOT's is extremely important, because subsequent steps in the process of the trategic marketing of a selected objective may be derived from the SWOT.  Users of a SWOT analysis need to ask and answer objective questions that will manufacture data for each category (strengths, opportunities, weaknesses, and threats) and maximize the benefits to find a competitive advantage.

If you are a smaller business, and you have never done a SWOT analysis, I would really suggest that you go through this exercise.  Have multiple members of your team contribute to the lists in each part of the table.  Then example the list with your core management team or executive team and talk about each item as objectively as possible.

A SWOT analysis is an essential exercise when constructing a marketing plan for your business.  Doing it will probably open your eyes to factors internal and external that are influencing the long-term performance of your business.

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Data: Knowing How Your Customers Use Media

I can't say this enough, so I will say it again:  It's all about Data.

Another illustration: today the Pew Research Center released the results of a recent survey, stating that less than 10 percent of people are using social media for up-to-date news.  So what does this mean?

I think we can gleam a few points:

1) This shows that your customers are probably using Facebook and Twitter for other types of information.  Social media is a losing proposition and a waste of resources if it isn't used properly.  Know where your customers are looking before releasing any type of news.

2) Press releases and other types of media announcements should not be on social media as a primary method of dissemination.  Social media should be a part of the whole information release strategy.  As with any properly constructed strategic marketing, a variety of communication methods should be used.  Social media may be cheaper to use, but it's going to cost you real dollars through lost sales if you're not getting information out via the proper channels.

3) Social media's value is in it's ability to give marketer's a more direct, personal connection with their customers.  Press releases and product information don't build customer equity.  Personal, meaningful connections with products and brands build customer equity.  Social media gives us one of the best avenues ever to build equity with our customers.

As always, armed with the right data, our jobs as marketers becomes much easier.  Don't waste your company's time or money.  Arm yourself with the right data so you can use the tools available in the most effective manner.

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Reality Check: Marketing Defined

Every so often you have to evaluate how you are doing.  If you are a marketing professional, it's your responsibility.  So when is the last time you stepped back, and took a look at what you were doing?  Sometimes the best way to do that is to start with the basic definition of marketing.

The simplest definition of marketing I can think of is: Managing profitable customer relationships.  The goals are to attract new customers through superior value, and to keep growing customers by delivering customer satisfaction.  If you are doing these things, then you will be able to capture value from customers to create profits and customer equity.

So if we break this down, then we get some basic questions that are extremely useful for evaluating your current strategic marketing plans:

1) Are your customer relationships profitable?
If you're not making money, then it's time to start figuring out why.  Start collecting data and begin looking for trends.  It's going to take time to get things back to profitability, so it's best to get started now.

2) Are you attracting new customers?
As much as we hate to admit it, we're always going to lose a customer.  Even the most loyal customers may eventually buy another brand.  If you're not attracting new customers, eventually your sales will fall flat, and you will not be profitable.  So what are you doing to attract new customers?  What value proposition are you presenting to them?  Are you properly differentiated from your competition in your target market?  If your value proposition isn't clear, if you're not clearly different from your competitors, then confusion may be keeping customers from being convinced you are the solution to their want or need.

3) Are you creating satisfied customers?
Are product's perceived performance exceeding expectations?  Meeting expectations? Are customers buying your goods and services again?  Are you gaining new customers?  Or are you dealing with dissatisfied customers and poor sales?  Remember that customer value and satisfaction are the building blocks for developing and managing your customer relationships.

4) Do you have key measurements of your customer equity?  
Customer equity measurements can be better indicators of your performance than sales and market share numbers.  If sales are high, and market share is high, but your customer equity is low, you're going to be losing sales and profits will be tanking soon.  Get some data so you can make some real decisions.

Sit down by yourself, and with your team, and take a day to honestly answer the above questions.  You may be surprised at some of the responses.  Now may be a great time to make adjustments to your strategic marketing plans.

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Marketing Strategies: An Overview

In my relatively short career I've met a lot of people and worked with a lot of organizations.  There are a lot of people who truly know what marketing is, and how to conduct it.  There are also a great number of people who believe that marketing is sending a flyer, an email, or is "just too expensive to do right now".  Many people think they know what marketing and branding are, but in reality, they don't have a clue.

There is a science to it, and more often than not, you need data to determine your strategy.  I'd like to spend the next few months continuing to discuss the basics of marketing.  Today I'd like to start to discuss Marketing Strategy.

Marketing Strategy.  Strategic Marketing.  What is it?  Marketing with a strategy?  Using strategy when you market?  I mean, it seems to define itself.  It seems so logical.  It's a bit more complicated than that.

Marketing strategy is a process that allows an organization to focus it's resources on the best opportunities to grow sales and maintain a competitive advantage.  Let's attempt to break this definition into digestible pieces.

It's a Process.
Marketing, and developing the strategies you are going to use, are part of a process.  It's not quick.  It's not fast.  If it's going to be effective, it takes time and data.  Don't rush.  Strategies are a fundamental part of marketing plans.  You can't even develop your strategy properly until your environmental scan is complete.  

It's centered on an Organization.
Marketing strategies are meant to help the organization meet it's goals.  They don't exist to meet your personal or departmental goals.  A key component of marketing strategy is to keep marketing in-line with a company's mission statement.  

It's all about Focus.
Marketing strategies are focused.  Focus comes from data.  Data helps you construct your multi-year plans.  That's how you achieve your goals.  When you stray from your focus, your strategies fall apart, and you start to bleed dollars from your marketing budget. 

Marketing requires Resources.
Marketing doesn't just involve the VP of Marketing & Communications.  It involves resources from all over your organization.  It's not just dollars (though you really do need the proper amount of them).  It's people.  It's staff.  It's ideas.  It's a team effort.  

It's about the Best Opportunities.
Creating marketing strategies allows you to focus on the best opportunities to grow.  Notice that I didn't say all opportunities, or some opportunities, or the easiest ones.  I said the BEST ones.  Just because you can do something, or spend your budget towards a certain media buy, doesn't mean you should.  It if doesn't directly fit the focus of your marketing strategy and your multi-year plan, then you shouldn't do it.

Marketing is supposed to help Grow Sales.
Marketing is worthless if it doesn't lead to sales.  Some of us don't want to admit that sales drive your business. Sales feed the company bank account.  Sales create cash flow.  Sales allow you to keep your job.  Never ever forget this.  If your marketing strategies aren't growing sales over a defined time frame, then it's time to change.  Remember, marketing strategies are supposed to have the ability to be dynamic and interactive.

Marketing should give you an Advantage.
Effective marketing gives you a competitive advantage.  You should always be differentiating yourself from your competitors.  You should always be selling your competitive advantage.  If you're not, then you're just blending in with the rest of your market segment.

Are your marketing efforts focused?  Are sales growing?  Are you working with your team?  Are you chasing after every opportunity and wasting precious marketing budget dollars?

Maybe it's time to reconsider your strategy.

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