Category Archives: marketing strategy

Preparing a Business Plan for its Applicable Audience: Bank, Investor or Other

By James D. Roumeliotis

Business Plan Image 2

Often, the initial task expected from an aspiring entrepreneur is to prepare a business plan. A comprehensive business plan, when concisely written, is a tool that conveys in detail the short and mid-term (1 to 5 years) goals and objectives comprising the projected sales strategies, the marketing, operational and financial plans. This document should include in-depth research conducted regarding the industry and the competition. Moreover, it describes the strengths, weaknesses, opportunities and threats/risks (known as a SWOT assessment) along with a financial analysis, and assumptions on growth. The average 25-50 page document also lays out a map of where your company will be and how it will get there – also known as the “vision.”

Pitch Deck vs Business Model vs Business Plan

A typical question normally asked is: which one comes first? It depends on which of the three is being requested. However, the pitch deck is generally sent early in the discussion. The business model is created for internal purposes and can be comprised within the business plan. The U.S. Small Business Administration (SBA) refers to the business model as “a company’s foundation and the business plan as its structure. The foundation, or business model, is the original idea for your business and a general description of how it functions. The structure, or business plan, elaborates on the details of your business idea.”

Artizan Fine Foods Pitch Deck Cover

A pitch deck is a presentation − a deck of between 10 to 20 pages slides that is shared to potential investors and/or used as a visual during a live presentation to either investors or other audiences. The pitch deck is an effective summary of the key items in the business plan and includes information about the business, who it serves and why, the size of the market, the unique selling proposition (USP) and how the business will win in that space. It also lays-out the details about what the entrepreneur intends on doing with the funds sought from an investor.

The pitch deck is created in a Microsoft Powerpoint format and converted to PDF prior to being sent-out via email.

Business Model Canvas Explanation

The business model, more specifically, a Business Model Canvas is a company’s plan for making a profit − a design for the successful operation of a business. It’s how you create value/make money while delivering products or services to your customers.  It’s in a form of a visual chart with nine building blocks describing, among other elements, a business’s value proposition, infrastructure, customers and finances. It can be used to understand your own business model or that of a competitor. The business model canvas was created by Alexander Osterwalder, of Strategyzer.

Business Plan Content - Sections - Image

The business plan is a non-static document (usually in MS WORD and sent in a PDF format) which describes in detail, what the business does, and how it’s going to achieve its goals and objectives. It also incorporates the business model, the financial projections, and all other details about customer interaction/engagement, customer service, operations including management capabilities.

The business plan is first and foremost used by a business as a reference guide and shared when requested by the bank for a possible loan and/or funding considered by the potential investor.

What a banker or private lender seeks

For debt financing, which is either provided by a bank or an alternative loan source, the business plan should contain a convincing reason why the money is needed and how it is going to be used in the business. Being the least risk adverse, as compared to an equity investor, a money lender’s main concern is the possibility of a business failure/bankruptcy. Its main focus is on the ability to make the loan payments and eventually repay the entire loan. As such, much emphasis is on the cash-flow analysis. Likewise, bankers are interested in the business background of the management team. The marketing plan provides information on how the business plans to cope with competition.

A lender’s additional information sought is other sources of finance the business presently has in its books along with a list of potential collateral which the bank can have readily access to (business and personal assets), in case the business is unable to repay the loan. Likewise, the borrower’s financial track record is carefully evaluated.

What an investor seeks

When writing a business plan specifically to raise capital to fund a new business or take an existing company to the next growth stage, an Investor — whether an angel investor, private equity or venture capital, seeks certain vital information and requirements. The business plan should include a detailed use of funds, a descriptive growth strategy, a list and profile of the competent management team, and credible, reasonable yet ambitious financial projections. An Investor will also look for a unique competitive advantage that enables the business to be more effective than its competitors, as well as whether the business will be making a profit and how long it may take to do so.  The business plan should also state an exit strategy since the investor needs to know how quickly he or she will achieve any gains on his or her investment.

Other specific uses of a business plan

Immigration officials (referring to U.S. & Canada) require those applying for an Entrepreneur or Investor visa to submit a business plan which states that the proposed business has the potential to create the required number of jobs (economic benefits for the country) to qualify him or her for business related immigration visa. Furthermore, the business is being invested meets the monetary requirements and is irrevocably committed (wire transfers, cancelled money orders etc.), an itemized list of goods and materials purchased for the start-up, as well as the lease agreement. The source of funds must be stated, as well as convincing information on the ability to develop and operate the business.

A Government agency may request the business plan to issue a grant. One of the components that simply must be present in the plan is to show that, as the business owner, you are investing your own money. The bureaucrat wants to know that there will be skin in the game. Additionally, what needs to be in the business plan to increase the chances of receiving a grant is how much money is sought, how the funds will be used  and how soon required (perhaps include a timeline). The plan must be written in a form which takes into account the economic benefits for a legitimate and viable business.

A Strategic Business Plan differs from other business plans as it exclusively centers around on the company’s vision and places emphasis on a particular objective. For example, to focus on a particular niche in the marketplace. What would follow is to makes sales, marketing and customer strategy more effective.

What follows is an ideal description and comparison, from the BDC (Business Development Bank of Canada), between the Business Plan and Strategic Plan.

Business Plan. Strategic plan. There’s a lot of overlap between the two, but there are also some crucial differences you should understand.

A business plan answers “what do I want to do?” questions. It includes your company’s organizational structure, marketing plan and financial projections. Its purpose is to define where you want to take your business. It’s often the founding document of a new business.

A strategic plan, on the other hand, answers “how will I do it?” questions. It includes a detailed action plan for the next few years to achieve your company’s goals.

Both should include a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) and be reviewed regularly so that they’re up to date.

In the final analysis

In essence, the business plan is a document not solely for the entrepreneur to spell out strategy and to implement it. Its purpose is also to make a pitch to a banker, potential investor, and prospective partner, or for other (rare) purposes such as immigration. As such, the information should be tailored to what is sought by the specific reader. It ought to provide clarity of thought and purpose, by clarifying strategy, introduce the Business Model, the company, its “raison d’être”, as well as the management team.  It attempts to persuade investors in raising funds, as well as honestly highlighting risks and challenges. The business plan serves as an entry point for further discussions. Besides the management team and its competencies, banks are concerned that their loan gets repaid at a defined point in time so they place emphasis on the projected cash flow statement. An equity investor prefers a business plan which is realistic yet ambitious, their focus being on growth, a return which will yield at least a 10x return on their investment along with an exit strategy in approximately five to seven years.

Key Elements of a Business Plan:

  • Explain the business model in simple terms;
  • Fit the plan to the company;
  • Be credible and informative;
  • Demonstration of knowledge of the market and competitors;
  • Stressing the risks and steps to overcome the risks;
  • Using clear and concise language.

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Sex and Sensuality in Advertising: Why it is effective and how to refine it

by James D. Roumeliotis

Gucci Guilty Sexy Ad

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Does sex really sell? It seems to sell but commercially, not morally. Sex in the media has been around as long as media itself ‒ though these days at more extreme levels (from subtle to overt).

They’re not quite selling a product but rather an expression of desire – a lifestyle that can be envisioned with the product or service. It attracts the male audience much more than the female as women are objects of sensual desire for men. It’s no wonder that most sultry ads portray bodacious females.

Marketing and branding via sultry imagery and insinuation

Sex is a primitive instinct which qualifies it as an attention-grabbing technique in the media domain. It’s no wonder a weapon of choice for marketers. Sex also transcends product categories ‒ whether it’s a consumer product such as Axe antiperspirant, a recreational pharmaceutical drug like Viagra or an exotic sports car.

Sexually explicit ads can be controversial and some offensive. They are also subject to socio-cultural climate. As long as they don’t get carried away to borderline pornography, but rather refined, preferably subliminal and certainly not violent or masochistic, the sultry ads can be considered playful and memorable. Their original intent is to create an emotional effect on the viewer. This way, the viewer develops a closer bond with the brand and consequently, stronger recognition. Some ads intentionally incorporate a humorous element which generates further interest for its intended audience.

Fragrance ads by some fashion designers are intentionally created to sell a sultry elixir in a bottle. To succeed and spark emotional purchase desire, its creators have raised the stakes by provoking the visual (as well as the olfactory) senses and causing the consumer to believe that he or she will feel erogenous and desirable with those he or she cares to attract. However, there are few controversial ads which have been banned as they seemingly pushed pop-culture buttons a notch too far.

The benefits of sex in advertising

Businesses have found that sexy ads are a great method for “word-of-mouth” and viral publicity. Their attention grabbing messages have the ability to cut through the clutter of ads and command considerably more views. The intended viewers, however, are mesmerized even as they are absorbing the ad’s underlying subliminal messages.

A case in point: In 2000, Heineken launched the “It’s All About the Beer” campaign. One spot, called “The Premature Pour,” shows an attractive and alluring woman pouring Heineken into a glass. As a result, a guy across the bar reacts by pouring his own beer but nervously pours it too quickly and spills foam all over the table, as well as on himself. The sexual content is tacit, yet blunt. The insinuation in this, and other spots in the campaign, yielded a successful outcome causing sales to rise 13% in the first two quarters following their airing.

Popular men’s magazines like Maxim have experimented often with their covers. By placing a spicy, semi-naked woman on the cover, male readership spikes and outstrips an image of any popular male star whom men can readily relate to.

At Montreal’s renowned steakhouse, Queue de Cheval (French for “horse’s tail”), its eccentric owner, Peter Morentzos ‒ who is known for pushing conventional advertising boundaries, came-up with the idea to host a “Food Porn” event for a charity event. The sold-out $250 per person event featured young hard-body waitresses in skimpy outfits along with shrimps hanging on them which resembled human trays. To promote it, he used the photo of a naked woman’s torso deemed too racy for print in the culinary magazine Gourmet.

What sexually overt ads should avoid

For sexually explicit ads to be effective, they should be created in good taste with respect to the following:

  • Provide a meaningful message through the images;
  • Avoid over-reliance on sex due to saturation as it may lose its intended impact;
  • Should not depict violence, aggression and/or masochism;
  • Shouldn’t be doing it with just any product merely to grab attention but with some relevance utilizing sexual ideas only.

If a brand is willing to risk taking a controversial position to gain attention amongst the crowded product landscape, it should not be excessively overt. It ought to target the brand’s specific market along with not offending its fans and best customers.

Marketers at times tend to step out of line ‒ though, today many consumers happen to be savvy and realize when they’re being manipulated by various media messages. The products touted in the ads may contain sensuous interplay but if they don’t stand-up to their promises and hype, those brands will disappoint and won’t be able to hold onto the customers for long. At the end of the day, the truth in advertising signifies the “trust” factor which is inherently crucial in attracting and retaining clients.

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Exploiting The Benefits Of Niche Marketing: Strategic Marketing

By James D. Roumeliotis

Niche Marketing Image

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In strategic marketing “speak”, who earns more money: a general practitioner or a specialist physician such as an ophthalmologist? The latter has spent additional years studying with emphasis in one particular area of practice which makes him or her both scarce and sought after in his or her profession. The same goes for an organization that has spent years studying the market with emphasis on doing one thing, but one thing extremely well. This automatically justifies higher fees translating to improved earnings. How does a saddle maker to the horse and carriage trade reposition itself to maximize its know-how in leather goods to now command $4,500 for a simple briefcase? Or even hawk silk scarves at $400? Think Hermes.

The answer lies in specialization, craftsmanship, and branding. As with all other specialized professions, a business that, chooses to concentrate on a particular market segment should simply be generating higher revenues. Alternatively, if you join the herd of the mainstream, there is always a vast consumer audience to tap. Profit is driven by volumes. It is harder to compete on price to the point of being perceived as offering
a commodity with little or no differentiation — otherwise known as a “unique selling proposition” (USP). The only exception to that rule is when an enterprise keeps churning out innovative, “must have” items ahead of its competition. Yet that requires constant creativity, refinements, and a considerable amount of R&D. Apple is an example of a
firm that has managed to hit both objectives. Not bad for an enterprise, that started life in a garage.

Defining the term “Niche”
Strategically, niche marketing is the way to go forward. However, you ought to be on top of game. Recently, the firm Kusmi Tea has managed to put all the right elements together in an unbeatable combination. It personifies mass marketing and branding. If you have a specific group of people interested in “organic tea”, you have your proverbial niche.
Whether promoting niche products, in focused markets, such as those for vegans, cruises exclusively for “cougars and cubs” or geared for the ultra high net worth individuals, the activities applied to attract those refined target undoubtedly call for creative strategic thinking.

Targeted Audiences
The best way to start is to define your target audience. An 18-yearold girl who wants to lose weight to fit into her dress is interested in weight loss diets. Hit her at her waist line, and the target is captured with simplicity.

The family who just purchased a puppy wants it trained and therefore requires the appropriate service. Show you can make a dog shake, rattle, and roll and still act well-behaved in the company of others and you will no longer need to flog dog whistles.
Every notice how a 50-year-old lady wants to hide her wrinkles and is always searching for a miracle formula to make her wrinkles disappear in minutes? Open Vogue and see how this “class act” can be achieved. These cited groups above represent finely honed targeted audiences. Marketing to such audiences and building an emotional bridge from the intention to purchase decision always attracts higher conversions. You don’t need to recreate the wheel. All you need to do is to find a suitable product that your target audience is looking for and present it on a silver platter. All target audiences liked to be addressed with intimacy and personal contact.

Driving the Niche
Common sense tells you that driving a selected audience is efficient and lucrative.
The following key index shows how niche marketing should be your chosen business strategy:
1. When entering new niche market, generally you will not have much competition to deal with. This is justification alone for choosing a specific market in the first place. It also makes your SEO (Search Engine Optimization) Internet marketing strategy
focused and cost effective.

2. Niche markets appeal to target customers, and they are generally much more willing to spend money when their specific needs are met. This means that by catering to a specific target market, you can generally earn a better profit margin.

3. Some niche markets contain sub-groups of the main niche. For example, acai berry weight loss pills or natural weight loss diets are sub niches from the weight loss niche. Despite their relatively small size, they are actually quite sought after. Identifying
this need spares you from having to compete for similar business. People who fit this profile will seriously consider your product — especially if it offers them a genuine solution.

4. Niche marketing makes it possible to focus on becoming a true expert within a particular realm while building a reputable brand name. Strategically, it is also more focused and easier to segment and attack.

The “Ideal” Niche Player
A niche market player is very effective at working closely with customers to build and maintain long term relationships by innovating and challenging the existing norms in the industry, thus adding value to the project, program, and organizational level. If one is considered an expert in what one does by focusing in one area, then great success will
follow. The value proposition must be relevant to the target market.

This means a target market must be clearly defined. Focusing on a specific market requires knowing it inside and out. This includes conducting a market analysis, stating a precise target market description and goal, as well as being clear about the type of relationship one would like to achieve with his/her market.

By definition, then, a business which focuses on a niche market is supplying a need for a product or service that is not being met by mainstream providers. As such, one can think of a niche market as a narrowly defined group of potential clients offering them the best of what you have. In return, their vendors will profit from higher margins and customer loyalty. As for targeting smaller “sub” niches, you will find them much easier to dominate.

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The Formidable Company: How to make your business highly competitive

by James D. Roumeliotis

Going against your competition — especially a large and established one is not a wise approach. Being nimble, positioning your product to a new and uncontested target market, and offering a delightful experience (rather than focusing on price alone) are the tactics to apply in avoiding competition.

Kindly click the image for the details.

How to Beat the Competition Presentation Image

Click image to view slides/pages.

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Brand Experience, Not Product Branding: Cutting Through the Clutter

by James D. Roumeliotis

Brand Experience

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Products in the same class-categories struggle to differentiate themselves. Consumers often take brands for granted. Purchases are not so much conscious brand selection as choice by default. The two following examples highlight this. Going out for coffee in North America usually dictates a visit to Starbucks. When sparkling water is ordered at a restaurant, Perrier appears almost by magic.

The age of the internet has made copying competitors’ products, marketing strategies, and overall business practices to name a few. It’s not enough to merely compete at a product and pricing level which doesn’t take long to be outdone. Anyone can lower prices. What begs the question is where you draw the line before your profit margins are eroded to the point of no return and many ramifications for a business. Savvy marketers look beyond pricing and product features. Instead, they search for sustained ways to market their brand rather than their product.

“Branding” redefined for the new era

 To begin with, a “Brand” is a promise of something that will be delivered by a business. This promise comes in a form of quality, an experience and a certain expectation in the mind of the consumer. It includes the Unique Selling Proposition (USP). Marketing, on the other hand, is about spreading compelling messages to your target audience while branding is a combination of words and action. Marketing is extroverted and communicates quickly, while branding is introverted and a slow process if it’s to produce any real impact. Effective marketing activities are vital in developing a brand. When combined successfully, branding and marketing create and promote value, trust, loyalty and confidence in a company’s image, products and services.

When consumers are delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation.

A branding strategy should consist of:

  • Brand Positioning – Position is a descriptive sentence, slogan or image the brand is known for in the mind of the consumer and which the company delivers on it consistently. This is what sets the product or service apart from competitors.
  • Brand Identity – This is every visual expression of the brand, whether in print, television, digital or the iconic (Pullman) brown color identifying the trucks and delivery staff of the UPS courier company.
  • Brand Experience – Generally speaking, brands that are designed for a lifestyle should have a much higher emotional value to consumers than ones based on features like cost or benefits alone.
  • Storytelling – Brands build relationships by the stories they tell. Stories add personality to products which customers can better relate to and feel affinity with. Luxury brands boast their pedigree.
  • Engaging with your target audience – this is conducted through social media and asking for feedback. Simply put, engaged customers help you build your business.

The holistic selling proposition

Consumers today are more brand conscience, yet there are companies which continue to spend money advertising and selling product rather than brand. They place emphasis on price and quality as differentiators despite these two being overused by many copycats. Successful brands take a holistic approach to selling by exploiting the 5 senses which now constitute the brand. This is accomplished by what I regard as “ambiance marketing” and “sensory/sensorial branding”, through a captivating designed setting, yet alluring. This adds character and invites clients to truly feel the brand experience.

To put the aforementioned into perspective, consider the following:

  • Visual – lighting, décor, colors, layout…you can get a real sense of movement using these elements.
  • Auditory – music, effects, volume, vibrations…you set the tone and the energy of the room with your sonic selections.
  • Tactile textures, comfort, climate…this is all about how your guests interact with the environment.  This is a big thing to consider when you are designing the layout.
  • Olfactory fragrance, emotion, ambiance…this sense is under-rated and powerful. Of all our senses, the sense of smell is most closely linked to emotion and memory. You can use something as simple as burning incense or candles to something far more complex like computer controlled scent machines to enhance your environment. This could just be the extra touch needed to set the mood.
  • Gustative – with food establishments, the challenge is in finding the perfect balance between sour, salty, sweet, and bitter during menu designs and beverage selections.  The presentation also makes an impact on the overall image.

Customer Experience equals customer abbreviation

Developing the customer relationship through customer experiences

The Total Customer Experience is the sum total of the interactions that a customer has with a company’s products, people, and processes. It goes from the moment when customers see an ad to the moment when they accept delivery of a product and beyond.

According to Bain & Company, a leading management consultancy firm, out of 362 leading companies surveyed, 80% believe they deliver a superior customer experience, but only 8% of their customers agree.

The experiences customers go through with your business determine the ultimate perception of your brand and image. Customer experiences also spread the word (offline/online) to others (friends, relatives etc.) about your brand/image. That said, each customer contact (“touch points”) should be handled with the utmost care to ensure that the total brand experience a person has is constant. This requires proper training and occasionally evaluating employee performance. Moreover, improvements may be necessary with systems, technology, methods, services, products and even physical premises. Complacency should be replaced with continuous improvement.

Creating a lifestyle brand through emotional attachment

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. The most ideal example is when thousands of people line-up, regardless of weather conditions, to get their hands on the latest iPhone or iPad. This happens because Apple has built an emotional attachment to their products by creating a lifestyle choice rather than a product purchase.

It’s about how it makes you feel. Same goes for baby boomers, whether accountants or attorneys or business executives who purchase a Harley Davidson motorcycle and ride them for about four or five hours every Sunday afternoon. The bike makes them feel like a rebel – sort of an escape.

A brand that is designed for a lifestyle should have a much higher emotional value to consumers than one based on features like cost or benefits alone. The goal of a lifestyle brand is to become a way that people can utilize it to relate to one another. Those brands are an attempt to sell an identity, or an image, rather than a product and what it actually does.

Lifestyle brands have gained an increased share of the luxury market such as BMW, Armani, W Hotels, Louis Vuitton and Rolex ‒ just to name a few. These have given way to consumers to buy products that they associate with a “luxurious life.” They are essentially a status symbol.

B2B branding differentiation

Consumers are attracted to brands’ nonsensical benefits such as status, affinity, self-comfort and prestige, whereas, Business-to-Business (B2B) customers make their purchase decisions based on practical rationale including pricing, product performance and specifications, Moreover, brand loyalty in the B2B sector is higher than in consumer goods markets because companies in the commercial and industrial segments seek satisfying and long term relationships since jumping from supplier to supplier can cause havoc and inconsistencies with product quality control. Consequently, developing brand loyalty among enterprise customers can capture a larger share can increase profit margins while protecting them against lower-priced competitors.

The final take

The key to success is to market your brand, not your product. Contrary to popular belief, a brand is not a logo, label or product but rather a relationship with your customers. Branding positively adds value to your company including brand equity. This is considered intangible brand value.

A company can define itself as a lifestyle brand when its products promote a more than a product with key benefits and attributes. Note however that lifestyle branding is more than just promoting “a way of life.” It is a product or service that provides consumers with an emotional attachment to the lifestyle of the brand.

One way to overcome the ‘price only’ differentiation, which erodes profits and does not generate loyalty, is for a company to consider building a lifelong relationship with each customer. To do so, requires that each customer enjoys a positive and hassle-free transaction with each touch point. The goal is also to reduce or eliminate customer problems altogether, but that begins prior to and during the first contact with the customer. All problems should be documented, reviewed and corrected without much delay. Hiring the right people is vital, so is training them properly, as well as empowering them to deliver a remarkable customer experience.

When promoting brands, consider that earned media trumps paid media and enhances the brand image. With adverts, consumers don’t care what marketers say. According to a 2015 Nielsen Group report, “False” is the term 89% of consumers closely associated with advertising campaigns.

Whether a product or service ‒ is a luxury brand or falls into another category, it is how you stand out from the crowd that distinguishes you. Know your target audience, get inside their heads and understand how they think and feel. What are their fears, emotions and anxieties? Once you’ve understood this quite well, you then manage the brand consistently.

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Shady and Dysfunctional Enterprises: Deceit, Greed and Short-sightedness in the Name of Profit and Market Share

by James D. Roumeliotis

Dysfunctional Company Hierarchy

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Businesses of all sizes normally develop various pain points. A seasoned entrepreneur has actually made a list of 100. In the end, pain is a motivator for action to turn things around. However, the key is in how to tackle each one and in a timely manner. Better yet, how many of them are ever anticipated — and as a consequence solutions readily available? What is not anticipated are repercussions from poor decisions made or deceit deliberately caused with or without knowledge from company authorities. As a result, denial sets in from the top with accountability being dismissed.

Needless to say, chaos reigns within organizations which for many results in bleak outcomes. Within, there is a lack of communication, trust, transparency and loyalty. Not a sincere and astute way to operate a business.

By all appearances, there are plenty of executives who are simply results driven at the expense of their customers, employees as well as with their vendor relationships. Remarkably, most of those companies are publicly traded.

Corporations lack trust from consumers

A survey conducted by JUST Capital’s of more than 40,000 U.S. participants and groups indicates that the nation’s largest corporations are “going in the wrong direction.”

Overall, only 41 percent of all Americans trust corporations “somewhat” or “a great deal,” while 50 percent of more conservative Americans trust corporations.

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Source: http://justcapital.com/research

The cause of distrust among consumers can be rationalized due to corporations misleading the public as a whole, as well as their shareholders. Deliberate misleading information by food producers in regards to nutritional benefits and nickel-and-diming by airlines, hotels and banks are causes for frustration, suspicion and loathing.

Sectors notorious for constant price gouging coupled with despicable service include, but not limited to, a select number of pharmaceutical brands, banking/financial services, cellphone service providers, cable companies, large food brands and airlines. Too add salt to injury, in the U.S. and Canada, pointless aggressive lobbying efforts by various industries yield their influence by means of generous contributions to political parties. They are also infamous for spending a ludicrous amount of money producing sly ads and propaganda which go against consumer wishes. Consider the soda lobbyists who, according to a NY Times article, “made campaign contributions to local politicians and staged rallies, with help from allies like the Teamsters union and local bottling companies. To burnish its image, the industry donated $10 million to the Children’s Hospital of Philadelphia.” Sadly for consumers and the city of Philadelphia, the tactics worked. Similar outcomes occurred in New York City and San Francisco. In the end, the soda industry’s rubbish of an astonishingly high calibre, comes as it does from the same producers of fatty chips to the semi-literate masses. Shameful practices include the deceitful marketing of chemically-calibrated and engineered to simply taste good processed food products that are making its mainstream market obese, thus unhealthy.

In certain types of large scale B2B transactions, there can be scope for unscrupulous behavior. One or both parties are tempted to forego ethics in favor of making the deal. Such relationships inevitably end badly because they are either uncovered by authorities, as well as not conceived with trust or respect.

Then there are the occasional devious companies that will do what it takes in the name of revenue and profit ─ disregarding authorities, customers and everyone who takes their trust for granted. Volkswagen’s blatant rigging of emissions tests with over 11 million of its diesel cars sold globally, 482,000 of which are VW and Audi brand cars in the U.S., is an ideal case in point. As a result of its mischievousness, the company known for its hard core corporate culture caused a great deal of damage to the environment. Their supposed clean diesel models have been spewing up to 40 times more smog-causing nitrogen oxide pollution. The recall is one example of a deliberate act gone terribly awry for a brand which wholeheartedly masterminded it with self-admission. Rather than sacking the CEO Martin Winterkorn, under whose watch this scandal occurred, and depriving him of his golden parachute, the supervisory board allowed the septuagenarian, Mr. Winterkom, to conveniently step down and take home a lucrative compensation package.

contact this author for his pragmatic and practical approach.>

Corporate governance or lack thereof

The term “Best practices” is not merely words but deeds. What is required is an efficient implementation of strategies, quality controls and delivering more than lip-service. Evidently, it is not easy, otherwise, many more businesses would be performing admirably.

To understand and penetrate the corporate governing structure and “culture”, you need look no further than the upper echelon of the hierarchical tree. It is where procedural decisions are shaped and executed. One would think and expect an entity’s leadership to head the enterprise by governing its long-term growth and sustained wealth. Conversely, there is a constant search for the “ideal” human resources. Recruited and fresh talent must resemble the leadership in tone and style. Call it the organization’s DNA. Exceptional organizations are good at these types of corporate strategies, thus strengthening performance effectively.

In the end, leadership ought to foresee and prevent any potential scandals, apply checks in balances, inspect what is expected, keep corporate structure layers to a minimum, and keep communication channels open.

Customers first, employees second — investors third

In the ivory towers of public corporations, the CEO and board of directors have been programmed to put their stakeholders best interests above all else. Their mission is to do what it reasonably takes to deliver quarterly results ─ in other words, to focus on the short term rather than sow the seeds and do what is most beneficial for the future direction of the company ─ despite any short term pains. Savvy and considerate top management know better that customers and employees are the two key drivers of corporate success.  The main principle is that if employees have a positive attitude, are passionate, well trained and competent, results will be reflected through positive customer experiences resulting in brand loyalty. Ultimately, the shareholders will reap the benefits through stock performance and generous dividend distributions.

Jack Ma, the founder and executive chairman of Alibaba Group, a family of highly successful Chinese Internet-based businesses, made a public statement which may have surprised the investment community. He publicly stated that, “Our customers come first, our employees second, and our shareholders third.”  The highly regarded membership-only warehouse club COSTCO performs actions consistent with one’s claims as they too follow Jack Ma’s mantra. The impressive financial results year after year speak volumes as they retain the best intentions of their employees and customers.

It took Amazon quite long to finally earn a profit since its inception. Founder Jeff Bezos and his senior executive team dug in their heels despite outcries from many of their shareholders for continuously making large capital investments with no profits in sight. For a while, plenty of cash was spent for IT related infrastructure including Cloud computing and everything related to giving the company an edge over the competition. Customer service and the customer experience have been priority no. 1. In the end, shareholders who lingered learned that patience with their investment in Amazon is a virtue in the long run.

The attitude of the individuals in the boardroom had better be that if investors are impatient and eager for quick monetary results, they can take their money and invest it elsewhere.

Advice for start-ups: ‘Steady as she goes’

A well-oiled operation should consistently head steadily on its current course regardless of any obstacles that get in its way.

Research by the U.S. Bureau of Labor Statistics reveals that nearly six out of 10 businesses shut down within the first four years of operation.

To be a successful entrepreneur is not an effortless task. It takes plenty of sacrifice. A new generation of young entrepreneurs think the road is smooth and a fast track to easy wealth. Not everyone will become Mark Zuckerberg. Obstacles and sacrifice are part of the deal. Harnessing opportunity and overcoming challenges on a daily basis to top the competition is constant work. These conditions are true no matter what the sector of business engagement or company size.

Telltale signs of weak organizations can be traced to inept leadership. The following points highlight the deficiencies:

  • Poor customer service – slow or no customer inquiry replies – abysmal handling of sales and service complaints. Service is portrayed as a reward, not a right or benefit.
  • No Unique Selling/Value Proposition. Companies need to define and articulate their unique value proposition and deliver on it consistently. Create the platform for sustainable and competitive advantage.
  • Operational deficiencies – various ailments and no structure
  • Absence of or very little communication among staff and management. Divisions aren’t well-coordinated and do not function as a team.
  • No transparency. There is hardly any openness from management.
  • Unethical practices – short-term selfish objectives in search of market share. Top executives should promote social norms and principles as moral agents.
  • Lack of proper execution of decisions and with new products/services.
  • Productivity incentives should be implemented to boost results and employee morale. People must be given a reason to work hard and be efficient.
  • Creativity is practically non-existent. An absence of innovation and employee empowerment will hurt progress and stifle new ideas.
  • No clear vision/strategy – there needs to be a strategic vision that reflects a truly unmet need and has the commitment of a dedicated CEO. That means that there is a well-defined target audience with a distinct value position that is differentiated, meaningful, and deliverable.
  • A weak sales force along with an unattractive compensation plan.
  • Favoring nepotism and bias – promoting family members over other qualified employees often leads to resentment or, worse, prompts valuable non-family employees to leave the company.
  • Poor hiring practices – should hire for attitude and train for skills.
  • Slow/delayed decision-making process – too many layers – overwhelming bureaucratic structure.
  • High turnover, which leads to poor employee morale, reduced intellectual capital, lower service levels, higher operational costs and decreased productivity.
  • Management in a state of denial about their organization’s shortcomings – remaining with the dysfunctional status quo
  • No channel strategy. Some companies focus on building a product, but don’t think through how to get it into the hands of customers. Even if your product is great, unless you can sell directly, you may be dead in the water without strong channel partners.
  • The hidden game – corporate politics – power plays by a handful of individuals for their own benefit to the detriment of their colleagues and the company.
  • Misrepresentation of brand(s) – too much hype – empty promises – not delivering on expectations – leads to dissatisfied clients who will alienate the brand.
  • Weak financial controls – cash flow dilemmas – over leveraged/undercapitalized (high debt-to-capital ratio) – not reinvesting a certain percentage of profits for future growth.
  • Absence of sound marketing program(s) and/or brand strategy. A brand is defined by how it behaves, from the products it builds to how it treats its customers, to the suppliers with whom it works.
  • Growing too fast and not staying on course as the company grows.
  • Lack or very little employee training & development.
  • Deficient in control systems – reactive rather than pro-active.
  • Lack of continuous improvements or complacent.

In the final analysis

In large corporations, the Boards should be held more accountable by paying closer attention to the behavior and actions in the C-suite ‒ thus reacting before things go awry.

The top executive’s job is to operate a business that adds value by means of the goods and services it provides to customers.

The way to solve an organizational problem is to confront the structural issues with a moral sense of purpose and ethics. Higher morale generates higher profits – though occasionally other priorities undermine that objective, for example, self-serving behavior by certain executives or chasing short-term selfish objectives in search of rapid market share, profits and self-interests before people. Monsanto’s executive conduct would make for a marvelous case study in this regard.

According to marketing maven Seth Godin, “It’s the flameouts and the scams that get all the publicity, but it’s the long-term commitment that pays off.”

Wish list of best practices should include but not limited to:

  • avoid potential scandals;
  • apply checks in balances in place;
  • inspect what is expected;
  • trust but verify;
  • retain corporate structure layers to a minimum, and
  • keep communication channels open.

In the end, what you manage and how you manage it is what you get — methodical, sustained growth with patience and lack of greed.

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The Challenger Brand: Going Up Against the Category Leader with an Alternative Product and Ethos

By James D. Roumeliotis

Challenger Brand

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The status quo is a complacent syndrome which exists with most established brands regardless of which sector they are categorized in. Despite a large capital chest, they are short-sighted, dull and lack the nimbleness to adapt swiftly. However, there those such as Nike and Amazon, among others, which innovate constantly. Nowadays, newbie companies fill in the gap and disrupt entire industries with revolutionary business models, products and services – whether in the service domain (think AirBnB, Uber and Netflix), automotive (consider Tesla) or in the consumer product domain (such as Dyson, Under Armour, Warby Parker and Hampton Creek’s Just Mayo brand).

The anatomy of the challenger brand

A “challenger brand” is defined as a company or product brand, whether a start-up or established, which faces up to the category leader in an advocacy stance. As a result, this type of brand/company is brusque to the point of creating and applying bold tactics. Furthermore, it is distinct and emotionally driven to be able play from a position of strength behind the dominant player in its sector. Consequently, the challenger brand eagerly takes on a unique position and showcases with conviction, to its target audience, why it is the logical alternative to the segment leader. Unique features offered may include enhanced features and benefits from those offered by the category leader. These may include better materials, technology, functional and attractive design, craftsmanship, performance, above average service, better value for the money, as well as social responsibility to name a few. This works well with consumers who are either under-served or under-valued by the leading brand.

Uber, with the birth of the ride sharing app, came along and challenged the taxi domain through a paradigm shift. It took the taxi leagues worldwide by storm which got the cabbies up in arms and resulted with them protesting and asking their local government to legislate against their nemesis. Rather than looking inward and reforming to compete, the cabbies chose the path to ferociously protect their precious monopoly. One taxi trade magazine even printed a column that condemned Uber as a “corporate pariah,” a “malignant tumor,” and a “giant octopus” that has “spread its tentacles globally.”

A challenger brand is determined to persist and persevere to constantly make a point to undermine the leading standard in order to change the rules to the benefit of the customer.

How to outsmart the category leader

When the challenger brand does not have the marketing budget to go head-to-head with the established brand in its category, it is easy to see why the latter can fail. To overcome this problem, the challenger creates unconventional marketing tactics which are more effective than traditional ones with much less ad spending. Sometimes that advertising is giving jabs to the weakness inherent with the category leader and it can include clever yet subtle messages which, if effective, may be able to persuade consumers who were leaning toward the established brand that it is not all that great as always thought.

Advocating and standing for something compelling, such as Patagonia with its social responsibility mission which is: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”  The idea is to make a strong emotional appeal about the changes they seek to make a difference with. It is demonstrating and personifying not only through mere words but also with deeds that they are a better alternative to the incumbent brand. This takes being and acting confident through passion, beliefs and a purpose against the norm in return for something that matters.

Jude Bliss, the editor of the online blog The Challenger Project, had made this noteworthy statement: “Challengers are as clear about what they are rejecting as they are about what they are championing, which involves clearly defining what you see in the current market that is broken, as well as what change you can bring.”

It does not matter whether you are a new and small brand or the largest. Everyone can partake as a challenger brand. As long as your largest competitor defies with your ethos, then you have a cause for a challenge. No better example of this than Apple vs Microsoft with their witty advertising jibes at each other as to whose PC is the smarter choice for the user.

Another tactic to use as a challenger brand, if you are in the consumer goods domain, is to be creative and stand-out among the crowd with exceptionally designed yet functional packaging. Taking away the bland and ordinary and making the product desirable. Consider what Toblerone chocolate, Veuve Cliquot champagnes, SKY Vodka and others have succeeded in doing which eventually spiked their sales.

Audi has taught other brands how to challenge

BMW and Mercedes Benz are two German premium leading auto brands which command an equal level of prestige and respect. Both are in the same league in terms of German engineering and precision. However, each has a distinctive style which distinguishes it in the target audience – younger who prefer dynamic driving and older demographic with preference for a luxury drive respectively. As regards to Audi, up until the several years ago, the brand was deemed as the awkward stepchild of the parent VW group — the Toyota of the German elite of sorts. Lately, Audi has stepped up its game and finally entered the world as a true competitor along with their German tagline exuding what they stand for: Advancement through Technology. Audi has been gaining on its German rivals. Its firm commitment to excel has brought Audi to an audacious position to vigorously challenge its opponents BMW and Mercedes.

In 2009 in a busy Los Angeles, California intersection, a billboard ad rivalry between what Audi initiated and with BMW responding had escalated to a new level. A tit-for-tat had ensued when Audi placed an image of the all new Audi A4 along with the headline: “Your move, BMW”. Santa Monica BMW, a local dealership, took on the challenge and entered a virtual chess game when it added a billboard not far from Audi’s which featured a photo of the BMW M3 with the counter punch, “Checkmate.” A few days later, Audi unveiled a new billboard to replace the one with the A4. It featured an R8 super-car and read: “Time to check your luxury badge. It may have expired.” In the end, BMW moved its billboard to some other place and the billboard ad war came to an end.

Audi and BMW Billboard Challenge 1

Audi and BMW Billboard Challenge 2

In a Brand Channel blog interview with Loren Angelo, director of marketing for Audi of America, has said that “As a challenger brand, you have to look at your category, your situation…and attack it head-on.” He further elaborated: “We need to continue to challenge. That’s what allowed us to drive our position and to turn the brand around beginning in 2008. A challenger brand doesn’t mean we only challenge the competition, but we communicate how we challenge the status quo and challenge complacency in our industry and in culture.”

That being said, as a challenger brand, constant and persistent messaging with conviction to the target audience ought to be applied along with the delivery of unique customer experiences to solidify brand loyalty.

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The Top 10 Most Read Articles in this Blog for 2015

by James D. Roumeliotis

Top 10 Articles for 2015

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As in every year, I have once again rounded up the ten most read/popular articles — this time for  2015. The following ten captured the most attention by numbers and from 154 countries in all. See them all below in descending order.  Your views are always encouraged including subject matter you think I should be covering more of.

THANK YOU for your readership and I look forward to feeding your mind with much more business practical food for thought this year which can be applied for timely results.

1 Luxury vs. Premium vs. Fashion: Clarifying the Disparity

2 Perceived Quality: Why Brands Are Intangible

3 The Art of Selling Luxury Products: Brand Story Telling & Persuasion

4 Mass Customization & Personalization: The Pinnacle of Differentiation and Brand Loyalty

5 Exceeding the Hotel Guest Experience: Anticipating and Executing Desires Flawlessly

6 Brand Awareness: the influence in consumers’ purchasing decisions

7 The Ultra Luxury Purveyors: Lessons from brands catering to the richest 1 percent

8 Identifying and Catering to the Discerning Consumer: Quality and Service Above All

9 Start-up Essentials: A Universal Roadmap for Starting a Business — Infographic

10 Product Features vs Benefits: The Brand Differentiation

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Giftvertising — a Brilliant Trend and Unconventional Marketing Tactic

by James D. Roumeliotis

WestJet's Christmas Miracle 2013 - Hamilton Airport, Ontario, Canada

WestJet’s Christmas Miracle 2013 – Hamilton Airport, Ontario, Canada

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Sadly, every day we are inundated with a slew of advertising messages almost everywhere we turn. There seems no escape.

A new study of media usage and ad exposure by Media Dynamics, Inc. reveals that a typical adult’s daily media consumption has grown from 5.2 hours in 1945 to 9.8 hours (or 590 minutes) currently.

Companies that wish to cut through the advertising clutter and stand-out are constantly utilizing unconventional and bold tactics through creative and methodical strategies. Through Giftvertising ‒ or gift giving captured on a video for advertising purposes, a brand develops memorable organized events with elements of surprise, while concurrently filming the reactions. The filmed message conveyed is one of generosity and caring to enhance customer perception.

Guerrilla marketing in video format

“Guerrilla” Marketing, a term was coined by Jay Conrad Levinson in his 1984 with his initial book entitled ‘Guerrilla Advertising’, is regarded as a bold, unconventional and low budget marketing/advertising strategy with effective results. In marketing, the element of surprise is a crucial method in breaking through a plethora of traditional advertising media. ‘Giftvertising’, an advertising trend, where marketers surprise their customers with free gifts, is akin to “Guerrilla” advertising in an online video format. Its aim is to create a highly entertaining and emotional bond with its customers and viewers. Furthermore, the scene filmed on video is anticipated to create buzz thus go viral on social media.

The advertising industry is constantly under pressure, by its demanding accounts, to create elaborate experiences for their targeted audiences. Ingenious campaigns are expected to break through the clutter, whilst differentiating a brand and improving its image which elevates its perception as trendy and customer driven. To be noticeably effective, the campaign required a public relations strategy approach, as well as be distinguished as authentic and purposeful by its viewing audience if it is to go viral.

Within the last few years, several brands experimented by launching their share of emotional based Giftvertising videos including WestJet Airlines which started it all with its “WestJet Christmas Miracle” − followed by others including TD Bank with its “Automated Thanking Machine”, Air Canada’s “Gift of Home for the Holidays” and MasterCard’s “Priceless Surprises.”

Case Study: WestJet

If there is a contemporary brand which inspired other Giftvertising campaigns which followed, it is none other than Canadian carrier WestJet Airlines Ltd. In December 2013, in time for the Christmas holiday season, it became one of the most watched viral videos over the Internet with over 40 million YouTube views (and counting). Additionally, it received numerous press mentions around the world. Consequently, other companies launched their own videos yearning similar results.

A year later in 2014, WestJet put out another remarkable Christmas video. This time it was set in the Dominican Republic. However, it did not reward its customers but instead it gave back to a small town in that country the airline flies to. Both videos average 5’30” each – an ideal amount of time to communicate the occasion without getting carried away.

Not surprisingly, both Giftvertising campaigns had a positive impact. They dramatically increased WestJet’s website visits along with bookings compared to the same month the previous years. All told, the company’s revenue soared by more than 80%.

All things considered

It takes unconventional marketing wisdom with bold tactics, along with a demonstration of genuine admiration and care for the customer, to produce emotional and memorable occasions including utter joy displayed by company employees. All this can have a profound effect on the millions of viewers. If it succeeds in its intended purpose, the publicity it generates on social media will be well worth the investment.

Giftvertising, undoubtedly, establishes a strong emotional bond between the brand and its customers just as it conveys a strong emotional impression boosting its positive image of a company one should certainly consider doing business with.

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