One of my blog readers recently asked me a very good question: what is the biggest challenge with Marketing to new prospects today and why? I struggled hard to come up with a single, most common challenge that marketers face in today’s business environment. Instead I identified three that I think are reflective of what most of you involved in brand management face on a daily basis (unless you work for Apple).
Increased Competition
It’s a fact: companies today are facing fierce competition on all fronts: product quality, price, customer service, innovation. This is mostly due to globalization. Barriers to entry in most categories are very low and new competitors seem to be appearing overnight. The number one rule of building a strong brand is to be the first in the category, or create a new one. But in today’s fast chancing environment that rule needs an addition: you need to be able to always be one step ahead of the competition and protect your advantage.
Research In Motion pioneered the smart phone with the introduction of the Blackberry. Today the company struggles to remain competitive as Apple and Google has taken their original idea and perfected it, while RIM was slow to react. Kodak was the king of film cameras, however when digital photography took off the company wasn’t able to keep up. Today Kodak is a marginal player in the industry.
Marketing to new prospects takes a good differentiation strategy to succeed. You have to provide your target market with a “reason why” they should choose you over your competitors. But even a good positioning is not enough without the ability to always deliver on it and, more importantly, to be able to defend it.
Brand Loyalty in Decline
With the explosion of social networking shoppers are more selective and knowledgeable than ever. They demand better quality products at lower prices, and perceived most goods as commodities. Increased competition is beneficial to consumers, who have plenty of options in most categories. Private label store brands are replacing well established brand names in consumer preferences. You can now research prices, product features and availability with a click of the mouse, and brands have less then 10 seconds to make a good impression.
The end result is a decline in brand loyalty, as people are willing to try new brands and compare the experiences. Very few brands have managed to build a solid group of loyalist, and that happened over a period of decades, not years.
How do you build brand loyalty? A good start is to have an in-depth understanding of your target audience, and to adapt, listen, and innovate. Harley Davidson is a good example of brand who managed to maintain and grow its loyal fan base by adapting to a younger generation with new, more affordable models and engaging Marketing programs.
Fragmented Communication Channels
Back in the old days marketers had a few options for allocating the Marketing communications budget: TV, radio, print, outdoor, public relations. Today there are those tools plus Facebook, Twitter, Mobile, Web, Google +, e-mail, search, blogs etc. A new communication tool seem to be launching every week and I personally have a hard time keeping up with them all.
As a consequence it is much more difficult to get your message out and build credibility. In order to create an impact you have to use multiple communication tools (print, web, social media, TV, trade shows, etc), whereas in the past newspaper ads, TV commercials and trade shows were probably enough to build awareness and attract customers. However in most cases the marketing budget has not grown accordingly so marketers have the big challenge of precisely dividing and allocating it to the medium that provides the biggest ROI.
The bottom line: it takes more time, patience, money, flexibility, and consistency to build a brand today than even 10 years ago. Marketers have to walk the fine line of balancing the need to provide immediate sales results and the long term goal of building brand equity.
I am very interested in hearing the challenges you are facing in your everyday job as marketers. I also welcome your Marketing questions and comments of any kind.
Hi Michael, I completely agree with your first two points. Keeping yourself one step ahead is key to success, but that’s easier when you’re an incumbent and not a established industry leader.
Paradigms start to form within the core of the business and trying to move away from the core to meet consumer’s demand is sometimes difficult. RIM was a business-focused solution, they didn’t cared much about end-consumer nor selling applications as a parallel business.
Your 3rd point is the evolution of communicating with consumers. It’s the social media revolution. http://youtu.be/lFZ0z5Fm-Ng
It used to be one-sided communications (Brands telling consumers what to buy), now consumers expect to talk back to brands and only those who are willing to listen are going to keep higher loyalty levels. However, you’re right about our budget, which are not increasing, hence the challenge. Perhaps we have to re-think our A&P investing strategies and balance it towards effectiveness. http://wp.me/p11ezC-b9