In last Monday’s Wall Street Journal, there was an article titled "Mistakes Marketers Make" written by Dr. David Corkindale from the Universirty of South Australia's International Graduate School of Business.
Unfortunately, Dr. Corkindale understands how to write the kind of article editors love to publish (i.e. trying to turn conventional wisdoms on their head) however; these "mistakes" are really his "misconceptions". Let’s take six--one at a time.
Misconception 1: Companies Need to Find and Target the Market Segments for Their Brands.
Wrong says Dr. Corkindale. Aim at the broader market. The profiles of those who buy different brands in a particular product category are not that different. Marketers who only target a certain buyer lose potential business - and spend unnecessary market research dollars on segmenting the market. In one recent marketing study, nearly 50% of consumers said they bought the same brand of gasoline regularly. However, after studying their purchasing behavior for 6 months it was found they only bought their brand 6% of the time.
Ironically, Dr. Corkindale has over-generalized his attack on targeting. Targeting is not a broad tactic. By its very nature it is designed to help tailor a marketing message for maximum effectiveness. Gasoline brand-loyalty is a terrible example. It's a limited homogeneous product. No one drives an extra 3 miles for brand loyalty when you’re running out of gas. Instead, ask yourself, "Pepsi or Coke?"; "Mac or PC?"; "Marlboro or Camel?".
Targeting and market research works. Otherwise, we’d shoot from the hip with a potato gun and hope we get close to our ideal buyers. This misconception stems from drawing broad generalities from minute observations. Anyone can see that logic gap.
Misconception 2: Loyal Customers are the Most Valuable.
Wrong again, according to Dr. Corkindale. Totally loyal buyers of a brand tend to make up only 10% of all buyers - and they often buy less frequently than other buyers. A company that focuses on gaining and retaining these buyers may not be doing the smartest thing.
First off, no customer is "totally loyal." Furthermore, how does Dr. Corkindale define a "loyal" customer? I would assume that a customer that buys less frequently than others is not a particularly loyal customer.
Loyal customers are indeed valuable. They can become the champions of your Brand. Treat every customer as the most valuable customer, but provide incentives for loyalty. Without loyalty, any incumbent competitor can swoop in and take all your hard-earned customers.
Misconception 3: To Succeed, You Must Differentiate Your Product.
Not according to Dr. Corkindale who says that doing so restricts your product's appeal to the small set of customers who like what you did differently. What most customers want is not differentiation but products or services that are simply better at doing the routine things they expect.
That is differentiation. It's crafting a message that demonstrations how your product or service 'does it better, faster or cheaper'. That’s the whole point. Without any differentiation, you're "me too"-marketing. Someone please remind Dr. Corkindale that necessity is the mother of invention—not marketing.
Misconception 4: Promotions Bring in Extra Worthwhile Business.
Nope - promotions just attract people who were already customers. The result? Giving discounts to the people who would have bought anyway. And the new customers you do attract often don't become frequent customers, says Dr. Corkindale.
This may be true, but not because promotions or incentives are a common marketing mistake. It's because they're commonly poorly executed. Most people don't have the faintest clue how to generate a buzz, develop a power-play promotion, and derive ideal buyers out of it such that the whole thing creates a positive return.
Give away a chance to win a tropical island with every can of soda, and you’ll convert very few new, loyal customers. Offer the latest iPhone with twice the memory at 1/3rd the original price, and watch everyone in America storm your stores.
Misconception 5: The Company that is best at Marketing the Four P's (product, placement, price, promotion) Wins.
Half correct says Dr. Corkindale who says that equally important is "brand strength". A strong brand is one that people trust and that has a track record of high quality and reliability. Companies need to do everything possible to nurture their brands.
There's nothing wrong with Branding. However, like a celebrity spending more time worrying about their public image than honing their craft, too many companies over-emphasize brand nurturing. It's hardly on par with the 4 P’s.
Misconception 6: Marketing is All About Hunting and Capturing Clients.
Not anymore says Dr. Corkindale. The Internet has changed everything. Consumers proactively hunt out and evaluate you online. They use the internet to find and make choices about the products they buy.
Try again, Dr. Corkindale. Customers are usually passive hunters until something peaks their interest in seeking you out. Maybe a potential customer is looking for a Halloween costume and so Googles it to find online shops. Building an optimized website, developing channels for traffic to enter your website and making it as easy as possible to make a purchasing decision are key to acquiring these customers. All are marketing activities designed to acquire and retain customers online. In other words, we might not be stalking our prey online, but we can set traps and use lures.
Although writing an article highlighting the mistakes in conventional marketing wisdom will get you published in the Wall Street Journal, it doesn’t mean you’re right. Marketing by its very nature is more art than science. There are no over-arching right and wrong ways to market. It takes an approach focused on the specific not on the general—a common misconception in Academia.