Business Update – May 2009
In times when there are fewer sales opportunities, leading organisations ruthlessly analyse their marketing mix to identify and eliminate weaknesses that might create purchase obstacles.
If your sales have slowed, one of the first areas to scrutinise might well be pricing. How you compare with competitors will determine your value perception for new customers, but will existing customers notice?
You bet your hat they will, and you are mad if you think otherwise. Part of ensuring your pricing is right is to see it from a customer’s point of view … and how can you do this if you’re not sure what your competitor is charging?
What’s happening in advertising?
If you thought it was all doom and gloom, you’d be wrong. The latest date from the Commercial Economic Advisory Service indicates that for the six months ending 31 December 2008, compared to the prior year all advertising increased 1.2%, with the big movers being Pay TV and online advertising up 25% and 11% respectively. Regional TV (11% of all advertising, declined 1.2%) and magazines declined just 1%.
Overall this is good news, and I think the next 6 months will be very interesting. Certainly Pay TV is doing well, as is the CEO of Austar, John Porter who has increased his pay to $5.2 million up 43%.
Has anyone been watching the Gruen Transfer on ABC 1? In its second season and still good value, but so is ‘Mad Men’, a highly involving profile of advertising in the 60s in New York appearing on Thursday via SBS.
One of my favourite reads is the Fin Boss magazine, and this month I was inspired by two articles … here’s why.
In a profile about consumer spending, Catherine Fox talks to the GM of David Jones apparel, cosmetics, accessories and footwear.
We learn that despite the plummeting economic indicators, the latest model Chloe handbag has been among the quickest sellers this season. It’s price: $3,000!
While there would not be sufficient lawyers’ wives in Port Macquarie to sustain a local stockist, the model still applies. Consumers are buying premium products if the mix is right.
In the same article, the boss of Industrie clothing, Nick Kelly says it’s time to marry caution with opportunity. “I think discounting is a flawed strategy … now is not the time to reduce marketing, because the easiest time to increase market share is when my competitors back off.” True words indeed.
What do leading marketers have in common when it comes to selling in tougher times?
1. Be realistic, with lower growth targets but maintain marketing support.
2. Don’t rely on price promotions for volume, as discounting will only damage profits – especially when competitors follow.
Our Council is claiming a satisfaction rating of 61% resulting from a survey of ratepayers late last year. While this seems a depressingly low figure, in one sense it is encouraging that surveys are undertaken.
For what good, you may well ask. With their financial situation it’s not like Council are in any shape to assist local businesses. Developers beware … higher contribution charges are on the way.
Locally, Alan Anderson has reached a milestone recently with his 60th birthday. Well done Ando – you don’t look anywhere near that age. Add 10 and you’re closer!
A young couple about to get married were killed in a tragic car accident and asked St Peter in heaven if he could arrange for them to be married.
Many years later they returned to St Peter and said, “You know, we thought we’d be happy. But now we have so many irreconcilable differences that we need to end our marriage and sort things out. Is there any way we can get divorced?” Are you kidding?” said St Peter. “It took me 100 years to get a Priest up here to marry you. l’ll never get a Lawyer.”