Printed
with permission from TCI
Management Consultants. A group of senior-level management
consultants, offering strategic planning and marketing services
to a wide range of public and private sector clients.
New
Marketing Practice - Rules for Success in a Changing World
by
David Mercer
Penguin Books, Harmondsworth, 1997
David
Mercer is a Senior Lecturer in Business Studies at the Open
University Business School in Europe. Prior to this position
he was involved with brand and marketing management for
a variety of organizations, including fifteen years with
IBM. So he knows his marketing theory and practice pretty
well.
In this
book he has compiled a set of tried and true marketing principles
and rules of thumb into an overall course on brand and marketing
management. Unlike an academic textbook, though, he has
steered clear of theory and abstract concepts that may be
difficult to implement in practice, in favour of practical
and workable principles that in his experience have actually
proved useful on a day-to-day basis.
"This
is an intensely practical rule-book designed to support
and empower the individual manager — you — by
offering a range of easy-to-implement rules which have already
led to demonstrable success. These simple rules encapsulate
the practical experience of some of the most expert marketers
in the world. They are intended to help managers who have
a less comprehensive knowledge of marketing than these experts,
but the unique in-depth knowledge of the specific problems
facing their own organization." (p. vii)
Throughout
the book, he presents 190 of these ‘rules for success’,
divided into four categories: ‘general rules’,
which apply to most management situations, not just those
pertaining to marketing; rules of strategy; rules of tactics;
and operational rules. The book itself is divided into 15
chapters, each covering a distinct aspect of marketing and
brand management. The rules are presented through discussion
of each of these topic areas. The chapter headings are:
Theory
and Reality
Competition
Product:Service Strategy
Branding
Segmentation and Positioning
The Customer
Marketing Research
Advertising
Conviction Marketing
Public Relations
Selling
New Products
Pricing
Marketing Planning
Strategies for Success
Throughout the book, Mercer adopts a very utilitarian, if
not downright contrarian, approach to marketing theory and
practice. If he does not believe that a given concept or
approach has merit in the harsh light of practical utility,
he will not hesitate to say so. For example, regarding the
hallowed ‘4 P’s of marketing’ approach (product,
price, promotion, place) he comments as follows:
"I
do not recommend this framework, no matter how popular it
is — and indeed suggest that you positively avoid it!
As you can see, in its rather desperate attempt to find
four categories that begin with the letter ‘P’
it ignores services; it places undue emphasis on Price and
comes up with a catch-all category for leftovers, called
Place, which tends to be meaningless, no matter how much
time is devoted to trying to explain what it covers. Not
the least of the problems posed though, is that the four
Ps make no reference to the customer or client — who
should be at the centre of the whole process!" (p.
6)
(Mercer
is similarly skeptical about some of the work of Michael
Porter, believing him to have developed some useful concepts,
but being overly simplistic in other areas. He also dismisses
the concept of the Product Life Cycle as being intuitively
quite powerful and appealing, but ultimately of little practical
use in predicting market performance.)
Some
of the more interesting and useful concepts that Mercer
presents are:
•
Rule G4 (meaning General Rule Number 4) - The Analytical
Four-Step, which is a process for developing your own judgement
about a given marketing (or any other) situation. It actually
comprises five steps, which are Step 0 — START with
a blank sheet of paper; Step 1 — SEARCH using your
own judgement of the situation for relevant factors involved
and write them on the piece of paper; Step 2 — SELECT
the most important factors, until you end up with the six
most relevant; Step 3 — PRIORITIZE these six factors;
and Step 4 — SYNTHESIZE these factors into no more
than two directives that will lead to action (pp. 9,10)
•
Rule T5 (meaning Tactical Rule #5) — The Experience
Curve, which outlines the theory and justification for the
notion that in many markets, the more that is produced,
the more that is learned and the lower costs become (p.
16)
•
Rule T8 — Fast Response: A consistently fast response
to competitor’s actions is usually the most (cost-)
effective strategy. (p. 24)
•
Rule O2 (meaning Operational Rule #5) — Sensitivity:
Determining which element (changed by 10%) has the greatest
(%) impact on the overall organization is a powerful device
for focusing attention on key issues, especially cost issues.
(p.32)
•
Rule G5 — The 80:20 Rule: "The most general and
powerful rule of all is this one. It simply states that,
across a wide range of situations, 20% of the contributors
(customers, say) will account for 80% of the performance
(sales volume, for instance)." (pp. 39,40)
•
Rule S6 (meaning Strategy Rule #6) - Branding Practice:
"The brand is simple in concept but normally represents
the most powerful device offered by marketing practice to
all organizations in all fields. With very few exceptions,
it embodies the most important and valuable investment that
any organization can hold. It must be developed over the
longer term — not milked for short-term results —
and above all it must be safeguarded. It encapsulates the
whole product:service package and is the means by which
the richness of this is conveyed to your customers in a
personified form." (p.60)
•
Rule S8 — The Rule of 1-2-3: This is the notion that
the most competitive markets are typically dominated by
2 or 3 brands, and between them they usually account for
approximately 70% of sales. For maximum stability of the
market, the brand leader should hold about twice the market
share of the second, and three times the share of the third,
market leaders. P.65)
•
Rule O10 — Market Segmentation: Practical and useful
market segmentation should be based upon characteristics
that are relevant to the consumer, rather than the supplier.
(p. 68)
•
Rule O45 — Simplicity: Simplicity is the key to successful
promotion. Less is more." (p.123)
•
Rule O49 - 5 OTS: The usual rule of thumb is that 5 OTS
(opportunities to see, or exposures to the message) are
required to achieve market impact. (p.133)
•
Rule T32 — Satisfaction Equals Perception Minus Expectations:
"If you EXPECT a certain level of service and PERCEIVE
the service received to be higher, you will be a satisfied
customer. If you perceive the same level where you had expected
a higher one, you will be disappointed and therefore a dissatisfied
customer." (p.147)
•
Rule O62 — Public Relations: You get the PR coverage
that the story is worth. (p.161)
•
Rule O69 — The Proximity Trap: You must not get fooled
into thinking that your real customers are your distributors
(because they are close by). (p.177)
•
Rule O85 — The Customer Bonus: The very best R&D
of all is to let the customer tell you how the product or
service should be developed. (p.213)
The
above is merely a sampling of the material in Mercer’s
book; there are many more ideas and concepts presented.
For each, he gives an explanation of the historical development
of the concept, related principles, an assessment of its
strengths and weaknesses, and an idea as to the situations
in which it can be practically used. It is a very thorough
and rigorous treatment.
New
Marketing Practice is a very entertaining and useful book,
highly recommended as an interesting read in itself, as
well as an on-the-shelf reference.
The
above summary has been provided to you compliments of TCI
Management Consultants
