Marketing That Works: How Entrepreneurial Marketing Can Add Sustainable Value to Any Sized Company
By Leonard M. Lodish, Howard L. Morgan, and Shellye Archambeau
Every dime you spend on marketing needs to work harder, smarter, faster. Every dime must differentiate your company based on your most valuable competencies. Every dime must protect you against competitors and commoditization. Every dime must drive higher profits this quarter, and help sustain profitability far into the future. Marketing That Works: How Entrepreneurial Marketing Can Add Sustainable Value to Any Sized Company can help companies diminish wasted efforts and key into “Marketing- Driven Strategy” that leads to sustained revenue and profit increases.
The three authors all have Wharton connections. Leonard Lodish is an entrepreneurial marketing pioneer at Wharton, as well as vice dean for Wharton West and founder of the Global Consulting Practicum. Howard L. Morgan, director and former vice chairman of Idealab and founder and partner in First Round Capital, is a former professor of decision sciences at Wharton. Wharton alumna Shellye Archambeau, W’87, is CEO of Metricstream, Inc., former CMO and EVP of Sales for Loudcloud, Inc., and former President of Blockbuster, Inc.’s e-commerce division, where she was recognized by Internet World as one of the nation’s Top 25 click and mortar executives. Lodish and his co-authors illustrate why every company needs multiple marketing plans, depending on what constituency is addressed — i.e., customers, investors, or other partners. They provide real examples, such as the “own store” strategy of Limited Brands that enables them to get the best locations and lease rates in malls, of how the concepts described have helped ventures make more money on a sustainable basis.
With competition increasing on a global scale and new technologies and communication sources putting more power in the hands of the buyer, companies are desperately implementing marketing programs to stay ahead of the competition and effectively influence buyers. Too many of these programs are failing to achieve desired results. Marketing That Works will show you how to avoid these pitfalls and how to create lasting success in your marketing programs. The book also includes the opportunity to access software that can help a company improve resource deployment. Every bit of the content inside the book has been chosen because it is proven to work and because it can add continued value to any size company.
Tying Together the Value Proposition: Distinctive Competence, Sustainable Competitive Advantage, and Positioning
Excerpted from Marketing That Works, “Chapter 1: Marketing-Driven Strategy to Make Extraordinary Money”
Orvis Co.—Excellent Entrepreneurial Positioning
The Orvis Company has done an excellent job over the years of capitalizing on a unique positioning in a very competitive industry. They sell “country” clothing, gifts, and sporting gear in competition with much bigger brands like L.L. Bean and Eddie Bauer. Like their competitors, Orvis sells both retail and mail order. How is Orvis differentiated? They want to be perceived as the place to go for all areas of fly-fishing expertise. Their particular expertise is making a very difficult sport “very accessible to a new generation of anglers.” Since 1968, when their sales were less than $1 million, Orvis has been running fly-fishing schools located near their retail outlets. Their annual sales are now over $350 million.
The fly-fishing products contribute only a small fraction of the company’s sales, but the fly-fishing heritage adds a cachet to all of Orvis’s products. According to Tom Rosenbauer, beginner fly fishermen who attend their schools become very loyal customers and are crucial to continuing expansion of the more profitable clothing and gift lines. He says, “Without our fly-fishing heritage, we’d be just another rag vendor.” The Orvis positioning pervades their entire operation. Their catalog and their retail shops all reinforce their fly-fishing heritage. They also can use very targeted segmentation to find new recruits for their fly-fishing courses.
There are a number of targeted media and public relations vehicles that reach consumers interested in fishing. Their margins are higher than the typical “rag vendor” because of their unique positioning. The positioning is also defensible because of the consistent perception that all of their operations have reinforced since 1968. A competitor will have a very difficult time and large expense to reproduce the Orvis schools and retail outlets. It also will be difficult for a competitor to be a “me too” in an industry where heritage is so important. The positioning and segmentation decisions Orvis made in 1968 probably added close to $1 billion of incremental value to their venture since that time. That value is our estimate of the difference of Orvis’s actual profit since 1968 compared to what the venture’s profitability might have been had they just been “another rag vendor.”
Better Product Development
Selling Blue Elephants: How to Make Great Products That People Want BEFORE They Even Know They Want Them by Howard R. Moskowitz and Alex Gofman
Your customers can actually help you create your next product, with the help of Rule Developing Experimentation (RDE), a solution-oriented learning experience. Completely scalable for organizations of any size and even for those with limited budgets, RDE is an automated seven-step process that defines how to design, test, and modify alternative ideas, packages, products, or services in a disciplined way so that companies discover what appeals to the customer, even if the customer can’t articulate the need, much less the solution.
Selling Blue Elephants: How to Make Great Products That People Want BEFORE They Even Know They Want Them examines the use of RDE in innovation and design, as well as applications in the international, political, bioinformantics, and financial services arenas.
The best-practice examples from today’s top companies, including HP, Prego, Vlasic, and Mastercard, illustrate how you can apply the same process not only in product and service design, but also in the marketing and messaging of products and services. “We have a proven solution which has direct impact for those managers with bottom-line accountability for their organization,” explains Dr. Howard R. Moskowitz, President of Moskowitz Jacobs Inc. and the creator of RDE. “This is the fastest, most cost effective and intuitive way for executives and managers to stay well-ahead of the customer demand curve.”
How to Use Rule Developing Experimentation
Rule Developing Experimentation (RDE) is a systematized solution-oriented process of experimentation which designs, tests, and modifies alternative ideas or messaging in a disciplined way so that the developer and marketer discover what appeals to the customer, even if the customer can’t articulate the need or solution. Follow these straightforward steps:
1. Think about the problem, and identify groups
of features or “silos” that comprise the target
solution. Each silo comprises several related features.
2. Mix/match the elements according a planned design
to create a set of test prototypes.
3. Show the prototypes to customers
and obtain reactions.
4. Uncover how each element drives
each customer’s reaction.
5. Identify naturally occurring attitudinal segments
of the population that show similar patterns
of elements driving responses.
6. Create learning rules, and apply the rules to create new
products, offerings and more, by choosing optimal elements.