By Cassandra Mascarenhas
While celebrating 100 years of marketing globally this year, the Chartered Institute of Marketing Sri Lanka Region launched its 11th CIM Annual Conference 2011 yesterday, a flagship event in fastest growing CIM body worldwide.
The conference will look to address the needs of the marketer who will take on the leadership to steer their organisation towards sustainable growth and so have aptly chosen the theme of emerging trends in marketing.
With CT Holdings Plc Managing Director Ranjit Page as Chief Guest and one of the UK’s pre-eminent academic authority on marketing strategy and author of more than 40 best selling marketing books Professor Malcolm McDonald as the keynote speaker at the inauguration of the event yesterday, it soundly set the stage for the many international and local industry leaders who will be addressing a vast crowd of marketers in Sri Lanka at the conference.
With the idea of the theme of the conference in mind, the organisers have zoned in on four specific areas; namely strategic marketing, innovation sustainability and digital marketing and the technical sessions during the conference will be aligned according to these.
“This year is historic for CIM as we celebrate 100 years of marketing and sales leadership globally. Our conference this year will address emerging themes in marketing as we now move into a new arena of development and as we move towards reconstruction and rebuilding and thereby attract foreign and global investors.
This is turn paves way for the private sector to proactively seize the many opportunities that will enable them to surge ahead in the industry,” stated the CIM Chairperson Chithrangani Herath Gunaratne in her welcome address.
Professor McDonald held the attention of the large audience with his deeply insightful keynote address in which he shot down many tried and true theories and practices and outlined what organisations should focus on in order to enjoy long term growth and success.
13,000 products are launched in America alone every year and 90% of these fail due to poor marketing and market segmentation, he stated in his opening lines.
“If you look at the point of inflection that all markets reach at some stage – where the supply is greater than demand – the immediate reaction of most companies is to start cutting down on costs but things get worse when they do that,” McDonald said. “It’s like there is an excessive desire to become leaner and fitter which eventually leads to emancipation and finally, death.”
He also dismissed what he called fads such as total quality management, business process reengineering and yet other tactic, relationship marketing, declaring that it has been statistically proven that if a company tries to delight its customers, it will end up going bankrupt.
Discussing CRM systems on which 12 billion Euros have been spent, McDonald said all research shows that in every sector, customer service levels have gone down which shows that although companies think CRM systems are the answer to everything, they are not, and will only work if a company understands its customers and markets and he urged organisations to grow up when it comes to marketing and to behave more responsibly.
Role of marketing academics
The academic also went on to criticise the work of marketing academics, stating that the output of academics has had zero impact on the practices of marketing.
“I guarantee that proper market segmentation will result at the very least, a minimum of 10% increase in profitability. You put value propositions together to meet the customers’ needs, delivering value and measuring it – what is lacking in most companies is the strategic bit – they lurch from period to period from year to year until they go belly up,” the professor said. “If you have got an effective long term strategy you will survive. If you are doing the wrong thing, you’ll die. Good robust strategy for me is everything and that is what I work towards with world class companies that go on year after year, whatever happens in the global economy.” He added that while needs based segmentation is very complex, it’s absolutely crucial to commercial success. Most marketing is business to business not business to consumer. People buy things, not companies. Once you can understand this and profile your customers, you can serve their needs. Social media and e-marketing do not make a difference, he went on, as the customers still remain the same and even though they have new technology to use, one must still understand their needs to be successful.
On the subject of standard accounting, McDonald said that a typical balance sheet is out of date, totally useless and don’t work but companies are forced to use them because the accounting community keeps making them.
“Your reputation is the only thing you’ve got. The brand at least in theory represents 20% but I think the brand name represents everything a company does. Nowadays organisations need to work out what their market is going to be like in the future quantitatively to survive. Everything’s changing,” he cautioned. “A typical profit and loss account is garbage that people look at in boardrooms. The last thing you should be doing is trying to measure the return on interest on a marketing campaign. Proper segmentation and proper targets – that’s what is going to work in the long run,” he concluded.
The keynote address was followed by a speech by the Chief Guest at the event, Ranjit Page who spoke on sustainable growth, which he admitted was not the easiest thing to achieve as the first thing shareholders and the board of directors ask for is for returns even before making an investment.
Looking back at his career at Cargills, he pinpointed the turning point of both the company and his life; meeting a farming community in a village outside Colombo, back in the day when they stocked their relatively few supermarkets at the time with produce from Colombo. His decision to start a collection centre amidst this farming community proved to be the opportunity that changed the company.
“It’s not about you or the shareholder, it’s all about the customer and how can we serve the customer through a brand and building a brand is not an easy thing as there is competition on a day to day basis but to retain the customer and to believe in what you’re doing as a business model is not the easiest thing,” he admitted.
He went on to say that Sri Lanka needs to concentrate not on the short term but on the long term. “It’s not the easiest thing to do when convincing the shareholders and board of directors but it’s not about the bottom line. The bottom line will eventually come if you understand the top line and your customer.”
To do something totally different is not easy but when doing what the community needs, a company will succeed, he added.
You cannot look at short term goals – it is the number of people we touch that counts not the stock market. The biggest asset this country has are its people, places like Singapore have to rely on more people coming into their country while Sri Lanka has 20 million people with talent, he said.
“All of us here today have a great opportunity to put together where we want to be as marketers. It’s not just our brand and company but the society and community at large. We need to be identified as different to the rest – this is an asset. I urge you to think about how you can make a difference by being yourself as a Sri Lankan,” Page stated.
Pix by Daminda Harsha Perera