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ISSUE: q406
01/11/2006
By Augustine Seyuba, head of corporate affairs, Barclays Bank Zambia
Where do we come from? What are we? Where are we going? – some pretty deep questions for marketers, which also happen to be the title of an 18th century oil painting by French artist Paul Gauguin.
Life – and business - is all about changing environments, but before we delve into the more esoteric questions, let us consider what constitutes “the business environment”.
The business environment is the set of market dynamics in which we operate, surrounding and including the marketer and his or her organisation.
Internally such market dynamics include corporate strategy, which in turn is linked to the organisation’s finances and capital structure, customer relationship management, resources and logistics, and management structure and processes. Connected to that is the need to secure business continuity, an element that overlaps both internal and external dynamics.
Business continuity links us to the external environment – industry and competitive forces, the political and regulatory framework, technology, economic and social factors.
It is these market dynamics that are the key. You need a deep understanding of how the market works if you want to stand out from the crowd.
Given that the business environment is changing constantly, how has the traditional marketing mix changed? The product A lot has changed about product solutions because of changing customer needs. For example, banks have introduced ATMs due to the mobility of the customer; computers have changed over the years – not only do we have desktops but we also have laptops as well, making working hours flexible and convenient; for more storage space a flash disk has been introduced to replace the diskette; and the music industry has revolutionised its storage solutions from cassette to MP3.
Price The price is affected by the changes in the business environment. For example, in the mobile phone market a SIM card used to cost K250,000. In addition, talk time was forfeited if not used within a specified timeframe, and the cost of handsets was too high.
Now the price of a SIM card is K10,000, talk time does not expire, and the price of handsets varies with the make and costs have come down.
Promotion There is a need to use a wide range of promotional tools to generate awareness and eventually sales, and other promotional tools that reinforce the product or brand image have emerged. For example, the internet has made it easier to reach various market segments.
The implication of all of this is that the changing market dynamics dictate sales strategy, not vice versa.
To be successful, you must recognise that markets are different and address the specific needs of each market.
GEt your vocabulary right Segmentation is about dividing a total market into different groups.
Targeting is about concentrating on target segments, disregarding the rest; but make sure the target is big enough.
Positioning: decide which “position” you would like to occupy in target segments; for example, Eagle lager is positioned for low-income earners, and the University Teaching Hospital (UTH) is positioned as the ultimate referral hospital in Zambia.
Communication: Different people prefer different kinds of products and services depending on their needs, values, lifestyle and situation in life.
Now consider the changing environment in the context of marketing brand strategy, and the shifting dynamics as perception, experience and behaviour interact between the brand and the culture, all leading to business results.
The dynamics of market evolution are well-illustrated by the case of the mobile phone. The mobile phone market has evolved into a simple tool – eye and finger.
A Glimpse of the Future Outsourcing business models shall be an alternative to control overall cost structure and crucial to managing customers.
Business processes shall be integrated into new value chains, with new players and new business models, where you can reach the customer with many different solutions, and a whole spectrum of product and service solutions.
The future business environment is also going to be totally different. Virtual customers will demand different and complex product, pricing, promotional and distribution models; and the customer will demand new customer relationship management (CRM) solutions.
As we mentioned earlier, business continuity is the factor that straddles the internal and external environment. Business continuity is at the customer’s request, but who is the sponsor or continuity planner? The bottom line is there is just one – the customer.
Unfortunately there is no silver bullet for managing the future business environment. Instead we must understand the business, eliminate the “fire brigade” approach, protect stakeholders, deliver confidence, increase profitability, and above all, use common sense.
Business continuity planning is about being prepared; ask yourself: what if? The nub is creating the competitive edge. Strategic marketing positioning – effective marketing strategies, flexible organisational structure, proven expertise, customer focus, good timing in strategy execution, a competitive edge in technology, and the support of the appropriate infrastructure.
Date: q406
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