Why do successful companies keep investing in ongoing marketing?

Seasoned Fortune 500 companies have a deep understanding and appreciation for marketing. Coca-Cola may already one of the most recognized brands in the world, but they nevertheless spend billions of dollars every year on their marketing efforts. (And you can bet they’re not doing it on a whim. They know exactly what those dollars will bring them in return.)

On the other side of the spectrum, startups and micro-businesses view marketing as a matter of survival, not theory: their business will disappear if they don’t invest in it.

Between those two extremes, however, an interesting thing often happens: companies forget about marketing. Once a company gets past a few million dollars in revenue, it’s tempting to let things slide. Some of these companies stop marketing altogether.

Business is growing and everyone’s staying busy, they think, so why bother with the expense and hassle?

I’ll tell you why.
Marketing is food, not medicine

Inexperienced companies regard marketing as medicine to be taken when something is wrong. (“Not enough customers? Take some marketing and call me in the morning.”)

This is completely wrong-headed thinking, and it’s one of the reasons so many otherwise successful businesses wind up failing. They get used to feeling busy…until they realize it’s too late to start what they should have been doing all along.

Marketing is food. It’s the regular, sustained nourishment that gets your business where you want it—and keeps it there. You need it throughout the day, every day.

Peter Drucker, one of the leading experts on management theory, wrote:

Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.

He also wrote:

Marketing is not only much broader than selling; it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of its final result, that is from the customer’s point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise.

This perspective is what keeps Fortune 500 companies so intense about sustained, well-funded marketing—even when they’re already successful by any measure.

While inexperienced businesses wait until they’re starving to start looking for nourishment, these savvy enterprises eat regular, healthy meals throughout the day, keeping them strong and thriving year after year.

Successful companies never stop marketing

Here are four common-sense reasons why the most successful companies in the world engage in vigorous, ongoing marketing efforts:
Ongoing marketing prevents “reputation rot”: If you surveyed everyone who’s heard about your company, you’d probably find that their understanding of who you are and what you do is out of date by at least a few years. Your company is constantly improving, but people’s perceptions tend to remain fixed. Every year that passes brings them further and further out of sync, until hardly anyone actually understands what your company has become. It takes years to shape and define your reputation, so you need to be doing it all the time. You can’t wait until it’s hopelessly out of sync, and only then start the arduous process of convincing everyone you’ve changed. (If you do, you’ll never make it to the other side.)
Ongoing marketing shapes your customer base: As your company evolves, your company will need to target different audiences. Sometimes your focus changes only slightly, and other times you have to start with a completely new customer base. Either way, you need to be constantly evaluating your target and adjusting your messaging, visuals, and strategy according.
Ongoing marketing gives you lots of options: Having “just enough” business isn’t enough. If you’re actively marketing, there should always be more demand for your offering than you can actually meet. This gives you the option to pick and choose your customers, to focus on the most profitable (or most enjoyable) ones, and to have a waiting list ready for when times get slower.
Ongoing marketing secures your company’s future: The single most important reason for engaging in active, ongoing marketing is simply that it secures your company’s future. Marketing creates business. You may have lots going on right now, but will it still be there in six months? A year? Three years? Savvy business owners don’t leave their future up to chance; they’re planting seeds now they can harvest next season.

If your company currently has lots of work, happy customers, and a busy staff, then you’ve successfully achieved a key milestone in the life of a business: viability. This isn’t the end of your journey, though, but the beginning — and marketing will be your constant companion at every step you take from here on out.

Businessmen Who Broke The Rules (And Some Laws)

1. Steve Jobs

Co-founder of Apple and chairman of Pixar, Steve Jobs towers over Silicon Valley as a renegade and artist as much as a business manager. Fortune magazine calls him a “global cultural guru,” responsible for changing the way the world works and plays. Yet, he has been criticized for his superior attitude, taking credit away from his subordinates, micro-managing his business, firing employees in fits of anger, and any number of minor infractions, such as parking his Mercedes in handicapped spaces. His net worth is estimated to be over $20 billion.

2. Sam Walton

At the end of his autobiography, Made in America, Sam Walton wrote that the most important rule in business is to break all the rules. He has also said, “I always prided myself on breaking everybody else’s rules, and I always favored the mavericks who challenged my rules.” His innovative and daring approach to business established the worldwide Wal-Mart chain, which replaced Exxon as the largest corporation in the world in 2002.

3. Bill Gates

It is common knowledge that the richest man in the world is a college dropout. Instead of completing his education at the prestigious Harvard University, Bill Gates decided to take a risk and devote himself fully to a little business called “Microsoft” he co-founded with a classmate, Paul Allen. Not content with the prevailing open-source practices of software development, Gates decided to buck the system by demanding a closed-source ethic. By changing the rules of software development, he established the software industry as we know it today.

4. Donald Trump

A self-made billionaire, real estate mogul Donald Trump is widely regarded as a man who makes the rules. And among Trump’s rules for success, you will not find the words, “humility,” “generosity,” “sympathy,” or “compassion.” The quintessential bullying boss, Donald Trump is a cultural icon and one of the most famous people in the world. Comparing publicity photos from his early years of fame with his more recent dominance on the world’s stage, it is clear Trump has cultivated a distinctly mean image. It is possible he still enjoys smiling, but apparently it is no longer marketable. While nobody is questioning his head for business, Trump’s fame, if not his fortune, is less attributable to any specific business deals or professional decisions than to his “mean boss” imagine and his high-profile personal life (including his widely publicized divorce from Ivana Trump and his scandalous sex life with Slovenian supermodel, Melania Knauss, who would become his wife).

5. Henry Ford

The father of the modern automobile, founder of the Ford Motor Company, and inventor of the moving assembly line was a highly unconventional business leader. Henry Ford challenged his times (and his investors) by insisting on producing affordable automobiles for a mass market. He paid his employees much more than was common at the time, creating what he called “wage incentive” and thereby attracting and keeping a strong work force. Advocating “welfare capitalism,” Ford took an unusual amount of interest in the lives of his employees, requiring them to live according to the rules set by his “Sociological Department,” which restricted how they spent their leisure hours. His risks paid off, and Ford Motor Company has helped define the modern urban landscape.

6. Ray Kroc

Ray Kroc did not open the first McDonald’s restaurant. He just turned a small, family-owned drive-in into a multi-billion-dollar global franchise. Like Henry Ford before him, Kroc’s ingenuity was in finding a way to bring high quality goods to a mass market. He revolutionized the restaurant industry by introducing strict guidelines for how his items were produced and sold. He turned the sale of hamburgers into a science, and even had his franchise owners earn a “Bachelor in Hamburgerology” at McDonald’s training institute. Unlike Ford, however, Kroc has been criticized for paying his employees as little as possible, and has been accused of trying to circumvent minimum wage laws.

7. Michael Dell

Widely regarded as one of the most important innovators of the computer industry, Michael Delldefied convention by cutting out the middle man and selling PCs directly to consumers, allowing them to custom order machines by phone and mail. A college dropout, he is now one of the world’s top three PC manufacturers and one of the richest men in the world. (If you compare their net worths, it looks like Dell could buy 6 or 7 Donald Trumps.) Some of his competitors have coveted his unique business model, but without matching his success. He has won such accolades as “Man of the Year” by PC magazine, “Top CEO in American Business” by Worth, and “Entrepreneur of the Year” by Inc. magazine. Dell.com is one of the largest consumer e-commerce sites on the Web

8. Roman Abramovich

Sometimes called the “quiet oligarch,” Forbes’ 15th wealthiest billionaire has always kept a closed lid on his affairs. A Russian oil magnate and owner of the Chelsea Football Club, Roman Abramovich has impressed the world with his daring and often surprising business decisions. Despite accusations that he has made his fortune by exploiting the malaise of others, Abramovich has been honored as Russia’s “Man of the Year” by Expert magazine and was awarded Russia’s Order of Honor for his charitable work developing the region of Chukotka, for which he has also been a representative and governor. Abramovich was making multi-billion-dollar business deals before his 40th birthday. He has admitted to spending billions of dollars on political favors.

Source: http://www.businesspundit.com/25-businessmen-who-broke-the-rules-and-some-laws/

How Procter & Gamble Designs Change

Procter & Gamble (PG) is a 175-year-old company that’s working hard to smooth those corporate age wrinkles. And it’s getting help from an eight year old corporate initiative that’s been pushing change since its former CEO, A.G. Lafley, decided in 2001 that P&G needed to get good at design-thinking.

For Lafley, design thinking was a way to get P&G to return to its roots as a company that pays attention to consumers. As I posted, he asked a long-time P&G employee, Claudia Kotchka, to create that capability and Kotchka got help in doing that by hiring an innovator from Mattel back in 2004 who created a process at P&G to solve tough business problems dubbed Clay Street.

As he explained in a March 7th interview, Kotchka lured David Kuehler, Director, P&G Integrated Innovation Capability, from Mattel’s (MAT) Project Platypus (PP). As described in a 2005 Business Week interview, PP took 12 employees with different skills and experience away from their jobs for three months and charged them with “conceiving and developing a completely new brand.” PP ran itself out of a separate 2,000 square foot building that “looks like a playground.”

As Keuhler explained, many companies came to visit PP — including P&G. When P&G was at PP, Keuhler observed that it was “the most committed to innovation and improvisation.” Ultimately, Kotchka persuaded Keuhler to start a similar activity at P&G which he did in 2004.

One of the first challenges Kuehler faced was what to call his new P&G project. As it happened, P&G made space for Kuehler’s new operation in an old brewery, “outside the berm of P&G,” on Clay Street, in a less-than-upscale part of Cincinnati.

It turned out that Lafley was on the board of a redevelopment commission for the area. After coming up with hundreds of naming options, Kuehler and Kotchka quickly agreed to name it Clay Street.

Clay Street achieved remarkable results quickly. According to Kuehler, Clay Street’s second session in 2004 helped revive a then-tired brand of shampoo,Herbal Essences. The cross-functional team that spent 10 to 12 weeks at Clay Street came up with ideas that boosted Herbal Essences’ so-called index — a measure of sales growth relative to year ago results — from 76 before Clay Street to 124 after.

The key insight that produced this astonishing result was that the team of P&G people responsible for the Herbal Essences makeover, based on the insights of a young intern, arrived at ”a very different idea of what the word organic means for today’s consumer, versus the meaning it had for older generations.”

For example, when asked to shop for items they considered organic, the P&G team selected “below the ground” products like herbal tea, health food and granola. By contrast, the Gen Y consumer’s theme was  “all possibilities” – including items such as smoothies and brightly colored blouses.

From this insight, the P&G team created a new “equity” — e.g., the brand’s logo, color, shape and ”how it performs and what it stands for in the mind of the consumer.” Instead of the clear bottle with gooey dark green shampoo, the new version of the product features pink and other more subtly-colored opaque bottles and a tag line “Discover Pure Botanical Bliss.”

Clay Street’s approach is to transform the way that P&G traditionally operates. Its tradition is for brand development to be led by staff from the marketing function — they choose the brand’s advertising approach based on its benefit to the consumer.

P&G in the past has encouraged teams to focus on their specific functions. R&D comes up with a technology to deliver the benefit that the consumer wants. R&D hands off to Design and Package Development to create the package and Sales goes to the retailer and asks how many cases it wants to buy.

At Clay Street, Kuehler’s team tries to change this mind-set. In a 10 to 12 week session, Clay Street tries to create the feeling of working in a start-up. In that context, Clay Street gets team members to take off their functional hats and see how the product looks from the perspective of the consumer — and in so doing – to view their work in the context of the other functions.

The result of Clay Street is that people behave differently. For example, the person from marketing comes into the team feeling responsible for the outcome, but more willing to listen and be open about not knowing the answer.

R&D might work with marketing to help develop advertising copy. And Sales might come up with ideas for package design based on looking at competitors’ packaging. At Clay Street, team members are able to  “bring their whole selves to the problem solving process, not just their functional expertise.”

How does Clay Street accomplish this transformation? Kuehler points out that a key element is giving the team a very clear goal and near-complete autonomy — rather than waiting for their bosses to provide direction. Clay Street also immerses them in new ways of thinking by bringing in speakers with different points of view on, say, sustainability. It also gives them “improv training” and shows them how to “leverage [the team's] collective genius.”

The final challenge for Clay Street is what happens to these teams after they re-enter P&G’s mainstream business. Without proper seasoning from Clay Street, such teams tend to lose their momentum.

So when it came to Herbal Essences, Clay Street worked with senior executives such as Susan Arnold, to encourage P&G to remove procedural barriers — such as dozens of meetings that P&G traditionally requires — that might slow down the implementation of the ideas that the team developed.

If P&G can keep the idea of Clay Street going, it will probably be alive and kicking 175 years from now.

Source: http://www.forbes.com/sites/petercohan/2012/03/12/how-procter-gamble-designs-change/1/

Free trade Agreements

.FREE TRADE AGREEMENTS

Free Trade Agreements (FTAs) have proved to be one of the best ways to open up foreign markets to U.S. exporters. Trade Agreements reduce barriers to U.S. exports, and protect U.S. interests and enhance the rule of law in the FTA partner country. The reduction of trade barriers and the creation of a more stable and transparent trading and investment environment make it easier and cheaper for U.S. companies to export their products and services to trading partner markets. Forty-one percent of U.S. goods exports went to FTA partner countries in 2010, with exports to those countries growing at a faster rate than exports to the rest of the world from 2009 to 2010, 23% vs. 20%.

Source: http://trade.gov/fta/

Types of Intellectual Property

Source: http://www.uspto.gov/web/offices/ac/ahrpa/opa/museum/1intell.htm

Market Analysis

Foreign Market Analysis: JAPAN

Source: http://www.slideshare.net/JustynaRoik/foreign-market-analysis-japan