subscribe to brand news 
09.06.2017 | Альбина Весина

Necessary and mandatory

 

part 1     < strong>part 2

 

 

Let's talk about the above in parts 1 a little more.

 

MARKETING

In Philip Kotler's classic book "Marketing from A to Z", one of the first pages says that a marketer is needed by a business not to sell what has already been produced or purchased, but in order to create a product in demand. A marketer is not an employee who organizes promotions, advertising campaigns or online promotion. First of all, this is a person who has the competence to identify the needs of buyers. This employee should help you find answers, including the following questions:

  • who is your main consumer? How old is he? How much does he earn? How is the product being searched? Whose opinion is it relying on? How does the product use? What is important to him when choosing a product? Where does he live? What magazines does he read, what websites does he visit?
  • who is your non-consumer? Is it possible to turn it into a consumer? What exactly needs to be done for this?
  • what consumer values do your competitors create? What are their strengths and weaknesses? In what and at the expense of what can you surpass them?

This knowledge will allow you to create a new unique product (service), or modify an existing one so that its value in the eyes of the consumer is higher than the products of other companies. The value in this case does not necessarily lie in price or design. It can be convenience of purchase, after-sale service, warranty, etc.

 

The one who knows his consumer (and his non-consumer) better than others will gain a powerful competitive advantage in the coming years. Marketing as a means of collecting information about consumers and the market will become the main weapon of competition. A set of measures to study the consumer and the market in most cases costs businesses several hundred thousand rubles, which is incomparably small compared to the losses caused by incorrect market decisions. Those who understand this and learn how to use it will be ahead of the competition by several steps.

The one who knows his consumer better than others will get a powerful competitive advantage.

VALUE

The consumer does not need a drill, he needs holes in the wall. People don't buy clothes; they buy future emotions from using them. Factories and factories do not buy fabrics, threads and accessories, components or equipment, they buy their future profits from their use.

 

Few people in Russia are able to think in terms of consumer value, speak the language of value, and focus business processes on creating and increasing value. But successful companies of 2016–2019 will learn this. They will know exactly (including through marketing) what exactly is the value of their product in the eyes of consumers, and will direct all the funds, forces and the best minds of the company to create and increase this value. They will learn how to measure it and track its growth rate.

The consumer does not need a drill, he needs holes in the wall. 

STRATEGY

The consequences of most important business decisions can be felt only in a two- to three-year perspective. Have you decided to release a new product? Move production to Asia? Open your own retail or online trade? Train staff in strategic planning skills? In the end, did you decide to do nothing and observe the development of the situation? You will not understand whether you have made the right decision for at least one and a half to two years.

 

And this, in turn, means that any such decisions must be weighed, calculated, well thought out. They should not be accepted intuitively, under the influence of an impulse, based on emotions. Such decisions should be accompanied by a plan that will allow you to assess both the economics of the decisions and their market consequences. In other words, such decisions should be part of a coherent, thought-out, developed and put on paper strategy. Successful companies in 2016–2019 will have strategies.

 

OUTSOURCING

I talk in detail about outsourcing in my recently published book "How to Ruin Everything and ruin a business. 13 myths about business management in Russia. I will only say here that this tool is extremely underestimated in Russia, and the desire to carry out accounting, legal work, logistics, IT support and even cleaning of premises very much pulls Russian companies back, preventing them from developing. Entrepreneurs themselves do not notice how these unnecessary, auxiliary functions waste their precious time, without giving them the opportunity to really think about the most important thing about the consumer and about the value that the company should create for him.

 

An employee costs the company about 2–2.5 times more than his salary, including taxes. That is, if you pay an employee 40 thousand rubles a month (with taxes), in reality it costs you 80 –100 thousand. But the point of outsourcing is not to reduce costs, but to release the most important resource - the working time of the entrepreneur himself and his best employees. By outsourcing processes, you not only make them cheaper, you free up your time (the only irreplaceable economic resource) for more important business tasks. Successful companies of the future will be "lean", not burdened with unnecessary processes, fully focused on their consumers.

The point of outsourcing is not to reduce costs, but to free up the working time of the entrepreneur himself and his best employees. 

ACCOUNTING

One of our clients had a warehouse and a production facility located at some distance from each other, this was due to the geometry of its territory. The products were transported from the workshop to the warehouse by truck. One thing cost the client a lot of money, but we were more impressed by another - the process of receiving and transferring products from the workshop to the warehouse was as complicated as the process of shipping goods to customers.

 

Russian entrepreneurs are very concerned about the safety of goods or raw materials. This is understandable, we have a lot of dishonest employees. However, the cost of accounting should not exceed the effect of its implementation. If you transfer semi-finished products from site to site on the basis of invoices, if the warehouse accepts goods from production as if it were transmitting information of national importance, you are spending money on something that does not create consumer value.

 

When you, as a customer, come to the store, you don't care how the accounting processes are built in this store. You are only concerned about the availability of the necessary goods at an affordable price, that is, your values are not related to accounting. Your consumer's values are also not related to accounting, he did not come to you for this. Therefore, if your accounting process is too complicated and confusing, it costs you very much, and the consumer does not care about it. Maybe it's worth taking a risk and loosening your grip on accounting, but to direct this money, time and effort to increase the value? Maybe the possible losses are more than compensated by the additional profit from the growth of value?

 

PERSONNEL DEVELOPMENT

There is a famous joke. One entrepreneur asks another - what if I train my employees and they quit? And the second one answers him: can you imagine, you won't teach them, but they will stay?

Years of market growth allowed Russian business to work without professional employees. Demand was guaranteed, the sale was often reduced to processing incoming calls and requests. But times have changed, and businesses can no longer afford to employ non-professional marketers, sales managers, logisticians or financiers. The qualifications of employees at all levels of management should be high, but hiring specialists from the labor market will not work – there are almost none there. Companies will have to spend time and effort on developing the competencies of existing employees, train them, develop and encourage their growth in every possible way. They will do this not out of charity, but out of a rigid market necessity.

 

Of course, when rebuilding the business model, entrepreneurs will have to take into account other factors - the development of the Internet and mobile technologies, the increase in the cost of logistics, and the decrease in the effectiveness of direct advertising. But they will be able to successfully cope with this task if they understand their consumer and their market well, know what value to offer their customers, be able to focus on value, discarding everything else. And of course, if all this is done on the basis of thoughtful, clear strategic plans.