Score business success in high-fast or low-slow economies
The World Economic Forum, held here for the first time last week, placed the Philippines on the world map. The timing was perfect, since the once “basket case of Asia” has become one of the fast-growing economies in the Asia Pacific Region, if not the world over.
Many months ago, the Philippines was singled out by a world-renowned economist as “a breakout nation”—one whose growth continues unaffected by negative developments inside and outside its shores. The growth momentum of the Philippines continues, despite the enormity of the setbacks brought about by Supertyphoon “Yolanda.”
What is even more significant is this: The general rule is a slow down in economic growth especially in North America and Europe.
Jointly written by marketing guru Philip Kotler and professor Milton Kotler, the book “Market Your Way to Growth” positions itself in low and slow growth economies in the United States and Europe.
And then the book provides advice on how to lead companies to weather such a negative climate—and thus churn out a respectable market or profit performance. (The book doesn’t say it, but Philip and Milton are brothers.)
The book provides this backdrop:
“Companies now find themselves operating in a two-track global economy. It is unlike the past economy—the one in the years before 2008.… The world today has countries operating at two different levels (low and high) and at two different speeds (slow and fast) relative to economic growth.”
It proceeds to state what has been public knowledge—that the American and European economies re-marked by low growth rates—and this lackluster performance will remain until the year 2020.
So the book asks: What should be the responses of business in a low-growth economy? At first glance, you will note that the question should not be addressed to companies in fast-growing economy like the Philippines.
You may be right, but come to think of it. If you will adopt the survival and winning strategies formulated for a slow-growth economy—you will get much better results in a fast-growth economic environment.
When you begin reading the “nine megatrends” mentioned by the Kotler brothers, you will realize these trends are happening right here in the Philippines. Consider just these five megatrends:
Global redistribution of wealth and economic power: Countries who were once have-nots have newfound economic muscle.
Continued urbanization and growing infrastructure needs: Frenzied infra building even in the Philippines is giving purchasing power to countless workers.
Growing number of opportunities arising out of science and technology: Sunrise industries like BPOs and online businesses are attracting our young professionals.
Growing cooperation between private and public: Big ticket projects are funded by public-private partnerships.
Customer empowerment and the information revolution: Online shopping has enhanced the power of search and choice in the “shopper”—no longer the “end-consumer.”
So, the book prescribes “8 Ways to Win”—which should be included in the “must-do” lists of Americans and Europeans in their home countries, and should likewise be in the lists of Asian tigers like the Philippines.
Any Kotler book is a very organized one. He begins with the backdrop, proceeds with an environmental scan that thus produces the “megatrends”—and then moves on toward the much-awaited pieces of advice of the marketing guru.
Every advice begins with the action word “grow.”
“Grow by building market share.” Who can quarrel with that? Ask two students of the Asian Institute of Management (AIM), and you will be treated to a debate on what’s the best route for growth: Increase your market share … or Improve your margins.
The Kotlers do not take the bull by the horns. Instead they cite a reaction in a competitive environment: “Companies will usually turn to many traditional strategies—such as cost reduction, product and package adaptation, and new communication tactics—to preserve their margins.” (What about protecting your market share?)
And the authors advise businesses: Search for more efficiency, prepare a SWOT analysis, improve your financial and marketing strength, reassess your marketing mix and profile—and, yes finally, “develop winning market share strategies.”
If you read the words of advice, you don’t see anything new in the prescribed moves of the two marketing geniuses—nothing that excites a new marketer—until you read about many examples in the corporate world and in the marketplace.
Learn about how Procter & Gamble sped up its growth by cutting costs and dropping weaker brands. SWOT analysis? It has been a standard process in any seminar workshop that elicits ho-hum among participants. Not with T Mobile that identified its transmission network as a “weakness,” and so drove T Mobile to decide for a historic merger with AT & T!
More of these real-life examples punctuate the sections of this book.
The advice—“improve your financial and marketing strength”—is as bland as bland can be. But if you are told by the book that “strategy options depend heavily on the level of strength in finance and marketing,” you will sit up and listen.
That sets the stage for the book to introduce four types of companies:
A strong company is a “business endowed with very good financial and marketing capability.” A stable company is strong financially but lacks the marketing skills to capitalize on opportunities. A struggling company is strong in marketing but lacks the wherewithal to carry out its best ideas. And, yes, a failing company—and one option mentioned by the authors is to “sell out to some other investor.”
Several named multinationals and famous brands featured in this book made and are making various growth decisions:
They brought down decision making to their frontliners, refreshed their brands, trimmed their product losers, transitioned from expanding market share to raising quality standards, decided to forget competition and be obsessed instead with customers, and began the eternal search for “fresh customer insights.”
In all strategies, one thing characterizes the moves of businesses who want to dominate a low-slow economy: They are rediscovering the power of focus—and thus they decide to prune products, trim the fat, and concentrate on few market niches.
The policy of “the more brands the merrier” no longer works. The shotgun approach is passé. Treating customers equally and summarily without differentiation belongs to another age.
One more thing remains. Winning companies are taking a much closer look at the customer—in all his/her conceivable aspects. Satisfying the customer is not enough. “Delighting the customer” is the new mantra. And you cannot bank on “a loyal customer.” You must have a consumer advocate, one who buys your product or service—and takes time to speak for you and your product.
The problem is, due to online shopping, the “customer” would be replaced by the “shopper!” This book prepares you for such unexpected role changes, happening in a disruptive world.
Survive—or, better still—prevail over chaos. This book is one guide to master an increasingly chaotic market. firstname.lastname@example.org
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