This System Is Easy To Use But Has Many Limitations

By Amy Wise

Bad marketing thinking is how the company uses its crown jewel, the Coca-Cola brand.

One reason children turn away from Coke and Pepsi is because of the 150 calories in each can. Being skinny is fashionable and being fat is out of fashion, although this concept is observed more in theory than in practice.

As people learn more about t

• Language: English
• Publisher: Amy Wise
• Release date: Feb 1, 2024
• ISBN: 9798869208927

Book preview

This System Is Easy To Use But Has Many Limitations

This System Is Easy To Use But Has Many Limitations

Copyright © 2023 by Amy Wise

All rights reserved

TABLE OF CONTENTS

CHAPTER 1 : NEEDLESS GOING ANYWHERE.

CHAPTER 2 : PEOPLE HAVE ALWAYS SOUGHT

CHAPTER 3 : CREDIT CRUNCH ENVIRONMENTAL

CHAPTER 4 : ONE YEAR AFTER RAISING

CHAPTER 5 : TO PROMOTE THE LAUNCH

CHAPTER 6 : THAT THE PRINCIPLE OF MARKET

CHAPTER 1 : NEEDLESS GOING ANYWHERE.

Surely in the long run, the 150 fewer calories in a can of Coke will hurt the brand. Tab could have become the company's future brand. But the company instead focused on Diet Coke.

24 - Managers focus on the short term. Marketers focus on the long term.

Harold Geneen(149), owner of a large corporation, has a favorite maxim: If you can do it in the quarters, you can do it in the year.

Another favorite motto of the former CEO of ITT is: There will be no more long-term planning.

The corporations of the old era have virtually disappeared, but this type of management thinking still exists today. Do the work in quarters and all will be well.

Short-term success for the long-term future

Marketing has a very different approach. There will be times when a company must change.

In 1997, PepsiCo achieved extraordinary short-term success by abandoning its restaurant chains (Pizza Hut, Kentucky Fried Chicken, and Taco Bell) to focus on its beverage business, a strategy we adopted. I recommended the 1996 book Focus: The Future of Your Company Depends on It (published by Alpha Books as Focus to Differentiate) before the company put it into practice.

There are many good marketing reasons to implement this strategy. PepsiCo is overwhelmed by Coca-Cola in key business areas. The headline of a typical Coke ad is: Has PepsiCo opened a restaurant near you? Please wait another four hours.

Because every four hours PepsiCo adds a restaurant to its empire, the ad continues. A restaurant to compete with your company and serve your customers."

In contrast, Coca-Cola promises commitment not competition - something that is quite powerful and effective in maintaining Coca-Cola's large market share in its core business.

The establishment of a subsidiary for the restaurant chain helped pave the way for PepsiCo to acquire Quaker Oats and the Gatorade brand in 2000. This deal significantly increased the strength of PepsiCo's beverage team.

One step back to take two steps forward is a general rule.

In our strategy, we often advise companies to discontinue unrelated products and services (that is, take a step back) and find a focus that can drive the company's business in the future. (that's two steps forward).

Many years ago, we tried this approach with a well-known software company. The CEO's response was: What? You want to destroy the company's $75 million annual revenue. (That famous software company is now bankrupt.)

There's an old saying: If you keep doing what you've always done, you'll keep getting what you've always gotten. The only way to break the mold is to change.

It's a step back that can do in quarters managers rarely take.

Turn on the wall

Many companies realize that without the influence of inflation, growth is rare. And the focus shifted again to cost reduction and layoffs.

Coca-Cola is one such company. For 16 years under the direction of Roberto Goizueta(150)(from 1980 until his death in 1997), Coca-Cola's stock market value increased from $4 billion to $145 billion. Eleven years later, Coke's value on the stock market began to decline. The most recent information we collected was $101.4 billion.

What did Coca-Cola do wrong?

Nothing.

That is a classic case of cause and effect. The cola market decreased (cause) so stocks also decreased (effect).

At least Coca-Cola hasn't lost its focus on buying restaurant chains. Instead, Coke continues to focus on its beverage business. Great marketing thinking.

Bad marketing thinking is how the company uses its crown jewel, the Coca-Cola brand.

One reason children turn away from Coke and Pepsi is because of the 150 calories in each can. Being skinny is fashionable and being fat is out of fashion, although this concept is observed more in theory than in practice.

As people learn more about the dangers of obesity, you might think that Diet Coke and Diet Pepsi would outsell their calorie-dense siblings, but that's not the case. The last time we surveyed, Coca-Cola's diet drinks accounted for only 41% of the company's sales.

What should Coca-Cola have done?

Let's launch another calorie-free cola brand to appeal to young people.

Actually, the company did. That brand is called Tab and used to lead the diet cola market. (On the day Diet Coke launched, Tab was the number one diet cola brand on the market, 32% ahead of Diet Pepsi.)

It was a tactical mistake, although carefully calculated, that killed the Tab brand. The company does not use the newest sweetener (aspartame) for Tab but saves it for Diet Coke. Tab is produced using saccharine.

Today, young people see Diet Coke as a brand for older people on a diet. And men see Diet Coke as a brand for women. These are not the perceptions that can help Diet Coke become the favorite beverage of the 21st century.

Tab and Diet Coke are examples of long-term thinking and short-term thinking. In the short term, Diet Coke will be a huge success. One year after launch, the product became the best-selling low-calorie beverage. This culminated in the brand being voted the best new product of the 80s.

However, in the long run, Tab is a better choice. Instead of being seen as an inferior version of Coca-Cola (the perception of Diet Coke), Tab could be positioned as an entirely separate product. In fact, it is the cola of the future.

Recently, Coca-Cola has tried expanding its product line to reach young people. The product was called Coke Zero with modest success.

Zero is a good name but Coke, half the name, drags the brand back to the past. Furthermore, the company is slowly eroding the Zero name by using bundles with Sprite and Powerade.

Unfortunately. One reason for the resounding success of cola water is the product's versatility. Ginger juice tastes like ginger root. Lemonade tastes like lemons. Orange juice tastes like oranges.

However, cola water combines many different flavors: caramel, vanilla, orange, lemon, passion fruit and many other spices.

Just like wine has many different flavors, cola water is not a boring drink. Cola drinkers rarely get bored of the taste. Cola still has a bright future if it is not labeled as outdated. And what if one of the major cola companies doesn't launch a second brand?

One of the most difficult problems in marketing is balancing current needs with future needs. Although Diet Coke has been very successful in the short term, its long-term success is still fraught with doubts.

Furthermore, Diet Coke is a brand with an obvious target on regular Coca-Cola. This brand was once positioned as the taste of Coke without calories.

That's how to build a brand like a seesaw. When one end goes up, the other end goes down.

Microsoft lost power

Another company that is bouncing against the wall is Microsoft. In fiscal year 2002, Microsoft's stock reached a price of $35. Five years later, the company's shares never reached this price again. Our most recent information shows the company's share price is $20.30.

When things get worse, managers have two options: solve the problem or hide the problem by buying another company. Microsoft tries to buy Yahoo! for $44.6 billion. (From a marketer's perspective, this is not a good idea because the acquisition will cause the company to forget its focus.)

What is Microsoft's problem? It is the Windows operating system, the company's crown jewel. It took the company six years and six billion dollars to develop Windows Vista, the latest version of the Windows operating system.

What's happening with Windows is also what's happening with Coca-Cola.

•      When nutritionists questioned the 150 calories in a can of water, Coca-Cola added a diet version.

•      When parents questioned the 45 milligrams of caffeine in a can of water, Coca-Cola added a caffeine-free version.

•      As consumers switched to fruit drinks, Coca-Cola added cherry, lemon and passion fruit versions.

•      When consumers switched to vitamin-enhanced water, Coca-Cola added a vitamin version (Coke Plus).

As a result, Coca-Cola has up to 14 different flavors. To date, Microsoft has introduced six versions of Windows, while only five versions are considered too many.

The six editions are: Windows Starter 2007, Windows Vista Enterprise, Windows Vista Home Basic, Windows Vista Home Premium, Windows Vista Ultimate and Windows Vista Business.

Vista is too heavy, has too many features, is too complicated, and is too expensive. The future of the operating system is still a big question mark.

A brand for today. A brand for tomorrow.

When it comes to brands, left-brain managers pursue only one goal: Let's put everything into our core brand no matter how many product lines we need to expand. That only works in the short term, not in the long term.

Right-brain marketers think in a different direction. As a rule, marketing is essentially a long-term proposition in which a new strategy takes many years to bear fruit.

The marketer will surely say: Let's focus on the core brand and solve the future by launching a second brand. Or even a third or fourth brand.

Why do personal computer screens look like the control panels of a Boeing 747?

Microsoft should launch a second operating system brand that is much simpler for the majority of consumers who only use basic computer functions such as email, web surfing or sending photos.

Of course such an operating system means starting from scratch with little or even no compatibility with current software. It's a step backwards.

Next, let the marketer control everything. Simplicity is not the way to position a new brand. Hey silly people, we have the software for you.

Speed is a new way of positioning. Computers are lightning fast. Windows' current software is hopelessly slow. In the New York Times, Lee Gomes said his readers kept asking: Why does every new version of Windows require more memory and a faster CPU but run slower than the old version?

A normal personal computer can alphabetize a list containing a thousand words in half a second. However, starting that computer from scratch can take up to a few minutes.

How many people want to buy a cell phone that takes two or three minutes to set up?

How many people want to buy a car that screams in the garage for two or three minutes before you can drive it out?

You can't sell a car that can go from 0 to 100 miles per hour in half a second if it takes three minutes to get the car out of the garage.

A lightning-fast operating system could be Microsoft's trademark of the future. That's two steps forward.

We can imagine Microsoft's reaction: What? You want to destroy $17 billion in annual revenue?

Managers believe that the key to success is developing better products.

Marketers believe that the key to success is building better awareness.

25 - Managers rely on common sense. Marketers rely on marketing awareness.

The common perception is that a chasm separates left-brain managers with analytical and logical thinking from right-brain marketers with synthetic and intuitive thinking.

As marketers gain more experience, they understand that conventional wisdom is almost never correct.

Philip Kotler(151), America's most famous marketing professor, declared: Marketing can be learned in a day but it takes a lifetime to master.

So how can a marketer work with a CEO, someone who has the power to make strategic marketing decisions but lacks the experience that takes a lifetime of marketing to accumulate?

Wish we knew the answer.

Many failures on the battlefield

We spent many days in many meeting rooms in many countries debating with CEOs and company employees.

A typical CEO would say, The presentation was great, but we're going to do it our way, and we trust the marketing team to execute this new strategy well.

Marketing is 90% strategy and 10% execution. With the right product, the right name, the right target audience, the right location, and the right timing, most marketing programs are guaranteed to work. The difficult part lies in the 90%. The simple part lies at 10%.

The implementation process mainly relies on people. And people are people. If two companies each hire 1,000 employees, then both companies are no better than each other in terms of human resources.

Furthermore, good strategy improves implementation. In fact, a good strategy is defined as one that allows the implementation process to be implemented in a better and more consistent way.

Carl von Clausewitz(152), the greatest military strategist in history, once said: We would make a mistake if we thought that strategy did not depend on tactical results.

Much of a manager's policy focuses on the implementation process. Fortune magazine once noted: 90% of companies fail to execute carefully planned strategies.

However, if these companies fail to execute their strategies, how can one know that these strategies were well-planned in the first place?

Good execution cannot change or improve a bad marketing strategy.

The cognitive side usually includes managers, who approach situations in a reasonable and correct way. The manager emphasized the product: If we can produce better products at more reasonable prices, we can win this war.

What frustrates marketers is that management's emphasis on common sense rejects the possibility that there can be marketing ideas that are illogical, defy common sense, and yet can still guide operations. company's business.

Ideas don't matter?

Charles Handy, a global management guru and founder of London Business School, once wrote: "I discovered that management is