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Get All Those Markets

Recently, there have been a spate of marketing missteps by companies that should know better, such as Bud Lite and  Miller Lite.

We don’t think it’s just a beer thing.

For some reason, many current marketing managers let their ‘woke’ ideology get in the way of sound marketing decisions.

For example, Bud Lite because of a mistake in using Dylan Mulvaney a niche influencer at best, to advertise their beer, which is a mainstream product and was using mainstream media, caused a 12% sales DECLINE as the US is heading into the holidays and the summer. And has to redesign their packaging to stress normal patriotic Bud Lite themes. The CEO of Bud Lite still hasn’t issued an apology over the mainstream media channels, which he should.

Similarly, Miller Lite featured some bikini models in a recent ad using mainstream media, and alienated some feminist groups. No counter ads using say, the Chippendales drinking Miller Lite and running in feminist-oriented media.

The point of these two problems is that marketers should either pursue mainstream themes if using mainstream media, or niche media if doing a niche ad. Either is ok, but don’t confuse the two, because you’re confuse and alienate your core markets.

Figure out which strategy you’re going to use, and then design the ad to influence the target market to buy your product. Or, remind the target market you’re still around and would value their purchase of your product.

And maybe, just maybe, do some retraining of your marketeers.

 

 

What We See in ’23

I gave a business talk last week to my local SERTOMA club on business conditions for the balance of 2023, and I thought I’d share it with you.

  1. There’s not going to be much of a recession (although we’re biased here in Arizona by the good economy), even given another 0.25% rate hike by the Fed.
  2. Interest rates are still historically low, but whether funds are available is a good question. I recently bought some shares in Western Alliance Bancorp, partially so I can get access to their thinking, and the stock was historically dirt cheap, because of the problems with Silicon Valley Bancorp. Local banks like WAB still do a lot of lending.
  3. Business conditions are pretty good, but not in the metro cities in blue states, because of theft and labor conditions.
  4. Now’s the time to tune up your web site and make sure it’s producing the leads you need. Talk to your webmaster and make sure you’re on Google Local Search.
  5. Now’s also the time to tune up your sales force and make sure leads don’t fall through the cracks.
  6. If you’re doing relationship selling, and we hope you are, make sure your sales reps have contacted all the customers that you haven’t heard from lately.
  7. Don’t pull back on your innovations, but check the estimates of share you might get, and make them a little more conservative. Heck, we’re restarting our online business school, www.businesssuccess.school, so we’re putting our money where our mouth is.

So, have all these in place by next week. 🙂

Progressive?

We’ve stressed making it easy for your customers to do business with you, but Progressive Insurance might not have been listening.

If you insure with them, they have an app called Snapshot which is mandatory to get the best rate. It tracks where and how you drive. Fair enough, and we’ll overlook the legal problems with such an app, which isn’t voluntary if you want the best rate.

But, getting the app on your phone is needlessly difficult, because Progressive wants you to download it through the Apple Store. Their reps don’t know why.

Free advice Progressive: put Snapshot on your own website, eliminate the Apple store (and I say that as an Apple shareholder) and save your policyholders some money.

You’re welcome.

Match Your Media to Your Market

Maybe it’s the spring weather in much of the US, but some marketers who should know better are spending a lot more money than they need to advertise to some segments:

  1. Bud Light appears on MLB network with an ad selling Bud Light to trans people. Big money, narrow market guys. But, you got Kid Rock to shoot up a case of Bud Light, so your normal market is clearly watching.
  2. Nike has a trans guy modelling a sports bra in TikTok ads; they pay him, so it’s not free, but how big do you think this market is, Nike? And, again, you got some adverse press on Fox News, so perversely, you might have hit the sports bra market.
  3. Two elderly guys, maybe gay, are celebrating the purchase of a house, which is fine, but does it make sense to put it on main Fox cable?

The point of these three vignettes is that all three advertisers should have researched the media that might appeal to the markets they were trying to reach, and then run the ads using those media. Saves a bunch of money, guys.

You’re welcome.

Export, Dammit!

Business conditions haven’t been the best in the last year or so.

I’ve also noticed that manufacturing in the US is losing jobs.

The US dollar is down compared to other world currencies, too.

I’m wondering why more manufacturing companies, large and small, aren’t apparently exporting if at all. The down dollar makes your US goods cheaper in foreign countries.

When I and a partner owned a manufacturing company, exports kept us going strong during a couple of recessions.

We fell into exporting, when a couple of our national suppliers recommended us to foreign companies, the foreign companies contacted us, we set up export terms, without any assistance from any US export agencies. We self-financed the exports, because in Reno, Nevada, the banks barely understood what our company did, let alone that our products were exportable.

Exports strained our balance sheet, because it wasn’t uncommon to wait 60 days for payment. Our parts were shipped in containers going across the ocean.

Eventually, our exhaust products were stocked by branches of four national companies around the world. We were honored to be included in their lines of business; but the export business wasn’t without problems beyond financing: you haven’t lived until one of your air intake parts fails in a South African mine, lunching a v-12 diesel engine and causing $20,000 in repairs (in 1986 dollars)

Now, there is EXIM.gov, which provides financial and technical support for exporters. And there is insurance for payment of export invoices, usually through EXIM.

Look around for US trade missions in your closest big city….they will act as overseas agents for you.

All things considered, just do it!

Get Focus on Your Business Idea.

I had a nice chat last Thursday with a young aspiring entrepreneur who probably left our lunch a little crestfallen that I didn’t readily embrace his idea for a few business. .

The problem was that he hadn’t focused enough himself on his business idea..

He didn’t know who his customers were and whether they’d embrace his idea, because he hadn’t done any research on his customers. He also didn’t know if his software product was unique, because he hadn’t done his Google/Bing research.

Research is much easier to do now than it was when I started Marketing Doctor, because of the internet. We’re not sure yet what role chat/GPT might play in market research, but we’ve got a client for whom we’re doing new product research right now, and we have a Zoom meeting on April 12 moderated by Peter Liefer of Primeview and the client is attending.

He’s got a prototype in production and we’ll probably do a focus group of possible users, because the idea hasn’t generated much interest on cold calls, even with product descriptions..

Our young prospect had a website, but. it was a bit off, because he didn’t have customer research data. but it was serviceable at this point in his corporate life. We suggested he tweak it and relaunch on GoDaddy and spend some money customer research and on search engine optimization to see what happens.

What he seemed reluctant to do is talk to some prospective customers and find out if they liked his software product idea.. Customers don’t bite, and the frequently have useful ideas. But you’ve got a couple of minutes to pitch your product or service to potential customers, so you’ve got to get your rap down pat. We offered to help him with that, too.

But, we don’t work for free. So, we hope he’ll go back to the thinking stage, fix what he’s got to and then sit in on one of our business owner sessions.

As consultants, we’re agnostic on ideas, because we have to evaluate products and services on potential markets. .

We Don’t Have Anything to Fear From Chat/GPT

I’m surprised Elon Musk and Steve Wozniak have come out publicly and called for a slowdown in the pace of implementing artificial intelligence and chat/gpt.

Both of them, as disruptors, should know better.

You can’t put the toothpaste back in the tube, or the genie back in the bottle, to use a couple of well worn metaphors.

The reason you can’t is there will always be some genius out there who doesn’t conform to what society is telling him or her to do, and that person will go ahead with their implementation of whatever they were working on..

For example, shortly after I started this blog, I see on Liz Claman’s Fox Business Show the head of Adobe Digital Systems announcing that they have in Beta testing an AI version of Photoshop, which allows you to just write out in the chat/gpt box what you want to see, and it creates it in about the same time that chat/gpt creates internet content.

Parenthetically, if you’ve ever written code or done the scut work of filling in designs for internet pages, you think that chat/gpt is great.

In a broader sense, there will probably be some dislocations among some people, but this dislocation.  has gone on as long as there have been innovations. Millers, weavers, buggy whip makers all found something new to do after their industries were innovated out of existence.

People acquire new skills and adapt.

That’s what thinking is for. I know it’s probably racist to hold such a radical view, but it is what it is. .

You wokers can go pound sand. Don’t be a bunch of Luddites. And Elon and Woz, you might rethink your position on this new thing called AI.

Is Your Bank Safe?

With all the commotion around the SVB demise and rebirth, and the condition of the other small regional banks, we thought we’d offer some comments on bank condition and what to look for:

  1. If you’re banking with one of the money center banks, your money is probably quite safe. None of them appears to be in any financial trouble, and although they might book some losses on the sale of their bond portfolio, they’ll probably hold all of their securities to maturity, avoiding the problem.
  2. If you’re banking with one of the regional banks that have had problems recently, there are things you can do to look at their condition…if they’re public, check the 10Q statement each quarter, which they’re required to file. As a general rule, give your bank the sensibility test: are they doing things that you find sensible? For example, SVB leased 160,000 square feet in a lake waterfront compound, which strikes me as not too sensible, unless they were planning to move major headquarters out of California, which is possible.
  3. Don’t put any balances in any one bank over the federally insured maximum, which is $250,000. Most of my clients don’t have this problem (their balances are $25-50k). Go find another bank or hold interest bearing CD’s or even corporate preferred stocks, which have an 85% tax exemption (or did), but which might have interest rate risk if the Feds don’t get their act together. You can also find high yielding dividend stocks, too. Check with your financial advisor. There are restrictions on what kinds of securities you can hold outside of your corporate IRA.
  4. Speaking of your corporate IRA, make sure that your investment advisor isn’t invested in ESG or DEI loving companies, because he/she might be costing you returns on your investment. Wharton and the University of Chicago reportedly have done recent studies on the different types of returns, and ESG/DEI returns were lower.
  5. People have done studies on which companies embrace ESG/DEI; Wayne Allen Root is one. He’s a little nutty, but he does good work.

So, all of these things should keep you busy this week.

SVB Turnaround?

With the bailout of Silicon Valley Bank (SVB) it appears that the bank could once again be used for the mission for which it was created some years ago: lending to smaller, entrepreneurial companies that wouldn’t be considered by other banks.

SVB was set up about 30 years ago to make such loans. For example, I had a software client who was one of the first to do console video games. He had a purchase order from WalMart for his new games (they had previously bought his older games, and they sold well), but the client needed financing for development and production of the games. At the time, Phoenix banks weren’t lending for this purpose.

So, based on the advice of Sequoia Capital of San Francisco, we talked to SVB. After looking over the relevant documents, and installing a few guidelines to ensure the loan was properly spent, SVB made the loan and the games got developed and produced..

Somehow, probably over a period of years, SVB strayed from its original mission of entrepreneurial lending, and became more like the bank of the Democratic Party, making large donations to Democratic causes.

SVB did back some very worthwhile companies in the intervening years but imagine what more they could have done if they had stayed with their original mission,  lending to all entrepreneurial companies, even startups.

By the way, SVB should also have advised its clients when their deposits went past the $250,000 insured limit. And the company CFOs should have realized it, too. As for payroll, when it’s done, money is moved from accounts to cover the disbursement, whether the company or a processing service does payroll, so this in a specious argument for keeping large cash balances in accounts.

SVB should once again bring in some bankers, not just some wokers, and go back to its original mission of providing entrepreneurial capital.

SVB’s capital structure is now apparently sound, and proper managing of loans to maturity limits, and a higher loan to asset ratio, will bring other ratios into line. Proper management and supervision by the San Francisco Federal Reserve should ensure that all remains well.

Sure, the brand name has been tarnished by some of the recent shenanigans, but if entrepreneurial companies feel that they got fair treatment from SVB in their loan negotiations, word will get around and the bank’s reputation will slowly be rebuilt.

Bottom line: don’t throw the baby out with the bathwater of past misdeeds.

Whew

Well, it looks like the banks did the right thing in bailing out Silicon Valley Bank (SVB) and firing the management.

However, there are other banks out there that hold an abnormal percentage of their assets that aren’t lent in Treasury bills and notes.

This means that, as interest rates are raised, the value of these Tbills and notes goes down, which isn’t a concern (they’re made whole at maturity) as long as the bank isn’t run upon and has to sell these assets at a fire sale price and raise capital at the same time, which is what did SVB in.

Powell and company at the Fed might have also learned a lesson, in that you can’t make up for lost time and raise rates more rapidly. There will apparently be no rate increase in March, and lower rate increases down the road, until the Fed sees what inflation does in coming months.

It’s also possible, although not discussed in the media, that banks like SVB might have to call in loans made at low interest rates to shore up their balance sheets.

So, call up your banker this morning inquire about his or her health and find out what the status of your loan is.