Marketing is not advertising...

This month we celebrate our management consulting business’ second year of life.  In dog life it would be 14 years; and given the demands and expectations of small business generating instant cash flow in the Zimbabwe market, the life of companies should be measured in dog years!  One is expected to generate cash flow within 3 – 6 months of operations!  Failure to do so, one is seen as a mickey-mouse business and not a serious player in the market.  Hence, it is no wonder you see many companies in Zimbabwe apportioning some of their capital into advertising their products in various forms of media platforms.  Whilst that is not entirely a bad idea, it is slightly deceptive if you think advertising alone will send your prospective clients into your store.  Here are four (4) reasons why advertising is not purely marketing:

1)       Advertising is for the lazy

Yes. I said it.  Advertising is for the people who expect a couple of beautiful looking pictures and sign post to pique a psychological reactions in your prospective and current clients to come and leave their hard earned money in your store.  Think again.  If you ask marketing executives from the big companies like Coca-Cola; Microsoft, MacDonald’s why they advertise; they will tell you that it is to develop BRAND AWARENESS and INCREASE PRODUCT VISIBILITY.  The oldest people in the marketing game are telling you something: the objective is not to derive direct revenue as a result of advertising.  Marketing academics will even further testify that it is difficult to measure and pinpoint how much of sales made in a particular period; comes from a specific advertising expenditure either during that month or previous months.

2)      Be relationship managers

Marketing is a relationship with your customers/target market.  People like to buy from companies that reflect who they are and sell their products in a way that is not just a quick exchange of product and cash.  Let me tell you a story of a company that manufactures wrought iron furniture.   After several months of the owners selling and marketing products for the business; they decided to hire a couple of sales and marketing executives.  Part of their remuneration would be earned as 50% commission of the the business that they bring to the shop (sales).  No doubt, the sales and marketing executives are clever, groomed and articulate however, that alone did not get more customers coming into their Umwinsidale showrooms.  In fact, management saw a decrease in sales over a period of 3 months; coupled with a high wage-bill.  Why?  The sales that did come through the door where as a result of the longstanding relationships that the owners have with prospective and existing clients.  This is because, unlike the employees; the business is a lifestyle not just job to the owners.  Upon further investigations, it became apparent that the owners are in every nook and cranny of social media platforms and social functions where every opportunity presents itself to package their product and service offering to their friends, family, and colleagues.   In addition, owners aspire for the quality of life that our clients aspire for.  Hence, the conversations with the clients go beyond just selling the finished product to them when they visit the showrooms.

3)      The discerning customer (value proposition)

As a result of globalization we are seeing the impact of consumer purchasing power on retail, manufacturing and services sector sales.  This is because the consumer is often exposed to many more choices and therefore, requires companies to offer value to their customers in the way that other companies offering the same product and/or service may not.  The degree of sophistication of a customer in an emerging market economy has increased over the last two decades.  Therefore, purely exhausting your advertising budget without a second thought to the discerning customer is like giving money away.  It’s useful and noble but does not generate any revenue for your business; thus compromising on the future viability of your business. 

4)      Marketing is about understanding the market

Marketing is one of the strategic functions in a business; advertising on the other hand is the administration function of marketing.  When I work as a consultant as I often do for some medium-sized companies in Zimbabwe, I am delighted to discover that 50% of them knew the importance of understanding their market.  They even demonstrated it through the previous surveys that they continuously conducted on product awareness campaigns, visibility of their brand amongst other factors.  In academia we call this Market Research.   Market Research is more appropriate execution for larger companies whose capacity and client base is too rigorous to manage.  However, we cannot under estimate the importance of engaging with our customers on a continuous basis.  I think small business do a better job of knowing their customers’ needs better than larger organizations.  This is because the environment in which they collect feedback from the client is informal; face-to-face; less structured and instant.  Thus, quality of the feedback is more likely to accurately reflect the customer’s honest view.

So, dear marketers don’t rely on your advertisers to be the custodians of your relationship with your clients; don’t be lazy! 

Copyright @ November 18, 2013.  This article was first published online on BlogSpot by Tambu Ndoro, Strategy & Innovation Consultant & CEO-Founder at Hanga Consulting Private Ltd©2011.  www.hangaconsulting.co.za coming soon. 

Private Sector, do you know what your Ministry has in store for you? : The Tripartite Free Trade Area Agreement

Yesterday, our organization, the SME Association of Zimbabwe was invited by the Zimbabwe National Chamber of Commerce to a Consultative workshop about Tripartite Free Trade Area  (TFTA) between COMESA-EAC-SADC.  This workshop is being funded by the British Council and we were only alerted of its nature less than 48 hours.  So, I took it upon myself to read up on TFTA what it is and why they need our input as an organization.  So I download two 20-page documents off the internet.   The first document I read was a well-researched paper by Petros Shayanowako, ‘Towards a COMESA, EAC, and SADC Tripartite Free Trade Area,’ (January 2011).  They were critical aspects to the paper he covered which would be useful to any SMEs or Private Sector whom would want to understand the historical background and impact of the TFTA on business, trade and industry.  I will not bore you with the details of the paper but more emphasis on Import-substitutions and Value Additions on our local industry would have been useful.   Hence, I then, referred to the Draft TFTA as suggested by Shayanowako’s paper to understand the specific legal guidelines that is informing the author’s deductive reasoning.  

As I read ‘The Draft Agreement Establishing the COMESA, EAC and SADC Tripartite Free Trade Area,’ Revised (December 2010).  It became abundantly clear what the benefits and the challenges of the TFTA were.  Now, I am not a Trade lawyer and neither, do I have a PhD in Trade and Development but it doesn’t take a social scientist nor a legal practitioner to explain Article 3: General Objectives, clause 1: to promote the rapid social and economic development of the region through job and wealth creation and the elimination of poverty, hunger, and disease through building skills, innovativeness and hard and soft infrastructure; and through improving the location of factors for sustainable generation of national, regional and foreign investment and trade opportunities. In essence TFTA is promoting the competitiveness of a country by developing the country’s competitiveness of its local industries.  So, here is when things became uncomfortable for me when the following assertion amongst others, were made by various senior persons with the mandate to speak on behalf of ZNCC and Ministry of Industry and Commerce, paraphrased as follows:

Zimbabwe is a dollarized economy.  When countries export it is because they want to buy up foreign currency; and since Zimbabwe has the U.S. dollar; the Botswana Pula; the South African Rand; and the European Euro then Zimbabwean SMEs can benefit from having countries in the COMESA-EAC-SADC trade with Zimbabwe for that foreign currency.  

Now here is the question I later posed to the panel after painfully listening to their unsolicited and uninformed advice about how SMEs can leverage from the TFTA.  How does a company in the manufacturing sector benefit from TFTA when (1) their production inputs in making a product is in a strong currency such as the US$; and (2) distribution (transportation costs) are in US$.  The retailer then puts a mark-up on the product to sell to consumers in the domestic market.  In the end, the products only fetches particular consumer with a specific disposable income and if one takes this product across the board to South Africa to sell in a weaker currency in South African rands; how does that product perfectly compete on price with South Africa?  Is this a sustainable model for the SMEs? Can the SME still maintain Zimbabwean jobs?  Can the SME still circulate income in the Zimbabwean economy?  Can the already under capacity-utilization manufacturing plant avoid the economic-certainty of poverty, hunger and disease knocking on its doors?  How do all these factors promote import-substitution and value addition?  My question was not welcomed by one of the panel members, in fact they responded as if they needed to exorcise the demon that had descended on me to even dare ask that question.

My question was greeted at first with ‘I don’t understand your question about exporting and production costs in US$?’ Then I repeated it slowly in simple non-economic terms to the Economists asking?  Then the respondent defiantly acknowledge the question and responded with soft indignation ‘I don’t understand why your production costs would be in US$ and why it would be more expensive? Anyway, it shouldn’t be more expensive because you have to look at what you are doing wrong in your processes to minimize that cost so that your product would be affordable.  So, fix that in your business processes and your products would be cheap.  At this particular point, my brain-stopped processing information, the way a laptop stops functioning the minute someone mistakenly pours water over it.   There were few more questions I needed clarity on, for instance how do you balance the contradictions inherent in Article 9: Prohibition of Export Duties with Article 19 of Safeguard measures…etc.  The respondent at this point was like, ‘Are you suggesting we bring back the Zimbabwean dollar, back?’ My colleague, sitting next me unsolicitly says ‘Yes,’ and the respondent greeted back with the violent ‘NO.  You can’t do that!  It is getting political. It’s a non-starter.  Like I said, look at your business processes.’ I responded passively saying that this was supposed to be an open dialogue and on that note our Q&A was shut-down by ZNCC official chairing the consultative workshop.  

******

During lunch I engaged with various colleagues as a few found my line of questioning an important one but did not have the courage or the insights to ask more questions and response to my queries.  As for the panelist, neither of them had the curiosity to want to understand nor seeks to impart their in-depth knowledge of the TFTA  to ensure we were all the same page.  I watched the stakeholders who had called the consultative workshop huddle into their respective groups without interacting with the rest of the delegates and accepted (finally) that the Zimbabwe I now found myself in, had a type of dysfunction, that to bring Zimbabwe to absolute resolve can not result in political change alone!

Copyright @ April 17, 2013.   Published on BlogSpot by Tambu Ndoro, Adhoc Strategy & Innovation Specialist for UN Commission Trade and Development (UNCTAD) and Hanga Consulting (PVT) Ltd, ©2011.  www.hangaconsulting.com.  Tambu is also a member of Research and Development Committee of SME Association of Zimbabwe ©2011 

An Ode: The Economic Activist

I am not your wife, your girlfriend nor your mistress

And neither do I aspire to be any of the three;

Therefore, when I am in the boardroom with you

Do not seek validation for your manhood mimicked in false assertions

Do not expect me to stroke your ego in an effort to promote your counterfeit self

Only envisage a woman who is here to fulfill her God-given purpose

I am not your wife, your girlfriend nor your mistress

And neither do I yearn to replace any of the three;

Thus, when I contribute my knowledge

Do not treat me like an imposter, to minimize and patronize

Do not regard me as the an enemy of the state, to destroy and to conquer

Only look at an ethical woman who values self-respect

I am not your wife, your girlfriend nor your mistress

And neither do I bring judgment to any of these roles

Hence, do not confine me to those compartments you have created in your male consciousness

But, be open-minded;

Be like the learning-organization you purport to espouse

Only live to serve; not to be served

I am Daughter, a Sister and a Mother-to-be

I am protected, cherished, and fearfully respected

I am not minimized so that the opposite sex is elevated

My voice is not ignored so that the male voices are the only monotonous sound in the room

I serve, I nurture, I love

My persistence is to engender an economic freedom that my gender is yet to fully actualize

Copyright @ February 18, 2013.  BlogSpot by Tambu Ndoro, Strategy & Innovation Specialist at UN Commission Trade and Development (UNCTAD) and Hanga Consulting (PVT) Ltd, ©2011.  www.hangaconsulting.com.  Tambu is also a member of Research and Development Committee of SME Association of Zimbabwe ©2011