Alberta Business Marketing

One of the biggest trends I've seen in my career is "knowing it all." Pre-Internet access to information was limited. Today, "knowing it all" is virtually impossible--there's a glut of information. Having a network of "know it all experts" in their field is more important than ever before. I'm fortunate enough to meet with many experts, such as Jim Milway of the Institute for Competitiveness & Prosperity (a not for profit organization that examines Ontario’s competitiveness, productivity and capacity for innovation). I spoke to him last year and picked his brain on innovation and the challenges for businesses competing in a global market. Recently I caught up with Jim to get his perspective on what progress?if any?has been made since we last spoke.

'Innovation and entrepreneurship have continued to be emphasized by government. At the federal level, in the last budget and the budget before, they continue to talk about innovation. But in my opinion, they have a flawed approach to innovation, i.e., "innovation is the result of scientists in labs creating new things." As a business person will tell you, innovation can be something totally unscientific or non engineering related. It can be about finding a new way to serve a customer, getting costs down by having leaner processes, finding ways to draw on information to redesign a product or service. So there’s a lot of management capability needed to improve our innovation game and I think our governments continue to put too much emphasis on engineering and science.

Now, I’m not saying don’t do any innovation in those areas, I just think we need to dial up management capabilities. That means greater investment in business schools. It’s still very difficult for our kids to get into business schools like Queens or Toronto or Western, and that’s not because of the difficulty of subject matter. It’s not like brain surgery?it's good solid subject matter. The problem is we just don’t have the spaces. The universities haven’t invested in the spaces, and that’s partially due to government funding policies and partially university choices.

There’s a big demand out there from kids for commerce and business programs, and we haven’t responded. The reason I can say that there’s more demand is that it’s more difficult to get into business school programs when you compare it to engineering or science programs. We need to up the skill level of our business people. Not just scientists and engineers, it’s everybody. We have a tendency to focus on the sexy stuff around a new molecule, or some breakthrough in gene therapy or bio tech. While all of these are tremendously important, the value you get from the improvement of a service or product or operations are innovations that drive our economy forward as well.

On the tax front, I think we’re in pretty good shape, although the investment numbers are trailing. It’s not that I am out there every single day talking to businesses, but the information we are getting indicates there’s a lag between improved tax policy and increased business investment. I applaud federal and provincial tax policy that has lowered the costs of investment. Businesses, however, are not grabbing those opportunities and making the investment in their businesses. This has been part of the federal election campaign. People are saying, “We’ve lowered the taxes and businesses aren’t investing.” To me it’s an unfair attack, but it’s there.

I think there are a lot more complicating factors that affect how much businesses invest in any given year. And it’s not exactly accurate or a good analysis to look at tax reduction and the HST here in Ontario over the course of a year to see what has happened with investment, without looking at other factors. Businesses are still a little skittish and haven’t absorbed the impact of the rise in the dollar. So much of our best businesses, or the ones that we are rooting for, are the ones that export. It’s hard for them to overlook or ignore the dollar. On one hand, they’ve had tax reductions on their investment spending. On the other hand, they’ve had the impact of the dollar, which makes it harder to compete in the U.S. It’s one of those things that you won’t really know until a few years later, unfortunately, when full analysis of all of the numbers are done.

We continue to believe that we need to push or prod businesses' investment along by raising the pressure they face. And that’s why, to me, things like trade are so important. If we conclude the deal with the EU, I think it will have some good long term effects on our businesses. What will happen is that the ones that seize the benefits of exports will have better benefits to seize and a bigger market in the EU. I hasten to add, let’s not hype our expectations, since we already have pretty low tariffs with the EU. The more we reduce the tariffs, the more they open their market up to our businesses, the better it is.

But there’s a flip side, which is also positive. Our businesses will be exposed to greater competition from European businesses. I believe it will bring out the best in our businesses. Of course, it will make it unpleasant for some. As the experience of opening Canada-U.S. free trade showed, it will put some out of business: the walking wounded as it were, the ones that aren’t that competitive. It will expose that weakness one more level.

There’s been talk about reducing our trade barriers with China, India – the BRIC countries. Again, I haven’t met a trade deal I didn’t like. Any increase in trade is positive.

In summary, on the issue of entrepreneurship in Ontario, the major contribution that governments can make is the kind of environment they create. I think they’ve done a lot on the tax front. And they’re on the right track with more trade agreements, but they just need to keep pushing those trade agreements. And they need to ensure our educational institutions are developing management capabilities for our businesses."

Tags: Research, Strategy
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CMA is supporting a study that is examining the digital/interactive economy in Canada. With a goal to obtain data from 10,000 persons working across industries in a digital/interactive capacity, we should expect very rich data – significant for most organizations as a benchmark. Questions will probe for advertising spend, wages -- by type of digital activity area (title), gender, company size and location, etc. The study also examines the career paths of those working in digital media, job satisfaction and professional development.

The survey is in part being funded by the 2010 “Mesh” prize and run by Teehan+Lax (Toronto-based firm). To achieve the respondent goal, all relevant associations in Canada will likely pitch in and help get the work out.

Take the survey here
Reports will be available in the summer.

Fast Facts
A previous study undertaken by the Canadian Interactive Alliance (CIAC), named, 2008 Canadian Interactive Industry Profile - estimated that there were 2,960 interactive digital media companies in Canada, whose gross revenues were 4.7 billion (3.8 billion from interactive activities), supporting 52.5 thousand jobs.

Tags: Digital, Research
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Do you remember the days when innovation was a big part of most major companies? You think about 3M, Xerox, IBM, GE, Disney as leaders in that field whether it applied to products, services and/or marketing.

Today when I think of innovation I think about companies such as Apple, Google, Amazon, Facebook and others. Yes, it just happens to be coincidence they are all on the Fast Company Top 50 Innovation list also.

But I wondered why many other large scale companies don't have such an emphasis on innovation anymore. You hear about lots of companies that "value innovation" and want to "be innovative". I can't recall how many times my friends told me the CEOs of their companies boldly proclaim to their staff "We need to be like Apple" during employee meetings.

Recently at an alumni reception from my alma matter, I chatted with a venture capitalist and it was her view that companies no longer invest in innovation because of cost. Plain and simple. Due to short-term financial pressure, organizations focus on quarterly results, therefore they can no longer "afford the luxury of internal innovation". She further stated "It would be naive to think shareholders would not freak out if guys in white lab coats were allowed to run around concocting ideas that didn't generate immediate ROI". It was her view that larger corporations perceived acquiring start-ups (and the innovations they bring) much more cost-effective than to build them in-house.

She pointed to the example of Google despite its own roots as a start-up as they now have acquired many firms over the years.

But what about here in Canada? Last time I checked Google was based in Mountain View. Indeed it appears large corporations in Canada are also acquiring smaller companies from a strategic perspective and have been doing so for quite some time. Whether it be Torstar or Transcontinental. So the trend certainly doesn't appear to be declining. However one could argue that some corporations are looking further towards the long term such as the case of Rogers Ventures which specializes in investing in technology start-ups right here in Canada.

So what does this all have to do with marketers? In Business Week a few years ago it was proposed that marketers bear some responsibility for this trend of lack of successful innovation in companies. Marketers you ask? Yes. The premise is based on three criteria.

(1) Successful innovations need more than a great idea. Indeed great ideas are a dime a dozen but execution is what really matters. Too many marketers only view their job as coming up with the idea. The execution rests with someone else be it in production, IT, distribution and/or sales. The biggest reason for this? Plausible deniability. If the concept fails marketers can point the finger at someone else.

(2) A lack of talent. Some people are great at generating ideas. Others are great at the execution of them. Very rarely are there enough people within large corporations that are talented at both. Or they are not being brought together at the right time to achieve a common goal.

(3) Fatalism. Marketers go into new initiatives (half-heartedly) expecting it to fail. So when they do there is no major surprise. Then the finger gets pointed at the executive suite for lack of support, resources or other departments for creating roadblocks or fighting over turf.

I'm not sure I totally agree entirely with all of these criteria but it certainly gives one pause as a marketer. In my experience the challenge for marketers/innovators is that it's harder in a larger corporate environment than a start-up one to be innovative - unless there is a specific culture that fosters and embraces innovation. One where employees are encouraged to contribute new ideas but are also recognized for them via both extrinsic and intrinsic motivators.

Lastly, it becomes important that an over-emphasis on short-term performance is not at the expense of long-term success. Perhaps then we just might see more colleagues at large companies wearing white lab coats again.

Sulemaan Ahmed

Tags: Get it off your chest, Integration, Research, Strategy, technology, This and That
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Why take yet another survey?

Because this one is a global study that yields benchmarks for a wide range of activities that matter to marketers. Marketing Outlook 2011 -- the CMO Council’s fifth annual benchmark of marketing priorities, spend allocations, and operational and organizational mandates, will in particular evaluate how social, mobile and digital channels are changing the marketing landscape and mix. Results provide a reliable barometer of media and marketing spend - and a sound indicator of where and how marketers expect to drive campaign effectiveness, efficiency, and yield in the months ahead.

The survey will likely take no more than 20 minutes to complete -- you'll be joining hundreds of senior marketing practitioners in providing valuable insight by completing the online audit.

In appreciation of your time, you will receive a complimentary copy of the detailed findings report (a $199 US value) upon publication in early 2011. Just make sure to provide your contact details at the end of the survey.

Tags: Research
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Paying more for what you want is not looking so affordable — or sustainable — anymore. Trading up was always a fragile phenomenon. But the context seems to have changed in the past two years. It rested, in large part, on consumer psychology — a feeling derived from self worth.

Masstige is in. Its prestige products available to the masses. Consumers want to connect emotionally with brands in categories where they expect quality, performance, and engagement. But in other categories that aren’t emotionally important, they become bargain hunters. For example, a passionate BMW driver will shop for store-brand groceries every weekend. Which one of these categories is your brand in?

A new emerging market segment called Masstige is growing at the expense of the premium segment in several product categories. Retail has seen a lot of activity in the Masstige space. 2008 and 2009 saw the introduction of new store concepts by the mainstream retailers, such as Murale by Shoppers Drug Mart and Oasis by Sears, while Sephora and Bath & Body Works continued their geographic expansion. Additionally, Yves Rocher introduced a new store concept that was well-received by customers.

This trend is notable in such products as skin and hair care, where Olay and TRESemmé positioned themselves directly against the premium segment, openly questioning the need to pay extra. There are many more successes - Coach persuaded women to buy $300 handbags when a $40 version from a value chain could have sufficed. Williams-Sonoma trained shoppers to covet a $50 stainless-steel hand-crank can opener, even though Wal-Mart sells a high-quality electric model for less than half the price.

The term Masstige was popularized by Michael Silverstein and Neil Fiske in their book Trading Up and their Harvard Business Review article "Luxury for the Masses".

Why is this trend important to senior marketers? Democratization of brands is strongly associated with higher market share and margins. It drives value and makes brands more resilient. Plotting your brand in the continuum of Masstige hierarchies can reveal new insights on how to optimize brand value and strengthen pricing strategies.

Merril Mascarenhas

Tags: Branding, Customer Experience, Research, social media, Strategy
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