The trap of “Excel Marketing”...?
The struggle to balance consumer expectations and corporate expectations on margins...some thoughts
Category : Blog
Imagine this scenario – you have a favourite restaurant, where the marvellous food keeps taking you back for more...time after time. And then one fine day, the tadka on the daal seems to have lost a bit of the zing (or the pasta arrabiata tastes more of onions & less of tomatoes). The first time this happens, you probably put it down to one bad day for the chef. The next time it happens, you mentally tick it off your favourites list (and if you are really upset, you go online and vent your spleen). It’s the same with packaged products we buy...
In today’s tough business conditions, where manufacturers of products ranging from cars to soaps have to grapple with spiralling input costs, it is natural (and necessary) to look at ways to manage/reduce costs for keeping gross margins healthy. And Microsoft Excel has made it very easy to try various permutations & combinations: A click of a button reduces raw material cost by reducing the strength of fragrance X in, say a hand cream. Voila! Gross margin has increased...A little more reduction and again a gain...? Perhaps not.
If the strength of fragrance X is reduced to the point that the consumer finds something amiss, trouble is round the corner, because a spark has just been provided for creation of a “lapsed user”. The irony is that Excel also helps track – though much later - the cumulative effect of a series of lapsed users into reduced sales...
So when Excel takes over Marketing, the ultimate outcome can be the opposite of what the intentions are. In the process of positively impacting gross margin, what is critical to ensure is that the product experience - which is core to the promise of the brand - is not diluted. Microsoft Excel cannot calculate the impact of number jugglery on consumer acceptability; but when the consumer expectation of “value” is met, MS Excel can accurately measure the gains for you!
The struggle to balance consumer expectations and corporate expectations on margins...some thoughts
Category : Blog
Imagine this scenario – you have a favourite restaurant, where the marvellous food keeps taking you back for more...time after time. And then one fine day, the tadka on the daal seems to have lost a bit of the zing (or the pasta arrabiata tastes more of onions & less of tomatoes). The first time this happens, you probably put it down to one bad day for the chef. The next time it happens, you mentally tick it off your favourites list (and if you are really upset, you go online and vent your spleen). It’s the same with packaged products we buy...
In today’s tough business conditions, where manufacturers of products ranging from cars to soaps have to grapple with spiralling input costs, it is natural (and necessary) to look at ways to manage/reduce costs for keeping gross margins healthy. And Microsoft Excel has made it very easy to try various permutations & combinations: A click of a button reduces raw material cost by reducing the strength of fragrance X in, say a hand cream. Voila! Gross margin has increased...A little more reduction and again a gain...? Perhaps not.
If the strength of fragrance X is reduced to the point that the consumer finds something amiss, trouble is round the corner, because a spark has just been provided for creation of a “lapsed user”. The irony is that Excel also helps track – though much later - the cumulative effect of a series of lapsed users into reduced sales...
So when Excel takes over Marketing, the ultimate outcome can be the opposite of what the intentions are. In the process of positively impacting gross margin, what is critical to ensure is that the product experience - which is core to the promise of the brand - is not diluted. Microsoft Excel cannot calculate the impact of number jugglery on consumer acceptability; but when the consumer expectation of “value” is met, MS Excel can accurately measure the gains for you!
1 comment:
Hi,
I don't know how, but have just landed up here while searching for MS EXCEL marketing tools and have read this blog on The Trap of Excel Marketing.
I also share the same opinion that softwares, no doubt have made our number crunching lives easier but beyond a particular point their results might not be actually applicable in practical scenarios. Because ultimately we are all human beings and particularly in my industry of financial services, though we are heavily dependent on softwares, yet I feel it can never take over the human understanding and sensibilities. I feel that algorithms or programming delivers a set result in all similar cases but due to diversity and complexity of human nature, human beings might react and perform differently in the given exactly similar set of circumstances. Any software in such similar set of circumstances will give similar results for the whole sample population whereas human being in the same arena might actually be behaving differently.
Hence beyond a point, softwares can actually portray a seemingly right but not acceptable figure.
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Warm regards.
Manish Saluja
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