Page 131 - Free the Idea Monkey

Here is a simple illustration from the most recent recession. In
analyzing the marketing data, we saw that many mothers were buy-
ing baby formula at the beginning of the month, as soon as they got
paid, because they were worried that they might run out of money
sometime during the month.

Obviously, that was a bad sign for the economy. But it seemed to
me to represent a huge opportunity for a company that already sells
to new mothers to enter the market with a low-price baby formula.

If our mythical company provided an extremely high-quality
product at a low cost during the recession, it would absolutely win
share and loyalty from these worried moms. Profits would come
later through economies of scale, the ability to reduce marketing
costs once the brand was established; and, yes, the mothers’ loyalty
would help lift other products in the portfolio and probably support
respectable price increases once the economy was on the mend.

STRATEGY #2: READY, AIM, AIM, AIM, FIRE
If you don’t like, or can’t implement Plan A (Win It Now, Expand

It Later), then it is time for Plan B. If you have a disciplined research
function, you are already sitting on insights into customer buying
behaviors, segment value and marketing. (If you don’t have it, start
building it today.)

These insights enable you to build an innovation plan that lets
you win one segment at a time, meaning you can lower your overall
marketing budget, but still spend more than your competitors in

certain segments and beat them soundly. The
key is to keep or expand investments
in specific areas of innovation
that are sure fire.

116 T H E U P S I D E O F P R O B L E M S