SPEAKER_00 0:15

Ah, Mini MBA. How are you? I've missed you. Welcome to session four of our QA. This is the one where everyone's way, way, way busy and don't post a lot of questions. And then they come back in session five and we've got 400 questions. So we'll have a short and sweet one this week, which is fine. You know, 25, 30 minutes. Some great questions, um, nonetheless. We've just done price and product. Matt, look, you know, there's nothing more important to whole mini MBA than the price and product modules. And by now, if you've done them, you should see why, right? I mean, you know, we have so much to offer when it comes to pricing. Um, and yet we're so afraid of it. And the organizations are so reticent to put us in into the into the mix. I really, you know, when people say they're passionate about stuff, I always go, yeah, really? You're not really passionate, are you? Well, I really am passionate about pricing, and I really want you to get a lot from the pricing module. I, you know, I feel like that's the crucial part of the mini MBA. All right, let's do questions, then we'll talk about what's up next. So, Alexi, I'm struggling with the practical side of building a segment-specific funnel for setting objectives. Okay. In reality, even in B2B, internal data is complete, incomplete. We may not reliably know certain attributes we chose for targeting across all customers and prospects. If I can't accurately identify which customers belong to my target segment in sales or customer data, how do I measure lower funnel stages like activation or conversion? And what should take priority? Choosing the strategically right segment, even if the measurement is imperfect, or taking data availability into account during segmentation so the funnel can be measured. Oh, it's definitely the former, Alexi. So don't worry. I mean, it's, you know, sometimes the data isn't there, especially in B2B. The main thing is you identify the B2B segment you want to go after. And that specifically means the bunch of firms you want to go after, right? Then break it down into the buying center and then go from there. If you can't do set, if you can't break it much further down that, don't worry about the segment stuff. Do the funnel just at the firm level. You see what I mean? So all you're saying is there are four, you know, the top of the funnel is the segment of companies. There are 5,000 companies in this segment. We know that, you know, on average, about 40%, whatever that is, 2,000 of them are aware of us. Of that, this many have talked to our sales reps, this many have bought from us, this many are still customers. That's good enough, B2B. Don't sweat it too hard. But it's all about the strategy, it's not about doing stuff so the data can be neat. Snigda. Uh, I don't have a question, but a comment.

unknown 3:06

Okay.

SPEAKER_00 3:06

I really like the pricing module. Yes, yes, Snigda. I this is the one I wanted you to like the most. And so I'm I'm really happy with this. Keep going. And it's probably the best one for me. Yes, put it in the net. Price back of the net. Look at his face. Pricing is something I always thought would be too complex or not in the scope for marketers. But this module has opened my eyes. Although the fact that you called the sub called the subject, I've devoted all my education to irrelevant and slightly strange was not fun to hear. What did I call irrelevant and slightly strange? What was that? I may have misspoken there. Good. But anyway, good, good, good, good. I'm so happy. Pricing is really, really, really, really something we should be doing. Adriana, if category growth is the primary driver of brand growth, is a market leader's job to expand the category, e.g., Gillette driving shaving frequency, or simply focus on brand penetration. Whoa, many things to say here. So, yes, I think category growth is the primary driver of brand growth. It's not the only driver, right? But if you're in a really good category, you can't help but go wrong. There are other drivers. But that's offset by the fact that driving category growth is really bloody hard. I see category growth mostly as a naturally occurring thing, like rainfall, you know, or age. I don't see it as a lever we can pull as easily as, you know, competitive share. So you have to offset those two against each other. Having said that, there are cases where you do want to drive category growth. They normally happen like Gillette when you're in a 50, 60, 70% market share situation, and you get most of the benefit. I've done work in medical industries where we had a tender. And so rather than talk about the medical brand we sold, we went after the condition and the treatment of the condition because we got all of it. And it was much easier to promote, and everyone loved us for promoting conditional treatment. So yeah, it can be an option, but normally, yeah, band penetration is the better lever because it's much easier to pull than driving category demand, if that makes sense. Michelle, I have a couple of questions. I noticed modules seven or eight were released at different times. Oh, really? One later on Monday and one on Sunday. Maybe you released the others at varied times too, but this is the first time I've noticed. Are you doing this for research or has it just happened that way? I love the Sunday release. It allowed me to complete the modules and be in time for the QA. Okay. Let me tell you the very strategic reason why we launched them at different times. I love you thinking that we're there like with all these experimental things. Glenn, aka Super Glenn, who runs the platform, obviously didn't get up early enough to release one of the two modules. Or he forgot for a few hours because he was hung over and he only put it on later in the morning, right? So no, we're not doing experiments. I would love to, I would bullshit you if it wasn't you, Michelle. I said, Yes, we're running A-B tests on different times. But Glenn was probably went out and got pissed and slept in and forgot to upload it. Something like that. We all do that. Um, I love him for it. Um, but I do like the fact that the Sunday release is the better one. And I I do think we try, I think these days we try and do a Sunday night release um for exactly what you say, but I'll check. I will check. Um, two, when you were designing the mini MBA, did you consider doing it over one year? Apologies, I'm not sure if you mentioned that and I missed it. But as I move more into the course, I was wondering if a longer time frame would have worked well for me to absorb the material or whether that would have led to more procrastination. Yeah, yeah, the latter. We did test it. Um everything's getting shorter, Michelle. So I went to Amsterdam a month or two ago to speak for Google, yeah, for their big like European something, something. And um, and it was very well done, I have to say. And I I I was under the impression all the way to Amsterdam that I was actually I was already in America and I was I flew, not a usual flight from me, Texas, Austin to Amsterdam. And then Delta, who appeared as far as I can see, to be very, very shithouse. Uh, Delta informed me when I got to the airport that my plane was actually leaving a day later than I was expecting. And I said, No, it's not. I gotta be in Amsterdam tomorrow morning. So you have to be a proper airline and get me there. And they said, Well, we can't do anything about that. Can you move along? And I said, No, I'm gonna stand here for the rest of the day until you find me another plane. You get me anywhere in Western Europe and I'll get to Amsterdam. That's the deal, but you've got to get me out of here. So in the end, they did, they did, surprisingly, after about an hour and a half of me standing there like a total asshole. They flew me, no, no, they didn't. They told me I had to drive from Austin to uh Dallas Fort Worth, which I promptly did in an Uber with a delightfully insane woman. Um, and then I got on a plane and got to Amsterdam. Anyway, the point of the story was she did drop me off at a roadhouse for an hour while she charged her Tesla. It was about a four-hour drive. And it was the best, dirtiest Mexican I've been to in years, and I thoroughly enjoyed the whole thing, and I had two beers, and it was great. Anyway, uh, the point was when I got to Amsterdam, I was under the impression that I was talking for an hour, which seemed pretty short given I was flying all the way there. But when I got there, the whole event was an hour, and I was talking for 14 minutes. And the point is it worked really well. So, no, we're not going to a year, Michelle. If anything, we're trying to make everything tighter and tighter because the kids these days don't want, you know, trust me, they don't want it in 14 weeks, they want it in three hours, right? TikTok style. So the the only thing to tell you is, yeah, you would procrastinate. Um, I'd like you to get through it, and then you've got the rest of your life as a member of the alumni to catch up on bits you missed. That's that's my plan. That is my plan. Alison, can you address how to navigate out of the discount Doom loop in the D2C e-commerce space specifically? It's so heavily promotional, and the business tends to be short-term. Unlike legacy CPG companies that can afford to think in multi-year horizons, D2C brands operate on compressed hyper short-term timelines. Yeah, but that's because they're stupid. It's not because they're special, right? We're completely trapped by immediate cash flow demands and real-time metrics. When you try to pull back on promotions to protect long-term margins, top line revenue inevitably dips in the short term. Yeah, yeah, it does, but your profit is actually doing very good things underneath. I think you're still looking at revs, Alison, and you shouldn't be. In a D2C environment, this causes panic. It feels practically impossible to convince a CEO to be patient and wait. All right, so look at IMG F U C K. I'm gonna tell you, all those principles apply to your to the D2C business. The issue you've got is you're looking at revenue and you're you're you've accepted these short timelines. Stop looking at them that way. Stretch it out, look at profit. You will find it's a different way of doing it, but it's a far more effective way. Not in the long term, but straight away. Don't look at revs, look at profit. I mean it. I I I've been I've been where you've been. Have a look. William Dornakamp. Hey, William. I bet you're a William with a V, which I always think is a better way of saying William. William, maybe. As a marketer, we try to fight against the product-oriented mindset where developers innovate, create, and expect marketing to figure out the tactics later. Personally, I get a seat at the table to influence the product P once a year. That sounds good to me. When product developers suffer from this build it and they will come delusion, how do you practically shake up that narrative? Do you have an example from your own career where you successfully force developers to step back and let the market lead the innovation? No, I've got an example where we turned the wheel though. So when I worked with 3M many, many, many years ago, we we had this amazing project when I was at, I'd just gone from Minnesota to London Business School, but they kept me on the project team. And the basic the question for the 3M team was why are we losing so much money on almost all of our new products? And the answer was because we have this exact mentality, William, that you're talking about. We think it's great, we're an innovative company, we keep inventing shit and then launching it, and not only does it not sell, there's not even a market for it. And we didn't stop that. What we worked out was do that, be as innovative as you want, be product-oriented. We want that, but before we get to launch, turn the wheel into the market as many times as we can, yeah, because it will only make things better. So don't stop it, don't try and control it, but get the wheel turning is the point. Yeah, that's the point. Uh and and and the product consumer uh dyad doesn't become start with the consumer. That doesn't work either, right? It's all similar, similar stuff, yeah. But it's not, you know, start with the product and launch it. It's wheel turning several times before we launch. Okay, that's it. That's it. Honestly, William, that's it. William's back with more. When reviewing customer touch points, it's easy if you have a few products or maybe even one. But what if you launch a massive set of new products every year? Well, that's a different thing. That's just generally stupid, William. But carry on. We simply can't examine the touch points of all of them. How do you prioritize? Do you focus research on the immediate bestsellers? No, no, no, no, no, no, no, no, listen to me. This is gout. You know when someone has gout? The problem isn't gout. The problem is gout means you're gonna die of a heart attack in the next 10 years. You see what I mean? Your problem here isn't I've got too many products in order to look at touch points. Your problem is you've got too many products, William, right? And so, oh hang on, you've said at the bottom, for your information, learn to kill will probably become my second mantra. Yeah, there you go. Make it your first mantra, okay? You need to kill more of your products, not just so we can measure the touch points, but because it is strangling your organization, Mr. Dornkamp. Strangling it, okay? You've already said you're the guy that once a year gets to do like product innovation. I would suggest next year, when your window of opportunity opens, you suggest killing 90% of the company's products, and that's how you want to be innovative. That would be a major, wonderful moment. Sean, I work agency side. Lovely. And we're increasingly being asked to lead on strategy, also lovely. But so much of the time the fundamental inputs are missing. That's why, Sean, they're asking you to lead because they have no clue what they're doing. Carry on. Either we're brought in too late, or honestly, the client just doesn't have them. And in reality, we know we're never going to get them. So, how do you do the best strategic marketing work you possibly can when you're always going to be working with gaps? Ah, look, something's better than nothing, Sean. I think the advent of uh synthetic data can save your bacon. And I think if you follow the basic premise of our course, that strategy is targeting positioning and objectives, you can deliver massive value to your hopeless, desperate clients. And the best bit, they're gonna remember you forever. Yeah, because if you're just delivering tactics, they're always gonna replace you. But if you give them a strategy, they're gonna be like, God, that Priyason woman, she's a genius, right? So, yeah, a bit of synthetic data, a bit of quick and dirty qual. Do what you can, use the course. You will be you're in, listen, you're in a good position there. A really good position. Get on with it, is my advice. It won't be perfect, but it'll be damn slightly better than having nothing, right? Elizabeth Schwab. I work on a premium uh CPG brand in a frequently purchased commodity food category where consumers have a strong reference price and where category pricing can swing dramatically due to supply and demand dynamics. Wait for it, wait for it. Either coffee or chocolate. Am I right? Am I right, Elizabeth? Shout at the screen if I'm right. Okay. Our current approach is to maintain a relatively stable list price and respond to category pricing swings with TPRs, temporary price reduction. While this helps us remain competitive during periods of elevated price sensitivity, it also raises a concern. Are we training consumers to wait for the yellow sale tag? Mm-hmm. Rather than reinforcing the brand's intrinsic value, which leads me to a broader question about dynamic pricing and brand equity. If consumers ultimately pay roughly the same average price over time, is it healthier to leverage dynamic pricing with, oh God, this is a good question, within brand appropriate guardrails to capture short-term market movements or to leverage temporary price reductions but maintain a higher but stable shelf price to smooth volatility and maintain consumer trust and reduce perceptions of price opportunism in a highly visible commodity category? How should markets think about the relationship between dynamic pricing, promotional dependence, consumer reference prices, and long-term brand equity in categories where consumers closely monitor price? Once a brand has become promotion dependent, how long does it take to rebuild a stronger everyday price proposition and reset expectations? I.e., climb your way out of the discount toilet. Thank you. Geez, Elizabeth. Generally, I can only give you two uh two two suggestions. One, uh brilliant question. Um it does appear as you read across the pricing literature that maintaining a relatively uniform price. Now, obviously, with some fluctuations is always the way to go uh over uh you know the bull whip effects of different prices, and that isn't always the case. You obviously want the flexibility and elasticities available, but generally, if you had to choose between uh charting a sort of fixed course of price versus the ups and downs, there's more advantages in the fixed course. Second thing, the one thing in your brilliant question I think you've missed is promotions don't have to be price. And we can beat even a price conscious consumer at their own game by offering them things that aren't related to price as a promotional support, uh, competitions, special cups if you are a coffee brand, whatever it might be. Yeah, don't lose that angle because it can be the best thing of all um within that two. Your final question how long does it take to get out of the toilet? Um if you look at the two case studies I used in the article from memory, they were both a 12-month fix, but there's a lot of pain in that 12 months, I would say. Too much pain for most companies to bet. Jack Rovery. So I ran a focus group with my target consumer, like they did in the Levi's video. And by the way, everyone, do the Levi's video. And my product landed really well. If I had the time and resources, do you think it would be worth running additional groups with other segments to understand if they'd like the product? Is that additional insight worth the effort? So, yes and no. With all qualitative work, Jack, you can't find a representative sample of focus groups. It's not, it's not um uh epistemologically valid. But what you can do is use data redundancy. So if you run another group and you learn more and your learning curve continues, yeah, keep going if you can afford to, you will get benefit. At some point, the learning curve will begin to flatten. New people will say new stuff, but it won't be anything new. And when that happens, you need to stop, right? Right now it could be incremental, but at some point, very quickly, it's the same shit, different flies. That's the way you know when you're when you're done, right? Jack Rothery again. In the co-branding section, you mentioned that the two brands would ideally have different customer bases. Yeah. Is it right to assume that both brands should be targeting similar segments? No. And if you were proposing a co-branded product to another brand, would you need to align on one unified audience segment? No. Or could both brands market their product to their own target segments? Yes. So look, this is all ideal stuff, but if you wanted to tell me, yeah, what does the ideal co-brand look like? There's a there's a product functionality synergy there, there's a strategic synergy, the two brands are getting stuff from each other, but in customer terms, you want to double up, right? And you want their customer and your customer to swap, yeah? So you can really get synergy. A good example. Let me remember the brands. When we had a great example, God, I'm not gonna remember the brands now. Anyway, there were two different beauty brands within LVMH, one of them wanted to do brand extensions into perfume, and the other one wanted to move into Japan. And the other brand was a perfume brand, and the other brand was strong in Japan. I'm not making it up, I just can't remember which brands they were. And so they did a co-brand for a season for a summer. I remember the lines outside a mut a Japanese department store. And the idea was we will buy some of your Japanese customers, you will get some of our perfume uh associations, and it was a lovely and very profitable co-brand. So, yeah, absolutely that's what you're looking to do. You don't have to do that, but it really maximizes value. Annabelle Armstrong, I really enjoyed the pricing module. Yes, another one. In practice, how do you hold the line on price when competitive pressure, customer expectations, short-term targets push you towards discounting? Where's the line between pricing discipline and market responsiveness? I enjoyed this module as it shows how much value in holding the line. New favorite catchphrase to the team holding the line. Yeah. What we learn, Annabelle, is about 90% of the time, when you don't hold the line, you should have hold the line. And so that's the dominant stat for you, right? I'm not saying you should always do it. What I'm saying is most of the time when you're dropping your pants, metaphorically speaking, you shouldn't be dropping your pants. Yeah. And so when you say competitive pressure, I go, yeah, they can do it. When you say customer expectations, I go, yeah, I want a low price on everything too. I'm not, you know, I also want to weigh 95 kilos and I don't, right? You know what I mean? I always get what I want, but that's what I want. And then there's short term targets. Well, we know that they're partly stupid, yeah. So my point is hold the line. You know, all your arguments against are mental models, if that makes sense. Deanne Palmer. Uh, how should marketing influence product portfolio decisions when growth targets drive the product launches? Recent experience, products were introduced through corporate initiatives. This resulted in a constant stream of new launches, all urgent, with a go-to-market today approach. But products were rarely removed at the same rate, creating portfolio complexity, consumer confusion. I was involved and part of the product lead team with approval authority for launches and discontinuations. And I managed to change some of the process, but it didn't reflect a true marketing-led perspective. What advice would you give marketing leads on effectively shaping portfolio decisions in this environment? I don't think you can fight the ocean Tien. I think what you do is you let them go and then you cut as quickly as you can the portfolio. Yeah? I think that's the way to go. Obviously, in a product-oriented, sales-oriented, slightly batty organization, they should they're going to launch these things. Don't fight the ocean. Chris uh Kirsty, Kirsty Cook. Hello. I'm loving the course. I wondered if you had any thoughts on how hold the line and focus on profit fits with the objective setting stuff we looked at. How Netflix encouraged password sharing because their goal was first and foremost uses exposure to the product. I'm working for a theater where the current aim is essentially bums on seats. So I want to tell them to go as low as they can with pricing. Is that silly? No, it's not. There's a difference here, Kirsty, between discounting and having an accessible price that will fill your theater. Do you see my point? Be careful that you you you know, there's you know, Ryanair aren't discounting, they're offering, you know, dynamic pricing. That's okay, you could do that. Uh Zara very rarely discount, but they've got a relatively accessible price point. You could do that. So, you know, just to you know take my point. You you can you can do pricing without doing discounting, and that's fine. John Duncan, can you share examples of smaller challenger brands which don't have massive budgets, developing distinctive assets, sticking with them, and having success. Any examples of smaller brands successfully using characters or sonic assets would be particularly helpful. Look, it's hard because by definition, these smaller brands aren't ones I'm exposed to very often. And but but I what what I will tell you, John, and and it's said sincerely, is absolutely there are many examples, and absolutely it it equally applies. I I don't want you to think about smaller challenger brands being different. There's that woman in Switzerland, whatever she's called, Julia something, and she keeps going on about how smaller brands need a different playbook. She's just trying to create a niche for herself. You know, honestly, she and she's got everyone worried that, oh, this might not be, you know, how does how is this different for B2B? How is this different for smaller brands? It's not. It's really not. So I promise you there are examples and you will see them around. And if I knew of smaller brands, I would be able to fill in my unfortunate gap there. But it definitely applies just as well. Ren Carolino. I sell books for publishers. While they have D to C pressures, if a marketplace like Amazon is where most of your new customers go, they frequently discount. And the category itself almost never realizes full price. How can you hold the line? As an industry, we enjoy retail panels like Sicana to find out sales and the recommended retail prices of competitors. However, selling to retail means we never realize recommended retail price. Only the 40 to 60% left after wholesale discounts. But if we publish that rec uh that the recommended resale price to Amazon, Amazon discounts dramatically to about the same levels, and now fewer acquisitions occur on D2C sites. Does holding the line here mean avoiding certain distributions? Or is there another way? P.S. Utpal Rock's I heard you uh you recommend him once, and his books helped me research and launch a 50% increase in price for a product funding over half another business profits. Um, many thanks for the immense value in your free articles and recommendations. Thanks, Ron. Yeah. Uptel Golakia is a very, very wonderful uh marketing professor based out of US somewhere. Um and he's always been we're the same age, and I remember him at when you're a junior marketing professor, doctoral student, you go on what's called consortium. And my year it was in Washington, DC in 1997. And um I think Uptal was there, and uh, and we all hung out together, and we're all going to be the future professors, blah, blah, blah. And Phil Cotler talks to us and Dave Arger talks to us, and you get treated very nicely. And I he always struck me as first of all a phenomenally nice bloke. He always wore a bow tie, even then. And he always knew what he wanted to do, which was price changing. And he's uh he is a you know, a very nice person and very good. So I'm glad I'm glad that helped Ren because he does know his onions. What was your point? Yeah, yeah, it's a shitty category, uh Ren, um, as you know. Um, shouldn't be, but it is. Um it's to do with distribution more than it's to do with price, is my only comment. But look, I'd be a better professor than I am. I'm not a professor, I'd be a better whatever I am if I could solve the current book distribution challenges. But it's a distribution problem, not a pricing problem, is what I would say. All right, great stuff. All right, we're off into communications next week, which is, you know, the place most of you want to be all the time. So do enjoy that. I've got a big clock for you next week. And then the week after we'll do distribution, we'll get onto the exam. I will be on my way to uh Sunny Can on the Friday night after I do my Q ⁇ A with you. So I will update you. I'm going out for dinner with Byron in his hotel suite in Nice. We're having a private dinner on Sunday night in Nice before Cann begins to uh to reacquaint ourselves. We haven't seen each other for a couple of years. I I imagine him really, I do imagine him in his dressing gown and his cravat and a beautiful glass of Bordeaux in his hand. But I'll report back on that anyway. Uh so have fun. Um, enjoy the last two modules, and we'll get onto the exam stuff. It's gonna get really good. So try and get up to speed. Things are really gonna take off now at the end of the course, and it gets terrifically exciting. Have a lovely weekend. Enjoy enjoy the clock of marketing communications next week. I'll see you uh in module nine.