We were as incensed by ABC's wooing of late night talk show host David Letterman as Ted Koppel, the venerable host of the ABC news program "Nightline." While Koppel was—quite rightly—roiled by the network's plans to replace "Nightline" and its in-depth analysis of Operation Anaconda in the mountains of Eastern Afghanistan with Letterman's show featuring stupid pet tricks, we were angered by its blatant display of testosterone marketing.

Much of the media coverage about ABC's reasons for pursuing Letterman focused on the network's desire to find programs that reach younger viewers, defined as two groups 18 to 34 and 18 to 49. According to the Wall Street Journal, "ABC builds its advertising sales efforts around reaching those young adult viewers." Though the show pulls in a sizable audience of more than four million viewers each night [equivalent in size to Letterman's] "Nightline's" audience skews older, "a turnoff to advertisers." ABC cannot generate the same amount of revenue during the late night television period as they could with Letterman because younger viewers, "are more prized by advertisers than older viewers who make up the bulk of the audience for 'Nightline,'" so says the New York Times.

The notion that the only way to sell advertising space is to have the right age demographic is completely ridiculous. Age is just one of the many demographic, psychographic, and sociographic characteristics marketers use—admittedly to varying degrees—to define their target audience. Gender, income, occupation, psychographics, and lifestyle, for example, are others. ABC clearly hasn't spent much time investigating exactly who [and by 'who' we mean more than 'older'] are the four million people who watch "Nightline" every night. Are they CEOs of Fortune 500 companies? Are they empty-nesters who travel for pleasure more than half of the year? Are they aging boomers beginning a to plan for retirement? Are they working moms?

If ABC invested time and money in uncovering this kind of information about the "Nightline" audience and targeting advertisers to whom the audience would be of value, they would boost profits. Contrary to conventional wisdom, some advertisers actually want to reach "older" audiences—insurance, financial service, luxury good, travel, healthcare, and pharmaceutical companies to name a few—and the extent to which ABC can make the case for buying time during "Nightline," the better the financial performance of the program and the network as a whole.

Instead of taking this counterintuitive approach to making programming and marketing decisions, however, ABC decided to let intuition and hormones be their guide and tried to find the needle in the haystack program that will be a hit with the kids. True, they tried to reduce their risk by buying an established TV success from another network, but in the process they potentially undermined one of their few remaining powerful brands. Happily, in the end, Letterman decided to stay put.

According to Jim Collins, the author of Good to Great: Why Some Companies Make the Leap…and Others Don't, most companies need an average of four years to crystallize a coherent strategic concept and seven years of intense effort behind the scenes before a company shows a significant and sustainable improvement in performance. In our experience, it takes at least six months to properly conceive and develop a new strategy, another 3-6 months to test it, and at least six months to prepare the organization to implement the new strategy. Once in the real world, it takes a year, sometimes two, of focused efforts to see the impact of the new strategy on performance.

Mobil's (now ExxonMobil) award-winning Friendly Serve strategy, for example, took 18 long months to research, develop, and plan. Then more time to implement. Then more time before the first clear indications of the strategy's impact on financial performance became evident. Now over five years into the strategy, the positive impact has multiplied as the company continues to build and expand the tactical elements of the campaign.

Mobil's long-term focus, however, is more the exception than the rule as companies routinely dump new strategies after less than a year—sometimes within months. It's no great revelation that, generally speaking, American companies are obsessed with short-term sales and profits [an obsession that's quickly spreading to other countries as well, particularly in Europe]. So naturally, Boards of Directors, industry analysts, financial markets, and, subsequently, senior managers have an insatiable need to look for the quick fix to a stagnating industry, declining company, or a brand that's on its last legs.

When the stakes are high, companies don't believe they can afford to give a new strategy time—it's better just to cut their loses now and start over from scratch, usually with a new management team in place. Most don't even take the time to figure out what, if anything, about the strategy was flawed to avoid repeating the same mistakes.

Beware: there are significant costs to scrapping a strategy and reversing direction. Along with the dollar costs associated with a change in strategic direction—charges for undoing a merger or acquisition or selling off recently acquired assets, for instance—companies also confuse customers who wonder what the brand will stand for this week and raise questions in financial markets about the long-term viability of the company. Just look to AT&T, McDonald's, or any number of the now defunct dot-coms for evidence of the damage done by flip-flopping business strategies.

Business strategies, like a fine wine, need time to age to reach their full potential. Senior managers need to ask themselves if they want a bottle of Boone's or Chateau Lafite when putting a strategy together and implementing it in the real world.

Back to top.

A vision, at its most basic, dictionary level, is, among other things, an ability to see something not visible. It is a force or power of imagination, something supernaturally revealed, as to a prophet. A vision provides a company with a purpose and sense of mission. Visions define a few outstanding goals around which companies can organize their resources; they help inspire the workforce to pursue common aims.

"To become Latin America's leading purveyor of candy," may not sound like something prophetic, but considering Arcor, based in Argentina and now the world's top candy manufacturer, had this idea in 1951 while operating in a relatively insular market, it's truly visionary. The company never considered its domination of the domestic market in Argentina a given, so it set about building an infrastructure which included central plants and vertical integration, quality products, and recognized multinational brands in pursuit of the company's vision.

Over fifty years later, the international focus of the vision continues to guide the company's business strategy. "We want to become the Latin American leaders in our specialty: confectioneries and chocolates," explained José Giai, a senior Board member at Arcor to an Argentine business magazine. "But there are still things to do."

Today Arcor's more than 1000 products—ranging from chocolates and hard candies to cookies and crackers, jellies and jams to sauces and canned vegetables—are available in 105 countries. The company's president Luis Pagani told Businessweek, "There are around 200 countries in the world, so we figure we're about halfway to where we want to be." In 2000, sales from outside Argentina accounted for 35% of its $1.1 billion in revenues, and Arcor leads package good giants Unilever, Nabisco, Kraft, and Nestle in many product categories in several international markets.

As a further testament to the power of its vision, in spite of Argentina's economic difficulties, many Latin American economic analysts attribute Arcor's continue growth to its international approach. In a report released in conjunction with consulting firm Booz Allen Hamilton, Universidad Austral economist Juan Llach held Arcor up as an example for other Argentine companies to follow. If there were more international industrial companies like Arcor in Argentina, Llach explained, "the overwhelming external and internal doubts about the competitiveness and capacity for growth of the economy of our country would not exist."

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

Back to top.

"Excellent marketing insight," write the authors of Market Research Matters, "is the edge that differentiates business winners from losers." This statement has never been truer than it is today. The authors make the case for using research to drive business strategy, explaining the critical variables to consider in forecasting the future of a business. Most importantly, the book describes how the research function fits within the organization and cites specific examples of how companies have employed different research techniques to make better decisions.


Back to top.

In a recent article on brands, The Economist asserted that, "while consumers have changed beyond recognition, marketing has not." Quoting the author Elliot Ettenberg, the article went on to say, "Everything else has been reinvented—distribution, new product development, the supply chain. But marketing is stuck in the past." We believe it's time to bring marketing into the 21st century and transform the traditional marketing model.

In pursuit of a new model, The Conference Board of Canada has dedicated the 2002 Marketing Conference to showcasing how leading organizations and marketing experts are pushing the practice of marketing forward. At the conference, Kevin Clancy, chairman and CEO of Copernicus, will give a talk on taking a counterintuitive approach to marketing and Roland Rust, a member Copernicus Board of Advisors, will discuss the latest innovation available to marketers to make more profitable decisions: Customer Equity. We'll have these presentations available for download in the next edition of The Copernicus Mzine.

The Conference Board of Canada's 2002 Marketing Conference will take place on April 3 and 4, at the Hilton Toronto. Click here for more information about the conference and registration: http://www.conferenceboard.ca/conf/Apr2002/2002Marketing.htm

Back to top.