Welcome to a New Era in Communications
The business world is entering a new era of communication. Consider a few items recently reported in the Wall Street Journal:
E-mail has become the preferred form of communication for business and students alike.
Electronic commerce is forecast to grow from $800 million this year to $8 billion by 2003.
The Internet and the personal computer enable us to transmit communications and obtain information literally at the speed of light.
Business transactions, product design and development, and other commercial activities are conducted at a much faster pace through the Internet.
America Online and Amazon.com are here to stay and will have an increasingly important effect on both advertising media and retailing.
These trends are of tremendous importance for retail jewelers and the manufacturers who supply them with goods and services. Even so, these technological marvels should be kept in perspective. While jewelers and manufacturers certainly should have their own Web sites, this method of communication should be just one part of an overall marketing mix.
In this new climate, retail jewelers need to focus on their own brand development in their local markets. I deliberately use the term “brand development” rather than “advertising.” Brand development is a much broader concept than advertising jewelry or watches. It’s the creation of a brand image that simultaneously distinguishes your store and communicates to the consumer what the business is all about. It’s what Tiffany & Co. has done so successfully through its newspaper advertising and through catalog mailings. Tiffany is perceived as the place to go when you’re looking for beautifully designed, special, high-quality gifts, regardless of the medium. Like the Hallmark tag line, “When you care enough to send the very best,” consumers know that whatever they buy from Tiffany’s is the very best.
So how do you communicate a brand strategy to both existing and potential customers? The old routine of handing the local newspaper ad sales representative an ad slick from the file is over. A marketing orientation requires careful thought about consumers. You need to address demographics (age, income, education, gender) and psychographics (lifestyle characteristics) in order for your message to get through the advertising clutter. What unique buying proposition does your business present to the consumer? How are you positioning your business in the minds of your target customers? You need to address these questions before you decide which media to use.
Establish your budget at the outset. The usual method is to allocate a certain percentage of sales. This dollar amount must fit within your overall profit plan. The growth of Internet communications should make you think about how you’re spending your ad budget. With the huge expansion of cable channels and the market segmentation they reflect, does it make marketing sense for your business to communicate with consumers through that medium? How about direct mail? What about billboards and radio? Doestraditional newspaperadvertising still make sense for your localmarketplace?
Think about these questions. After all, change is upon us, and there’s no escaping it.
This is one of a Counterpoint series on the fundamentals of doing business.