When I see – I remember; When I do – I understand!

How difficult is it to practice what you thought you understood? Very very difficult – a course on Strategic Marketing made me realize this. I understood the difference between simple sounding strategies and the difficulty in implementing those strategies. This elective course provided us a chance to work with a marketing simulation software – MarkStrat – over several years (each virtual year equivalent to one class) and design and implement strategies to win in that market. It involved the whole gamut of activities that would be needed to win any market.

When I chose the course my intention was to ‘practically learn’ the theories that I had learned. Learn – I did but only several magnitudes more than what I had anticipated. There is a huge difference between theory and practice and the whole exercise made the learning very much visible to myself.

Let me take a stab at recording few of my key learning:

• Even though you might want the whole population to buy your product, you may not have the bandwidth to sell it to everyone. So identify the strengths of your product and target the segment of the market that is most likely going to get impressed with least effort from your side.
• While identifying the target customer segment ensure that this segment is going to exist for as long as you are planning to sell your products. Imagine if you are targeting at ‘singles’ and very soon people prefer to get married early and the market size of ‘singles’ dwindles.
• Emotional detachment from your products is very important for survival. You might have invested huge amount of effort and funds to bring a product to the market. But if the customer does not like it, then no amount of advertisement will help you sell the product. It is tempting for you to keep on producing expecting the customers to attain maturity and start liking your product but the cost of lost opportunities for your working capital (the working capital that is getting stored in your warehouse in the form of products and the loss in the form of inventory storage cost) can kill your business. This is where a ruthless CEO or head of the business unit plays a prominent role.
• The sales forecast is very important – else the inventory will pile up or there could be a shortage. In either case, it brings in volatility into your whole orchestration.
• Sustained R&D investment is very important for future growth. If you do not realize this when you have enough funds then it might be too late when you are facing hard times – you may not have any budget left to invest in R&D.
• It is very tempting to want to be the first mover into a new market – but the risk is that you do not know what the customers actually need. So in some situations it might pay off to let your competitor move in first so that you get a chance to gauge the requirements of your customers.
• If you are the market leader then it is very tempting to not invest on further improving your product (or you might want to invest your funds somewhere else). In such case, your competitor is going to overtake you very soon (believe me – very easy to understand this sentence but very very difficult to comprehend and then implement it in real world)
• Do not target a market just because it exists – do you have the R&D and production capability to enter the market? Does your company have the capability to give your product the best possible entry into the market? Does your company have deep enough pockets to sustain your product in case of slowdown in the economy? Is everyone ready to stay committed to the product while it requires huge upfront investment for R&D and publicity?

Even though the simulation was in a products environment, I was able to relate the learning to a service market.

This course has made me realize the very important role played by the data from market research and the need for having access to consistently reliable data on market research. Being able to access the right data is the most important requirement to draw the right strategy.

The biggest learning for me – The usefulness of having a framework that provides feedback on my actions. If such a feedback mechanism is not available then it is worth investing on some report or something that will enable us to see the results of our actions.Worth the effort so that I learn and can take the right actions going forward.

OK, let me sign off now. I need to submit an assignment to Prof Kalam and Prof Gupta – I hope I get time to write about that course very soon!!