— What are the differences between squirrels and rats?
— Marketing.
Part One.
Recently, a rather developed acquaintance surprised me by saying that he doesn’t like “blacks,” meaning not African Americans, but residents of the Caucasus republics. They, in his words, are his “payaрt.” I asked him who else he doesn’t like, and I got the expected answer: “Jews.” Well, he was drunk. It’s not even customary to say such things out loud. Fifteen minutes later, another acquaintance asked me if I like rats. My feelings about them are like the character in a joke regarding tomatoes: “Not at all, but I can eat them.” So I said that I have a neutral attitude. Intelligent and respectable creatures. He replied, “You see, I hate them.”
Considering that I am a half-Jew with Georgian roots, born in the Year of the Rat, it becomes clear why I was in a philosophical mood that evening and why a couple of days later all that philosophy turned into this article about marketing. What is really happening?
From the perspective of institutional economics, which is the field of knowledge that attempts to apply economic principles to all areas of human relationships, the case with the rats and the “blacks” is explained very simply. Both individuals… act In conditions of limited rationality, people weigh the potential benefits of interacting with others—be they humans or animals—against the possible costs. Given that people often share unflattering stories about both “blacks” and “rats,” stereotypes are formed to help individuals make the right choices. A person lacks both the time and the means to incur the transaction costs necessary to determine whether a particular individual is good or whether a certain animal is a sweet treat. It is rational, in the face of incomplete information, to avoid seeking out knowledge and instead to reject.
In this context, when it comes to people, cultural differences and related issues play an important role in establishing a barrier of transaction costs. various understandings the same. For example, if you say the word “at ease” to a soldier, he will envision something completely different compared to what a girl might imagine upon hearing the same word from a grumpy guy who just entered a small elevator with her. In other words, to gain a friend from another culture, one must understand that culture, and the process of understanding involves going through a series of offenses, misunderstandings, conflicts, and simply mismatches in values.
This is exactly what my first acquaintance told me after I mentioned that maybe he just doesn’t know them, which is why they “bother” him. He replied, “Why should I pay attention to their culture and customs? Why should I try to understand them?” I stopped the conversation at that point. To me, it’s simply interesting and enriches your inner world. At the very least, I won’t make the mistake that my first acquaintance easily makes, confusing an Armenian with an Azerbaijani, and it won’t surprise me that the former are Christians and the latter are Muslims. However, from the perspective of rational behavior as an economic agent, my first acquaintance is completely right. Why try to establish contact with the “other” when there are plenty of your own around? The transaction costs are just too high.
Now about the epigraph. Yes. A rat is fundamentally no different from a squirrel. It’s just smarter and has a hairless tail. But we, often without realizing it, live under the influence of stereotypes. Very few people are capable of looking at things objectively. Do you think you’re objective? Then take a stroll through the algae along the riverbank or eat a boiled spider. Can’t do it? How about a shrimp? What’s the difference? Some people even refuse to eat nutria just because it’s a water animal.rat.Moreover, the nutria is larger—it’s a water rabbit. That fluffy little treat.
Well, yes, a rat is gross, but an Aston Martin is a cool car. And if we allow ourselves to use heuristics like “like everyone else” or “like the more expensive” or “like no one else” when it comes to people who are clearly more valuable than any other product, then we are even more stereotypical in our attitudes toward consumer goods. We don’t have time to think and figure out what distinguishes a Škoda from an Audi. For us, Audi is cooler. For us, a car handmade in Italy is cooler than a mass-produced Japanese vehicle. But that’s nothing more than a stereotype. It’s been cultivated by marketing and allows different people to be charged different amounts for the same device that moves people from point A to point B.
Part Two.
-Are you finished, Mr. Slade ?
-No, I’m just gettin’ warmed up.(Scent Of A Woman movie)
Recently, many companies, when discussing marketing communications, claim that the most effective channel for these communications is the internet. When you ask anyone where they found a particular company, they respond — online. a) Traditional advertising doesn’t work, and there’s no point in spending money on it. b) Especially during a crisis. Let’s break down this thesis into parts and clarify that we won’t be talking about mass consumer goods (FMCG).
a) Traditional advertising
Of course, none of us would intentionally stop in front of a billboard to jot down the phone number listed on it. In other words, no one is going to call the number you took the time to put on the billboard. And no one is likely to visit the website mentioned on the billboard either. However, let’s imagine that you’ve launched a product called a “transplukator.” Your transplukator can do important things, and it either does them alone or does them in a way that nothing else can. That’s not the point. The point is that the idea of searching for the word “transplukator” would only occur to someone who has already heard or knows something about it. Where would that knowledge come from? The internet? Ha.
People don’t know that the thing you’re selling even exists. To familiarize them with the properties of this thing, you need to spark their interest in reading a promotional article, and you can do that with a teaser that grabs their attention. For example, there’s a material called aerated concrete. What is it? How did you learn about it? How does it differ from foam concrete? Which company that produces aerated concrete comes to mind first? How did you find all this out? Why did you start to take an interest and now have the knowledge of why aerated concrete is better than foam concrete? What prompted you to explore this? Are you unfamiliar with aerated concrete? Okay, fine, why do you think Aston Martin is a cool car? And if you suddenly decide to buy a luxury vehicle, you’ll type “buy Aston Martin, Kyiv” into one of your Google searches. Why would you do that? Where does that stereotype come from? Meanwhile, surprise, surprise, Aston Martin’s management is convinced that marketing communication isn’t built online.
Now, let’s assume you’re trading something that others like you are also selling. For example, concrete or metal products. You don’t have the time or need to build a brand or engage in PR. Everyone who needs concrete or metal products has long been aware of what they are and what they’re for. You’re not a manufacturer; you’re just a seller, and there’s no point in talking about the special quality of your product.
At the same time, if there are 5 companies in your city doing the same thing as you and offering the same price, a person who chooses the first 3-4 links online will rely on their subjective feelings, which, yes, are influenced by stereotypes and cannot be otherwise managed in conditions of limited rationality. Yes, the buyer will find you online. They will discover your online store. They will think about your reputation and how stable you are in order to trust you with their order and spend their time placing it. But they have no source of rational information about this. The client will be irrational. They will act as an agent with limited rationality, guided by stereotypes. And it would be incorrect to say that a large billboard (a huge advertisement on the side of a building) won’t work in your favor in this case. At the same time, they will still find you online.
Your happiness lies in the fact that all 5 or 50 companies that come up in an online search don’t offer the same thing, and their prices vary. Each one has something different to offer, and each one knows exactly what that is. Some provide delivery, others offer extended warranties, some have the same product but in a different color, and some have all certified installers or assemblers, and so on. The price shopper, who is just going through phone numbers, is only interested in the price—the one attribute of the product that they have a clear and straightforward understanding of. However, no one buys a refrigerator or vacuum cleaner solely because it’s the cheapest option. You are forced to make a choice. You are shown additional features beyond just the price, and you are told that these features are important, while the competitors lack them. Take, for example, the real advantage of a “direct drive” washing machine. Seriously, right? Yet you are compelled to look and choose. You are marketed to with beautiful animations and realistic displays in stores, showcasing or even pulling this advantage out of thin air. They show you that, look, they don’t have “direct drive,” but we do. Stay alert.
How will people know, even before they type “buy air conditioner” into the internet, what sets your company apart from the others? What will make them ask your competitors if their installers have “certificates” or if the company offers an extended warranty for the same price? They won’t find out about this anywhere and will only base their decision on the price of the product unless you shout about it yourself from every corner and emphasize that this is the most important factor when choosing a product. To the extent that if another company doesn’t offer this, their products shouldn’t even be compared to yours.
No, of course, you need to make an effort to ensure that your company appears at the top of search results for key terms or is constantly featured in contextual advertising. Naturally. At the same time, you need to ensure that when a client is choosing between you and Vasya Pupkin, they ask Vasya about the enhanced features of his product or, seeing the same price for both you and Vasya, they would choose you because they have…there is a feeling…that he has already heard something about you. And all of this, of course, is true if you are doing good work and there isn’t a collection of negative reviews against you on the internet, but only positive ones, which you… facilitate Текст для перевода: ..
In other words, the internet is the place where sales actually begin. It’s where a person finds you or your product with a somewhat already formed need. All the marketing happens before the internet. It’s about planting an idea in the client’s mind—an idea that prompts them to open their browser or choose you from a lineup of similar companies—this comes from traditional marketing techniques: advertising and PR. If you’re sitting back and waiting, along with your SEO specialist, for some kind of internet magic to bring you customers, you are very much mistaken. What you need to do is think about advertising in the way described in this article.
- Advertising should explain the purpose of the product and the reason to buy it. Moreover, it should call for action.
- In this case, the advertisement should encourage the customer to type something into the search bar.
- Even what you write on the billboard should lead people to you when they search for it online.
- And advertising should help the client choose you among equals.
- And the advertisement should convey to the client the idea that products from different companies differ not in price, but in something else. Something extremely important.
Think about how to do it first, and then take action. Otherwise, no billboard saying “Buy roller skates only from us, call 223-322” will work.
b) Crisis
They say that in the past we had 50 clients a month and could spend money on advertising. Well, the word “spend” is concerning. Of course. Because when the company currently has only 5 clients, it’s clear that if we had 50 again, no one would need advertising, and all this marketing…The term “шелупень” can be translated as “rubbish” or “trash,” often used to refer to something of little value or worth.Communication would be a waste of money—there’s just not enough time to keep up. So it turns out that advertising is needed right now, when there are only 5 clients. But there’s no money, and besides, it doesn’t work; all the clients come from the internet. Well, we’ve already talked about the internet and also discussed why advertising doesn’t work. It’s precisely because not everyone has changed their attitude towards advertising in the 21st century. If your ad doesn’t pass the test outlined in the list above, then it simply won’t work. Not at all.
If you can find your 50 clients a month again, taking them from your competitors who proliferated before the crisis but haven’t gone bankrupt yet, you’ll be back on top. Right now, during the crisis, when your capacity is underutilized, it’s crucial for you to attract clients who are heading to your competitors. The market is unified, and the one who can pull the blanket over themselves will win. This isn’t even a secret; it’s obvious. However, in addition to following the advertising guidelines I mentioned earlier, it’s important to understand that advertising is not an expense but an investment. If you can take half of your competitors’ clients, the cost of advertising you incur should be less than the profit you gain from it. Do the math, estimate it. Take action. Just remember that “one billboard for one month” is definitely throwing money away. You won’t achieve Inception with that. And remember, advertising must be backed by quality and reputation. Otherwise, you’ll be constantly “renting” the market, bringing in new customers through advertising expenses instead of “buying” it by building a sales strategy aimed at bringing back your old clients again and again.
In the first sale, it’s not the product or service that is being sold. What is sold to the customer is the idea of coming back again.