Monday, December 14, 2009
Wednesday, October 7, 2009
Critique - "All companies should invest heavily in advertising because high-quality advertisin can sell almost any product or service"
Why do companies such as Coke, Microsoft, Nike or Ferrari spend millions on advertising? A corollary to this would be “why all the successful companies spend so much on marketing”. Two simple words that can answer this are "Advertising sells". It not only targets customers as a conscious level, but also at the psychological level. Though investing money into advertising can make a product sell better, excessive advertising may not necessarily get the results intended. Moreover, every company needs a good and acceptable product. Further on, it will be clear, that though advertising increases sales, getting the right amount of it and advertising the right product are equally important factors.
Advertising is sometimes designed to target you at the subconscious level and it has amazing results. So investment in such techniques makes business sense. If you ever walk into a supermarket and decide to buy a chocolate in haste, what would you usually buy? Which name comes up in your mind? The name of a well know brand, that you have seen on advertised somewhere. Now here’s the interesting bit. Walk to the candy section and have a look. You would find the best know brands at arms length, while the unknown ones are like somewhere below. Why is it so? It's advertising targeting the customer at a unconscious level. Such is the power of this technique that it is rampant in countries like Australia, America and Europe.
Heavy spending on advertising can sometimes trigger an advertising war resulting in the investment targeting the rival and not the customer. Hence the investment is not fully realised. In such cases there is a lavish and wasteful spending by all companies involved. It eventually reaches a point where neither of the parties can back down leading to a advertising war. An excellent case of such rivalry took place in Australia between the two major telecom operators, Telstra and Optus. They ran campaigns directly targeting each others on topics like flaws in billing system, plans and coverage. So the advertising now is more about how bad the rival is, rather that about the product. So though investing heavily in advertising can get companies into the limelight it can sometimes spark a advertising war. We need to draw a line on what kind of advertising and how much of it is needed.
Companies need to put fair bit of though on whether the product will be accepted in the market. Now suppose we try to sell something that is socially not accepted then it going to be very difficult to get customer to buy it. A classic case of customer rejection would be the now famous margarine. Even though margarine is a good and successful product its initial launch was a complete disaster. How could such a superior product be a failure given that margarine taste was almost similar to butter? Unsuspecting people could not even pick the difference between the two. Investigations revealed the answer was in the colour. When margarine was initially launched, it was white in colour. No amount of advertising could convince people to buy it. So companies simply added colour and sold it. That’s the story of the now famous margarine. It’s obvious that advertising can make a difference to sales.
Investing in advertising is a wise decision for the right product from a sales point of view, however investing heavily in advertising may not necessarily be the right solution for every company.
Advertising is sometimes designed to target you at the subconscious level and it has amazing results. So investment in such techniques makes business sense. If you ever walk into a supermarket and decide to buy a chocolate in haste, what would you usually buy? Which name comes up in your mind? The name of a well know brand, that you have seen on advertised somewhere. Now here’s the interesting bit. Walk to the candy section and have a look. You would find the best know brands at arms length, while the unknown ones are like somewhere below. Why is it so? It's advertising targeting the customer at a unconscious level. Such is the power of this technique that it is rampant in countries like Australia, America and Europe.
Heavy spending on advertising can sometimes trigger an advertising war resulting in the investment targeting the rival and not the customer. Hence the investment is not fully realised. In such cases there is a lavish and wasteful spending by all companies involved. It eventually reaches a point where neither of the parties can back down leading to a advertising war. An excellent case of such rivalry took place in Australia between the two major telecom operators, Telstra and Optus. They ran campaigns directly targeting each others on topics like flaws in billing system, plans and coverage. So the advertising now is more about how bad the rival is, rather that about the product. So though investing heavily in advertising can get companies into the limelight it can sometimes spark a advertising war. We need to draw a line on what kind of advertising and how much of it is needed.
Companies need to put fair bit of though on whether the product will be accepted in the market. Now suppose we try to sell something that is socially not accepted then it going to be very difficult to get customer to buy it. A classic case of customer rejection would be the now famous margarine. Even though margarine is a good and successful product its initial launch was a complete disaster. How could such a superior product be a failure given that margarine taste was almost similar to butter? Unsuspecting people could not even pick the difference between the two. Investigations revealed the answer was in the colour. When margarine was initially launched, it was white in colour. No amount of advertising could convince people to buy it. So companies simply added colour and sold it. That’s the story of the now famous margarine. It’s obvious that advertising can make a difference to sales.
Investing in advertising is a wise decision for the right product from a sales point of view, however investing heavily in advertising may not necessarily be the right solution for every company.
Does a flat structure make business sense in organisations
Many organisations with a flat structure have reaped the benefits of such a structure. However, one size never fits all. In some organisations this structure may be the ultimate solution, but in others this could be doom. So the type of business dictates what kind of structure is best suited to it operation. However, having a structure that adopts both hierarchal and flat structure will help businesses capitalise on the benefits of both the models.
Decision making is one of the key elements that decide the course of a organisation. Especially, the ones that have a high deal of risk associated with them. For example decisions like downsizing of the organisation, restructuring, mergers and acquisitions have a enormous effect on the direction that a organisation is taking. So, naturally there is going to be opposing views in such cases. This is when responsibility and accountability comes into play. A "flat" organisational structure could seriously jeopardize the organisation interest in such time. However a mixed structure would welcome all possible views and ideas and take the best way forward.
Some industries such as Information technology and Investment banking need constant interaction between managers and subordinates. When there is high amount dependence on the information provided by the subordinates, a mix of hierarchical and flat structure could be much better than any other structure. Ideas can be exchanged more freely and the best way forward can be decided by using everyone’s knowledge. However in case there is a disagreement on and decision, the hierarchy can solve the problem.
One of the major problems in organisation is stress. Stress is one of the primary reasons for burnouts and feuds in organisations. So reducing these may lead to better results and performance. Once way to achieve these are to have a mixed flat organisation structure. This encourages better collegiality and corporation within the organisation.
Different organisations have different needs. Even though it may not be possible for every organisations to adopt a mixed structure, having an environment that promotes collegiality and cooperation is definitely going to help.
Decision making is one of the key elements that decide the course of a organisation. Especially, the ones that have a high deal of risk associated with them. For example decisions like downsizing of the organisation, restructuring, mergers and acquisitions have a enormous effect on the direction that a organisation is taking. So, naturally there is going to be opposing views in such cases. This is when responsibility and accountability comes into play. A "flat" organisational structure could seriously jeopardize the organisation interest in such time. However a mixed structure would welcome all possible views and ideas and take the best way forward.
Some industries such as Information technology and Investment banking need constant interaction between managers and subordinates. When there is high amount dependence on the information provided by the subordinates, a mix of hierarchical and flat structure could be much better than any other structure. Ideas can be exchanged more freely and the best way forward can be decided by using everyone’s knowledge. However in case there is a disagreement on and decision, the hierarchy can solve the problem.
One of the major problems in organisation is stress. Stress is one of the primary reasons for burnouts and feuds in organisations. So reducing these may lead to better results and performance. Once way to achieve these are to have a mixed flat organisation structure. This encourages better collegiality and corporation within the organisation.
Different organisations have different needs. Even though it may not be possible for every organisations to adopt a mixed structure, having an environment that promotes collegiality and cooperation is definitely going to help.
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