PREFACE
The feedback we received after our first article is pleasing. The improving feedback from readers based on their own ideas and experiences gives us clues that we are on the right track.
In our second article, we want to talk about two topics;
- Creating Value
- Marketing arguments and tools
The leather industry is among the sectors rapidly affected by developing market conditions, including both ready-made clothing and leather production. It is a sector that can quickly feel the negative reactions of a market that is slowing down or dealing with crises, as well as enjoy seeing the results of an accelerating market.
It is quite interesting to see how the wave of emotions and thoughts we create by feeling exceptionally special as an industry results in our own sector. We can say that the prejudice against institutionalization and branding, or the lack of sufficient attention to customer satisfaction, as well as the approach of advancing marketing activities merely by establishing a marketing department or through a few individuals, are among the mistakes being made. All of these are factors that have an impact on whether the resulting whole will create a significant value. Let’s make these elements more understandable together under subheadings.
MARKETING
The main problem faced by the leather industry today is not the scarcity of goods but the scarcity of customers. Producing more products than consumers can afford is a common problem in many industries around the world. The simultaneous desire of companies to grow and the inability of markets to grow sufficiently will cause excess capacity.
Extreme competitive environment is an inevitable result among businesses, and it is obvious that avoiding this excessive competitive environment cannot be maintained only with price competition or promotions.
Marketing ideas are what make a company succeed. Production, purchasing, research and development, finance and other company functions exist to support the company’s business in its customer market.
As HP founder David Packard observed on this subject;
“Marketing is too important to be left to the marketing department. In a truly large marketing organization, you don’t say who is in the marketing department.Everyone in the organization must consider the impact of those decisions on the customer when making decisions.”
The same idea is well expressed by Professor Organization theorist Philippe Naert:
“Even if you bring very talented people to the marketing department or establish a department consisting of talented people, you cannot achieve a marketing culture. Marketing starts with top management.If top management is not convinced of the need to be customer-oriented, how can the marketing idea be accepted and implemented by the rest of the company?”
CREATING VALUE
Businesses do marketing with a system based on creating, communicating and capturing customer value. It should not be forgotten that no value can exceed the value your customers demand. The value your customers expect is also a value your business must pursue on behalf of your customers. Although this process may seem to be quickly ignored, it is not difficult to measure its results in the medium and long term.
The following saying is actually a frequently used saying about ignoring. It makes the path your business should follow in the process safer.
”Successful businesses learn from their mistakes. More successful businesses learn from the mistakes of others.The more successful businesses are those that learn from their own mistakes and those of other businesses.”
What is meant here is that it is useless to measure the magnitude or smallness of the consequences that may arise after the customer’s perception of value is destroyed every time. If there is a clear outcome like a bright day, it would be to proceed with the thought that customer value will be stretched under all circumstances and nothing will happen.
However, one of the things that excites businesses is their interest in new customers.
It is obvious that the opportunities offered to new customers are generally much better than those offered to loyal customers. Of course, there is no harm in the price-performance relationship that can attract the attention of new customers and is often necessary, but our relations with loyal customers must also proceed with the excitement and meticulousness of the first day. It should not be forgotten that the cost impact of loyal customers on the business will be less than new customers.
As Jack Welch, who was the chairman of the board of GE company for many years, said;
”The age of value is approaching. If you do not sell a top quality product at the lowest price in the world, you will be out of the game.”
Of course, the lowest price perception here does not mean selling products at a lower price than all inputs. It states that such products should emerge that any company would offer a price much higher than your profitable price when making the same quality product.
Companies worry about spending more money to satisfy their customers. Companies need to distinguish between value-adding costs and non-value-adding costs.
Let’s try to explain this with a simple example within the framework of the leather industry;
A piece of leather you produce will be an additional $1 cost in addition to the unit cost of the leather, and if the color of suede and skin tone to tone will not be of value to your customer, it will be a cost that does not add such value.
Or, to give a more extreme example, if making your leather products with a floral scent at a unit cost of +1$ will not respond to this cost input in your customer’s perception of value, such a cost will be a cost that does not add value.
On the other hand, having a certificate that can increase the sales power of customers with a unit cost of +1 or the high shaving fastness you offer in your products may be a value-adding cost. At this point, as a business, it will be necessary to have a clear understanding of customer needs.
BRANDING
Becoming a brand is a frequently discussed issue, especially in our country. Of course, it is not right to say that it can be easy, but there are two examples of why it is necessary that I would like to share with you.
The first of these; Showing your business in the market as a company that provides the sought-after product and service. Being a brand is an element that makes things easier for businesses in the century of extreme competition in their healthy growth and preservation of their assets.
The indicator of a great brand is how much it is connected to and preferred. Harley Davidson, which we all know very well, is an example of this. A general Harley Davidson customer will prefer that the new engine he will purchase is also an engine of this brand. If we give another example from Starbucks, we can easily hear the words “There is coffee, and there is Starbucks coffee.”
But I can already hear the words of semi-finished product manufacturers saying; But aren’t the buyers of our products the final customers? This is a complete illusion and simplicity.
There is a cooperative called Sunkist Growers, founded by American citrus producers, and CEO Russell Hanlin says in a speech: “An orange is an orange… yes, it is an orange; Of course, unless that orange is Sunkist…Sunkist is an orange producer that 80 percent of consumers know and trust.”
It is not difficult to give a similar example from the world leather industry. I can already hear the names.
Secondly, the brand values of the brands. Today, a business may want to slow down, stop, close down and start again, and even benefit its stakeholders and itself with a high brand value presence. I will be giving examples from more global brands to make the examples more understandable, and then we can continue to explore together through our own businesses.
Roberto Goizueta, former CEO of Coca-Cola, made the following comment to the question of whether brands are important; “All our factories and facilities may burn to ashes tomorrow, but it is very difficult to touch the value of the company, it is hidden in the good will of our brand representation and the collective knowledge within the company.”
Many healthy companies in our industry may experience ups and downs with their existing brands, they may be left alone with crises, they may not be able to take quick action against the unstable conditions of the market, but they will be able to maintain their wealth in the sector as long and strong as the value-brand they have created.
MARKETING TOOLS
Some young marketer friends are waiting for more concrete approaches. They want to make a difference to their business and raise awareness with concrete tools that they can use and take as an example. At this point, being a strict bookworm will put you ahead of your competitors.
During an organization I attended during my university years, I received Tom Peters’s book The Circle of Innovation and read it with curiosity and mentally filtered it. It is an old book, but an experience was shared in the book. I quote it verbatim;
At Susan Sargent Designs, she is a designer and provides a wide range of design services on carpets, rugs, pillows and textile products and says; We only sell our products to certain individuals through representatives, but we would like to develop direct relationships with final buyers. For this, they decide to place a card in products such as carpets, rugs and bedding sets that go to the final buyer.
She meets with the operations manager and says, “Please make a card begging people to contact us. And… PLEASE use simple English, keep it memorable and cheerful.”
The image below is the image of the original card in those years.
After this visual, we decided to implement a similar method in our business to improve our direct relations with customers and created the following card, some parts of which we revised according to our own company, within the customer packages.
The results have been incredible and we have entered a process where we can share emotions and information directly with many valued customers. People who received the package, such as designers, buyers, company managers, etc., said that they were extremely excited and that even the products that were sent only for sample purposes were remembered in the future and that the bond of emotion and experience increased.
Of course, before I forget, the e-mail and telephone load has also increased considerably.
