Rick Baker Thought Posts
Left Menu Space Holder

About the author

Name of author Rick Baker, P.Eng.

E-mail me Send mail
Follow me LinkedIn Twitter

Search

Calendar

<<  November 2024  >>
MoTuWeThFrSaSu
28293031123
45678910
11121314151617
18192021222324
2526272829301
2345678

View posts in large calendar

Recent Comments

Comment RSS

Competing – using a low-Price strategy

by Rick Baker
On Mar 18, 2011
At our Leaders’ workshops we tie two marketing concepts together. The two marketing concepts are ‘the PQS Triangle’ and ‘Differential Advantage’. Both of these concepts are ‘vintage’ marketing thoughts…..things we learned a few decades ago.
 
PQS Triangle is a picture, designed to make it clear businesses can set its marketing strategy based on a combination of Price, Quality, and Service. Rarely, if ever, can a business succeed if its marketing strategy is designed to win at all of P, Q, & S. Put another way – it is virtually impossible to deliver the lowest Price, the highest Quality, and the b set Service all at once. Something has to give. For most of our Clients the thing that has to give is Price: most of our Clients are not in a position to offer the lowest Price.
 
Differential Advantage answers the question: Why do our Clients buy from us rather than do nothing or buy from one of our competitors?
 
When the PQS Triangle and Differential Advantage are combined we have the essence of the marketing strategy.
 
For certain businesses the marketing strategy does contain Price – ie, the business can compete by offering better prices than their competition.
 
We think this is rare [even though we recognize many of our Clients’ Clients want it or demand it].
 
We think many businesses struggle and fail because they use a low-Price strategy when that is a doomed strategy.
 
However, there are 2 scenarios when a business can compete using a low-Price marketing strategy.
 
Those 2 scenarios are:
  1. Volume Leadership scenario: when your business has massive volume you can use your buying clout to reduce your supply costs and you can use ‘economy of scale’ to reduce your operating costs. Then you can reduce your Prices, hold a Price advantage over your competition, and grow your business. Big-box stores can always offer better Prices than boutiques.
  2. Educated Entrepreneurship scenario: when you have obtained specialized knowledge [for example, from being an employee at a big business] you can draw on your specialized knowledge to compete with bigger, less-entrepreneurial or more-bureaucratic businesses. This is how many entrepreneurial businesses get started.
Now – there may be other scenarios where you can use a low-Price marketing strategy and run a profitable and sustainable business.
 
If there are then we would really like to know them.

Tags:

Entrepreneur Thinking | Marketing | Sales

Sales Tweet #175

by Rick Baker
On Mar 18, 2011
Sales Tweet #175 Ernest Seller's favourite letter is "I"...what a coincidence - the same as his favourite topic.
 
The Thinking Behind the Sales Tweet
So, it would be wrong to say "There is no I in Ernest". [Mr Kaye made this up…actually, Ernest doesn’t have a favourite letter. Ernest does have a favourite number…it's #1.]

Tags:

Thought Tweets | Ernest Seller

Mark Weber visits our Centre For Family Business

by Rick Baker
On Mar 17, 2011
“Resolving Disputes in Business and in Life”
 
That is the title of the presentation Mark Weber gave at our last Centre For Family Business breakfast.
 
As always, Mark provided a fun, educational session.
 
I took lots of notes and this Thought Post outlines a couple of my take-aways…which I have already used to help myself and other folks with decisions.
 
For more information, please contact Mark Weber.
 
1st take-away: When resolving a dispute, first focus on Interests
 
There are three approaches to resolving disputes: the Interest approach, the rights approach, and the Power approach. Mark pictured it this way:
 
 
Interests are our needs, desires, concerns…that’s the best place to resolve disputes. When we escalate discussion from Interests to Rights we get into negative emotional territory. An example of Rights would be, ‘the contract says _______’. Beyond discussion of Rights, disputes could escalate into Power territory. An example would be, ‘setting an ultimatum’.
 
When facing a dispute, first, take time to focus on Interests.
 
2nd take-away: People are biased and make a fundamental attribution error
 
While Mark was talking, I drew a little table to capture another lesson.
 
 
When it is me
When it is someone else
When things go well
I give the credit to myself
I give the credit to the situation
When things go poorly
I blame the situation
I blame the person
 
I don’t believe this is intended to apply to all the people all the time. Rather, it is a tendency we should consider as we judge other people…and, as we try to understand how other people judge us. 
 
In summary, when the biasis at work we judge like this:
  • When other people do poorly we blame their behaviour [ie, we blame them]. However, when other people do well we give credit to the situation.
  • We do the exact opposite when it comes to judging ourselves.
Thank you, Mark, for presenting very helpful advice on this thought-provoking topic…a topic that, as your presentation title says, applies both to Business and to Life.
 
***
 
A personal story – about Bias
 
Clearly, to the extent bias exists in us we should work to find at least middle ground.
 
As an example - Performance Appraisals are not a dispute per se…but they can quickly and even quietly become disputes.
 
Many years ago I recognized I tended to judge people too harshly when I gave performance reviews. My view at the time was - people judged themselves too leniently. I came to these conclusions because I asked people to write their own self-assessments and provide them to me before I presented the performance review I had written about them. When I received their self-reviews and compared them to my boss-created-reviews I noticed a consistent, big gap. I gave this quite a bit of thought. I tried to put myself in the other peoples’ shoes so I might understand how they reached their self-review scores. Then I thought about why the gaps in our views were so large. I concluded I set very high standards on myself and those standards could not, in general, be applied to others. [Perhaps that conclusion was wrong…I hope to discuss this with Mark Weber.] I decided to refrain from reviewing people’s self-assessments until I had completed a first draft myself. Then, I took my first draft and before looking at the self-assessments I raised every grade…about 20 points out of 100. That removed the gap for some people, removed more than half the gap for most people…however, a too-big gap still existed for some people.
 
That was many years ago. I now understand situations are a vital consideration. I now know under the same situation some people succeed while other people fail. I know leaders and co-workers must do their best to construct ‘winning’ situations. And, we must do what we can to help one another be better prepared for the ‘challenging’ situations.
 
More on this topic in future Thought Posts…

Tags:

Communication: Improving Communication | Entrepreneur Thinking | Family Business and CFFB

Sales Tweet #174

by Rick Baker
On Mar 17, 2011
Sales Tweet #174 Do you sometimes act like a 6-yr-old soccer player, focusing on the ball instead of the goal?
 
The Thinking Behind the Sales Tweet
Not a bad metaphor. While it is a joy to watch those little players do that in sports games it is no where near as enjoyable watching sales people do it. Just ask a sales manager.

Tags:

Humour | Sales | Thought Tweets

work at Work? or work at Home?

by Rick Baker
On Mar 16, 2011
On LinkedIn, a question was asked about the pros and cons of working at home versus working at work.
 
Here are some of my thoughts:
 
Excellence happens when people have the benefit of face-to-face interactions with other people: relatively few people achieve their full potential in isolation.
 
So, if it is an either/or decision then the answer is ‘workplace’.
 
For many roles, some tasks may actually be performed better in isolation…less interruptions. As the requirement for collaboration increases face-to-face interactions become increasingly necessary. This can, in part, be mitigated by video conferencing. But, that’s not as good as face-to-face discussion.
 
How to change work conditions to obtain a more home-like mindset?
 
That’s a great question.
 
Recently, a friend decided to build a new plant facility for his business. He went to each employee and asked them what they would like to see in the new building. Then, he included everything his people requested. The plant was awesome: lots of light, bright colours…and a squash court.
 
Now, everyone can not go that far.
 
But, the big lesson I learned was – Ask people what they want.
 
Ask with sincerity.
 
Listen.
 
Follow through.

Tags:

Delegation & Decisions | Entrepreneur Thinking

Sales Tweet #173

by Rick Baker
On Mar 16, 2011
Sales Tweet #173 Ernest Seller admitted to his Boss “One time I thought I was wrong but I was mistaken”.
 
The Thinking Behind the Sales Tweet
On the other hand, Ernest still isn't 100% sure about that.

Tags:

Thought Tweets | Ernest Seller

Copyright © 2012. W.F.C (Rick) Baker. All Rights Reserved.