I hope you enjoyed my little foray into “Back to Basics Week”. It was fun to review some of the strategic issues that we don’t face every day. As I posted last week, we marketers are mostly engaged in tactical elements.
But suppose you had a new product to launch. You’ve got your strategy and product all set, just need to do a market test to get things going, and get buy-in of the rest of the organization. This final case study (complements of Big Picture Guy) is as much about politics as it is about marketing or strategy.
“My latest frustration is based on a market test we did conduct. Operations wanted to ensure the costs were borne by Marketing. Any unsold product, they insisted, would have to be the responsibility of the product managers. Finance, always seeking to keep working capital low and turns and GMROI (gross margin return on investment) high, pushed to have a small run so that, in the event of an unsuccessful launch, only minimal quantities would be left to languish in our warehouses.
The sales group screamed that they cannot and would not sell out of an empty wagon. Without a commitment from a bearish Bull Terrier, the likelihood that we will reach the volumes needed to justify a launch is diminished. Which, in turn, means that payback period and IRR (internal rate of return) targets are likely not going to be met. So General Ledger, our under-reaching accountant with the over-arching ears, refuses to include the project in our budget calculations. The senior management team is unsure it wishes to back a project that is not even in the budget. It is all nickel-and-dime stuff.”
Read the rest here: The Waters Wear the Stones
It’s not an easy situation to resolve. BPG sums up that the situation “reminds me of this Bulgarian proverb: If you wish to drown, do not torture yourself with shallow water.”