murat ulker
Today, I am continuing where I left off last week, as I see that the interest in marketing is quite high from the comments received on my first post. I stated that nearly 80 famous marketing practitioners and academicians attended the EWMS world marketing summit held online on 6-8 November and summarized a few speeches myself. In my opinion, there are a few more important speeches, I have summarized these as well. I also examined the ULKER brand as an example.
Laura Ries, daughter of Al Ries, one of the founders of the positioning concept, was also among the speakers. She is promoted as a “positioning expert“. In her speech entitled “The Effect of Marketing on Consumer Behavior“, she said that his father’s positioning strategy, which he explained in his book “Positioning: The Battle For Your Mind” (*),which has been translated into 22 languages and is one of the best-selling marketing books in the world, now works differently:
“GE, GM, IBM are having a very hard time. The time for the important brands of the 20th century is about to run out. So why? Because these brands have a single name behind everything. 10 years ago, GE’s sales were $ 157 billion and profits were $ 11 billion. Today, it has a sales volume of 95 billion dollars and a profit of 5.4 billion dollars. One of the things that weakens the brand is that they put a single name on everything. GM announced its bankruptcy in 2009. Chevrolet; big, small, expensive, cheap, sports etc., cars and it went bankrupt with all those cars. IBM is also having a hard time. ”
Laura Ries “21. “There are 5 rules for positioning in the 21st century” and explained them one by one. I have written and explained how these rules have worked for us.
Be global, not national: Many firms can earn high revenues from their sales within one country. But the world is now very global thanks to the internet. Since its establishment, the Internet has destroyed borders between countries. Since its establishment, China has been producing globally. In the latest research; we see that China has an export volume of 2.4 trillion dollars. This is 1.6 trillion dollars in America, 1.5 trillion dollars in Germany, and 730 billion dollars in Japan. This shows that China has increased its sales by “exporting” and playing globally. Being able to export is the biggest investment to be made in a country’s GDP. However, you need to focus on global trade, you cannot sell everything. You need to limit your product range. Think of a small settlement where a grocery store sells everything and earns well, but when you get out of this little place and go to a bigger place, you find many small marketplaces that specialize in their field. To play globally, you need to have less variety of products, and people need to get to know you by certain products. When we look at America, there are 52 digital brands that stand out globally. However, in China, Huawei is holding all this market and challenging its competitors in America, that is, reduce your product range, this is important in terms of positioning. Today, Ulker is the export champion in our country’s category and is an international brand specialized in biscuits and chocolates produced in many countries.
Focus on your competitors, not your customers: Your customers always ask you to do good work, the best, the highest quality, the most special, and you feel obliged to realize this. However, there are many companies in the market and they all strive to achieve the best. For example, four airlines (United / Delta / American / US Airway) in America announced their bankruptcies. Yet, Southwest still stands because Southwest focuses on what is different, not the good. And what’s better for their customers is simply selling seats rather than providing more specific services. No orange juice, no food service, just peanuts. And they didn’t go bankrupt. Because they focused on the different. They focused on being different from their competitors. As another example, when Red Bull began selling in thinner metal cans, all other energy drink companies began offering similarly slim canned energy drinks. They said we calculated the best rates for you and made a calorie calculation. Even Coca-Cola offered energy drinks in thin cans. Only Monster put its products in large metal cans, did not count calories, and did not calculate sugar. Now, Red Bull has 43%, Monster 39%, Rockstar 10% and Coca-Cola 1% market share. This is no accident – be different. For example, the ULKER Cubuk Krakers have been for decades, always the only product suitable for every budget.
Have a narrow product portfolio, not wide. It seems normal to focus on selling everything in the market, but you cannot sell everything. Think of the car companies trying to sell everything at once. BMW offers, for example, all the features available on the market. But this is not a successful feat. Due to this strategy, BMW is currently ranked 11th. But when it comes to electric cars, only Tesla comes to mind, or another example is Great Wall Motors. This Chinese company focuses on one model only, cheap SUVs. The vehicle named Haval sells quite a lot. For example, the focus of the Ulker brand is the Biscuit and Chocolate category. As Ulker, we do not intend to enter the construction business.
Be multi-branded, not just a single brand. A brand cannot do everything, consumers have neither such perception nor expectation. You start with a single brand, but then you have to turn each different product you produce into another brand. Apple, Coca-Cola, and Proctor Gamble are companies that have made products under these brands. Apple; IPhone, IPod, IPad, etc. Coca-Cola has 20 brands and P&G has 25 brands. However, Kodak announced its bankruptcy because it made a branding mistake and named the new digital brand it had released as ‘Kodak’. However, Kodak had released the digital machine in 1975, but in consumer perception, it was an old-style production company with films containing Kodak chemicals, and when the company named its new brand Kodak, the consumer refused to buy it. As my example, ULKER has Biskrem, Halley, Probis, Dankek, Hanimeller, Dido, Laviva, 8 Kek, Cizi, 9 Kat Tat Cokonat, Cokomel, Ikram, Rondo, Metro, Bizim …
Focus on the visual, not just the text (**): All brands try to stay in mind with their mottos, but the main thing is the visuals. If you associate yourself with visuals, the consumer perceives you much more clearly. I call it the visual hammer. The visual hammer is a very successful strategy. It makes you authentic. Take Coca-Cola and Pepsi. Coca-Cola is a visual hammer with its logo, the moment you see it you say this Coke, but Pepsi? McDonalds is easily recognizable by its golden arches on the top, but Burger King? A small visual change you make can give you a lot. For example, the Ulker brand is an icon in its own writing, with the letter “UE” u with Umlaut and its writing style. Turkish children know and prefer the brand from the age of two.
London Imperial College’s Professor Sandra Vandermerwe gave one of most the interesting speeches of the summit. You already know Maslow’s Hierarchy of Needs. It is one of the most talked-about human psychology theories in business life. The US psychologist wrote an article on the hierarchy of needs in 1943. There has been no other model that defines human needs since then. I suggest that young people, those trying to do start-up business, firstly understand Maslow’s need theory well. Because people buy to meet an abstract or concrete need. Either this need is defined, or you redefine this need or this need is hidden, and you create it. Here is Sandra Vandermerwe says that Covid-19, which unexpectedly entered our lives, changed our behavior; because our individual needs have changed. “Our most basic needs established by Maslow have transformed into completely different shapes with Covid-19, and now we marketers are working to understand new consumer behavior and create models suitable for it. She asks the question: “So what has changed? How does our basic needs map help us?” Then she summarizes the new need map as follows:
I compared Vandermerwe and Maslow in my own way…
Maslow: Physiological needs
Post-Corona Vandermerwe: Contingency (What might I need right now based on future conditions?)
Maslow: Feeling Safe
Post- Corona Vandermerwe: Preparing for the future to be safer
Maslow: Feeling close to a reference group
Post-Corona Vandermerwe: Becoming a group member to realize the most appropriate behavior.
Maslow: Self-esteem and recognition by others
Post-Corona Vandermerwe: Inspiration and inspiring others
Maslow: Realizing your own potential
Post-Corona Vandermerwe: A feeling of self-empowerment and control of your destiny
Maslow: Don’t think beyond yourself
Post-Corona Vandermerwe: Doing good for society, country, and the universe.
So as you can see, Prof. Sandra Vandermerwe also reached the #makehappybehappy philosophy, and of course, I agree.
Famous brand professor David Aaker said similar things in his speech entitled “Winning in the Post-Covid19 World”, but his examples were different. “If we want to earn now, we have to do meaningful work first,” he said. Here he gave us two company examples. First one is Unilever, he explained that Unilever launched a campaign 10 years ago to eliminate the carbon footprint and support sustainable life and rearranged the company goals accordingly. “We now understand the importance of this step for social well-being and better health,” he said. The second example was Unilever’s lifebuoy brand, which produces hygiene products. This company drew attention to the importance of hand-washing during the pandemic process. However, by doing a similar study before, it started a “wash hands” campaign based on the fact that 2 million children under the age of 5 die every year due to poor hygiene conditions and malnutrition, and in addition with the “tree of life” supported children who have difficulty obtaining nourishment. For this reason, what they did during the pandemic period was found more convincing.
Aaker said, “A second point we learned during the pandemic is the brand communities that meet social needs,” and explained the issue as follows: “We all wanted to communicate, see what we value, and be connected with someone. Many of us have experienced the unhappiness of meeting social needs digitally. But here, the importance of brand communities is realized, a brand community is a community of people who are involved in your brand and share the same passion as you. They want to participate in an activity, share a similar area of interest, and create a common ground on a topic. Your brand’s website is important to convey this feeling. If we give an example of this, one of them is Etsy. Etsy is a digital company that sells handicraft products. People can exhibit and sell their handicrafts here. The other is Sephora’s ‘beauty insider community’. People can share their comments on beauty products in this forum. ”
I see brand communities like this and others helping people build social networks and be part of a group. Brands can now be reached with these networks and ties. However, such groups that marketers do not see or want to see are more active in WhatsApp, which is not accessible in any way, and this trend is spreading. It is not possible to reach here by any means, including marketing authorization right now!
From Germany, Professor Dr. Hermann Simon’s talk titled, ‘True Profit – After Corona has never been so important’ was not a marketing speech but rather a talk about business administration. “Banks and government agencies only have real profits. Companies can keep real profits, but they don’t like to explain it. Interest, taxes, expenses and other expenses are important factors that reduce the profits of companies.” Simon made a very striking start, “And the companies that have the Right Profit at this time will survive these days. Companies enjoy disclosing their earned profits to the public, but are unaware of how much of it is real profits. Many companies calculate profit from a simple account, but this figure can be the end of many things. Correct Profit is the last figure that gets even the smallest expenditure deducted. And companies can continue this period successfully only if this final figure (Net Profit) is positive,” he said, his statements were even more important.
What he later said was interesting for global companies. “There is a negative correlation between the size of the economy and the profit margin in your country. Countries with the highest profit rate in the current situation are Russia, Brazil, India. Countries with low-profit margins are Japan, Germany, France and America. Countries with the largest economies have the lowest profit margins. It is very difficult to do business and hold on to these countries. Because as the economy expands, your profit will shrink compared to the country. This situation is also valid for the sectors. Companies operating in the field of biotechnology have a profit margin of 21%, while the profit margin of companies operating in the automobile industry is 7.4%. Because biotech companies have a relatively new and limited scope, companies doing business in this field are able to retain their profits. On the other hand, the profit margin for automobile companies is lower. In other words, an automobile manufacturer must try harder to take a share from the market and make a profitable venture. This situation is much more dramatic for the FMCG sector. It is much more difficult to get a share and hold on in sectors where the margin is high but the True Profit is low.
Prof. Dr. Hermann Simon then gave information about the companies and surprised the audience even more: Currently, the most profitable company is Saudi Aramco with 110.975 billion dollars (annually). The daily profit of this company is $ 304 million. Apple is in second place with an annual profit of $ 59,531 billion and daily profit of $ 163 million. Bank of China comes third with an annual profit of 44.895 billion dollars and a daily profit of 123 million dollars. 4th is Samsung and 5th is JP Morgan. Well, despite the high profitability figures announced by Apple to the world, how can Saudi Aramco be above them? All of these are related to economic balances, and many of the systems you see have been rearranged to gain public trust.
The point emphasized by Prof. Dr. Hermann Simon is very correct. Therefore, in order to ensure the continuity of our businesses for society and for sustainable success, we should closely examine profit margins in times of crisis and focus on the Right Profit, not on our net profit, on the remaining cash (free cash flow) and take this into account in our accounts. Otherwise, we may be living and letting others live in a fantasy world.
The speech made by Larry Light, former Global CEO of McDonald‘s, drew attention to the difference between business schools and real life, revealing the reasons why young people are no longer interested in business education as before.
He said that with Covid-19, the already decreasing student demand decreased by 70%, even in online MBA alone, there was a 60% decrease, in addition, 1-year MBA programs also decreased by 50%. Because students who enter these departments often complain that they are not getting value for their money. Many complain that MBA programs do not support creative thinking and that their education kills their creative potential. Many of the students, especially Gen Z (born in 2000), see these schools as racist, sexist, closed to development and creativity, and destroying the imagination”.
These schools seem to see business education as just about reading what has been written so far. They seem to have difficulty keeping up their curriculum with time and technology. To me, they are not up to date. I think students are now learning more from Google University. In addition to what they can learn from books and the internet in schools, it would be better if they learn a little bit of practice and some different case studies, but now I see that there is a blockage here as well. I do not see upto date information in most of the books and articles I have read. What I have read are the heroic stories of that period written on the achievements of people. Indeed, it is not possible to understand the full practical consequences of the study. It is not possible to understand the reasons for the failures in real life. It has never been more important for business schools to engage with the industry. Because the sector is widening the gap in practice with Covid-19 and reaching another level. Schools that claim to raise the employees of the future should now update themselves immediately.
Larry Light says, “MBA programs are based on financial engineering. This form of education is a devastating disease. Financial engineering has one good point. Maximizing profits in a short time, and at all costs. This doctrine reduces our chances of fighting with companies that greedily see people as capital. For example, this financial engineering is the reason for General Electric’s failure. Similarly, there are many firms that are going bankrupt and people are not capital. Quality budgeting should replace financial engineering. Sustainable models are produced in this model. Another point about these schools is the educational models based on extreme analysis. Over-analysis models are methods that stop students’ creativity and put them into a certain area. Good analysts come out of this training, but these people are closed to creativity and imagination”
I have said it before in articles that I’ve shared, analysis, research, insight are really important for renovation, and innovation. But if there is no creativity, who will produce something new from existing data, it is not possible for me to manage companies in today’s stormy seas with the information in the book. It is necessary to add on to this, transform the results into behavior, and train human resources that will bring companies to safe harbors.
Larry Light concluded his speech: “Facebook had its CMO resign just 2 years later. Why is that? Because the CMO did not understand its users. So it is difficult to present marketing cases today with simple marketing. A business cannot be managed with simple marketing knowledge in times of crisis”.
I wonder what is Ulker’s marketing secret? Most of the time they say “it is successful because it has very good distribution“, which is true. It is our responsibility to take our products even to the remotest corners of the geography we are in, to contribute to the economy, and to make the customer profit. But this doesn’t explain everything. The definition of effective marketing is: Maximum customer satisfaction responsibly and profitably! What is it not? It is not new advertising forms, use of different tools, events, promotions, campaigns, etc. The important thing is to be demanded by the customer. True responsibility in marketing is the responsibility to understand the needs and desires of our customers. That’s why I say that Ulker’s success lies in the following words:
The consumer (buyer) is satisfied and the customer (seller) is satisfied! (An old Turkish saying)
In other words, if my consumer (buyer) is satisfied, and also my customer (seller) is satisfied, then the producer (maker – us) is as well!
#makehappybehappy
Note: This article, which is open source, and can be cited by mentioning the author. No copyright required.
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(*) Al R. and Trout J. (2001). Positioning: The battle for your mind, Mc-Graw Hill Education.
(**) Ries L. (2012). Visual Hammer, Nail your brand into the mind with the emotional power of a visual, Ries&Ries.