How marketers can prepare for the unexpected
The apparently unexpected result of the Brexit referendum last June, and the US Presidential election in November, seem to have stunned and surprised the world. Both outcomes were not predicted by either the media or the political establishment, and yet all the signs were there that the unforeseen outcomes had a high probability of happening.
In business as in other activities, the unexpected can happen, sometimes with disastrous consequences. Part of being an effective manager is the ability to manage risk. For the marketing manager, responsible for producing and maximising the flow of profitable income for a business, the successful management of risk is of major importance. It is therefore useful to see what lessons might be learnt from the Brexit referendum and the US Presidential election.
It would seem that any similarities between the Brexit referendum and the US Presidential election were superficial. The subjects of each vote were entirely different. However, there were similarities, the most obvious being outcomes which were not contemplated by the media or the political establishment. In Britain, successive government administrations had discouraged including the public in any debate about the nation’s involvement in Europe, after joining in 1972. This resulted in an alienation of increasing numbers of the electorate, who saw their rights and freedoms being eroded by European laws that were not of their making.
In America, it appears that there were large groups of the electorate who had good reason to feel increasingly forgotten and ignored by political organizations that seemed unconcerned about their living conditions and future. In both Britain and America, it was these two groups that separately produced the surprising result.
But why was it a surprise? The result was only a surprise because the political establishments in both countries, and to some extent elements of the media that had become less independent minded and more politically biased, had become blinkered in their outlook and refused to acknowledge unpalatable truths. In both countries, “the powers that be” had come to believe their own rhetoric, such that there could only be two opinions, - theirs and the wrong ones.
In any business, it is all too easy to become blinkered in outlook, and to believe your own view to the exclusion of others. For the commercial manager, it is essential to be open minded to alternative possibilities, in order not be caught out by the unexpected or to make wrong decisions.
One of the prime sources of commercial information is provided by market research on which many a business decision is based. But how much reliance should be put on that research? Election opinion polls are a form of market research, but recent results have shown them to be significantly unreliable, predicting the wrong result in both the Brexit referendum and the US Presidential election. In principle, market research correctly carried out is usually accurate in its result, but it does depend on how well it is enacted in selecting a representative sample and the suitability of unbiased questions. Market research ought always to be corroborated from other sources to verify its findings.
In order to reduce the risk of making wrong assessments and subsequent decisions, marketing managers should:
- Develop and maintain strong customer relations in order to fully understand their requirements both current and future.
- Use market research, but always treat with caution and seek to verify its findings from other sources.
- Keep up to date with economic reports.
- Review political reports that may affect the economy or the particular market.
- Review relevant market reports especially regarding current and future trends.
- Maintain intelligence on competitors.
- Regularly undertake a SWOT analysis on own business, major competitors and the market in general.
- Seek to identify and consider all aspects that could or do affect the business.
- Seek peer group review of any assessment as it is easy to be deceived by one’s own opinion.
Marketing managers need to be confident in their decision making based on a careful assessment of the commercial situation, drawn from an analysis of all relevant information.
The most important questions regarding accepted truths and opinions is “How do you know? Where is the evidence?
Wishful thinking or the avoidance of inconvenient facts or opinions, leads to bad decision making for which there is no excuse.