Altyrian View

Recently, a client said something that I just haven’t been able to get out of my head. We were in the middle of a budget discussion (lots of those going on these days) when she said “You know, we can’t outspend the competition, so we just have to outsmart them.” Our conversation went back to the budget and that was that.

Well, no, I guess that wasn”t entirely that, because the more I think about what she said, the more fundamental truth I see in it. Especially for us marketing strategists who understand that the number of dollars we spend on marketing and advertising isn’t nearly as important as how we actually spend those dollars.

Of course, this doesn’t mean that a company should spend nothing on marketing – that would be stupid as well as ineffective. Instead, it means that it”s better to spend smarter, to get more for every dollar of the marketing budget and to do those things that will generate the highest results. It means to focus our targeting, to sharpen our message, to explore and utilize new approaches for delivering our message. At times, it might also mean rethinking and changing our brand image to bring it more in line with our market. And it certainly always means to keep our focus on constantly improving the customer’s experience with the company and the product.

It also points to a big reason for strategy in the first place - the competition. They’re out there spending money to take away your customers and sometimes they have more money to spend. Regardless of budget constraints, you can – and you should – do whatever it takes to outsmart them at every turn.

In the middle of the past year’s economic mess, General Mills was able to increase their second quarter earnings by a whopping 49% through – you guessed it – strategic marketing. You can read the details in  AdAge and  The Wall Street Journal (you’ll need to log in to read them, it’s worth the effort if you have access).

Did you notice more Pilsbury ads last year? How about Cheerios or Yoplait? Odds are, you did.

With the lousy economy, more and more of us have been eating meals at home. Sucks for  restaurants, but a great opportunity for General Mills (SWOT anyone?). To capitalize on this and other opportunities, the company boosted last year’s second quarter ad spend by $40 million – a 37% increase – focusing the spend on “high ROI ideas”. The result of this and other strategic moves was a very surprised Wall Street when the Big G announced their 49% increase in second quarter earnings.

General Mills’ strategy involved:

• Identifying the existing marketing opportunities
• Pinpointing and dumping their non-performing products
• Increasing their marketing spend on performing products
• Targeting ads to reach high-return market segments
• Balancing their media spend for highest return
• Investing in international growth
• Prepping new products to launch in 2010 (Chocolate Cheerios anyone?)

Marketing strategy – yes! Kudos to General Mills for taking the right steps and reaping the rewards. Think I’ll go have a bowl of Wheaties now.