Sales and marketing terrorism

10 08 2006

The recent media coverage of political terrorism throughout the world has me reflecting on terrorism and extreme sales and marketing tactics in the business world.

Every industry has individuals or organizations that use drastic, pointless, unethical or dangerous economic tactics in order to increase income or market share in the short term. This use of drastic and irresponsible actions can be called sales and marketing terrorism.

The goal of sales and marketing terrorism is to create immediate change, instill panic and chaos, or further the goals of one group who cannot or are not willing to work with the current system of rules, regulations and norms.

Many times the reaction to these isolated incidents will severely impact the industry, market or specific businesses. Reactions can result in increased government legislation, more government or industry intervention, increased costs of doing business, loss of revenue and reduced customer confidence in the organization or industry.

Some examples of “sales and marketing terrorism”:

A competitor who initiates a campaign of extreme discounts or low prices (dumping) in order to eliminate a competitor or increase market share.

A marketing campaign that uses lies and innuendo to reduce the reputation of a competitor or industry segment.

Products of extremely poor quality (below expected consumer beliefs or expectations) substituted for products known for their quality.

Don’t confuse sales and marketing terrorism with innovative ideas and paradigm shifts in how to do business. The difference is that a sales and marketing terrorist has no plan other than disruption.

Sales and marketing terrorism is a short term strategy or single event that has no regard for long term collateral consequences. They believe their actions will be justified because of short term increases in profit or market share. Rarely do they succeed, but often create chaos and disorder in the marketplace that have an impact on the industry and consumers that can last for a long time.


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3 responses

9 10 2006
Edward Donnelly

Lee,

You are right on target here. I have seen the mad rush to the lowest price. All value is missed or cut away in a frenetic rac to “get the sale”. The long range problem for all involved is that custoemr expectations are based on a crazy, irresponsible price that can’t be sustained.
Great post,

Edward Donnelly

10 10 2006
Lee Iwan

Ed,

I thought this was a behaviour limited to the 3rd world countries and emerging markets (unsophisticated markets). First discovered it in Central and South America, Mexico, and finally China, but realize it’s happening everywhere. If we don’t wake up and start creating long term strategies and valid pricing structures, the future will be pretty bleak.

Do we really want to be part of a highly competitive rush to bankruptcy?

I will admit it’s a difficult situation for organizations to sit on their hands and ignore these “terrorist” sales campaigns, lose their market share and see prices deteriorate. The only valid solutions seem to be holding firm, working with and educating the customer and waiting for the rogue organization to fold (and they always do).

Lee

21 03 2007
How we react to unethical actions and behaviour « Lee Iwan, Accumulated Experience

[…] Sales and marketing terrorism  […]

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