These notes were prepared by Tom Webb, Global Co-operation Consulting, for a workshop organised by the Co-operative Federation of Victoria Ltd
MOCA 1 Introduction
MOCA 2 Global Challenges
MOCA 3 Key Co-operative Strengths
MOCA 4 Marketing vs Co-operative Education
MOCA 5 Key Marketing Opportunities
MOCA 6 Image vs Character Marketing
MOCA 7 The Research
MOCA 1 Introduction
Welcome to Marketing the Co-operative Advantage. The objective of this workshop is to explore how we think about co-operatives and marketing. We will do that by sharing with you some thoughts and insights that came out of conferences held in Boston in November 1995, 1996 and 1997 and numerous workshops held in Canada, the USA and Europe.
The conferences are based on a belief shared by the Co-operative Development Institute of Greenfield Mass., and Global Co-operation Inc., that there is an enormous opportunity to be had by co-operatives if their marketing reflected their pride, not only in the particular products and services they sold, but in who they were as co-operatives.
In
any transaction to meet our needs, the transaction should be different
if it is based on co-operation. All
co-operative transactions should reflect an openness and trust not possible
if each party is out to benefit at the expense of the other. This
is the co-operative advantage! We
believe that the time has arrived when co-operatives have to rethink
every aspect of what they do in response to a rapidly changing world.
The starting point for creating exciting marketing is to begin with an understanding of your environment. Global challenges and trends more and more set the tone on ‘Main St.’ Globalisation is not happening out there somewhere, it is happening on Main St. These trends are fundamentally changing our world. It is within the context of these trends that we must act to ensure the improvement and growth of co-operatives in our world. Marketing Our Co-operative Advantage, as part of the education role of co-operatives, is no exception! The strengths that come from being a co-operative are the starting point in any discussion of marketing or any other business strategy.
Co-operatives need to reflect on key questions.
·
I know what marketing is for an
investor driven enterprise, but what does it mean for a co-operative?
·
If co-operatives are committed
to education what is the relationship between co-operative education and marketing?
Great marketing learns from what others are doing.
Great MOCA is no exception! Not
in copying their work, but by learning from it in a way that is consistent
with who co-operatives are. What
are the tried and true marketing concepts that work and what can we learn
from them? Great marketing
also depends on research. It is important
not only to believe in ourselves, but also to understand how others see
us, how they will filter our message and how receptive they are to that
message. Finally, we need to ask, “How has this worked
for others?” That is what Marketing
Our Co-operative Advantage: The Workshop is all about!
MOCA 2 Global Challenges
The emergence of the global economy - We have always had a "global economy," but
today it reaches every enterprise on every main street in every community
in our world. Forty years ago people in our communities
got their groceries from small family merchants supplied by family-owned
wholesalers. Co-operatives
were often the leaders with vertical integration, owning their own
wholesaler. Today the co-operatives are still vertically
integrated, but their competitors have surpassed them integrating
from the farm gate through processing to the retail shelf. They
have gone beyond that and horizontally diversified into movie theatres,
manufacturing, car rentals, real estate and many other ventures across
provincial and national boundaries. Co-operatives, slow
to include workers in mutual self help, have fallen behind.
MOCA 3 Key Co-operative Strengths
Co-operatives
are an alternative way to organize business. There is a sense that all is not well and that we need
new ideas for the next century. People
are distrustful of both governments and corporations and worried
about the future. Co-operatives have a friendly positive image,
even if many do not really understand them.
What
sets co-operatives apart is that their values and principles are forged
as part of their structures, while
investor-driven business depend upon who is in charge today for values
other than maximum return on invested capital. Co-operative
structures, values and principles push members and managers to reflect
on the ethics of their decisions. The
structure of investor-owned enterprise pushes workers and managers
to place the bottom line ahead of values. There
is a hunger for values and principles. Co-operatives can turn their values and principles from a perceived
liability in the market place to a coveted strength.
As
people-based businesses, owned from the bottom up, they are focused
on community needs and are well placed to offer hope. They
give people a chance to do something positive, to take actions which
can improve their lives and communities. They
put decision-making as close as possible to the community and make
community benefit a consideration in the decision-making process.
As
democratic enterprises, co-operatives offer peoples an opportunity
to build a new balance into their societies. The one dollar,
one vote market place can be countered by bottom-up economic democracy. Co-operatives
cannot bypass the market, but they can soften and balance its decisions.
As enterprises with multiple bottom lines, co-operatives can be financially sound while being structured to respond to peoples concerns about the ecology, community survival, fairness, and community responsibility.
The co-operative commitment to education increases the ability of co-operatives to cut through the alienation sweeping our populations.
MOCA 4 Marketing vs Co-operative Education
For years, many consumer co-operatives did no advertising at all. Many co-operative leaders saw advertising as one of the costs co-operatives did not have to carry because their members believed in their co-ops - that is why they joined them! Many co-operators thoughts about advertising were summed up in the somewhat cynical line, “I know what advertising is - it is the way big companies tax you on what you buy so they can lie to you about what you bought.”
Especially with the advent of television, co-operators began to see that advertising was having an impact on their members. Second and third generation members forgot the advantages of co-operatives and why they were created. Creative advertising with heavy coverage was educating members to see co-operatives from the perspective of the marketplace. Advertising was having an enormous impact even to the extent of changing people’s attitudes. More and more North American society began to measure well being by how much we owned and by whether or not we had the best of this product or that service.
Key Questions for Co-operators
MOCA 5 Key Marketing Opportunities
Let me suggest four major
marketing opportunities for co-operatives:
Making TRUST the
core and soul of all member relations,
and member, management and Board education programs, marketing, merchandising,
See marketing and merchandising as a
vital form of education. Marketing
based on manipulation can lead to alienation, but when it is used to
inform and empower, it leads to trust. Co-operatives'
commitment to education is unique enterprise strength.
Use character/values marketing that fits comfortably with the commitment of co-operatives
to education and their value base.
Use relationship marketing. One
of the most powerful tools available for co-operatives - a real, rather
than a contrived characteristic that enhances their character.
The challenge for co-operatives
is to respond thoughtfully and creatively to the question: I know how it is done in corporations, but how is it done in co-operatives? This is the key to Marketing Our Co-operative Advantage.
Relationship Marketing seeks to create a relationship and loyalty between an enterprise and the people it serves. We see it every day in frequent flyer clubs, preferred customer clubs, and even motel chains. For investor-owned enterprises, the relationships are largely contrived. For co-operatives, the relationship exists and is fundamental and real.
Character
Marketing is marketing that flows from
the nature of your business and the values and principles you cherish. Ben and Jerry’s Ice Cream and the Body
Shop are both regarded as strong character marketers. For example, Ben and Jerry’s hires an independent outside
analyst to do a social audit which they publish in their annual report
and which always includes a critique of where they have fallen short
on their proclaimed character.
Co-operatives can be a source
of hope in a world that is becoming increasingly nervous. But
co-operatives too have an alternative – they can become more and
more like their competition. Marketing
Our Co-operative Advantage makes good business sense and makes
co-operatives increasingly part of the solution.
Ironically, co-operatives generally do not have strong records as relationship or character marketers. This does not have to be so.
Character
marketing strengthens
co-operative relationships. Relationship
marketing flows from the co-operative character. Together
character and relationship marketing are a powerful combination. Used
by co-operatives, their power is enormous. The
co-operative advantage of having a real basis for trust can be enhanced
and brought to fruition by this powerful combination of relationship
and character education that includes marketing!
MOCA 6 Image vs Character Marketing
| Image Marketing Characteristcs | Character Marketing Characteristics |
| What they want people to believe. | What we really are - improved reality not image. |
| Focus on competition. | Focus meeting people's needs. |
| Exaggerate trivial differences. | Reveal significant differences. |
| Conflicting multiple brands. | Meeting needs with coherent brands. |
| Selling brand. | Selling co-operation and trust. |
| Narrow information flow. | Open about who we are and what we do. |
| Relies on paid advertising. | Can use public relations to pass on your message. |
| Brand/product defines you. | You define product to serve members. |
| Promote contrived relationships. | Promote real relationships. |
| Unique selling point often copied. | Unique selling point truly unique to co-operatives. |
| Contrived message can create cynicism. | Real message improves worker performance and member relations. |
MOCA 7 The Research
Would Marketing Our Co-operative Advantage be
an attractive idea if people thought that co-operatives were a bad idea? If the idea were completely discredited in
public eye, the clear answer would be “forget it.” If public perception were
generally not strong either way, it would indicate the opportunity still
existed to win over people’s hearts
and minds to a good idea. If people
were fairly favourable, it would represent an opportunity for co-operatives
to take advantage of the favourable impression to increase their ability
to offer people an alternative.
So what are some of the messages from the research?
·
The values that underlie co-operation are valued
by people around the world.
·
People like co-operatives and credit unions.
·
The understanding of co-operatives is wide spread,
but shallow.
·
A high percent of people would prefer to buy
from co-ops and buy co-op products other things being equal.
·
Many co-operatives are not recognised as being
co-operatives and their products are not seen as co-operative products.
·
People think co-operatives and
credit union are needed in today’s society.
·
Co-operatives are seen as being a greater benefit
to communities than their competitors.
·
People rate non-operational benefits of co-operatives
highly, but awareness of them is low.
Our market research tells us that people have
faith in our co-operatives. For
the most part, that faith is well placed. Marketing
what makes us unique has a broad appeal to people whether they live in
Canada or the United States, Europe, Africa or Asia, north or south,
east or west. If co-operatives can make
the creative leap to connect their reality with peoples needs they can
grow and prosper. Copying what
corporations do may from time to time bring short run success, but in the
long run undermines who you are and makes Marketing
Our Co-operative Advantage less successful and more uncomfortable.
Last updated: 8 March, 2004