Friday, April 04, 2008

Logical, Responsible, Practical

"Illogical, captain."

When times get tough for businesses, there are things that get the heave-ho, put off or downgraded. Training, recruitment, marketing, R&D; they all tend to be the victims of a slow market. Yet there is slow market and there is market change. And under the conditions of the latter, there are businesses that operate in a fashion that defies logic, whose very existence is perhaps not logical.

The tourism market in Mallorca functions at present under two obvious conditions of market change - lower spend per head and an alteration caused by all-inclusive offers. The lower spend might be defined as being evidence of a slow market; to the extent that it is a market change, permanent, is debatable. There is less equivocation surrounding the all-inclusive; it denotes a market change and is probably irreversible unless the force of European law establishes standards of service by the all-inclusive that are beyond the capabilities or the budgets of hotels.

When talking to some businesses, their response to the likes of marketing or advertising spend is that they cannot (or will not) do it because of all-inclusives. The all-inclusive is the devil. It is also a convenient devil. The illogic of the argument is profound, as the logical outcome of this stance is that the business itself is not viable, not just its spend on things like advertising. A business is many things. It can be argued that its marketing (in its various facets) is a business. Without it, there is no business.

The market change has highlighted the impoverishment of some of the supply in the market; not impoverishment in the sense of having no money but in having no idea how to truly market one's business. There has long been a passivity of expectation within the Mallorcan restaurant and bar business; that the mere physical presence of an establishment is sufficient to bring in customers. This is, and has always been, wrong-headed. It is not just wrong-headed under today's conditions, it is distinctly dangerous.

Take a combination of a slow market and a market change, and the temptation to cut costs is understandable. No business looks to over-spend, even in the best of times, but when the market is less than buoyant - as it is - it is still no excuse to cut back on the very thing that creates differentiation or a presence in a competitive market - one's marketing. To not perform this or to entrench significantly signals the onset of failure. To cast the all-inclusive in the role of the pantomime villain that is stabbing the business in the back may have some validity, but the logic of the market is to fight back, as the alternative is to fold. And there is logic in that. The all-inclusive is, in one sense, a positive. It has, or should, force businesses to address the very nature of their business, their marketing and indeed their presence in the market. The all-inclusive has placed the spotlight on over-supply and a lack of innovation and proactivity. It, together, with the lower spend, has ended the days of easy money. Not investing in aspects of the business, such as marketing and advertising, is a common reaction, but the logic, or rather illogic, of the argument, disguises the real problem, and the real problem is not the all-inclusive.

And ... by the way. I don't normally accept comments that come into the comments thingy. I do ask for me to be mailed, but exception time. Two comments about Roger Hodgson for yesterday's entry. Both very positive. Glad to post them. Sounds like Rodge could be a decent gig at the Pollensa Festival. Only too pleased to give a different perspective. Thanks.

QUIZ: Yesterday - "Music", John Miles. Today's title - look back to yesterday if a clue is needed.


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