Trade in the era of steam and sealing wax.

Only a small portion of the UK  work force will have had direct experience of trade and commerce before  we joined the EU over 40 years ago. Those with that experience will now be retired or approaching retirement.

It is reported that staying with the status quo of EU  membership was a factor for many voters expressing a preference to remain, rather than face the risks of the unknown future in the world beyond the borders of the trading bloc.

Trade and commerce has evolved over the centuries from the caravan routes of the 'Silk Road,' to the maritime ferrying of goods between countries from the Romans and Phoenicians - bringing prosperity, knowledge, education and long periods of peace, such as Pax Romana, were enjoyed.

Ultimately the British Empire, an Empire that at its peak accounted for 23% of the world's land mass and 24% of the world population, provided a vast market. Manufactured goods from Britain were sold to all corners of the world - the British world that is - in exchange for agricultural products and commodities. The infra structure of many countries benefitted from the building of railways, ports, roads and modern cities, with legal systems, education and healthier conditions. It was the 'greatest empire the world had ever seen' and ushered in a period of Pax Britannica. The British Empire trading model was still largely operational during the working lives of people of my parent's generation. In the days of steam power before rapid communications by telephone, Internet and jet travel became possible, businesses traded throughout the world. So why the sense of foreboding now that the UK is returning to trade with the world?

 Maps of the world placed the British Isles top centre and the Empire countries were coloured pink. It was a simple graphic symbolism of the British Empire.  Communications with offices scattered across the Empire, or pink bits, were by mail or cable. Letters were written with great formality, ensuring the correct form of address and salutation were applied, the sign off too with the name, title and position of the writer, even the date was quaintly referred to as the '12th instant'. The stationery, letterhead and quality of paper were all prepared with extreme care. The business letter spoke for the brand. It was a world away from the universal 'Hi' that is commonly used for email greetings.

My parents both worked for the same company which had its head quarters in the City of London, a manufacturing facility in Hertfordshire  and offices in countries like South Africa, India, Australia,  New Zealand, Canada and more. My grandfather had worked there too, but that's another story. Not surprisingly stories from work often cropped up as we sat around the kitchen table eating a modest evening meal, which had probably stretched the post war ration coupons to provide. A favourite of mine was the 'mail train' story. For some reason, one that didn't matter to me at the time, the company sent out letters or documents to the offices of Empire which began their journey with the evening 'Boat' train which left Waterloo Station at 6pm promptly. Junior office staff generally delivered the company's mail around the City, but the the evening mail train was handled differently because the letters and packages were not ready until quite late in the day. It is approximately one and a quarter miles from the City office, across Blackfriars Bridge to Waterloo and to speed up the delivery process from office to train, a team of young clerks was assembled to run a relay race - not against other teams, but against the clock, coping with the evening rush hour traffic, the tardiness of the letter writers and the immovable timetable of the Southern Railway Company. Waiting anxiously for the packets to be sealed and secured with sealing wax, by a clerk apparently oblivious of any urgency, the seals of the business house were carefully applied and scrutinized  before being handed to the first runner. Dashing through traffic and crowds the precious package was passed to the last runner to deliver. One particular evening the package was later than usual and my father was running the last leg. As he entered Waterloo Station the guard was already blowing his whistle, steam was applied to the locomotive as its wheels searched for traction. Running up the platform to the outstretched hand of the  Guard it was safely delivered to an understated "left it a bit late tonight, son" to which my father had no breath to reply.

Single market or world market?

Euro Realist Newsletter / photo on flickr

Despite the British electorate voting to leave the EU, some politicians still seem to think that somehow this excludes the so called single market.

Since the outcome of the vote to leave the European Union on  June 23rd, remarkably little seems to have happened. Something called Article 50 has emerged as a mechanism for starting the process and this has yet to be 'triggered' by someone. Some individual has taken the UK government to court to sort out whether the Prime Minister should or indeed can, press the exit button or does Parliament have the right. It doesn't inspire much confidence in much happening.

I  suspect that the voters who voted to leave the EU expected the UK government to do just that and leave lock, stick and barrel. I  doubt whether many voting to leave thought it would take much more than posting a letter of resignation and cancelling the membership cheque. Maybe to add a note that in future we would make our own laws, spend our taxes on our projects, take the EU starry flag off of everything from car number plates to passports ... oh and reclaim our assets such as fish in our territorial waters.

Remarkably little seems to have been planned for an 'out' vote; our government like the rest of the EU   probably regarded the referendum as 'rubber-stamping' the continuation of EU membership so there was no plan B.

So where do we go from here. Well the rest of the world is not a bad start. In the next few blogs we will outline some options.


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Marketing in a post globalisation world

Recent political events might suggest that globalisation has passed its high-water mark and is now in retreat.  Events such as the British voting to quit Europe and Americans voting for Dr Donald Trump - in short for a major change, turning away from big business and big government. So what is in store for marketing managers and how will marketers respond to a changing economic environment?

Hold on, what's this all about and why is it relevant to a b-2-b marketing manager for example? OK. Turn the clock back several decades to the situation in post war Britain. Before that and after the Wall Street crash and  economic depression of the late 1920's into the 1930's the pre-war period (post WW1 that is) had been a time of slow recovery and high unemployment. One of my grandfathers like many of his generation, had been unemployed for most of the 1930's and it was only the Second World War that brought him employment, working on fitting out vehicles for the military. The post war reconstruction continued the demand for product that had started around 1940 and boomed throughout the 1950's and 1960's as Britain re-built. Then, there were few 'luxuries' to buy, even if there were some available and you had sufficient coupons. It signalled the end of post war austerity.

Each year the big electrical enterprise I worked for  - everything from TVs, radios and cookers to lighting - held a sales conference, sometimes at a West End theatrical venue. It  was more of a celebration and rally, than a conference. As sales growth that continued to beat targets year on year and even bigger targets set for the coming year.

When I  entered the world of product management in the early 1970's the telephone never stopped ringing. The reason was always the same - it was someone needing more product and looking for me to jump their claim up the list. Strange as it might seem now, pretty much everything was made in our own factories, designed by our own R and D teams, delivered in our own liveried trucks. As product managers, our time was divided between development meetings, working with the development and test engineers, visiting factories, training sales teams and above all working with planners to get product shipped. In the end it was all about delivering the goods. As market leader in many sectors of electrical goods industry, our product philosophy came down to one key marketing issue - identify which product was to be the big runner in the sector then invest in tooling and manufacturing capability to be the lowest cost producer for that class of product. With the the ability to provide stock into the wholesalers and costs that enabled any contract to be won by steep discounting,  it all came down to designing, making and shipping the stuff.

As product managers we were less enthused by the sub-contractors the company chose to knock out 'specials' and low volume product and we were dubious about the correctness of some of the granting of purchase orders. But I digress. By the early 1970's it was all about to change. When your big strategy is built on lowest cost supplier [see pages 87 to 90 of Technical Marketing - Ideas for Engineers] it calls, or did then, for high volume production. What happened in the early 1970s was the long post war boom ended. OPEC, an organisation of oil producing countries restricted oil production which in turn caused prices to quadruple and with oil and derivatives critical to most western economies the annual growth driven by the build in construction came to an abrupt halt. The high volume production lines had switched from our biggest asset to our biggest liability. Lamp making lines producing millions of fluorescent tubes had to continue running as a continuous process as glass tubes came into the factory and shipped out at the other end as finished packed tubes. Discounts got steeper, up to 98 per cent at one time and red ink on the P  and L account led to redundancies for the first time in our experience.

With British industry now generally uncompetitive in production and with lower productivity than many other countries, great swathes of the once mighty industrial heartlands turned into a derelict reminder of better times. Innovators turned to lower cost producers, not the metal bashing 'sub contractors' that made lower volume product - they were even less productive. Soon the product designs were taken off shore until China became the world's factory. Big companies set up head quarters in tiny countries mainly full of banks and low tax regimes. So what happens now? One thing is sure - it will not be a return to the type of boom of the 60s and 70s. What it will be depends on the new era in politics that may be emerging.