Cometh the Hour, Cometh the Man?

This month saw the annual Macworld conference take place in San Francisco. For Apple, this is a major event, used to launch spectacular new products to an always-eager world. Apple’s customers almost seem to beg the company to sell them something new...

Notably, Apple’s charismatic CEO Steve Jobs was absent, attracting much media comment. Jobs - a co-founder of Apple along with Steve Wozniak – has not always enjoyed an easy relationship with the company. Nevertheless, he is seen as a shrewd entrepreneur who enjoys a positive profile – Jobs is Apple to many, and his infectious explanations of the latest company gems at Macworld are a key part of the Apple brand.

Jobs is a cancer survivor, and his failure to attend the event has provoked some to ask who his successor could be, and what qualities that individual should possess. Jobs has sought to distil the media furore by stating he is suffering from a hormone imbalance, from which he will recover. I hope so.

This event underscores why the role of the CEO is so important. How they build a corporate image in a way that reflects positively on a company’s products has been recognised as a way of ‘building brand awareness and knowledge in a cost-effective manner to reach specific audiences’ (Kotler & Keller 2008, p. 317). Jobs’ role at Macworld has been to promote the brand of Apple as an innovative producer of desirable products, and how successful he has been!

The power of CEOs to influence the public perception of their organisations, and thereby contribute to corporate health, is undeniable. Here are some other notable examples:

Richard Branson, who seems to enjoy a similar profile to Jobs. Virgin does possess a very strong brand identity, and Branson’s publicity stunts are well known.

Gerald Ratner, whose gaffe in the early 1990s when he described his company’s products as ‘crap’ at a key speech, was disastrous. (Now apparently known as ‘doing a Ratner’).

Bill Gates, whose massively successful company Microsoft has adopted business tactics that have been brought in to question on a number of occasions. Gates’ profile has been variable at best, although he has now started to enjoy greater recognition for his philanthropic work. How this has influenced the public’s perception of Microsoft remains to be seen, although Gates has appeared in recent adverts (‘I’m a PC’) designed to challenge Apple’s ‘I’m a Mac’ campaign. Would this have been appropriate 10 years ago?

My questions are these: if the power of mass advertising is weakening, should companies be more reliant on the personality of their CEOs? Will charismatic leadership combined with a positive media image be of more value in future, and what are the risks involved? 

Power to the People

The era of handheld Internet applications has just begun to empower consumers. With the ability to instantly index bar codes against a local database, consumers will be able to directly compare prices instantly on items in a retail store.

This technology, currently enabled by the iPhone and Google handsets is only the beginning of the impact of instant data sharing among consumers. One of the things many retailers depend on is the relative price ignorance of consumers or that they will be able to recover the cost of their loss leaders on the profit spread of the other merchandise purchased. Will that be compromised?

What if consumers each took the time to report the price of big ticket items, such as automobiles and cars? If I could see what the last 5 people paid for their Toyota Camry I am likely to get mine for less than any of them paid.

Combining this technology with GPS enabled hand held or with Internet mapping and the properly position company could literally lure people directly to their doorstep. Creative marketing techniques might even include using the very price comparison technology directly on store shelves to demonstrate low prices. This would seem to me to put a strong downward pressure on the difference in retail pricing among stores at least those in close geographical proximity.

This technology probably also stands to most benefit those companies who benefit from economies of scale and who have the lowest prices on average.

Can you think of a time you paid for something and a short while later found it on sale somewhere else cheaper? Would you use technology like this?

Zune Hell

I was in Zune hell on Christmas Day, but I am getting out. I am returning the Zune I got for Christmas and going back to my iPod. I spent several hours trying to get it to work. I give up. Not my idea of fun. When I hooked it up at first, I got all sorts of error messages saying I needed to install software. When I tried to install the software, it crashed. After several tries and reboots of the computer, I got the software to install, then it told me I needed to install yet more software. (All this software was the "babysit" kind, where you have to hit "next" every 5 to 10 minutes). I finally got all the software installed, then it wanted me to sign in and create an account, then start the free 14-day trial. Will someone tell Microsoft that the landing page after signing up for the 14-day trial should give some kind of hint as to what to do next? All this took hours. I finally got the software running, and figured out how to find a song. But I made the mistake of double-clicking on the song, and it wouldn't stop playing! Nothing I did could stop the song. I had to control-alt-delete to run task manager to kill the program to stop the song. And the Zune still won't work. No matter what I do, it says "music" --every button I push, and I've tried them all, in various combinations. "Music" says the display, mockingly, with no sound. The battery icon indicates a full charge. I realize that a few more frustrating hours could get me video in my pocket, but I am going back to my iPod, which installed and updated first time and every time. I'd rather have less stress and less video in my pocket, than more of both.

Targeted use of Internet Advertising.

As an Australian living in the UK my internet browsing habits are probably a bit different to most of you and I have noticed an interesting marketing tool that may be of interest.

I read the Sydney Morning Herald almost daily, because it keeps me up to date with what's happening at home and it also because I like it's coverage of world affairs.

Recently I have noticed that the advertising I see on the site is particularly targeted to my circumstances. In particular I see advertisements for currency exchange services and ads from recruitment agencies offering me the opportunity to be 'head hunted' back to Australia.

Obviously the web site identifies my location from my IP address and targets the advertising appropriately.

Everybody wins from this. The normal, Sydney based, advertisers don't care whether someone in the UK doesn't see their ads and presumably don't demand a reduction because of it. It's probably in the fine print. The targeted advertiser is offerred a chance to advertise in a major publication at a fraction of the cost of the full rate. The newspaper makes some extra revenue and even I don't mind seeing ads that are more relevant to me. Actually it makes me feel kind of special.

Check out http://www.smh.com.au/ if you want to see what I mean.

What other clever uses of internet marketing have people seen. I know every time I go online to Amazon I get an email from them.

Fat Silver

What can marketing/marketers contribute to economic revival?

This post was submitted on behalf of Janetta:

Now that economic growth based upon easy credit has ground to a halt the rhetoric has changed from “spending too much”, particularly in the retails sectors, to “spending too little”.

The high street has responded with sales and promotions. The government is trying to respond via fiscal policy. Namely, changes income tax and VAT. Are these responses likely to be effective and what are their outcomes, both intentional and not intentional in the short to medium term?

Customers, who have any purchasing power, will benefit from the sales and promotions which will generate some cash for the retailers but not as much per item as they had anticipated. Everyone, regardless of income will benefit from the 2.5% reduction in VAT, which is a positive step in itself as VAT is a regressive tax which falls disproportionately on those with lowest incomes. It is, however, unlikely to generate much additional spending as demand is relatively inelastic in the current economic climate, as the retailers are discovering, with up to 50% reductions still not resulting in the required additional sales of goods.

From a marketing perspective such broad brush responses only form part of the environment in which they operate. Decisions will have to be made as to where a good or service is to be positioned in the market and specifically and who the likely customers are. Some people in the upper to middle class/income group may well be better off due to the environment outlined above plus reduced interest rates on their mortgages. There may well be scope here for marketing higher end goods and services targeted at this group.

Conversely, it has already been noted that changes in customer behaviour in favour of cheaper alternatives such as discount retailers such as Lidl and Aldi and choosing eating at home options rather than eating out (Dominos). Has this been a temporary “knee jerk” reaction to media hype regarding the effects of a recession on “everyone” when in fact many people such as those in secure public sector jobs may well be better off than they were before? Unemployment will fall, as always, disproportionately, on manufacturing, retail and non statutory service sectors, belying the fact that these are the sectors which successive governments have propounded to assist to underpin economic growth.

How the labour market responds over the next few months will generate challenges and opportunities for marketers. Those who correctly identify their key segments and customers and act ahead of competitors in generating demand for their products and services may well change the domestic retail and service landscape determining which businesses thrive and those which fail. Marketing may be a more powerful instrument in determining the economic future than the blunt ones so far proposed by the government.

Janetta Jones

Barclays - Slippery Slope?

This article is submitted on behalf of Ceri:

Although the banks have dominated the news over the past few months my posting is nothing to do with the bailout of the banks, mortgages or interest rate cuts.

Having bought my house less than 2 years ago, when house prices were at their peak, I try and avoid the majority of the depressing news items on the current economic climate in fear of finding out that my house is now worth significantly less than I paid for it. Instead, I decide to spend my evenings watching people like Esther Ranzen being locked in a box and eating eyeballs.

It was during one of the commercial breaks for ‘I’m a Celebrity get me out of here’ that I first saw the new Barclaycard commercial – the one with the man going down the waterslide. I’m sure that the majority of you have seen it by now, but for those who have not here is a little bit about it:

It begins with a geeky office worker stripping to his pants and leaving the office for home through a store cupboard. Once in the store cupboard he then jumps on this huge waterslide that travels around the city (Sao Paulo and Rio de Janeiro – I think). It goes via a grocery store and a library until finally arriving at his house. I forgot to mention that he picks up a banana on the way and gets stuck in the library. If your thinking random, very random then your right.

The first few times I saw this commercial I had no idea what the advert was trying to tell me about Barclaycard. Having just started an MBA module as part of my MBA I watched the advert with my MBA hat on and thought – who is the advert trying to target? What is the advert trying to tell me? Does it make me want to run out and get a Barclaycard? The answers to these questions at the time were ‘don’t know’, ‘don’t know’ and ‘no’.

However, having now seen the advert a few times, there is undoubtedly something about it that makes me want to stop and watch. It is humorous, intriguing and the Bellamy Brothers theme tune will have you dancing about your living room like John Sargent.

The commercial is in fact advertising the new Barclaycard contactless technology http://www.barclaycard.co.uk/personal-home/easy/ - however this is insignificant. The commercials real merit is in the impact it will have had on the awareness of the Barclaycard brand. You Tube have labelled it the best commercial of 2008. I am interested to see what you think.

Put your volume on max, enjoy and let your love flow!

http://www.youtube.com/watch?v=6JUKjR-5UzI

Ceri

Zero Finance Car Marketing

Car Finance Marketing
In recent times I am starting to hear a lot of advertising on the radio for zero percent finance. The likes of Vauxhall and Renault are advertising it and Volkswagon is pushing it on commercial vehicles. And it sound like a great deal, especially when no one is lending money. I suspect that you don't gain much out of it. The price of the car will be adjusted to cover the cost of the dealer borrowing the money and lending it to you for free. But with interest rates at all time lows that differential has eroded and is far less noticable. It makes good sense for a strong company like a car manufacturer to borrow at these rates and use it to entice you to buy their product. But will car companies get burnt the way banks have in the last year. I presume they are not naive and will have thought of the risks (although I would have said that of the banks a year ago). I think it's a smart piece of lateral thinking and clever marketing.

End of an era for the UK High Street

It's been a long time since I actually bought anything from Woolworths but I was sad to read of its demise today. Back in the 80s I worked in my local Woolworths, sweeping up after school, and later as a supervisor of Saturday till staff. The store had a family atmosphere (complete with elderly matriarchs in the cash office and an avuncular manager). A full time job there was seen as a career by many of their staff.

Woolworths has been an icon of the High Street since 1909 (when the US-owned F W Woolworth & Co Ltd opened their first stores), and a fixture of the FT30 index of leading UK companies (a precursor of the FTSE100) since its inception in 1935. A year from their centenary, Woolworths has a nationwide network of over 800 stores, and 30,000 employees who now face almost certain redundancy. Having rejected a bid from frozen food chain Iceland only 3 months ago, today Woolworths failed to find a buyer to save them, and they appear to have collapsed under the weight of spiralling debt.

"Woolies" has (or had) a special place in the UK's national psyche. A Woolworths store was once a treasure trove of useful household items, quality toys and games, pop music (particularly back in the 7-inch era), "pick 'n' mix" confectionery, and the only photo machine in town. Their brand was a byword for economy and variety.

Perhaps inevitably, as UK society and consumer behaviours have evolved over the last two decades, Woolworths lost focus on (or could not maintain) their core competencies and - aggressive business policies aside - its survival this far has largely relied on increasingly low quality goods. As a result, although a certain nostalgia remained, their brand lost its lustre and its meaning. As a recent article in The Guardian's online edition stated, "it is no longer clear what the store is for... Woolies has outlived its usefulness and many of its products can be bought more cheaply elsewhere."

A brand can outlive you, but it cannot save you.

Now, anyone know where I can get some passport photos done?

Marketing of Public Safety - The Dilemma

As a police officer studying Marketing as part of my MBA studies I have been interested in the role of marketing within the police service.
If the primary purpose of policing is to improve public safety it is essential that the police service address two critical issues. One is improving the actual safety of the public i.e. reducing crime rates and detecting reported crimes. The second is to reduce the fear of crime. The fear of crime refers to the fear of being a victim of crime as opposed to the actual probability of being a victim. The fear of crime can have a number of damaging effects on individual and community life.
The problem for the police service is that the fear of crime is often disproportionately higher than the actual crime rates. The dilemma for the police service is that in marketing police success and ‘actual crime rates’ only raises awareness of crime and disorder as an issue and as a consequence (I suspect) increases fears of becoming a victim. For example, a past initiative has been to inform local residents of the outcome of search warrants targeting local drug dealers. Whilst this may reassure some local residents and convince them that the police have been active and have addressed a local problem, for those that were previously unaware of the local drug problem the marketing of the operation has only alarmed them that they have drug dealers in their neighborhood.
I would be interested to receive your comments on this dilemma. I remain convinced that marketing has a positive contribution to make towards improving public safety I have just not yet figured out what it is.

Can we beat the credit crunch?

Economic Downturn?...Dwindling Sales?...Maybe not. Some companies have made strong sales recently, despite the gloomy financial climate. Domino’s and ASOS are two successful examples. Domino's has benefited from consumers tightening their belts to save money, as eating at restaurants becomes increasingly expensive. While ASOS discounted clothes have continued to be in steady demand from young customers. In addition, both of these companies focus on on-line shopping as their main retail channel.

I’m sure we can find various other examples such as “pound” or “dollar” stores and discount chains. But the question for us marketers is: Can every retail company beat the credit crunch by implementing new marketing strategies to cater for the cautious consumers? Can it also be the case for those companies that position themselves or some of their brands extremely high in the consumer’s mind (such as luxury brands)? How about niche or specialist companies?...What do you think?

Here is the story from BBC news website:
-------------------------------------------------------------------------------------------------------------------
Two firms - a fashion retailer and a pizza firm - have bucked the trend and seen solid sales recently, despite the economic slowdown. Online fashion firm ASOS saw sales more than double in the six months to 30 September, compared to the same period a year earlier, a trading update shows. Meanwhile Domino's Pizza saw sales up 8.8% year-on-year in the third quarter.

Both companies remain positive in their outlook and expect strong growth to continue, as consumers seek out deals. Despite the good news, shares in both companies slipped 2% during morning trading.

Many firms have been hit as consumers try to tighten their belts, following higher fuel prices and mortgage costs. However ASOS, which has its own brand clothing as well as discounted designer labels, has benefited from solid demand from young customers and a shift to online spending. Chief executive Nick Robertson said: "We believe that our business dynamics and customer base should be resilient to the wider economic issues and that online shopping will continue to gain market share."

Domino's has also benefited from consumers' desire to save money, as eating at home becomes increasingly attractive. James Cooke, an analyst at Panmure Gordon stockbrokers, said: "Despite the slowing of the economy and squeeze on consumer spending, Domino's Pizza continues to see organic growth in the business".

Advertising invades U.S. Air seat trays

There is tremendous competition for the consumer's attention these days. Any opportunity to grab his or her awareness--even for a moment--is precious. The other day, I noticed that advertising has now crept onto the fold-down trays on U.S. Airlines' seats. On busy flights, the crew will sometimes ask passengers to have their trays opened before the beverage station reaches the the passenger, prolonging the exposure to the advertising message. Hopefully, with clear plastic glasses, the beverage will not cover the advertising message.

This is one of the more devious tactics I have seen recently. It will be interesting to see if passengers--used to nice, neat, clean trays--will object to what may seem like aesthetic revulsion.

Back on the Coffee Bandwagon

I happen to come across this opinion editorial that appears to confirm what a lot of people are saying about the mighty Starbucks brand.

Rebates Stink

I said I would rather buy an item for $19 rather than an identical item for $20 with a $5 rebate. This is straight math: Estimated time to fill in the rebate form once you have everything ready: 5 minutes. Chances of having everything ready without spending gathering time: 10 percent, tops. What you need ready is: the rebate form, the receipt, the box the item came in, a knife to cut the box, a larger than normal envelope, extra stamps, and a pen. I estimate at least a 10 percent chance of spending 30 minutes to try and gather everything, then giving up and not getting the rebate . Average gathering time is about 10 minutes. Then there is the tracking time, of about 10 minutes spread over the 6 to 8 weeks it takes to get your rebate back, and where you get mad at someone if the rebate doesn't show up. Chances of the rebate not showing up for whatever reason, at least 10 percent. Time spent in chasing down a rebate that does not show, 60 minutes. Time spent in cashing the rebate check: 1 minutes.
So here we are:
5 minutes -- filling the form
0 minutes --gathering times 10 percent
10 minutes -- gathering times 80 percent
60 minutes -- chasing no rebate times 10 percent
10 minutes -- tracking time spread over 6 - 8 weeks.
5 +8 + 10 + 6 + 1 = 30 minutes

Extra stamps cost about 80 cents

chances of no rebate -- 20 percent (10 percent your fault due to gathering difficulties, 10 percent other).
So the rebate sender spends a half an hour for an 80% chance of getting $5 less 80 cents in stamps, and a 20% chance of spending another hour plus for nothing. That is way less than minimum wage.

No thanks.

Eat your words!

I have never seen advertising like this before. But I've always wanted to be able to eat my words.

"Marketing works, but only if you have the right product."

Just read this article that suggests that various marketing channels and methods will only work if the product is right. The author downplays the effectiveness of interruptive advertisements such as TV, radio and banner ads, and emphasizes in the future, it will be all about viral or social marketing.

Creative?

I was browsing through my typical list of websites for the evening and came across this interesting collection of ads.

This one is my favorite









However, this one reminded me of

Mr. Clean from our course

Click title for entire collection.

Cell phone users outside U.S. secretly tracked

http://www.msnbc.msn.com/id/24969880/ the privacy issues mentioned here support the doubts that were raised during the datebook phone service presentation.

Rewards program for coffee

With rolling out their new free Wifi internet access, Starbucks is looking to gather the goods on you in return. Article in title.

how will GM market remaining inventory?

Today Gm announced closing of 4 truck & suv plants. Gas price is predicted to increase more.So how will GM market the remaining inventory on hand with already declining sales. The only avenue I see is marketing in countries like Venezuela where gas price is 19 cents due to subsidy. This was they can get rid of inventory on hand and focus on smaller cars like in Europe ( as gas prices were always high there)

New Airline Baggage Policy

American Airlines is setting precident for a new policy - charging for checked baggage. It is likely other airlines will eventually follow suit, unless they can recognize how stupid this is.

"Customers who purchase domestic economy class tickets on or after May 12, 2008, but before June 15, 2008, may check one bag for free and check a second bag for $25 each way. Customers who purchase domestic economy class tickets on or after June 15, 2008, will be charged $15 each way for the first checked bag and $25 each way for the second checked bag."

What is your opinion on this?

Here is mine:

- I would like to think I will steer clear of this policy, as long as possible, but there could be the point where the price of the ticket plus baggage is cheaper, so I'll just be annoyed and pay it. But, given that generally airline tickets are the same, I'll likely just go with another airline even for a few bucks more, just to avoid the hassle.
- Up until now airlines have encouraged people to check bags to save cabin space (the upper bins above the seats), but now, to save a buck, people are going to take as much as possible into the cabin. This will lead to crowded aisles as people try to shove their stuff in place, causing delays in boarding and deplaning, which in turn will cause dissatisfied customers!
- Just as people hate all of the hidden fees on credit cards and cell phone contacts, soon they will hate airlines for all of the hidden fees and policies

The policy will drive away business and negatively impact customer service - not too smart, if you ask me.

- April

Top Global Marketers

Who are the top global marketers? According to Advertising Age, there are two parts to the answer: top advertisers by media spend and the international agencies that handle them. The annual report, now in its 21st edition, is referred to as 'the dots'.
Some of the things that I found interesting in review the annual report include:
- Ad spending is tracked by a number of organizations: Neilsen, IBope, PARC, more
- The top spender is Proctor and Gamble, spending over $8.5 Billion dollars worldwide
- Many of the ad networks are owned by the same holding company (see page 3 of globa accounts report)
- Multiple networks will handle the same brand, and in some cases, ownership is broken down by line of the brand; for instance, Ford has 15 different accounts.
- You can view ownership by advertiser or account

Enjoy!
April

Free Gas Cards

The Thursday before Memorial Day weekend, Verizon Yellow Pages caused havoc at the Bragtown Shell. Cars were lined up for hours to receive a FREE $40 gas card, sponsored by Verizon Yellow Pages and given to the first 200 cars. Although people were intrigued enough to start lining up just after midnight, was the promotion effective? Will customers remember that Verizon Yellow Pages sponsored the event or will they only remember the free gas? Would this promotion have been more effective if it was sponsored by a company in the industry of gasoline (such as Shell or Exxon)? If Shell gave me a $40 gift card, I would be more inclined to visit their gas station in the future.

http://www.newsobserver.com/news/story/1082668.html

Strong Brands

Companies such as Prada, D&G and Christian Dior have established themselves as top of the line brands. Their strong image allows them the opportunity to penetrate markets outside of their primary focus. Although these three are high fashion brands, they have moved into the mobile market. Christian Dior, a high fashion brand, has recently announced they will be releasing a line of cell phones. Although the average price for a smart phone is $101, Dior will be retailing their new phones for a high $5000 each. Due to the price range, Dior’s cell phones will not be competing with Motorola or Nokia but rather Prada and D&G in the newly created market for brand-name cell phones. Does strong brand awareness allow companies the ability to create new markets?

http://tech.yahoo.com/blogs/hughes/27919

Buy One Get One Free Deal - on Houses!

I just read this online and had to post it. The prevalent marketing and pricing strategy of offering "buy one get one free" has reached a new level: homes. A housing developer in So-Cal is offering a free $400.000, 2000 sq ft house in Escondido, if you buy a $1.6 million house in San Pasqual Valley. How really effective is this pricing/marketing strategy? At the least, he is getting some free publicity.