As the world becomes more globalised, foreign markets present a wealth of opportunity for companies daring enough to venture outside their home borders. Many of them, when making this leap into new waters, make a crucial mistake; they fail to take the time to understand the culture of the people. This lack of complete information can not only lead to marketing plans missing their mark, but also leave the people with a tarnished brand association.
A Detergent company hoping to establish itself in the Middle East was once taught the importance of this very ruthlessly. This company already had its product in the market but sales were low. To capture a larger share of the rapidly growing market in the Middle East they planned an extensive marketing campaign. Their plan was centered on a simple advert which was published in magazines and billboards in the region. The advert was a simple comic strip made up of three panels. On the leftmost panel was a pile of dirty clothes; the middle one showed them being put into the washer; the rightmost panel showed a pile of clean clothes.
After the ads were run, the company saw a decrease in sales. The executives were surprised until they realized, far too late, that that the official language of the Middle East, Arabic, is read right to left. The ad made people think that the company’s detergent turned clean clothes into dirty ones.
Friday, April 30, 2010
Thursday, April 29, 2010
"Thought on Flash"
Steve Jobs released a statement today addressing why the iPod, iPad, and iPhone do not support flash. He listed several reasons, including an argument that Flash is not an open system.
"Adobe’s Flash products are 100% proprietary. They are only available from Adobe, and Adobe has sole authority as to their future enhancement, pricing, etc. While Adobe’s Flash products are widely available, this does not mean they are open, since they are controlled entirely by Adobe and available only from Adobe. By almost any definition, Flash is a closed system."
This quote reminded me of our discussion in lecture about Walmart bullying their suppliers to work on Walmart's terms. It seems as if Apple does not want to be at the mercy of any other company, which in this case would be Adobe.
This was by far not the only reason Jobs provided for Apple's decision, and he said the other reasons were much more significant, but I wanted to share this one because it related directly to something we discussed in class. Here is a link to the full article if you are interested in his other points: http://www.apple.com/hotnews/thoughts-on-flash/
Wednesday, April 28, 2010
New Marketing Technology?
http://online.wsj.com/article/SB10001424052702304159304575184270077115444.html?mod=djem_jiewr_swwgn_042210
So I just recently found this article in the journal (link above) about how companies like ebay are trying to tap into the social networking hype to find data on potential customers through the friends of their current customers. There is this small startup called 33Across that analyzes data from social networking sites like facebook using tracking cookies that track how current customers and their friends interact with one another so that they can strategically target ads in the right places. For example, say an ebay customer shares a movie review with a friend. The firm then can place a cookie on the friend’s browser so that specific ads that might interest the individual will pop up when they visit certain sites.
As social ties can greatly influence a person’s purchase decisions (think about the whole word of mouth marketing channel), naturally, advertisers are all over this. Many critics have found this to be an invasion of privacy and I would have to agree. I think this is taking the whole idea of using CRM as a tool to gauge your customers’ preferences to a whole new level. CRM tools are ok as they are used to better serve customers and, more importantly, it has more transparency as customers usually are aware of such capabilities. However, this these tracking cookies are similar to predators who stalk you waiting for opportune times to attack with an annoying ad.
So I just recently found this article in the journal (link above) about how companies like ebay are trying to tap into the social networking hype to find data on potential customers through the friends of their current customers. There is this small startup called 33Across that analyzes data from social networking sites like facebook using tracking cookies that track how current customers and their friends interact with one another so that they can strategically target ads in the right places. For example, say an ebay customer shares a movie review with a friend. The firm then can place a cookie on the friend’s browser so that specific ads that might interest the individual will pop up when they visit certain sites.
As social ties can greatly influence a person’s purchase decisions (think about the whole word of mouth marketing channel), naturally, advertisers are all over this. Many critics have found this to be an invasion of privacy and I would have to agree. I think this is taking the whole idea of using CRM as a tool to gauge your customers’ preferences to a whole new level. CRM tools are ok as they are used to better serve customers and, more importantly, it has more transparency as customers usually are aware of such capabilities. However, this these tracking cookies are similar to predators who stalk you waiting for opportune times to attack with an annoying ad.
Tuesday, April 27, 2010
Tony Hawk Video Game
Growing up, skateboarding was looked down upon. The board was risky, bulky, dirty, and heavy. There weren't any parks in my neighborhood, and the few that existed outside of town were populated by people who enjoyed getting hurt. Tony Hawk single-handedly raised the sport to a new class of fame and appreciation. After completing the impossible 900-degree spin at a competition, there's been a growing buzz around for skating. Kids in urban areas have dropped their basketballs and footballs for the chance to speed through town on their boards. Even rappers now openly admit to skateboarding - it's the new "cool" thing.
In class we discussed how celebrities are often used to promote a product; and if this is done effectively, both the product and celebrity become synonymous in so that a brand is created. Tony Hawk and his team used this tactic when they launched the Tony Hawk Proskater Series. With each new release, the game sells out and becomes an instant bestseller. Yet, the graphics and gameplay (except for the new version where a board is attached to the system) are not substantially better than the first game. Tony has such a powerful brand in the world of skating that gamers will continue to purchase his games.
TIDE Detergent
The market for laundry detergent is arguably the most competitive internationally. There are thousands of different brands just in the United States alone. Each boasts 1-3x concentration, fresh scent, and downy softness after each load. Through it all, Tide continues to control market share. This can only be attributed to its creative commercials, constant "innovation," and product placement.
Each year, the commercials are more and more clever. Tide specifically targets rural, middle households, and ensures to include a motherly figure in each ad. Each year, it also adds a new type of Tide: Tide bleach, Tide color, Tide-to-go, or 2x Tide with Downy. The customization gives consumers an array of options to choose from. Other brands have one or two products and promote their cleanliness, but Tide reigns because of its differentiation. Tide detergent is also placed conveniently at eye-level in the stores I shop at. It is also difficult to miss because the bright orange sticks out from the others.
Shifting Media Preferences
I haven’t been home since Christmas, and I am really looking forward to going back for a change of pace and scenery. One change that I am looking forward to upon returning home is the change that will take place in my media preferences. Let me explain…
Right now, I couldn’t name a single movie in the theaters and I have no idea what songs are playing on the radio. I haven’t kept up with any TV shows, and I have even found it hard to keep up with the NBA playoffs that I once enjoyed.
Being in college has made my choice of media strictly a computer, and the same can be said for most of my friends. Even though I own a TV here, with a busy schedule it’s hard to watch it other than during meals or in brief breaks during the day.
This personal change in media preferences that I undergo as I travel from college to home makes me realize the challenges that marketers face when trying to attract college students. For example, does American Express stick to the same strategy for marketing the Zync card during the summers that they use during the school year?
The success that firms can have in marketing to college aged students during the six months that they are not at school could really differentiate and decide who ultimately succeeds in the market. Firms need to understand the extent to which college students, like myself, shift their media preferences in order to remain competitive.
Right now, I couldn’t name a single movie in the theaters and I have no idea what songs are playing on the radio. I haven’t kept up with any TV shows, and I have even found it hard to keep up with the NBA playoffs that I once enjoyed.
Being in college has made my choice of media strictly a computer, and the same can be said for most of my friends. Even though I own a TV here, with a busy schedule it’s hard to watch it other than during meals or in brief breaks during the day.
This personal change in media preferences that I undergo as I travel from college to home makes me realize the challenges that marketers face when trying to attract college students. For example, does American Express stick to the same strategy for marketing the Zync card during the summers that they use during the school year?
The success that firms can have in marketing to college aged students during the six months that they are not at school could really differentiate and decide who ultimately succeeds in the market. Firms need to understand the extent to which college students, like myself, shift their media preferences in order to remain competitive.
ESPN
ESPN is the preferred channel for sports, and it has been maintaining its position as the best source for athletics for decades . This monopolgy is due to its marketing strategy, which continues to adapt to the ever-changing audience.
ESPN's several distinct programming zeros in on specific demographics. "ESPN Classic" is for the Sports fanatic -whether he be the dated viewer who enjoys reliving the '85 Jordan vs. Bird showdowns or the young tyke who wants to learn of Michigan and Notre Dame Universities' football program legacy. "ESPN U" is targeted to the college student who only cares to keep up with his favorite local sports teams. And the main ESPN channels, "ESPN1" and "ESPN 2" are for the general populus. The introduction of Espn 3 is much needed with the growing fanbase for car racing and international soccer.
Over the years, ESPN has intentionally changed its programmings' sportscasters and showstime lengths to cater to the viewer. In the past, sportscasters were mostly middle-aged Caucasian males. Today, they each come from diverse backgrounds - people enjoy seeing individuals who actually look like them deliver the news. Also, highlights and clips are shorter in length and they are repeated several times more over the course of a 3-hr show. ESPN's research revealed consumers were on-the-go and needed updates quikcly.
The color scheme is also rather provocative. The dark red and black colors appeals to athletes because it gives ESPN's interface a rugged, yet modern and tech saavy appearance.
Marketing Strategy of the University of Pennsylvania Health System
In my HCMG 203 course - Clinical Issues in Health Management, I had the opportunity to attend a lecture University of Pennsylvania Health System’s marketing strategy by the Chief Marketing Officer Suzanne H. Sawyer. Penn Med’s primary objectives are: develop profitable customer relationships; participate with the all major local and regional commercial payers and local managed care organizations; maintain niche of providing high-acquity, complex care; participate in large market specialties; design a full porfortlio of delivery; build competitive advantages of academic medical centers; leverage barriers to entry from competition; seek innovation and update techniques; maintain brand equity; and target specific segments and advertise to them with focus on brand.
Monday, April 26, 2010
KFC Chinese Coupon Casualties (^_^)
KFC Chinese Coupon Casualties (^_^)
“Sales Promotion” is perhaps one of the most expensive methods of marketing that is employed by an organization. It stimulates demand by lowering the cost of the product to the consumer in order to make up the lost margin with higher overall profit with a higher turnover on products. One method which is employed is the use of coupons; which these days can be cutouts from the magazine or printed online on websites.
Quite archaic and inconvenient, when a simple loyalty club card could suffice, KFC used this method to market their products in China. What was the result of this campaign? Well, the outcome could have easily been predicted. In a market of over one billion consumers, it is near impossible to keep track of which coupon issuance is valid and which is not. And when clever consumers start making copies of this coupon; one that guarantees a 50% discount on products, you can see how margins not only thinned, but near evaporated.
Because of this manipulation by a few bad eggs, KFC cancelled the whole promotion to public outcry. A bad promotion campaign coupled by a bad marketing exit; KFC’s public image not only has been tarnished, but it has lost the confidence of its valuable consumers. In a country where reputation is everything, KFC should have handled the promotion better; perhaps by issuing coupons on print material instead of ones from its website, and by not using a 50% discount to stimulate demand (this is not loss sales..this is ridiculous).
How it will rebound is anyone’s guess; but it should be a valuable lesson in how not to run a campaign, that if it may turn out to be too costly, it’s probably not worth the money. (^_^)
http://www.adweek.com/aw/content_display/news/nontraditional/e3i2bf7a2a5a7ec6db2ebe035d420ef018c
“Sales Promotion” is perhaps one of the most expensive methods of marketing that is employed by an organization. It stimulates demand by lowering the cost of the product to the consumer in order to make up the lost margin with higher overall profit with a higher turnover on products. One method which is employed is the use of coupons; which these days can be cutouts from the magazine or printed online on websites.
Quite archaic and inconvenient, when a simple loyalty club card could suffice, KFC used this method to market their products in China. What was the result of this campaign? Well, the outcome could have easily been predicted. In a market of over one billion consumers, it is near impossible to keep track of which coupon issuance is valid and which is not. And when clever consumers start making copies of this coupon; one that guarantees a 50% discount on products, you can see how margins not only thinned, but near evaporated.
Because of this manipulation by a few bad eggs, KFC cancelled the whole promotion to public outcry. A bad promotion campaign coupled by a bad marketing exit; KFC’s public image not only has been tarnished, but it has lost the confidence of its valuable consumers. In a country where reputation is everything, KFC should have handled the promotion better; perhaps by issuing coupons on print material instead of ones from its website, and by not using a 50% discount to stimulate demand (this is not loss sales..this is ridiculous).
How it will rebound is anyone’s guess; but it should be a valuable lesson in how not to run a campaign, that if it may turn out to be too costly, it’s probably not worth the money. (^_^)
http://www.adweek.com/aw/content_display/news/nontraditional/e3i2bf7a2a5a7ec6db2ebe035d420ef018c
The Nonprofit Marketing Dilemma
During this class we've primarily discussed how marketing pertains to consumer brands. But there also are so many other types of marketing out there. Taking a look at one specifically, nonprofit marketing, shows how the problems nonprofits face in their marketing strategy and tactics are different from those consumer brands face.
Take for instance this scenario:
When nonprofits want to buy tv advertisements spots, they must do so with donated money. But how can they do that when donors love to read those brochures saying 100% of their donation goes directly to helping those in need. Donors don't prefer donations being spent on marketing expenditures instead of direct charity efforts. Yet, to ultimately grow as an organization and become more effective organizations have to create greater awareness and raise more funds. How can nonprofits do that without paying for traditional marketing?
Check out this unique Unicef Belgium spot if you can
The ad shows a boy fighting a river for his life. He ultimately dies, presumably from lack of safe drinking water. If we saw more ads like this on primetime tv or in newspapers what do you think the impact would be? Would the status quo be different?
Take for instance this scenario:
When nonprofits want to buy tv advertisements spots, they must do so with donated money. But how can they do that when donors love to read those brochures saying 100% of their donation goes directly to helping those in need. Donors don't prefer donations being spent on marketing expenditures instead of direct charity efforts. Yet, to ultimately grow as an organization and become more effective organizations have to create greater awareness and raise more funds. How can nonprofits do that without paying for traditional marketing?
Check out this unique Unicef Belgium spot if you can
The ad shows a boy fighting a river for his life. He ultimately dies, presumably from lack of safe drinking water. If we saw more ads like this on primetime tv or in newspapers what do you think the impact would be? Would the status quo be different?
Marketing taken to the next level
Campfire is a viral marketing firm based out of New York City. The firm takes an extremely creative approach to marketing that often tries to target consumers without them knowing and turn the media and individuals into a free source of publicity.
For example, in a campaign they ran for Audi, they organized the theft of the first A3 in the US at the Audi dealership on Park Avenue. They followed through with fake security guards, police investigation, media coverage, etc. In addition, the next day at the New York International Auto Show, they placed signs explaining the theft of the car where the car should have been on display. Campfire followed through on every single detail to make sure that if someone wanted to investigate (which they strongly encouraged), everything would add up and give the person more to look into. Here is a link where you can watch a video that explains the whole campaign:
http://www.campfirenyc.com/archive/2006/10/10/audi-the-art-of-the-heist/
The campaign was extremely successful as within 90 days there were 45 million PR impressions, 2 million visitors to AudiUSA.com, and 500,000 story participants.
Here you can find entertaining videos that detail their other various projects:
Campfire is a very small firm, but it works with large players such as HBO (True Blood campaign), Verizon (Fios campaign), USA Networks (The 4400 campaign), and more. They are able to deliver a great product with a small workforce because they use creativity to generate buzz around a brand that eventually snowballs into extensive coverage by taking advantage of the curiosity of individuals other external sources. This gives the large firms great grass roots and word of mouth marketing. With such a value proposition, Campfire can make sizeable margins (I was as an analyst on an investment banking team working with Campfire and dealt with their financials) on these very large contracts as they run a lean shop.
This area in marketing has been growing fast over the past several years. I see it playing a much more integral role in firms' marketing campaigns going forward as it is so effective from both a cost and performance perspective. Do you agree?
Free Music Download
A few posts below, Christian wrote about sponsored tweets on Twitter. I came across something that I think is equally interesting and possibly more effective.
It's not uncommon for a new music artist to release a song for free to gain a following. In fact, iTunes offers "Discovery Downloads" for free all the time. I recently came across a link for a free download of a new song by a new artist named Aaron Fresh. The catch is that when you download the song, it connects to your Twitter account and tweets about the free download. This essentially accomplishes two things at once - both a free trial and a viral marketing launch.
Is this a good idea? What do you think?
Here is a link to see what I'm referring to. (This link doesn't connect to your twitter - there is another link to click on the website if you want to download the song.) http://bit.ly/aH4pT5
Beautiful Just Like You and Me?
Beautiful Just Like You and Me?
Cathay Pacific unveiled an innovative marketing campaign that will definitely be of immense value to their public image. As students, we see profiles of professionals that work at the various investment banks all the time; as this is a standard strategy to add a human face to an organization. But when you read their profiles; nothing there is as…well, ordinary and normal…and not as relatable to the general population.
For 2010 Cathay Pacific opened a portal that provides pictures and backgrounds of their flight crew team, from flight attendants and purse handlers to airplane pilots and operations manager. It adds a human face to the organization but also a very personal touch; their biographies are words that the employees wrote for themselves, less altered than most profiles out in the public domain. These people could very well be you and me; all with their strengths and their weaknesses, some with their silly moments and others with their life altering decisions.
People always wonder what type of marketing is most effective; and to be honest, the genuine type of marketing is most effective. If what you see if believable; then you are more inclined to accept the message that it portrays. I am very happy to have stumbled upon this particular website and marketing development as I have never see a more diverse portrayal of an organization; from all walks of life, from all walks of background, and from all our pasts, presents, and futures.
See how you like their website =)
http://www.cathaypacific.aero/people/en_low.html
http://www.adweek.com/aw/content_display/news/strategy/e3ic70c834af0ab246075837d8eb2deeacb
Cathay Pacific unveiled an innovative marketing campaign that will definitely be of immense value to their public image. As students, we see profiles of professionals that work at the various investment banks all the time; as this is a standard strategy to add a human face to an organization. But when you read their profiles; nothing there is as…well, ordinary and normal…and not as relatable to the general population.
For 2010 Cathay Pacific opened a portal that provides pictures and backgrounds of their flight crew team, from flight attendants and purse handlers to airplane pilots and operations manager. It adds a human face to the organization but also a very personal touch; their biographies are words that the employees wrote for themselves, less altered than most profiles out in the public domain. These people could very well be you and me; all with their strengths and their weaknesses, some with their silly moments and others with their life altering decisions.
People always wonder what type of marketing is most effective; and to be honest, the genuine type of marketing is most effective. If what you see if believable; then you are more inclined to accept the message that it portrays. I am very happy to have stumbled upon this particular website and marketing development as I have never see a more diverse portrayal of an organization; from all walks of life, from all walks of background, and from all our pasts, presents, and futures.
See how you like their website =)
http://www.cathaypacific.aero/people/en_low.html
http://www.adweek.com/aw/content_display/news/strategy/e3ic70c834af0ab246075837d8eb2deeacb
America the Story of Us
America the Story of Us
Educational advertising has been specifically used by various industries in order to successful push their products. If you remember the Einstein Baby Videos, the Mattel Toys, and the Fisher and Price Gadgets…these were sold to consumers as things that could help jumpstart their baby’s intellectual and physical development process. Not sure if they actually did the trick, but advertising has now entered even the historical arena.
The History Channel and ArtLumiere has partnered to bathe three United States landmarks in old-age images of our humble “log-cabin” past to promote their new show about “America the Story of Us.” Quite patriotic, this show does highlight a recent poll, where more Americans know the mascot of McDonalds than the last two presidents of the United States. However embarrassing this may be, this advertising campaign does merit significant value for marketing; as it is one of the few that has a unified partnership with Xbox, Pandora, and MSN. Using a broad array of media outlets, the History Channel hopes to successful promote this new series.
But what I found most intricate was its use of buildings. If we remember from the Zara Case, the concept of store-front as an ad is one philosophy ArtLumiere has espoused. The landmarks that were chosen [Central Station, Union Station, Wilshire Hotel] all have significant visibility and consumer traffic. Not only are the partnerships here unique, as a first for the History Channel and one with a historical basis, but the use of storefronts as a low-cost marketing strategy is the more admirable.
http://www.adweek.com/aw/content_display/news/nontraditional/e3i7db724a2489ff4cc258fc17ba32139b1
Educational advertising has been specifically used by various industries in order to successful push their products. If you remember the Einstein Baby Videos, the Mattel Toys, and the Fisher and Price Gadgets…these were sold to consumers as things that could help jumpstart their baby’s intellectual and physical development process. Not sure if they actually did the trick, but advertising has now entered even the historical arena.
The History Channel and ArtLumiere has partnered to bathe three United States landmarks in old-age images of our humble “log-cabin” past to promote their new show about “America the Story of Us.” Quite patriotic, this show does highlight a recent poll, where more Americans know the mascot of McDonalds than the last two presidents of the United States. However embarrassing this may be, this advertising campaign does merit significant value for marketing; as it is one of the few that has a unified partnership with Xbox, Pandora, and MSN. Using a broad array of media outlets, the History Channel hopes to successful promote this new series.
But what I found most intricate was its use of buildings. If we remember from the Zara Case, the concept of store-front as an ad is one philosophy ArtLumiere has espoused. The landmarks that were chosen [Central Station, Union Station, Wilshire Hotel] all have significant visibility and consumer traffic. Not only are the partnerships here unique, as a first for the History Channel and one with a historical basis, but the use of storefronts as a low-cost marketing strategy is the more admirable.
http://www.adweek.com/aw/content_display/news/nontraditional/e3i7db724a2489ff4cc258fc17ba32139b1
Marketing the Census?
Marketing the Census?
Do you see the boxes in your college halls? Did you receive a piece of mail with “required by law” for the 2010 census? Marketing for this once-a-decade government survey has been quite extensive; with ads on websites, commercials on televisions, and brochures/fliers on selective locations. The value of the Census is traditionally understood as a way for the government to allocate future funding for various investments; but overall interest has consistently been low for participation. Why would this be?
Well, if you look at governmental allocation of funds for the last twenty and thirty years, it has not always been the most equitable. Some states like New York do not even get a proportionately share of the funding; examples have popped up in the news where infrastructure money has gone to Midwest states from the U.S. Federal Government that would rival New York and California (when the formula for this allocation was on a per person basis). Likewise, embarrassing news have arisen where cities that have 0% chance of terrorism (don’t want to sound harsh, but are the ones that will risk damage…not a random farm) have received more funding for terrorism on a per person basis.
If people do not have confidence that a product will work; will all this advertising and marketing be of any value? And beyond this, the “required by law” is a really old gimmick. While you have to fill out the census as required by law, the last case for non-filling was like near half-a-century ago; maybe a poor way to threaten the uneducated.
http://www.adweek.com/aw/content_display/news/strategy/e3ie77b4ee401b87ca1ec53cd47a219e61b
Do you see the boxes in your college halls? Did you receive a piece of mail with “required by law” for the 2010 census? Marketing for this once-a-decade government survey has been quite extensive; with ads on websites, commercials on televisions, and brochures/fliers on selective locations. The value of the Census is traditionally understood as a way for the government to allocate future funding for various investments; but overall interest has consistently been low for participation. Why would this be?
Well, if you look at governmental allocation of funds for the last twenty and thirty years, it has not always been the most equitable. Some states like New York do not even get a proportionately share of the funding; examples have popped up in the news where infrastructure money has gone to Midwest states from the U.S. Federal Government that would rival New York and California (when the formula for this allocation was on a per person basis). Likewise, embarrassing news have arisen where cities that have 0% chance of terrorism (don’t want to sound harsh, but
If people do not have confidence that a product will work; will all this advertising and marketing be of any value? And beyond this, the “required by law” is a really old gimmick. While you have to fill out the census as required by law, the last case for non-filling was like near half-a-century ago; maybe a poor way to threaten the uneducated.
http://www.adweek.com/aw/content_display/news/strategy/e3ie77b4ee401b87ca1ec53cd47a219e61b
A Serial Testers Dilemma
So you see this new gadget that your dying to have, but you’re worried that it might not be all that it’s cracked up to be. You need to know if it’s worth the investment before you cough up the cash. You can’t ask your friends because their living the stone-age when it comes to the latest tech, and you don’t trust professional reviewers because their unwarranted glorification of all things Apple has left you skeptical. Who do you turn to? An In-Home Product Tester of course! They are just like you and me, ordinary people, imparting their experience with a new product that they’ve just laid their hands on. Seemingly reliable information. But is it really?
Companies send their products out to these testers for free in return for a video review planted on the web (most often on YouTube). Most testers get into this business not because they have an eccentric affinity towards testing tech, but because they just want the free stuff. And as all they want is new gear, they seldom bite the hand that feeds them. You very rarely come across a review that completely bashes a product. Cause let’s face it, if a nineteen year old flamed the new gadget your company has been on for the last five years, you aren’t going to send him other stuff anytime soon. So these testers have a great incentive to keep things tempered; no one is going to voluntarily surrender their product to negative marketing.
This said, testers can’t just glorify all products they get their hands on to try and get companies to send them even more stuff. The public isn’t dim-witted, they would catch on, and that tester would quickly lose credibility. What the testers need to do is to strike a balance. One that avoids being overly critical of a products fault, but at the same time does not needlessly glorify it. How to do this while still being imparting something useful to the public? This is the serial tester’s dilemma.
Thoughts?
Sunday, April 25, 2010
Burger King's New Ad Strategy: We copied McDonald's
Its no secret that for a long time Burger King has played second fiddle to McDonald's in the fast food space. It seems that no matter what it does, it is impossible for BK to take the number one spot from McDonald's. Meanwhile, I read an article recently that explained how the biggest profit margins for fast food chains are now found during breakfast, a segment that McDonald's crushes the competition in, rather than lunch or dinner. In fact, Subway in the past month has recognized this development and produced new breakfast offerings themselves.
So how does BK revise its strategy to try to compete and gain market share in the most profitable segment from the market leader McDonald's?
Check out its recent advertisement for a new breakfast sandwich below
Watch Burger King's New Breakfast Ad
Very interesting strategy in my opinion. Openly admitting that they've copied McDonald's signature McMuffin and simply made it cheaper. BK has found a way to profit off of the widespread brand recognition and equity the McMuffin has built.
Interestingly enough, McDonald's official response to the ad: Imitation is the finest form of flattery.
What do you think? Good strategy or not?
So how does BK revise its strategy to try to compete and gain market share in the most profitable segment from the market leader McDonald's?
Check out its recent advertisement for a new breakfast sandwich below
Watch Burger King's New Breakfast Ad
Very interesting strategy in my opinion. Openly admitting that they've copied McDonald's signature McMuffin and simply made it cheaper. BK has found a way to profit off of the widespread brand recognition and equity the McMuffin has built.
Interestingly enough, McDonald's official response to the ad: Imitation is the finest form of flattery.
What do you think? Good strategy or not?
Twitter Launches Advertisement System Based on Consumer Acceptance
We have all been witnesses to the growing popularity of social networking media for advertising that has encountered a recent spike with the creation of facebook. The truth of the matter is that this type of marketing is not going away and may hurt search engine advertising on the long-run, especially now that twitter has launched its ”sponsored tweets”. Sponsored tweets consist on messages or ads that pop up in a user’s top portion of the twitter user interface. The display of these ads and messages, however, is based solely on consumer acceptance, meaning that it will only pop up in the screens of those users that have the greatest probability of responding to the advertisement. A growing number of companies including Virgin Air, Starbucks, Best Buy, Bravo, Red Bull, and Sony Pictures have already begun to use this new kind of media marketing to pitch new products.
An increasing number of prominent marketers have already predicted a possible threat to search engine marketing that this and other social media marketing may cause in the long run. As senior analyst at Forrester Research, Augie Ray, state: "Search is not going to go away, but there is a shift that is occurring, as consumers find out a great deal about products and sites that may interest them from their social graphs instead of needing to search." More and more companies are beginning to consider this new type of marketing initiative as an effective way to reach out to potential customers instead of relying on these potential customers to reach out to them.
-Cristian Lacayo
Marketing a Musical Comedy Series
I was among the many anticipating viewers who tuned in two weeks ago for the return of the FOX TV show Glee, after nearly a season-long hiatus. I saw the pilot episode last summer, shortly after it aired in the end of May after hearing raving word-of-mouth reviews. Glee's promotion team seemed intent on generating hype through guerilla and viral marketing campaigns by getting people to watch the pilot, rather than investing in expensive, wide-distribution advertising. As Fox's VP of Marketing said, "The show sells itself better than any (campaign) can," so Fox was hoping that the qualities of the product would generate enough buzz to promise a loyal viewership in the Fall. Surely enough, Glee performed beyond expectations in the fall, but because the show's producers were so hesitant to invest in the show, there were several production breaks. Between the summer-long wait between the pilot and the first half of season one and the most recent 4-month long gap, Glee's marketing campaign successfully created enough interest in the show, but didn't produce enough episodes to meet the demand.
Stage One:
Since the idea for a musical comedy series was conceived, the creators seemed highly uncertain of how the show would be received and divised a unique marketing strategy to test the waters for viewer demand. In the television industry, a penetration-type srategy with an innundation of advertising is more common. Instead, I heard about Glee through tweets, facebook posts, links on media blogs, and on a less technologically-advanced level, posters plastered on the side of warehouse walls. Through the summer between the pilot episode and the first half of season one, Glee characters also appeared on Twitter accounts and made in-person appearances at select cities. Most importantly, the creators allowed Glee to be available for streaming-on-demand sites like Hulu. So steadily, throughout the summer, more and more people heard about the show, watched the pilot, and eagerly anticipated the show's airing in the fall. Having surpassed initial expectations, the show took a season-long break to finish producing the rest of the episodes, this time with the support and interest of the public. More big-name celebrities like the leads from Broadway's "Wicked" and Neil Patrick Harris (How I Met Your Mother) wanted to make guest appearances on the show, and the show had a strong viewership base of "Gleeks."
Stage Two:
In my opinion, while the break in episode distribution was inevitable given the limited initial investment Fox put into the show, the gap in between the halves of the season has diluted the viral buzz generated from Glee's initial marketing campaign. Every episode in the first half of the season seemed to be an experiment to see what the public reacted to most favorably, whether it was which characters were featured most prominently, what types of songs were sung, or what jokes were most well received (Sue Sylvester, the hair jokes are starting to get a little old). Most worrisome to me is that the quality of this season will be diluted, now that Glee's producers are so intent on producing the exact type of show based on the data gleened from their earlier experiments. And, because they are now more confident in the show's financial outlook, they are throwing money into all levels of advertising and moving away from the initial skimming strategy. If this series were to disappoint like the second season of Heroes did, Fox would end up losing a lot from their relatively late decision to heavily market.
My Hope: Product Quality to Back the Advertising
Because Glee's pilot was intended to be a trial, they were unable to deal with the unanticipated surge in demand, and consequently, weren't able to keep up with the production through early 2010. I only hope that they'll keep the storylines fresh and the lines witty, so that their advertising doesn't go to waste for these new episodes.
Source: http://www.tvweek.com/news/2009/04/glee_pilot_doubles_as_marketin.php
Stage One:
Since the idea for a musical comedy series was conceived, the creators seemed highly uncertain of how the show would be received and divised a unique marketing strategy to test the waters for viewer demand. In the television industry, a penetration-type srategy with an innundation of advertising is more common. Instead, I heard about Glee through tweets, facebook posts, links on media blogs, and on a less technologically-advanced level, posters plastered on the side of warehouse walls. Through the summer between the pilot episode and the first half of season one, Glee characters also appeared on Twitter accounts and made in-person appearances at select cities. Most importantly, the creators allowed Glee to be available for streaming-on-demand sites like Hulu. So steadily, throughout the summer, more and more people heard about the show, watched the pilot, and eagerly anticipated the show's airing in the fall. Having surpassed initial expectations, the show took a season-long break to finish producing the rest of the episodes, this time with the support and interest of the public. More big-name celebrities like the leads from Broadway's "Wicked" and Neil Patrick Harris (How I Met Your Mother) wanted to make guest appearances on the show, and the show had a strong viewership base of "Gleeks."
Stage Two:
In my opinion, while the break in episode distribution was inevitable given the limited initial investment Fox put into the show, the gap in between the halves of the season has diluted the viral buzz generated from Glee's initial marketing campaign. Every episode in the first half of the season seemed to be an experiment to see what the public reacted to most favorably, whether it was which characters were featured most prominently, what types of songs were sung, or what jokes were most well received (Sue Sylvester, the hair jokes are starting to get a little old). Most worrisome to me is that the quality of this season will be diluted, now that Glee's producers are so intent on producing the exact type of show based on the data gleened from their earlier experiments. And, because they are now more confident in the show's financial outlook, they are throwing money into all levels of advertising and moving away from the initial skimming strategy. If this series were to disappoint like the second season of Heroes did, Fox would end up losing a lot from their relatively late decision to heavily market.
My Hope: Product Quality to Back the Advertising
Because Glee's pilot was intended to be a trial, they were unable to deal with the unanticipated surge in demand, and consequently, weren't able to keep up with the production through early 2010. I only hope that they'll keep the storylines fresh and the lines witty, so that their advertising doesn't go to waste for these new episodes.
Source: http://www.tvweek.com/news/2009/04/glee_pilot_doubles_as_marketin.php
Saturday, April 24, 2010
Imitation is the sincerest form of flattery.
Our discussion last recitation about Zara got me thinking about imitation products. How is it that designs and products, so blatantly copied, are allowed to exist in a country such as the USA (the land of trademarks and home of patents)? Despite all the hoopla over of Zara pulling designs straight off designer runways, its actions are at the very least defensible to the extent that Zara does not compete directly with the luxury lines it draws inspiration from. By offering imitation designs at a significantly lower price and quality, Zara targets segments that scarcely overlap with that of the likes of Gucci and Prada.
The true controversy lies with those products that attack with a double edged sword: imitation and direct competition. One of the most striking examples of this that I have noticed in my day-to-day life is the CVS Pharmacy brand, which offers generic versions of an array of brand name products sold in CVS stores. Not only does CVS imitate products based on their attributes, to almost an identical extent including packing and product description, it also enforces direct competition and strategically places its in-store brand adjacent to their brand name equivalents. The only notable different between the CVS Pharmacy products and the original brand name products is that the former has relatively lower price points, making them more competitive within the same market segments.
Ultimately it comes down to a question of fairness. Should stores such as CVS be able to piggyback off the marketing efforts of brand name companies? Is it fair that brands spend millions cultivating specific brand inferences and communicating messages to their consumers only to have the success of their efforts shared by a generic brand that can offer an all too similar good for a lower price because it did not have to invest nearly as much on marketing itself? Perhaps more importantly, does this tactic even work on consumers? Would you buy a CVS Pharmacy product over its brand name counterpart? Do you even notice this counterfeit marketing?
Lost iPhone
I am in the market for a replacement for my two-year-old cell phone, so the recent news about a possible 4G iPhone on the Verizon network has really interested me.
For those who don’t know, this prototype phone was apparently lost by a man named Gary Powell– an Apple engineer who supposedly left this phone at a bar in Redwood City, California.
Apple is notorious for being extremely secretive and for product releases with great hoopla, so this product “release” was definitely out of character. At first, I, along with many other bloggers on the Internet, thought that this whole incident was a creative marketing ploy by Apple to get more buzz for an upcoming product. However, Apple does not need to resort to these viral tactics to get more of a buzz about their product. Everything they touch seems to turn to gold, so there would be no reason why they would change their product release and marketing strategy.
I wonder how this product leak will affect Apple’s sales of the iPhone in the coming months prior to the release. I know that I will hold off on buying a new phone until the details of this product are released. I just wonder how many others are in tune with websites like Gizmodo and will actually take this new product into consideration when making a purchase decision about the iPhone. Or will the unintended and unconventional strategy actually create more of a buzz about the new product?
Only time will tell, but with Apple’s recent success, one drunk engineer losing his phone shouldn’t be too detrimental to the company in the long run.
For those who don’t know, this prototype phone was apparently lost by a man named Gary Powell– an Apple engineer who supposedly left this phone at a bar in Redwood City, California.
Apple is notorious for being extremely secretive and for product releases with great hoopla, so this product “release” was definitely out of character. At first, I, along with many other bloggers on the Internet, thought that this whole incident was a creative marketing ploy by Apple to get more buzz for an upcoming product. However, Apple does not need to resort to these viral tactics to get more of a buzz about their product. Everything they touch seems to turn to gold, so there would be no reason why they would change their product release and marketing strategy.
I wonder how this product leak will affect Apple’s sales of the iPhone in the coming months prior to the release. I know that I will hold off on buying a new phone until the details of this product are released. I just wonder how many others are in tune with websites like Gizmodo and will actually take this new product into consideration when making a purchase decision about the iPhone. Or will the unintended and unconventional strategy actually create more of a buzz about the new product?
Only time will tell, but with Apple’s recent success, one drunk engineer losing his phone shouldn’t be too detrimental to the company in the long run.
Social Responsibility Boosts Brand Perception
A new survey by Landor Associates, Penn Schoen Berland and Burson-Marsteller measured consumer perceptions of corporate social responsibility practices and ranked companies that are the most responsible. Results showed that despite the recession, 75% of consumers believe social responsibility is important, and 55% of consumers said they would choose a product that supports a particular cause against similar products that don't. The survey found that 70% of consumers are willing to pay a premium for products from socially responsible companies. This gives companies the opportunity to differentiate themselves amongst their competitors by using this marketing strategy of communicating how they give back to their employees, communities and the environment.
Perceptions of social responsibility have dropped in the industries of health care, financial services, and automotive, whereas it has been rising in apparel, an industry that a decade ago was viewed as one of the most irresponsible.
However, even though 38% of respondents reported that they would spend the same or more on products or services from socially responsible companies, more than half of consumers are do not even know or are unsure of the meaning of CSR, which stands for corporate social responsibility. Many consumers seem to get sucked into events, such as the earthquake in Haiti, of which companies play off of their sympathy.
Just how how weight does social responsibility have when you purchase a product, and how sincere are companies when they utilize this marketing strategy?
http://www.adweek.com/aw/content_display/news/strategy/e3id9db7bed8e9402cbfb822466e4855c09
Perceptions of social responsibility have dropped in the industries of health care, financial services, and automotive, whereas it has been rising in apparel, an industry that a decade ago was viewed as one of the most irresponsible.
However, even though 38% of respondents reported that they would spend the same or more on products or services from socially responsible companies, more than half of consumers are do not even know or are unsure of the meaning of CSR, which stands for corporate social responsibility. Many consumers seem to get sucked into events, such as the earthquake in Haiti, of which companies play off of their sympathy.
Just how how weight does social responsibility have when you purchase a product, and how sincere are companies when they utilize this marketing strategy?
http://www.adweek.com/aw/content_display/news/strategy/e3id9db7bed8e9402cbfb822466e4855c09
Penn Admissions Marketing Strategy
I'm sure we all saw prospective students walking around campus the last two weeks sporting buttons that said "Penn Chose Me." These were part of Penn's marketing campaign to convince the accepted students from the class of 2014 to choose Penn over other schools to which they were accepted. To go along with the buttons, Penn Previews tour guides wore shirts that said, "I Chose Penn. Ask Me Why" and parents received buttons proclaiming that they are "Proud Penn Parents."
I volunteered at Penn Previews both last year and this year, and last year there was not nearly as much emphasis put on how "special" it was to be chosen to attend Penn. It will be very interesting to see if Penn's yield (the number of accepted students who ultimately matriculate here) increases this year compared to last year. I would assume that the big marketing push targeted at accepted students comes from the fact that yield is one of the measures by which schools are ranked, and Penn is committed to remaining at the top of the U.S. News and World Report rankings. Sometimes I forget that academic institutions, like companies and business, also have to work hard to maintain an image and a brand.
I volunteered at Penn Previews both last year and this year, and last year there was not nearly as much emphasis put on how "special" it was to be chosen to attend Penn. It will be very interesting to see if Penn's yield (the number of accepted students who ultimately matriculate here) increases this year compared to last year. I would assume that the big marketing push targeted at accepted students comes from the fact that yield is one of the measures by which schools are ranked, and Penn is committed to remaining at the top of the U.S. News and World Report rankings. Sometimes I forget that academic institutions, like companies and business, also have to work hard to maintain an image and a brand.
Friday, April 23, 2010
3D TV’s Speed Up the Product Life Cycle for “Regular” HD TV’s
The fact that many early adopters are drifting towards this new product and, as such, eliminated any possibility of product replacement in the HD TV market, along with the decrease in price of the product, has led the HD TV market in an unexpected swift arrival into the mature stage of the Product Life Cycle. Although the high margins been charged for 3D TV’s in this introductory stage is projected to make up for the future loss of profits in the HD TV market for the companies that have entered the former market, other companies such as Toshiba and Panasonic that are lagging behind in their entry to the 3D TV market may be experiencing significant problems in the recent future.
Sources: Various
Cristian Lacayo
McDonald's Unveils 'I'm Lovin' It' 2.0
McDonald's global chief marketing officer Mary Dillon shared the company's refreshed "I'm Lovin' It" campaign with franchisees and other attendees at its McDonald's Worldwide Owner/Operator Convention. The 7-year-old campaign is the company's longest running and has become so iconic the company has decided to stick with it. "I'm Lovin' It" is now the company's most successful and longest-running campaign, surpassing the iconic "You deserve a break today," and "Food, Folks and Fun," both in longevity and sales gains.
"Even more importantly," Ms. Dillon continued, "we're making sure that we build both brand equity and drive sales with every piece of advertising." She described an approach that's more authentic, more saturated in consumer insights and emotion, and within "a framework that gives us a consistent point of view about our brand."
A new example is an ad McDonald's promoted on Twitter and has featured on its YouTube channel about a father bear rewarding his son for a good report card with a McDonald's meal. In "Proud Papa," the young bear attracts the attention of a car of tourists so the papa bear can scare them away. The two then eat the tourists' fries, and the father then shows his son how to tip the car over to get the "extra fry at the bottom."
What do you think of their new campaign?
http://adage.com/article?article_id=143453
"Even more importantly," Ms. Dillon continued, "we're making sure that we build both brand equity and drive sales with every piece of advertising." She described an approach that's more authentic, more saturated in consumer insights and emotion, and within "a framework that gives us a consistent point of view about our brand."
A new example is an ad McDonald's promoted on Twitter and has featured on its YouTube channel about a father bear rewarding his son for a good report card with a McDonald's meal. In "Proud Papa," the young bear attracts the attention of a car of tourists so the papa bear can scare them away. The two then eat the tourists' fries, and the father then shows his son how to tip the car over to get the "extra fry at the bottom."
What do you think of their new campaign?
http://adage.com/article?article_id=143453
Rebates for energy efficiency
I came across an article that discusses issues consumers in Massachusetts are having receiving their government-promised rebates for energy efficient products. The story reminded me of the example Professor Neidermier used in his Pricing lecture when he explained that it is hard to convince consumers to purchase products that use value-based pricing, such as new energy-efficient lightbulbs that are priced based on the economic value to the customer. Though the new lightbulbs are more energy efficient and will probably save the consumer money in the end, most consumers can not justify spending more than double a normal light bulb for the new ones.
This problem arises frequently in our increasingly environmentally-conscious society: products that are "greener" are generally more expensive. Though it is admirable that the government has attempted to step in and help change consumer patterns by offering rebates on "green" appliances, clearly the rebate system is flawed. If the government is truly committed to encouraging consumers to purchase more environmentally-friendly products, it should try a different tactic and subsidize the production and distribution of these products so they are no more expensive than the older, less environmentally-friendly products. Hopefully, once consumers become attached to the "green" products and recognize their benefits (the new light bulbs, for example, are last much longer than the old ones) the government could slowly remove itself from the equation and the price of the products could steadily increase.
This problem arises frequently in our increasingly environmentally-conscious society: products that are "greener" are generally more expensive. Though it is admirable that the government has attempted to step in and help change consumer patterns by offering rebates on "green" appliances, clearly the rebate system is flawed. If the government is truly committed to encouraging consumers to purchase more environmentally-friendly products, it should try a different tactic and subsidize the production and distribution of these products so they are no more expensive than the older, less environmentally-friendly products. Hopefully, once consumers become attached to the "green" products and recognize their benefits (the new light bulbs, for example, are last much longer than the old ones) the government could slowly remove itself from the equation and the price of the products could steadily increase.
To Brand or To Extend?
To Brand or To Extend?
Snapple, Gatorade, and Coca-Cola; three popular beverage drinks with brand value that numbers in the millions if not billions. Organizations strive to find products like these which can bring in not only significant profits, but a sustained competitive advantage. A simple way to test how valuable these brands are; compare the likelihood of you to buy a can labeled Coca-Cola and a can labeled Soda.
While it is great to introduce a new bestseller brand, can it be as valuable to sell an associated or extended brand? Can Coca-Cola sell a version of itself that will also make millions of dollar? Here is a big surprise for 2009, 93% of the best-selling new brands were not “new brands” but “extended brands”. Do you remember Bud Light Lime Beer, Campbell's Select Harvest Soup, and Dreyer's/Edy's Fun Flavors Ice Cream? These products were some of the industry leaders for product revenue [for newly introduced products] and they are certainly not unknown names to the consumer.
Studies from the Information Research Institute supports these findings as 46% of firms prefer to use extended brands for new products in order to capitalize on brand equity [and reduce advertisement costs to build product awareness]. Very much like “replacement R&D” in SABRE, organizations are touting this strategy with an additional knowledge in mind; consumers value health-conscious products and convenience-related products.
While “to brand or to extend” is the question, any good marketing plan must not only be strategically sound, but environmentally as well. A strategy that does not match the environment is bound to fail.
http://www.adweek.com/aw/content_display/news/client/e3i121152486b7856cddad1cfc160daf2e5
Snapple, Gatorade, and Coca-Cola; three popular beverage drinks with brand value that numbers in the millions if not billions. Organizations strive to find products like these which can bring in not only significant profits, but a sustained competitive advantage. A simple way to test how valuable these brands are; compare the likelihood of you to buy a can labeled Coca-Cola and a can labeled Soda.
While it is great to introduce a new bestseller brand, can it be as valuable to sell an associated or extended brand? Can Coca-Cola sell a version of itself that will also make millions of dollar? Here is a big surprise for 2009, 93% of the best-selling new brands were not “new brands” but “extended brands”. Do you remember Bud Light Lime Beer, Campbell's Select Harvest Soup, and Dreyer's/Edy's Fun Flavors Ice Cream? These products were some of the industry leaders for product revenue [for newly introduced products] and they are certainly not unknown names to the consumer.
Studies from the Information Research Institute supports these findings as 46% of firms prefer to use extended brands for new products in order to capitalize on brand equity [and reduce advertisement costs to build product awareness]. Very much like “replacement R&D” in SABRE, organizations are touting this strategy with an additional knowledge in mind; consumers value health-conscious products and convenience-related products.
While “to brand or to extend” is the question, any good marketing plan must not only be strategically sound, but environmentally as well. A strategy that does not match the environment is bound to fail.
http://www.adweek.com/aw/content_display/news/client/e3i121152486b7856cddad1cfc160daf2e5
Macy’s and Sears at Prom?
Macy’s and Sears at Prom?
Social media and social networks have become invaluable marketing tools used to attract a younger clientele to the products and services of an organization. Sites such as Facebook, Twitter, and MySpace have grown over the years as mainstream areas for trend-breaking ideas and styles. Especially for the younger population, these sites are used on a daily basis to chat with friends, post on walls, and receive event invitations.
Sears with Ultimate Prom Experience and Macy’s with Prom 2010 Tab on its Fan Page, these two organizations are becoming pioneers in the social network area of advertisement and promotion. Through the use of integrated marketing communications, there organizations are hoping to use Prom Advices to drive Prom Sales. More or less, these sites begin with the pretext of offering useful information then promotes the products of these organizations throughout the site.
In addition, both organizations use sweepstakes and discounts to further incentive the consumer beyond the more personalized atmosphere that is already a hallmark of these two sites. At the minimum, Sears and Macy’s hope that these social networks can bolster their brand awareness among teenagers, so that future purchases for other products may be diverted to their stores.
Of course, like you may have guessed, this is but only part of Sears and Macy’s integrated marketing communications plan. Print ads and magazine ads are still very much an integral part of their marketing mix.
http://www.adweek.com/aw/content_display/news/client/e3i9e0f4d3075c501ab9dee525ae8f2f6d4
Social media and social networks have become invaluable marketing tools used to attract a younger clientele to the products and services of an organization. Sites such as Facebook, Twitter, and MySpace have grown over the years as mainstream areas for trend-breaking ideas and styles. Especially for the younger population, these sites are used on a daily basis to chat with friends, post on walls, and receive event invitations.
Sears with Ultimate Prom Experience and Macy’s with Prom 2010 Tab on its Fan Page, these two organizations are becoming pioneers in the social network area of advertisement and promotion. Through the use of integrated marketing communications, there organizations are hoping to use Prom Advices to drive Prom Sales. More or less, these sites begin with the pretext of offering useful information then promotes the products of these organizations throughout the site.
In addition, both organizations use sweepstakes and discounts to further incentive the consumer beyond the more personalized atmosphere that is already a hallmark of these two sites. At the minimum, Sears and Macy’s hope that these social networks can bolster their brand awareness among teenagers, so that future purchases for other products may be diverted to their stores.
Of course, like you may have guessed, this is but only part of Sears and Macy’s integrated marketing communications plan. Print ads and magazine ads are still very much an integral part of their marketing mix.
http://www.adweek.com/aw/content_display/news/client/e3i9e0f4d3075c501ab9dee525ae8f2f6d4
Thursday, April 22, 2010
Does The Nice Company Finish Last?
Does The Nice Company Finish Last?
Corporate social responsibility [CSR] has always been a touchy subject in marketing. Is money spent on CSR worthwhile? Is the publicity valuable? Does it enhance shareholder wealth?
Research again and again has shown the publicity is more valuable than sales promotion and product advertisement. People view publicity with a level of authenticity that cannot be matched by other marketing mediums. But people have always been skeptical about how CSR can be incorporated in this marketing matrix to enhance brand equity.
CSR has been viewed as an unnecessary component of an organization by some because the goal of an organization is to make a profit. Ideally, the organization should achieve this objective by ethical and legal means but the only requirement is the latter. Because CSR is viewed as the job of the government, as the government would know best how to allocate money to achieve a socially optimum level of utility, opponents of CSR see it as wasteful of organizations.
This view, though rational, has potential flaws. CSR can be compatible with “bottom-line” ideology because CSR can augment the product perception of consumers. Consumers pay for quality, and a company that has positive publicity from CSR, can make statements that are readily more trusted by consumers. As such, these companies with CSR can spend less on advertisement, make more profit, and retain loyal customers.
Here is the solid evidence:
*70% of consumers are willing to pay a premium for products from socially responsible companies*
*28% of consumers are willing to pay at least $10 more for products from socially responsible companies*
http://www.adweek.com/aw/content_display/news/strategy/e3id9db7bed8e9402cbfb822466e4855c09
Corporate social responsibility [CSR] has always been a touchy subject in marketing. Is money spent on CSR worthwhile? Is the publicity valuable? Does it enhance shareholder wealth?
Research again and again has shown the publicity is more valuable than sales promotion and product advertisement. People view publicity with a level of authenticity that cannot be matched by other marketing mediums. But people have always been skeptical about how CSR can be incorporated in this marketing matrix to enhance brand equity.
CSR has been viewed as an unnecessary component of an organization by some because the goal of an organization is to make a profit. Ideally, the organization should achieve this objective by ethical and legal means but the only requirement is the latter. Because CSR is viewed as the job of the government, as the government would know best how to allocate money to achieve a socially optimum level of utility, opponents of CSR see it as wasteful of organizations.
This view, though rational, has potential flaws. CSR can be compatible with “bottom-line” ideology because CSR can augment the product perception of consumers. Consumers pay for quality, and a company that has positive publicity from CSR, can make statements that are readily more trusted by consumers. As such, these companies with CSR can spend less on advertisement, make more profit, and retain loyal customers.
Here is the solid evidence:
*70% of consumers are willing to pay a premium for products from socially responsible companies*
*28% of consumers are willing to pay at least $10 more for products from socially responsible companies*
http://www.adweek.com/aw/content_display/news/strategy/e3id9db7bed8e9402cbfb822466e4855c09
Facebook "Like" Buttons
The news by Mark Zuckerberg and Facebook to add billions of “Like” buttons on sites all across the internet is going to really change how firms advertise their products on the internet. Word of mouth and personal recommendations are the strongest forms of advertisement, and these buttons, in effect, allow internet users to personally recommend products to all of their friends on Facebook.
Right now, to my knowledge, the buttons are only featured on sites like CNN.com, the Wall Street Journal, and Yelp, but I can imagine that all other internet retail sites, like Amazon, will soon add this button so that their users can recommend products to all of their friends. I can even see myself clicking the “Like” button when I see an article or product that I like – in the past I rarely took the time to post any links to my Facebook wall to share with friends.
Because of the increasing connectivity between what people read online and what people recommend to their online friends, it means that both good press and bad press will spread even more rapidly over the internet.
With these new Facebook buttons integrated throughout the internet, firms and marketers will have to keep an even closer eye out for what their customers “Like” and recommend to their friends.
Better than the Wii?
Better than the Wii?
The Wii has been the *Golden Standard* in video game entertainment because of its motion sensor devices that is a technological superiority to the joysticks and buttons of the past. “Project Natal”, a potential challenger to this dominance, will be launch by Microsoft later on in the year to offer an innovative and virtual experience sure to excite gamers.
However, this breakthrough is both a homerun for marketing and gaming. “Project Natal” is a motion recognition device attached to Xbox 360s that will enable the creation of an interactive environment. Not only will “Project Natal” recognize your movements, which will be translated to the game, but it will recognize your features, which will be translated to marketers. Imagine the “Project Natal” cameras which see an iPod in your room, and then the information is transferred to marketers. Minutes later, an ad will pop up in the game which will display the iPad, a product that you will likely be interested in purchasing.
“Project Natal” is more or less a technique that could strengthen target marketing which is invaluable to marketers to persuade consumers to complete a purchase. Its profit potential may have legal implications [invasion of privacy], but its advertisement effectiveness should be a definite consideration for advertising agencies.
http://www.adweek.com/aw/content_display/community/columns/other-columns/e3i9d00b780a7553c2191ffbdf21f9ace0c
The Wii has been the *Golden Standard* in video game entertainment because of its motion sensor devices that is a technological superiority to the joysticks and buttons of the past. “Project Natal”, a potential challenger to this dominance, will be launch by Microsoft later on in the year to offer an innovative and virtual experience sure to excite gamers.
However, this breakthrough is both a homerun for marketing and gaming. “Project Natal” is a motion recognition device attached to Xbox 360s that will enable the creation of an interactive environment. Not only will “Project Natal” recognize your movements, which will be translated to the game, but it will recognize your features, which will be translated to marketers. Imagine the “Project Natal” cameras which see an iPod in your room, and then the information is transferred to marketers. Minutes later, an ad will pop up in the game which will display the iPad, a product that you will likely be interested in purchasing.
“Project Natal” is more or less a technique that could strengthen target marketing which is invaluable to marketers to persuade consumers to complete a purchase. Its profit potential may have legal implications [invasion of privacy], but its advertisement effectiveness should be a definite consideration for advertising agencies.
http://www.adweek.com/aw/content_display/community/columns/other-columns/e3i9d00b780a7553c2191ffbdf21f9ace0c
Pricing in the Music Industry
One of the industries that is facing some of the toughest marketing decisions right now is the music industry. Over the past few years, record sales have plummeted, and illegal downloading and music piracy have been blamed. It's tough enough to sell physical copies of CDs in music stores when the same music can be downloaded in iTunes without having to leave the comfort of home. However, it's even harder to convince people to pay for a download when the same songs can be downloaded for free from file sharing websites.
An article I read the other day brought up another reason the music industry may be suffering. The author argues that the ability to download (and pay for) individual songs may be more to blame for the drop in overall sales. In lecture, we discussed the merits of price bundling. The music industry used to price solely by bundling, charging a certain amount for a CD with multiple songs. Now that it is so easy to download individual songs, people are rarely buying entire albums, and they are spending less as a result. I would also argue that this makes it more difficult to develop a fan base and following for an artist. For example, someone that hears Kesha's "Tik Tok" may like the song and choose to buy it, but it's unlikely that they will buy her entire CD. They wouldn't be likely to want to pay to attend her concert if they don't know more than one of her songs, etc.
You can't deny that piracy has hurt the record industry, but it may not be the only reason for its demise. The move away from price bundling may be another reason, but there are also a lot of people who have purchased songs for $0.99 that would not have paid ten times that for a full CD if it were the only option.
I'm not sure what the next move for the industry should be. Universal Music Group recently announced that they will be lowering prices on all of their physical CDs, but I'm not sure if this will make a significant difference. At what price will people be willing to buy a physical CD rather than downloading it (illegally) for free or purchasing only the few songs they know and like? Is there any such a price? What do you think?
(For those who are interested, here is a link to the post I read: http://torrentfreak.com/is-piracy-really-killing-the-music-industry-no-100418/ and to an article about UMG's pricing announcement: http://www.billboard.biz/bbbiz/content_display/industry/e3i56ed42b9a46f8554e2671afccecca01b)
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