Finding Marketing Opportunity Amid Confusion

Beginning a discussion by saying "the government creates marketing opportunity" is a bit unusual. We tend to think of governmental regulations and influence as limiting for businesses. One exception might be the Consumer Assistance to Recycle and Save (CARS) program, better known as "cash for clunkers." Its aim is to entice owners of fuel guzzling vehicles to trade for more fuel efficient models. The program itself could be a boon to the auto industry as it offers up to $4500 in incentives to consumers. However, if auto companies rely only on the stimulus effect such a program would potentially create they will miss opportunities to reach potential buyers.

An example of proactive marketing in response to the government incentive program is Ford's "Recycle Your Ride" campaign. Ford has observed (probably correctly) that the conditions and eligibility requirements of the incentive program will be confusing to many people trying to determine if they are eligible. In response, Ford has an interactive calculator on its web site that will enable consumers to input information on their vehicle to determine their eligibility for the government incentive. In addition, Ford has identified approximately 20 models in its product line that meet the criteria of the government program.

By being a resource for consumers to sort through the details of the Cash for Clunkers program, Ford may be better positioned to reap the benefits of this incentive program than its domestic competitors. A quick perusal of GM and Chrylser web site home pages finds no mention of the Cash for Clunkers program or any marketing efforts that respond to the opportunity. The emphasis of the content on those web sites currently is the company, while Ford's site tries to help the consumer. Which one do you think potential car buyers will favor? Ford's tactics illustrate that we should always be looking for an opportunity to provide clarity for customers when uncertainty is present.

Marketing Daily - "Ford Eyes Opportunity in Clunker Confusion"

Motives for Going Green: Status and Savings

The green movement, coupled with the current recession, are considered by many observers of consumer behavior to mark a permanent, significant shift in how and why we buy and use products. Have we realigned our values to reflect new priorities that promotes the greater good over our personal well being? Sounds good, but we may not be there yet!

According to a study by Communispace Corporation, consumer motives for green behavior are driven more by status and frugality than altruism. For some people, their efforts to recycle become a badge of honor, something they can talk about in conversations to score points among their friends. For other people, green efforts may be more about saving money (e.g., reusing sandwich bags, drying paper towels and reusing).

Do the results of the Communispace study mean that we should look down on those people who are engaging in green behaviors for non-altruistic reasons? Not at all! These candid insights open possibilities for involving more consumers in the green movement. Just as we buy cars, shoes, and everything else we consume for a variety of reasons, encouraging green consumption should take a multi-pronged approach. It is not all about making a difference; many people find it difficult to believe their efforts alone can make a difference. So what do they do? Nothing. Green marketing campaigns should consider how to appeal to different values consumers hold beyond saving the world. If the bottom line is getting more people to engage in more environmentally responsible consumption, it should not matter that multiple routes are used to get to the destination.

Media Post Marketing Green - "Frugality and Social Status Trump Altruism"

Can Any Smartphone Competitor Upset the Apple Cart?

Apple is enjoying tremendous customer loyalty among users of the iPhone. A Crowd Science report reveals 82% of iPhone customers have indicated loyalty to the brand for their next phone purchase. Moreover, 40% of Blackberry customers, Apple's chief rival in smartphones, expressed a desire to switch to the iPhone with their next purchase. That figure towers over the 14% of non-Blackberry customers surveyed who indicated a desire to switch to Blackberry. The Crowd Science survey figures, coupled with the astounding sales performance of Apple's new 3G iPhone (1 million units in the first week on the market), suggest Apple's momentum in smartphones will be difficult to stop.

Can anything derail Apple at this point? Many consumers have been deterred by the high price of the iPhone. But, with models as low as $99 today, price is less of an obstacle. The exclusive partnership with AT&T is more of a challenge to overcome. Consumers that are either locked in to contracts with other carriers, have concerns about AT&T service quality, or have loyalties to their current carrier remain elusive customers for Apple. How long will the exclusive arrangement with AT&T last? The deal is lucrative for Apple, and strong sales of the iPhone suggest it is not a major impediment to customer acquisition.

In the long run Apple must expand its distribution beyond a single carrier if it intends to become the dominant smartphone brand. For all of the hype and attention the iPhone garners, Apple is third in global smartphone market share behind Nokia and Blackberry. Apple may be a niche player in the personal computer market, but it dominates the portable music category. Now, it may be driving it toward achieving dominance in the smartphone category, too.

Marketing Daily - "Carrier, Pricing Leave iPhone Slightly Vulnerable"

When Great Advertising Does Not Equate to Great Marketing

Crispin Porter + Bogusky is one of the hottest ad agencies around. One brand that has benefited noticeably from the creative influence of CP+B is Burger King. The brand was in shambles when CP+B became its agency five years ago. At the time, CP+B was BK's fifth ad agency in four years, not a way to create continuity of brand meaning! Since becoming BK's agency of record, CP+B has received accolades for work such as Subservient Chicken, The King character, and Whopper Freakout.

What is the one thing that CP+B has not done for BK? Gain market share. According to figures in an Advertising Age article, during the period 2003-2008 McDonald's has seen its market share grow almost 3% to 46.8% while BK slipped 1.6 points to 14.2%. These numbers are a painful reminder that marketing is much more than advertising. McDonald's has outperformed BK in targeting value conscious consumers. Also, McDonald's has invested heavily in remodeling stores and adding coffee bars to compete with Starbucks and Dunkin' Donuts. McDonald's has elevated the experience of visiting many of its locations. BK frequently comes under criticism for lackluster service and less than clean restaurants.

Building a great brand entails managing all customer touch points. Advertising is certainly one of those touch points, and the BK/CP+B partnership has made great strides in this area. BK has much work to do to make the overall experience of visiting a BK better. If that occurs, BK's relevance among quick service restaurant patrons will rise and result in BK being a more viable competitor to McDonald's.

Ad Age - "What Crispin's Lauded BK Work Doesn't Do" Gain Ground on MCD's"

Add Flexibility to Brand Position

Establishing a brand position is essential in today's crowded marketplace. Brands clash with numerous competitors to persuade customers that their offering is the one that is better, superior, or otherwise the best solution. Positioning is a strategy to stake claim to a point of difference that can enable a brand to separate itself from the pack.

Brand positioning works... sometimes too well. A great example is Wal-Mart. It staked out a low price position and used it effectively. In recent years, Wal-Mart tried to shift perceptions to be viewed as more of a lifestyle brand and not all about low price. Wal-Mart was struggling to burst out of the low price box, but along came the recession and being perceived as great value was in vogue again.

Another brand that seems to be looking to move beyond its core positioning strategy is GEICO. Saving money was the point of difference GEICO used to entrench itself in the auto insurance market. More recently, the savings benefit has been complemented with an ease of use benefit ("so easy a caveman can do it"). Now, GEICO has bowed an ad campaign touting a 97% customer satisfaction rating. The ads deliver additional brand associations about GEICO. Persuading consumers that GEICO provides efficient claims service would serve to negate suggestions by competitors like Allstate and State Farm that low price insurance means one receives less service in return.

GEICO is being smart by giving its brand position some flexibility. It is not relegated to being a low price brand. Positions need to change in response to market conditions and consumer tastes as well as reflect competitive activity. GEICO appears to be well positioned to compete in the auto insurance category for years to come.

Marketing Daily - "GEICO Shifts Ad Focus from Savings to Service"

Permission Entails Respect

Permission marketing is one of the most useful tools in a marketer's communication toolkit. People agree to receive e-mails from your company. Their consent potentially overcomes the message clutter barrier that can hamper otherwise well conceived promotion campaigns. What could possibly go wrong when we have one's permission to send e-mails?

Getting consumers' permission to send e-mail is one hurdle; sending messages with relevant and compelling content is another hurdle, one that is not always cleared. According to a survey by Epsilon and ROI Research, unsubscribing from opt-in e-mails is a problem facing marketers. Survey results found 55% of North American recipients of permission marketing messages unsubscribe occasionally, and 14% said they unsubscribe frequently. The reasons? Irrelevant content (67%) and too many e-mails sent (64%) were the top two. A third reason was concern that e-mail address was being sold or shared (50%).

These results provide a call for responsible use of e-mail among marketers. Permission entails an obligation not to abuse the privilege of e-mail communication with a customer or prospect. Just like a person who gets tuned out because they talk about irrelevant topics or talk too much, a company can become a nuisance by sending e-mails that are uninteresting or too frequent. Customer permission is a significant commitment to gain. Treat permission respectfully to minimize the possibility of unsubscribes to your permission-based list.

eMarketer: "Why E-Mail Subscribers Unsubscribe"

Expand Your Brand by Expanding Its Purpose

Selling opportunities for products are limited by the purposes or uses of them. Managing products in the maturity stage of the product life cycle usually includes a prescription to develop additional uses for the product. While this prescription is logical, pulling off a campaign to convince customers they should expand their view of your product's capabilities is easier said than done.

An example of a brand seeking to expand the scope of its product is Sharpie. Its markers are ubiquitous in offices, but being an office supply item limits Sharpie's business potential. Sharpie looks to break out of the office supply box through its "Sharpie Uncapped" campaign. The campaign uses traditional media advertising and a web site (www.sharpieuncapped.com). The site connects visitors to Sharpie's social media presence on Twitter, Flickr, Facebook, and YouTube. The effort is a way for Sharpie to strengthen relationships with consumers and differentiate the brand. If successful, more people will not need markers, they will want Sharpies. And, Sharpies will have more relevance in their daily lives.

Will the Sharpie Uncapped campaign work? At first glance, it does seem to be a stretch that the company could convince consumers that its markers are more than just markers. Sharpie's social media tactics could be potentially effective for making the brand more personable and less like an object (even though that's what it is, I know). If Sharpie can shift consumers' views of the brand from a commodity-like office staple to a "cool tool" to use at home, school, and anywhere else, it will have succeeded in expanding the brand's role. The result will be a more relevant, stronger brand.

Marketing Daily - "Sharpie's Out to Prove It's More than a School Supply"

The Danica Effect on NASCAR

Speculation is ramping up that Danica Patrick, the beautiful, spunky driver that took the Indy Racing League by storm four years ago, is interested in switching to NASCAR. Why move when she has enjoyed fame and some success (one victory) in the IRL? NASCAR is the premier auto racing league in this country. It attracts sponsor and media dollars that dwarf Indy Racing. Many experts believe a move by Patrick to NASCAR would create immense sponsor interest, increase ticket sales, and boost television ratings.

While the idea of Danica Patrick competing in NASCAR and the marketing opportunities it would create is intriguing, the impact of her presence would likely be more noticeable in the short-term than the long-term. The addition of Danica to NASCAR would create great fan interest; broadcasters and track promoters could incorporate Patrick into story lines used to market races. Once she joins the fray, she will have to be competitive. Danica would need to be on a competitive team in order to best leverage her marketing assets. If she does not win races or at least run well consistently, her appeal will diminish.

Danica Patrick is a pretty big fish in the rather small pond known as the Indy Racing Series. A move to NASCAR would make her a distinctive fish as the only female driver, but she would have to win the loyalty of fans by her performance on the track. If she succeeds in that regard, her marketing potential soars even higher. If not, she would join Sam Hornish, Jr. and Dario Franchitti as drivers whose jump from the IRL to NASCAR sounded like a "thud."

Ad Age - "What Danica Could Do for NASCAR, Sponsors"

Penske-Saturn New Direction for Auto Industry

The announced sale of GM's Saturn brand to businessman and racing team owner Roger Penske could mark the beginning of a new direction for the global automobile industry. A key component of Penske's plan for Saturn is outsourcing the production function. Plans call for finding global sources that could make Saturn vehicles to specification. Penske's logic is that in some cases significant cost savings could be realized if production occurs in locales like China or India. Moreover, the ability to shop around for producers will result in shortening the cycle time from a car's design to its appearance on the showroom floor.

The Penske plan essentially transforms the marketing function for an automobile company and becoming more like the apparel industry. Saturn becomes a marketing organization, involved with the design, distribution, and promotion of its brands. Manufacturing will be handled by sources outside the company. The same model has spread to the personal computer business effectively.

What would be the limitation for Saturn's implementation? Quality perceptions. A clothing marketer can contract with various manufacturers to produce products, and if a supplier has a problem maintaining the brand's quality standards that supplier may not be hired in the future. Sources for manufacturing autos are not as plentiful, and the reputation of the manufacturer is an element of an auto brand's identity. Saturn will have lean on its already established reputation initially. Once cars are produced by external sources the marketplace will decide if their quality is consistent with Saturn's reputation. Ultimately, consumer evaluation of Saturn will determine if it succeeds, not cost savings on manufacturing.

USA Today - "Penske-Saturn Deal Could Change How Cars Are Sold"

Personal Recommendation Still the Power Source of Influence

The growth of user generated media via blogs, podcasts, and user forums has led to a rush by marketers to gain influence among active content creators. Bloggers and other social media creators have a potentially wide reach, so it is fitting that efforts are made to get buzz generated through this medium about brands and companies. It is like traditional word-of-mouth communication on steroids.

Now, we learn that the influence of social media tools on buyer behavior is not as strong as assumed. A study by Mintel found that only 5% of consumers surveyed indicated they had made a purchase based on a recommendation from a blogger or chat room. Personal sources of influence continue to dominate buying behavior as friend/relative (34%) or spouse/partner (25%) were cited many times more than social media sources.

Before marketers abandon their social media strategies, let's consider the study's findings more carefully. Granted, people within our own networks carry more sway than impersonal sources (that seems comforting to know). But, social media tools enable greater access to our networks, allowing us to gather information about brands or companies that we might not have otherwise. For example, a quick glance at my Facebook friends list reveals that I have 48 friends from my hometown. Only two of those people live in the same geographic area as me, and were it not for Facebook I would not have known they were nearby. The point is I have access to personal sources of information, and the online channel expands access to my network significantly.

Brand recommendations from bloggers or other sources with whom we have no personal connection (i.e., friends), may carry influence similar to a celebrity endorsement in an advertisement. Some people will take notice that may not otherwise, some people will make a buying decision based on the recommendation, and many others will take it for what it is: an attempt to sell them something. That level of skepticism does not exist when recommendations are shared within a personal network. Nothing has changed- personal networks still hold the power. Social networks provide a means to harness the power.

Marketing Daily - "People Prefer Offline Recommendations, Study Finds"

GM: Reinvention or Repeat of Failure?

GM turns the page to a new chapter in its 100+ year history today. The bow of of "Reinvention" brings the promise of a new GM. The "Reinvention" commercial includes a prompt to visit a web site detailing the plans of the new GM (http://www.gmreinvention.com). Given what we have seen from the old GM over the last 10-15 years, our expectations should be rather low.

An interesting statement from the commercial is "There was a time when eight different brands made sense." Oh really? When was that time? A significant problem GM had for years was too many brands. It has not been a problem only recently; the glut of brands led to resource wars within the company. The result was that all brands suffered. GM's problems are hardly new. It should not have taken being forced into filing bankruptcy protection to bring about radical changes at GM.

A major reason GM was reluctant to declare bankruptcy was it was concerned the effect it would have on customer confidence in the company. Would people be willing to buy cars from a company that had filed for bankruptcy? Months of negative press about GM had the same effect. The company could have been well on its way to making a new GM if it had faced realities sooner. Now, many people are skeptical that GM can reinvent itself given that it squandered its rich heritage over the last two decades with inaction and infighting.




Link: Ad Age - "New Ad Introduces Consumers to 'New GM'"

Will Frugality Last Longer than the Recession?

Job layoffs, frozen or reduced wages, and uncertainty about the future direction of the economy have led consumers to undertake a belt tightening of a magnitude rarely seen in the United States. Consumers have cut out many discretionary purchases and traded down to lower priced options for other purchases. This coping behavior may be the appropriate response to the current situation, but what happens when better times return? Will penny pinching be replaced by free spending ways many people had pre-recession?

According to an article in Advertising Age, marketers fear that the pull back on spending could last long past the end of the recession. Once we realize we can exist with spending less on certain products and eliminating other products altogether from our lives, little incentive exists to revert back to previous buying behavior.

If this prediction comes to fruition, marketers will be forced to make significant changes to their approach to customer relationships. Leveraging customer relationships by pursuing up selling and cross selling opportunities will not hold the potential that it once had. Instead, marketers should examine how customers connect with their brands. What attracts customers to the company or brand in the first place? What is it that you do that customers like or appreciate? It is not limited to your products or services. Community involvement, cause support, and social responsibility initiatives are relational connection points people have with your business. The aim of differentiation to achieve premium pricing might be replaced with differentiating to strengthen relationships and relevance with customers.

Link: Ad Age - "Marketers Fear Frugality May Just Be Here to Stay"