Opportunism build identity

 Tonight, 4am, as I’m sure you all know, is the final of the Rugby World Cup. France is playing against New Zealand, and even if there is a huge probability that we’re going to get crushed: Allez le bleus!

What is really nice about France reaching the final is that brands are building a lot on it to advertise, they just act as fast as they can delivering an ad in the hours or the day after the event happened.

The first big one was after the quarter final, where France beat England, a huge rival:

Bred with roastbeef.

To explain a bit, the rooster is the emblem of France and roastbeef is a name we often use to characterize the british (yes, we’re mean, but they call us froggies!). Nike is the official sponsor of the French Rugby Team.

The impact has been huge; the image was all over social medias and press. It calls directly to our renowned chauvinism and it works.

A second just appear some days ago:

Come on Marc, shave this moustache!

Again, a bit of explanation: Marc is the head coach of the French rugby team and recently grew an ugly Freddy Mercury moustache. Plus the moustache is here formed of two silver ferns that is the emblem of the All Blacks, the New Zealand rugby team. The ad has been released by Wilkinson, a renowned razor brand.

Those are recent examples but it occurs quite often in France, brands buy the back cover of a national newspaper and deliver a simple, smart and slightly irreverent message.

Even if I’m sure it doesn’t really call for a purchase action, I like the fact that brands also advertise to promote their own identity. It’s hard for a company to have a real character. And the only way they can build one is by their actions: events, ad… But the fact that they sometimes release those instant ads just calls the fact that there is humans behind the brand and that they’re concerned about the same topics as their consumers. Now is rugby and tomorrow something else but I think brands should definitely work on this angle of being part of the society movement.

To finish an ad that also made a lot of noise at its time:

Published in the biggest sport newspaper in France by Sony for Playstation after the shameful loss of the French soccer team in the world cup.

Couillu!

Barthelemy Bricout

It’s just so convenient

Online shopping has got to be the best thing ever! I can’t imagine my life without it anymore.

Instead of stressing around Christmas last year and waiting in line for hours I simply ordered all my presents online. I did not have to go to the store several times because the things I was looking for were already sold out. I could concentrate on my final exams and yet did not have to worry about getting gifts in time. In fact, I even made better deals and came up with better ideas due to my online research. It was simple, stressless and just so convenient.

When I arrived in Winston-Salem, online shopping got me through the first few weeks. Since I do not have a car while I am here, amazon.com provided me with everything I needed. I was able to get everything for my room, everything from an iron board to a hairdryer to posters. The best thing for me was that I did not have to bother anyone and was still able to buy everything that I wanted. It was perfect!

But what I really go into rhapsodies about is shopping online for cloth. This has captured me for years and is even more important to me than going to a retail store for several reasons: First I like the fact that I have the opportunity to figure out if the cloth I order matches cloth I already have. For my cousins wedding, I ordered shoes online and was able to see if they fit my dress immediately. If I had not been able to do so, I would have been forced to remember the color of the dress to match the shoes and risk buying the wrong color.

The other thing that I really like is that I can make sure that I don’t buy the cloth, just because I am in the mood for “a completely new look”. Maybe this is just me, but I don’t know how many things I bought in stores and never ever wore in my life. However, it never happened to me when I ordered things. I think it’s because of the fact that I usually have the cloth at home for a few days before I return those that I don’t want to keep.  I am not really familiar with the way it works in the States, but in Germany I can order the cloth on account and first pay after I returned those things that I don’t want to buy. There is a longer time frame between seeing the cloth for the first time and making the actual purchase decision. That’s why the “I am just in the mood for this kind of dress right now” factor is eliminated, at least for me.  Further, I realized that I am willing to buy more expensive cloth online than I do in stores. This might be due to the fact that I am more confident that I am actually going to wear them. The other factor that influences this is that, in general, consumers value things more that they own:

“The lowest price at which consumers agree to part from a good (selling price) is often considerably higher than the highest price at which they agree to acquire the same item (buying price).”¹

Although consumers are still the buyers in this case, the products are in their house and it kind of feels like owning them already. Therefore they are willing to pay a higher price, because it feels more like parting from a product, which is obviously nice for the online retailer.

I could go on and on about the advantages of shopping for cloth online. Other benefits are not having to wait for an empty fitting room, not having to deal with intrusive sale stuff, rewarding oneself during tough studying periods without feeling bad for losing a lot of time by going to a mall and so on. But I think you already got my point. I am huge fan of online shopping because it’s just so convenient! What about you? Do you feel the same way? Do you prefer shopping cloth online instead of going to a store as well?

Fabienne Schattner

¹ http://en.scientificcommons.org/42706051

Personality Brands

Personality branding is a very nascent field, one which has developed very recently, with the explosion of mass media, and the evolving cultural climate of the world. 50 years ago, a sport star was merely a sports star, but today they have become larger than life personalities, endorsing products, causes, events, and much more. In fact, personality branding has become a vital tool for anyone to differentiate themselves in any given field, and stay ahead of the competition.

David Beckham is a case in point. As a footballer, he has his share of critics, who are more than ready to point out his poor heading, his under developed left foot play, his inferior one-on-one dribbling skills. However, there is no doubt that when it comes to football, Beckham is the sun among the stars, miles ahead of his contemporaries as a brand, even the more highly rated football players. When he shifted  to Las Angeles Galaxy, he signed a whipping $250 million contract, while every other player burned with envy. What allows him to command such a premium? Personality Branding.

Brand Beckham is one of the biggest to come out of Great Britain, which was recognised by the Queen, when she bestowed the Order of the British Empire (OBE) on him in 2003. All through his career, whether it’s the highs or lows, he has never been out of the public eye. The power of branding really comes into play when we consider some of the speculation concerning his transfer to Real Madrid, which some commentators say may have been because of the brand synergies he could provide. He and Real Madrid were both sponsored by Pepsi and Adidas, whereas his old club, Manchester United, was sponsored by Adidas’ arch rival Nike. Tim Leiweke, the president and CEO of Anschultz Entertainment Group, which owns the LA Galaxy, said that within three months of signing on Beckham, there had been a rise in merchandise sales by 700% for the Galaxy and by 300% for the league. That is the power of personality branding.

Nor is this phenomenon limited to sports. Entertainment is one of the favourite echelons for celebrity brands. Take Oprah, for example.  Having a talk show which has stayed at No.1 for 18 years is  no mean feat. As a brand, Oprah has been very careful about steering clear of portraying herself as a business, instead taking on a I-am-every-woman role, one which everyone can relate to. Her willingness to open up is what helps her establish trust with her audience, and win their enduring loyalty. And the results speak for themselves. When she recommends something on her show, people go out and buy the product. Dick Parsons, CEO of Time Warner, says once Winfrey makes an endorsement sales increase tenfold.

An interesting point to differentiate between various brands would be on the basis of ownership – that is to say, how much does that celebrity own the brand. For example, we can clearly see that David Beckham plays a pivotal role in brand Beckham, and is the majority shareholder in his brand. One wont expect him to walk away from it. But can we say the same of celebrities who don’t have such feelings of loyalty or belonging to their brand, perhaps in one or the other girl or boy bands which seem to pop up every now and then. They may simply walk away from the brand, and few would be surprised, because their involvement in the whole product is quite low, in spite of being the face for the brand. Such celebrities may feel more like ‘employees’, something which would not go a long way towards inspiring loyalty from them.

~Anshuman Rastogi

The Battle Against Private Label

Wal-Mart is in an incredible position.  While it maintains itself as the top retailer in the U.S., even the recession and its dampening effects on consumer spending couldn’t shake the retail behemoth.  Wal-Mart was still able to emerge on-top, as many consumers looking for a cheaper alternative chose to save their money by shopping there.  As a result, companies have no choice but to sell their products through the retailer, no matter how little margin they are able to achieve.  And remember that this is even more the case during the economic recession.

But Wal-Mart pulled a fast one on its multitude of partners and distributors.  It began to introduce private label items.  And these were not just generic versions of soda, cheese, milk, and fruit snacks, but private label items began popping up in departments all over the store.  Now, you name it, there’s a Wal-Mart brand in fashion, office supplies, automotive products, wines, and even cell phone services.  And all of these labels are in the store juxtaposed to comparable products, at a lower price point.  During the recession, of course consumers are going to be encouraged to be more price sensitive, and Wal-Mart was able to leverage this fundamental consumer shift in order to push sales its line of private label brands.

And it is important to note that Wal-Mart is not the only retailer that has done this.  Target has a healthy family of private-label brands, as well as grocery stores, who have been doing private labels since long before the recession.

However, the fundamental change took place when these private labels began to cut into sales of the better-known, trusted brands all over the store.  And some companies were unprepared for this.  Sales began to erode due to the private-label brands, causing a dilemma with companies who have to distribute through Wal-Mart.  One one hand, they cannot threaten to pull out of Wal-Mart, the largest retailer in the world.  But on the other hand, they do not have the leverage to convince Wal-Mart to stop pushing its private-label brands, since the retailer has control over its own building and distribution centers.

I found myself musing during my next trip to Wal-Mart, trying to guess which seemingly ‘generic’ brands were obviously private-label, though cleverly named something other than ‘Wal-Mart brand’ to be able to compete with specialized product categories, and was amazed at what I saw.  I saw Charmin Paper Towels, priced normally, then the private label, sitting next to them, then another line of Charmin paper towels next to the private label, priced even lower than the Wal-Mart brand!

It looks like the answer for some companies is creating a product line that competes directly with these private labels, adopting the ‘if you can’t beat them, join them’ attitude.  The brand was written in a mix of English and Spanish, attempting to appeal to an apparently price-sensitive demographic that they must have concluded is drawn more toward private label items.  But it was an interesting attempt at leveraging a well-known, trusted brand name, offering a lower price point, and hoping to capture back some of that lost market share.  I’m curious to see if this is just a passing fad, or if it escalates into something more.  Let the battle against private label begin!

By Eric Wiggins

Give The Dog A Bone

The car rental company Hertz recently added a new feature to the cars people can hire: dog cages are fitted in it. This is a great thing for people that own pets and love to bring them when they go on a hiking weekend for example, or wherever they go, this can be useful.

The problem is that the service is very specific and doesn’t speak to all the persons that rent a car. Indeed, not everybody has a dog. So we can say that at least 50 per cent of Hertz’ customers don’t care about this new feature.

The question they have asked to themselves was how they could reach dog owners, and only them. This segment is particularly wide and hard to define, as dogs are universal. No matter the age, the sex or the social level, every kind of person is susceptible to have one.

This is always delicate to communicate for a specific part of your market, as you don’t want to confuse others with a message they could not understand or they could interpret as a new turn in the company strategy. It can also be a waste of money to target a wider audience than the one you really need to.

Hertz decided to use the technique of direct marketing to reach the specific target of dog owners. The concept is nothing new you will say, but the way they have used direct marketing is both creative and funny. Instead of trying to reach the dog owners, they decided to attract… their dogs!

Their plan was simple: they hid dog bones under bushes and behind lampposts, where only a dog could find them. The bones came with a message attached to it, which was directly delivered to the owner when the dogs returned to him with his “trophy”. The message indicated the link to Hertz’ website, and a phone number to book a car.

I think this is a funny way to do direct marketing, which usually appears boring and annoying to me. Everyday we receive tons of spam mails for every kind of product, we don’t even pay attention to it anymore. And who likes to receive a phone call to hear some kind of advertisement?

What Hertz did used a part of humor, and to me this is highly effective. I would be amused if a brand was trying to reach me this way, and at least your dog has won a free bone!

Sylvain Daressy

Cultural Considerations: Tackling the Heterogeneity in Society

Marketing departments and advertising agencies carry out due diligence to understand their existing and potential customers.  In theory, this additional research leads to campaigns that are effective and targeted.  Ads are uniquely designed for various customer segments and customized to reflect specific positioning to a group of purchasers.  The choice of casting, setting, and dialogue can, at times, be painstakingly scrutinized.  The ultimate goal:  connect with the buyer.

What is of particular interest is the way that companies advertise their goods and services, specifically in light of the cultural differences of their customers.  For instance, there are examples of companies that run a set of commercials using the exact same script but with each advertisement showcasing actors of a specific race/ethnicity.  I have seen an ad on BET, and, after switching the channel, experience a moment of déjà vu when an eerily similar ad for the same product airs on NBC, this time with a white family instead of African-American.  The positives of this observation:  businesses understand the similarities in their customer base and realize that a strong commercial appeal can cross demographics.  Various individuals are able to relate to commonly shared moments, routines, and rituals, which allows for little differentiation in advertising strategy execution.  The negatives:  companies think that ads that feature an ethnicity outside of the primary demographic of a certain network or show will fail to resonate with those select viewers. 

On the extreme, companies cater to a particular demographic and tailor their messages based on supposed “research” of various degrees of accuracy.  The positive:  businesses understand the uniqueness of their customers and work specifically to craft a message that resonates with a given group.  The effort of customization deserves commendation.  The negative:  sometimes these tailored approaches can be particularly offensive, if taken to the extreme.  Ads that target African-Americans, for example, may feature Hip Hop music, slang, and baggy jean-wearing protagonists that do not capture adequately the breadth and depth of black culture.  No matter how well-intentioned these ads are, they arguably portray stereotypes that showcase a truth only applicable to a portion of that population.

What are the major takeaways of this examination of commercials?

§  There are strategies in place to showcase the commonality of buyers with an emphasis on choosing the right commercial to air on the right channel at a specific time for targeted customers. 

§  Despite best attempts, buyers can be turned off by efforts that fail to portray accurately customers’ lives and instead rely on generalizations.

§  Companies understand that customers need an appeal to which they can relate.  They need to see themselves on screen and visualize themselves using the products/services.  Businesses intentionally choose all aspects of advertisements with this hope in mind.

D.J. Vaughn

What’s in your wallet?

by Luis De La Cruz

All of my “short trips” to the grocery store always become a nightmare at about the point when, after wandering around the checkout counters looking for the one with the shortest line or the line with the emptiest carts, I am forced to wait in line for 10-20 minutes. I personally hate waiting in line. Fortunately, Google has an app for that. It is called Google Wallet. 

With this app Google is aiming to simplify the shopping experience at brick-and-mortar retailers. By the way, did I forget to mention that thousands, if not millions, of unproductive jobs could be eliminated as this and other similar apps become more popular?

So, this is how the solution works. On the software side, you can have one or more credit cards tied to your Google Wallet account. You can have gift cards and pre-paid cards tied to it as well. One additional benefit is pulling digital coupons from Google Offers and from sites such as Groupon and Living Social. On the hardware side, a highly secured NFC chip in your phone will communicate directly with the terminal located at the point of sale when you are ready to pay for your purchases. To be able to use your cell phone to pay for any purchase, you first have to enter a PIN to unlock the Wallet.

In the near future we can expect a host of retailers luring shoppers by offering special discounts and coupons that can be used only through Google Wallet. 

Although we are not there yet, the ultimate goal will be to have an integrated app that lets consumers scan the bar codes of the products that they drop into their carts so that, when they’re done shopping, they can hit the pay button on their cell phones and, voila!: no lines; no more rolling of eyes after seeing an old lady pull her wrinkled bills out of her money bag to dreadfully count bill after bill; no more exasperation with the die-hard coupon cutter ahead of you or with the heavy laden carts when you hold a single item purchase in your hand. Goodbye unloading and loading at the counter and welcome self checkout. No more worries about carrying my five credit or debit cards with me either.

But, not all is rosie. No one really wants to use a credit or debit card that needs a constant battery charge. And what about those unexpected crashes? To make matters worse, there is the issue of personal information.  How much is too much information in the hands of one company? Google already knows about my online habits and now is looking to know all of my shopping habits to exploit that information to gain more advertising revenue. Now Google will know my wants better than I know them myself. 

So how is this Wallet thing going to impact my shopping habits? First, as mentioned earlier, it will make it unnecessary to carry the seven credit/debit cards. As a mobile application, it will be more flexible than any traditional payment method. Options include integration of loyalty programs, gift cards, personal finance programs, etc. Finally, it will most likely make it possible to split payments across more than one payment method. Wallet will also make it easier to benefit from coupons and promotions. In sum it will simplify the shopping experience and retailers are hoping to see an increase in the number of shoppers that they have lost to online retailers.  Will this endeavor succeed? Well, I hope that it will at least do better than Google+.

Marketing is in the eye of the buyer

     Again, I find myself straddling the world of company and consumer. I think it is especially salient in my chosen path of marketing, which often takes on the role of the “voice of the customer”, within an organization. Even marketing professionals forget to take a step back and ask…

How does this affect our customers? (Who are, by the way, the life blood of every company.)

      In an age where marketing is moving toward a conversation between company and customer, this question is more important than ever. No longer does a shotgun approach work. Customers are inundated with information and the only way to cut through the clutter is to be relevant. Increasingly customers want to know; what can this company do for me?

       The recent Netflix case, referenced in an earlier post, is a classic example of a company being internally focused and forgetting to think about their customers.

       My former organization had a similar issue of loosing sight of our members. Every department wanted to market their program or publication to a point were members were receiving 4-5 emails a DAY about offerings they may or may not be interested in. As you can imagine, customers in the better case scenario cared enough to complain, and in the worse case,  completely tuned us out and didn’t renew their membership the following year.

       Losing sight of the customer can be as simple as using marketing ploys or company lingo when interacting with them. An example: asking a customer how many SKUs they prefer in a category when conducting market research is pointless as the vast majority of consumers will have no idea what an SKU is.

For marketers and other business professionals, I recommend four simple steps for keeping customers top of mind;

1. Use the grandma test. Run your marketing research or campaign against your grandma (or someone external to marketing/the company) and see if they understand what you are asking or trying to get across.
2. Use your data. Technology today allows for increasingly personal interaction with customers. I am always amazed by companies who fail to use what they have available to make information as relevant as possible. 
3. Appreciate complaints. If a customer cares enough to complain, listen and take actions.
4.  Finally, and most pointedly, there is no better way to understand the customer then to be one. If this is not possible, I believe every employee should serve on the frontlines of customer service on a reoccurring basis and hear first hand what customers think and feel. 

      New companies or products are successful because they address an unmet customer need. Fundamentally, companies are built with the customer in mind. Yet it seems the larger companies grow, the further from mind serving the customer becomes. I would argue that the level at which a company keeps the customer in mind directly relates to its longevity and long-term success.

Alyssa Thomas

Why we spend?

I've been thinking about my spending habits lately and have noticed that when I'm having a great time (99.9% of the time with other people), I probably spend about double the amount I would if I was alone.

This has led me to a few questions about the social aspects of spending. 

Why do we spend more in a social setting? Why do we spend more when we're having fun? Do we subconsciously equate the fun that we're having with the money we're spending? Do we think that if in that moment we stop spending, the fun will stop? Or is it that we feel the need to prove ourselves to those around us and therefore spend money as a symbol of status?

Truth is, I don't know. I really think that when I'm having a good time I somehow tie that positive experience to the number of dollars that have left my pocket or the pockets of those around me: 

Quality of experience being directly correlated with number of dollars spent. 

Fundamentally, I know this isn't true and I've had wonderful times for free. However, I can't help but look back on the receipts of my escapades with friends and think..."Why did I spend that much again?" What it usually comes to is that in that moment I'm thinking "Let the Good Times Roll...Who cares about money? Let's live in the moment"... 

This seems to relate to a fundamental belief that exists within society: 

"Cheap things are no good and Good things aren't cheap"

This relates to products just as much as it relates to services or experiences. With this fundamental belief at the core of everything we do, I wonder how much of our spending is simply to achieve a great/fun experience...Is my inside voice really saying "This isn't going to be a great night until you've spent at least $80" and therefore in the effort to achieve that experience I spend at least that? 

Who knows? What I do know is that I undoubtedly spend more when the goal is 'crazy fun'; and especially more if the goal is 'crazy fun with friends'. I think I'm going to experiment and aim for fun with friends with no money. I wonder if my post-activity feelings would be just as positive as those related to nights when I've spent a lot. 

We'll see how it goes. What are you guys' thoughts? Is this a familiar experience or am I the crazy nut alone in this?

Marielle des Etages

Groupon: Friend or Foe?

One of the more intriguing stories in the marketplace as of late has been the pending IPO for the internet coupon site Groupon.  Over the past year their company has gone from receiving valuations of up to $30 billion to potential bust.  But what is the true value of the company and what value have they brought to the table?  Are they actually able to alter buyer behavior and help businesses build customer loyalty?

Like most human beings, I started to analyze this thought by thinking on my past experiences working with online coupon sites that e-mail me every day.  Currently I am signed up to two sights (Groupon and LivingSocial) and my initial thought after saying their name is simply “spam.”  I feel as if a majority of what they offer is mediocre at best and not relevant to my personal tastes.  However, they occasionally offer something that is a fantastic deal that I can’t pass up.  I think it is funny that the first thing I do every morning is check my e-mail to see if Groupon actually has something good for me, yet I am disappointed almost every day.  But not enough to unsubscribe to their spam.  Not yet anyway.

I don’t believe that Groupon’s website builds customer loyalty.  Most businesses use their services hoping that consumers will come back after trying their product or services.  The fact of the matter is that I like to buy things on Groupon that I feel are a good value but then I feel as if they are overpriced when I don’t have a coupon.  Suddenly paying $80 for a massage isn’t as attractive knowing that I can wait for Groupon to have another deal in the near future.  Over the past year I have purchased 10 coupons and have yet to become a repeat customer at any of those businesses.  More often than not I bought these coupons because they were a good deal for businesses that are normally out of the way or too expensive.  More often than not I feel as if the things they offer are discretionary spending and need to entice me 

A recent article in the New York Times sheds even more light on this topic.  According to their findings, 80% of all Groupon subscribers have never bought a deal.    In addition to that, their sites are promoting bargain hunting from all consumers.  In the New York Times article, they cited several businesses that regularly receive calls asking if they are willing to match prices from competitors.  To make matters worse, recent research from Boston University and Harvard has actually shown that the coupons attract consumers that are harder to please and more likely to complain on cites such as Yelp.  They went as far as to state that this cost a business up to 1/2 star rating on these services. In the end it sounds as if promoting their business on Groupon has actually caused more harm than good and it will be interesting to see if this is a growing trend among Groupon customers.  

Thoughts?

-Chris Gabriel

What is Operations?

No, not really; arbitrary coherence though?

Dan Ariely, Professor of Behavioral Economics at Duke University, and author of Predictably Irrational, outlines an interesting social phenomenon. 

In 1974 Frenchman Jean-Claude Brouillet purchased an atoll in French Polynesia.  With that came a lagoon filled with black-lipped oysters—and with those, black pearls.  At first, however, there was no demand for the things; after all, they were gun metal gray and about the size of a musket ball.  As time passed, many marketing efforts failed; he could have tossed the effort aside.  But instead, Brouillet commissioned a spot in the front window of a New York 5^th avenue jewelry store with an outrageously high price tag.  Shortly after, the most prospers women were strutting around New York city with black pearls draped around their necks—and we have been anchored to the high price since.

 Drazen Prelec, an MBA professor at MIT’s Sloan School of Business, conducted an interesting experiment with his Marketing Behavior class: his fifty-five students each wrote their last two digits of their social security number on a piece of paper.  He then introduced several items—two bottles of nice wine, a computer keyboard, an academic book, a box of Belgium chocolates, etc.  Next, each student wrote their last two SS numbers in dollar form next to each item listed on the paper—for example 79 would be $79.00.  The class then had an auction for each item, and the each student wrote whether or not they would buy each item at the winning price.  The result was the folks with the lowest numbers were the lowest, and vice versa.  The simply usage of an SSN was enough to anchor the price!

Arbitrary coherence is when although the initial price was arbitrary, once those prices are established in our mind, they become the basis for decisions going forward—making them coherent. 

For example, I pay the same rent amount that I paid at one point for a studio apartment in Washington, DC.  Here, I have a three bedroom townhouse, deck/yard, and too much space.  I was anchored to the price, and saw this as a deal too good to pass up.  I just as easily could have been anchored to a lower cost of living environment, and augmented accordingly.  This is congruent with a study Uri Simonsohn’s, a professor at University of Pennsylvania’s Wharton Business School, class conducted that showed when people move to and from different cost of living cities they often remain at their previous spending state.  Folks coming from low to a high cost of living area will often live in a smaller house, etc.  Folks upgrading do just that—they upgrade.

Anchoring influences all kinds of purchases.  How has this affected you and any of your decisions?

Tim Smith