Category Archives: global marketing

Paying to play

Supermarket
Expensive real estate (Photo credit: Sean MacEntee)

The reports of Walmart paying bribes in Mexico to get permits to build stores  have certainly stirred a lot of industry buzz.  Pundits pose on both sides of the issue, debating whether this is truly illegal or merely how global business is done today. (For a thoughtful discussion of this issue, see:  www.perishablepundit.com )

While the final verdict on the case may take years and we’re not expressing our opinion, nor are we legal experts (disclaimers!), we can safely say here that this type of thing is rampant in most parts of the world.  In fact, in most cases it is just life as usual.

In Brazil, for example, the country would not function were it not for what the Mexicans call “gestores” and in Portuguese are “procuradores” and their many minions.  In a country where bureaucracy is endemic,  it’s the only way to survive.

If you have to wait in line for a document to prove you are still alive, you may very well die before you get it.   That’s why you hire someone to stand in line for you:  so you can get on with your life.

We assume this also applies to commercial construction permits.   In retail, a month may be a lifetime, so it’s easy to see the type of pressure this exerts on a company trying to enter a new market.

But let’s digress a bit to something we do know a little about, and that’s the concept of “paying to play”.  When we talk about this we are of course referring to the cost of doing business at retail outlets, sometimes delicately termed “real estate fees”.

Clients are often shocked when we tell them what it takes to get their products up on supermarket shelves.  Shelf slotting fees are said to be a $9B+ industry alone, and can easily run over $30,000 per SKU. (AMA)

So, if you have a brand with three different flavors, that’s three separate SKUs (you do the math.)  Note that this is typically in addition to off-invoice, case allowances or any other relevant fees to get your products promoted properly.

When you look at the one to two percent annual margins of most supermarket chains today you can see  that slotting is an attractive profit center.   But it’s important to also remember that a simpatico retail partner can make or break you.  So,  if you’re lucky and end up with your products on their shelves, why, you may soon retire in grand style.

Yet many of the sweet-hearted folk who make the great-tasting  jams you see at your local farmer’s markets don’t know or understand this.  They remain at the farmer’s market for that key reason:  they can’t get their products into the great indoors because they have no money.

We often run into the great  jam-&-jelly-makers of this world who spend thousands of dollars to participate in trade shows where they hope to meet supermarket buyers, yet have no capital to go any further.  They believe that just having great-tasting stuff is enough.

It’s like a pretty, aspiring actress hoping to be discovered sitting at a Hollywood lunch counter.   Does it still happen?  Maybe, but the “price” can be high, as these gals will tell ‘ya…

“No such thing as a free lunch” is the adage marketers need to keep in mind here.   If not actual hard cash, then certainly you need the “capital” of a well-thought out strategic marketing plan and a product that is totally of  the moment:  ideally, an “Aha!” item a chain may wish to keep for itself.   Additionally, to deal with the pressure you need a large set of what from Spanish roughly translates to “spherical male organs”…

Still, even if you have THOSE, you may wish to pray for some venture capital angel or a M&A expert to show up and offer to sell your wonder product to a major company so you can go sip Margaritas pool-side and forget all this stuff.

The Retail Games

Black Friday line
Let the Games begin!

For the sake of your health and safety, not to mention sanity,  we trust you came away unscathed from the recent shopping madness this past weekend that concluded with Cyber Monday.

What’s next:  “Techie Tuesday”?, “Wacky Wednesday?”  (Don’t laugh, and remember:  you saw it here first).

You’d hardly know there was a recession going on for the crowds that made this Black Friday allegedly the best on record (final sales figures still to be tallied), sending retail chain stocks soaring 5%+.  The Occupy Wall Street folks who organized to boycott “big chains” during the Holiday didn’t seem to have made a dent.

For marketers this urge to splurge is a rather thrilling, if unsettling, phenom.  After all, it was only a few years ago that the term “Black Friday” even became part of the American lexicon.  An elderly family member still thinks it’s some newfangled  religious holiday…

With stores now open during the sacrosant Thanksgiving Day, retail is now a new ball game:  one where nice guys finish last.

The protests of the pious about spending this time with family makes a good point, but the harsh truth is that retailers would not be opening their doors if there wasn’t demand.  And consumer demand has apparently reached a fever pitch as shoppers with pepper sprays and push strategies win the day.

As marketers, here are some key questions to ask ourselves about this trend:

  • If everyone’s already shopped out by Black Friday, what becomes of other Fridays…or any other day before Christmas?
  • What happens to manufacturers when inventories are already depleted for the Holidays and no new orders come in?
  • What do retailers do when their gross margins are dented by these deep discounts?  Do they dive even deeper?
  • If consumers only crave deep discounts, how will we wean them back into EDLP?

You may recall the halcyon days when many chains employed  Hi/Low pricing strategies, where discounts were something to be savored, special promotions were creative hallmarks, and blowouts only occurred post-Holiday. 

With Everyday Low Pricing the norm and “extreme couponing” the end game, it’s a challenge to make a case for brand-building.  Or is it?

We’ve blogged about the complex human character that hungers to shop.  There are elements at work in our subconscious that take pleasure in these animalistic rituals taking place in the retail jungles.  In short, the Thanksgiving spending spree is just one big game hunt.

Yet, once the thrill of the chase, the stampede of the crowd, and all that glitters disappears and shoppers finally view their prize quietly at home, do they hear the little voice asking:  “What is this garbage you just spent your last dollar on?!”

Stuff shoppers may not tell us

Soldiers and Family members participated in th...
Even the Armed Forces uses focus groups

At the same time marketing pundits are proclaiming that focus groups are dead, they’re trying to unearth what makes consumers tick. 

Used to be if you were a manufacturer and wanted to get some real qualitative (as opposed to quantitative) info on your new product, you’d put a focus group together. 

Get a small group of women together in a room all day, feed them well and pay them something, and they’ll tell you anything…Fact is, focus groups, when done well and includes multi markets and profiles, can give you information you can’t get anywhere else. 

Qualitative info(the hard numbers) you can get from scanner data.  Intimate stuff, such as what truly turns a shopper on:  things she would never tell anyone outside that room, that’s what makes focus groups useful.

But it seems this practice has gone the way of the Dodo bird, as “mystery shopper” clubs, chat rooms, on-line surveys and mobile apps appear to provide marketers with enough fodder from consumers.  Although these arguably much lower-cost tactics have their proponents (on-site focus groups can be very pricey), they still can’t be compared with being able to gauge the immediate reaction on the face of a group participant.

Now it seems this psychographic profiling and what it reveals is making a comeback.  It’s interesting that marketers claim they now want to get inside the consumer’s head when what they’ve been doing is mainly blitzing coupons at her…

In any case, Kraft just announced they’re developing a sophisticated new science of  “emotional profiling to provide actionable answers”  both for them and their retailer partners, according to trade pub CPG Matters.  Apparently, they are splitting hairs about whether shoppers “like” or simply “prefer” something, and how that spells the difference at check-out.

We’ ve always tried to look at the “need to have” vs. “nice to have” component of any marketing outreach.  Especially in today’s economy, folks are going to look carefully at what they buy, and probably prefer the former.  Do we really need the “green” detergent that costs so much more?

Yet food is a different animal.  There exists strong triggers — look, aroma, taste, and emotional ties — that make the food decision for us, regardless of logic.  How else can you explain the Australian expats’ continuing love of  Marmite

One of the key challenges facing manufacturers like Kraft is that this emotional reaction to food means, as they put it:  “that two identical-looking products could achieve the same score in acceptability tests, but perform wildly differently in the marketplace.”

That we shop with emotion is nothing new, and psychographics have been part of the marketer toolbox way before we knew what to call it.  Importantly, though, the increasingly ethno and income segmentation of the population adds complex levels to marketing plans.

We used to rely on reports from AC Nielsen and others that provided snappy, “canned” profiles we loved, such as “Bluehairs in Sun Country”, which neatly encapsulated all residents of, say, Vero Beach, FL.  Sure was easy to do specific-store marketing then…

 Today, with ethnic groups making up almost half of some metro markets, things are different.  Importantly, the cultural diversity means traditional tools like focus groups don’t work as well. 

For example, Latinos will typically say things that may not be true just to please the researcher.  Also, the acculturated/assimilated Hispanic may shop more like an Anglo…except when she’s with her mother.  You get the changing picture.

Trying to make this emotional connection to the consumer is nothing new.  It’s just so much harder today.  That’s why if the Big Guns are seeing the need to reinvent segmenting strategies to hold onto their brand dominance, we smaller guns should also.

Location, location, location…

Image representing iPhone as depicted in Crunc...
Staring at this instead of the shelf?

We’ve posted often about the importance of segmentation, that one size no longer fits all, etc.  But all that’s old hat now because there’s new stuff afoot.

What still holds true, however, is that around 70% of all purchasing decisions are made in store.  In fact, the new apps we discuss below help support that impulse adage.  Long the mantra for buying real estate, “Location, location, location”  has now also become a marketing buzzword.  

Recently, we’ve watched the popularity of in-store radio grow:  a very old medium that has been revitalized by innovative systems like VOXPOP (see 2/11 post) that not only time the message to the moment (and specific store), but also provide lift data post-promo. 

As they’ve long said about advertising:  50% of it is wasted…but which 50%?  Now, we’re closer to knowing.

We also know that with shopping/social mobile apps such as Foursquare, GroupOn, and others,  the ability to pinpoint exactly where customers are at any given time is going to become a key strategy. 

 There is an acronym for this:  LBS (location-based service) and you’re going to be hearing a lot more about it.  According to Applied Predictive Technology, LBS or mobile marketing is being  quickly adopted by major restaurant and retail chains.  

As an example, General Mills offers a two-for-one coupon for its cereals to the iPhone of a consumer standing in the middle of the aisle.  Another example is for drink deals broadcast to anyone walking within a block of a 7-Eleven.

The venture capital crowd has allegedly invested heavily in these LBS companies in expectation that these services will displace more traditional couponing channels, such as newspaper inserts.   The Mobile Marketing Association (MMA) also claims that consumer interest in mobile coupons continues to grow (but then, they have a vested interest here…)

Lest we abandon all oldies-but-goodies to climb onto this new bandwagon, let’s not forget that no single element a program makes.  The key to effective marketing is applying integrated tactics that work together to achieve maximum impact.

Just like with social media, all this input can quickly reach a saturation point with consumers.  They’ll just turn off their phones or simply ignore the texts.  On top of that, dealing with all this actionable stuff simply adds more time to to the shopping experience, and evidence points to the fact folks want to spend less — not more — time inside stores.

The benefit of  “old-fashioned” in-store audio, of course, is that shoppers can’t turn it off but they can tune it out if they wish.  It’s not an invasive technology but more of a subconscious influence.  Also, it doesn’t take time away from shelf surfing, which is something retailers need to look at.  More time staring at your iPhone = less time spending!

Importantly, LBS enthusiasts need to remember that whatever the hot new technology used to deliver the message is, they still need a compelling USP.  In fact, it needs to be even better than before because customers need to be driven to take immediate action. 

Manufacturers seem to want to control this new marketing technology themselves namely because they claim they can do it all in-house, with no need for agencies.  They’re wrong, of course, because there are few corporate suits (read:  brand managers) with the zany mind to do this well.  This means that the creative strategy part of the marketing plan has never been more important.

In summary: the message is the medium and, despite all the latest gizmos, will always be.

Rewriting retail rules

Apple Computer
Temptation greater than Adam & Eve's fruit

Lately, we’ve been focusing on some of the new things that are making us look at marketing in a different way.  We’ve discussed social media, shopping apps, on-line gaming and auctions, plus the myriad ways marketers make money by using badly-disguised “tricks”.

Yet one thing missing here lately has been report of innovative bricks-and-mortar retailing.  Not surprising, as we read about the consistent quarterly downturn of majors such as Walmart, The Gap and so many others.

While savvy chains like Target, Tiffany, Costco, Publix — plus our frivolous favorite, Gumps — are doing well or just holding their own,  let’s admit it, many chains haven’t added any real “Oomph!” to their operations in a while.

But there is one company you really never thought of as a retailer which  is now making the corporate suits at the chains tremble, and that’s Apple.  From all trade reports, not since Adam and Eve has there been such excitement over an opening.

Ten years after its first Apple Store opened its door, the company has grown “faster than any retailer in history”, fawns a recent feature on USA Today, heralding the opening of their latest New York emporium.  With sales last quarter topping $ 3.2B — an increase of over 90% YTD — Apple is said to be rewriting the rules of retail. (Darn, and we were just learning them!)

What’s amazing is that this growth comes when the entire category (computer retailing) appears to be dying.  Witness the list of chains that have already shuttered all or some stores, or plan to:  Gateway, Circuit City, CompUSA, and Best Buy.  In contrast, Apple plans to add 40 new stores to their current total of 330, all expected to create the camp-outside-night-before-opening fervor they inspire in their fans.

To us, the Apple Store mystique is not entirely new.  We were already onto them way back on 8/24 when we posted about how fun they were.  After parting with beaucoup bucks for an iPad at one last year, well, we simply became groupies like the others…  

Not that we actually hang for hours at these stores, sitting at different terminals, writing a book (as apparently one customer did) or flirting with the quirky Genius Baristas (their “geek” sales team).  After all, we do have a business to run!

But we sure like to visit them.  The stores exude excitement and coolness, like a hot, stylin’ nightclub where you’re a VIP and from where you’ll never be bounced, and finally emerge, hours later, drunk on new tech.

Then, one day, not long ago, the iPad developed a serious problem:  the on/off switch stuck.  So we bundled the baby up and rushed it to the nearest Apple Store.  Like an efficient paramedic, a Genius Barista immediately came by, looked at it grimly and rushed it back-stage.  We feared the worst…

But it was just minutes later that the young Genius emerged with a brand, new iPad.  No muss, no fuss, no questions, and certainly no request for more money.  Could retail be any sweeter?!  

(Did we even bother to ask why the thing stuck in the first place?  The answer is an equivocal “No”.  We simply took the new unit and ran…)

The person responsible for this retailing nirvana is none other than former Target merchandiser-in-chief,  Ron Johnson.  Focusing on the the customer experience and sound assortment strategies that made Target a great place to shop, Johnson did what many said was impossible:  he turned a great computer-maker into a great retailer.

Marketers like to say:  “Well, we focus on our core competency, nothing else. ”  Heck, we’re guilty of that same sentiment.   But we admit we may be wrong here, as many apparently were about Apple. 

It’s not that they even had to go into retail.  Or, as though they weren’t already on top of their game with their numerous “iProducts” and now, the brand new, barrier-breaking iCloud.   And it’s not like Steve Jobs isn’t already a guru, if not a god, becoming more so with each re-appearance of his ravaged body at new product launches.  

It’s just that this is a company that decided to take total control of their brand.

That’s why Advertising Age just named Apple “Marketer of the Year”.   If they’re also named “Retailer of the Year”, well, then the rules really have to be rewritten.

Working it in store

supermarket 70774
Where impulse will get'cha

The proof is in the pudding, as the saying goes, and especially so when you are talking ROI for marketing programs.  We’ve posted often enough about the value of metrics and measurement, and nothing is quite as satisfying for a marketer than to see those sales needles jump in-store.

That’s because no matter how brilliant or elegant your marketing plan is, if it doesn’t play in Peoria (or wherever your target market is) then you’ve failed.  The ability to have it work in-store — where the rubber meets the road — is where it counts.

This is especially so when you consider that in-store marketing has recently surpassed the $18 billion mark and is projected to grow significantly in the next five years.  Regardless of the relevance and performance of  primary drivers (see last week’s post), over 70% of buying decisions are said to be made in-store .

Savvy retailers then partner with their vendors to ensure they are keeping a sharp eye on the results of their programs.  Unfortunately for most retailers, developing a program template that achieves reliable results is still a work in progress.  According to MarketingLab, most claim less than half of programs are successful, but as with much of media, the question is:  which half?

The chart below reflects the interesting results of  what promotions and merchandising activities seem to work best:

To us it’s not surprising that “Seasonal Programs” are the  most effective , with almost 30% of responses.  After all, if most shopping is done on impulse then “what’s hot now” is certainly a key motivator.  We would combine this with the “Short Term” stat because, again, it’s the now-or-never inpulse that drives sales.

Within the seasonal focus we would add themed promotions.  We’ve found that when you build an event and display around a well-executed theme — even ones as mundane as “Christmas in July” “Winter Wonderland”, “Fruitful Fall”, or even “Fiesta Days” –customers are drawn in by the visuals (retailtainment)  and the promise of a bargain.

When it comes to the second most effective in-store tactic being media-specific, again, we are not surprised.  Radio, especially, which does not require shoppers’ active attention and plays a strong subconscious influence, is the most cost-effective and easily-measurable.  

VOXPOP, a leading in-store media company, reports that over 40% of shoppers who listen to in-store radio are influenced to buy differently.  They also report 300%+  lifts from their campaigns.

Finally, the higher percentage of success with in-store as well as department-specific programs reinforces that a cohesive effort that goes across all store departments is the best.

Trends: did we call’em?

oasis of the seas_inbound
The people who build these must know something...

Last December 31 we posted our 2010 Trend Predictions:  an exercise in marketing crystal-balling that may yet backfire.  So, let’s look at what we may have called…or missed. 

We’ve reprinted a brief excerpt of our predictions (in italics) and color-coded them as follows:  Green for “You GO, girl!”, Red for “Thine name is mud!” and Yellow for “Am (still) curious…?”  plus, we added our thoughts for 2011 (You can still read the original 12/31/09 post here).  Here we go:

DEATH OF MASS MEDIA  The advertising industry has been predicting the end of mass media since the late 80s… Yet, like Cher, it has orchestrated comebacks in varying guises…cont…  

Yep, we called the surge of social media, but there was much more we didn’t, like the advent of mobile marketing apps.  Marketers are still spending on traditional media (print, broadcast, billboard etc). but the difference is it’s now typically paired with a social media campaign designed to work like the tide to lift the entire flotilla. 

DEATH OF MEGA-AGENCIES.  Pursuant to the trend above, some marketers are choosing to forgo “Mad Men” monoliths and build their own Dream Team

Truth is, we don’t have an exact metric on how many big agencies went out of business in 2010, if any (and we haven’t heard of any).  However, the trend is, like with most businesses today: the big get bigger, and the small either stay cute and boutiqueish, or they die.  However, we have seen several large agencies go from being media-commission dependent to charging clients for time/expenses.   As it should be, although prompted less by altruism than by the sheer fact that mass media is dead (see above).   We have never liked the media-commission-as income practice because it trulycan be a conflict with the best interests of the client. (Spend more so we make more!)  It also appears that with a more challenging marketplace, clients are truly seeking out agency expertise…as it also should be.

TIGHTER SOCIAL MEDIA STRATEGIES. On 11/19 we talked about Twitter’s possible monetization. There is no such thing as a free lunch: not for long, that is. By charging to promote and/or to view, social media may soon be, well, less socialist…

We thought Twitter would monetize by now and we were wrong.  To their credit, they have managed to remain a free service and survive the ups & downs of  a start-up.  In fact, they’re almost mainstream media now. (Even we’re on it now, see right column!)  The number of businesses now using it — even B2Bs — has exploded.  This week we read Facebook was infused with investor capital so it could continue to remain a private company.  If that’s not confidence in the medium…

THE EDLP MENTALITY. We see retail chains increasingly adopting everyday-low-price strategies (EDLP) instead of the hi/lo of yore. This, coupled with personnel cutbacks, are making pundits predict the death of creative promotions and customer service.

Based on our many posts about lousy customer service, we’d say we called this one, although even WalMart has gone soft on its “price roll-back” strategy,  filled its aisles back up, and appears to be going for a kindler/gentler approach. 

THE MEDIUM IS THE MESSAGE. This old adage has recently been recast by Comcast’s purchase of NBC. Controlling content was the goal here. While networks have lost their supremacy (and their death bell tolls), they still offer something valuable the hardware giants want: creativity.

(Ref Twitter, above) We were also spot-on about this.  Yet this past season we saw some exemplary cable offerings, proving that networks have less hold on the creative process.  Gems like HBO’s Prohibition-era mini-series, Boardwalk Empire (definitely not to be confused with Jersey Shore) and the continuing high-level Mad Men are only two among several programs that have pushed the creative edge of the pay-TV envelope.  With new cable offerings on the table as of 1/1/11 (i.e. Oprah’s OWN channel) we predict the networks will turn into the home of campy reality shows and not much else.   They question is:  how many Dancing With The Stars or American Idol wanna-bes can they churn out?

EVERYMAN AN EXPERT. The consumer became king long ago.  Now, as emperor of an increasingly-expanding domain he (she!) can, with a product review, blog, or Tweet, build or destroy in one single post.

We got the green on this one as well.   We see this trend continuing and, with Foursquare and other mobile marketing services full-frontal, truly large tribes of people are being followed wherever they go and asked for their opinions, but mostly for their money.  Scary, big-brother-type thought, but here we are….

SEARCH FOR SUITABLE SUSTAINABILITY ANGLE.  We addressed this in more detail on 12/18/09 so will make this brief: marketers who claim this platform need to carve their own positioning on this issue to avoid “me-too-ness” .

Yeah, we called this one, sorta… but the truth is it’s still looking a bid faddish out there with this topic.  We think it’ll take a while for the buzz  to die down a bit about this and social responsibility, and only those companies with truly unique angles and a real program to tout will remain.

FRUGAL FASHIONISTASThe Great Recession has spawned consumers who actually boast about being on food stamps. Today, more than 741,000 websites expound on the topic of a frugal lifestyle.

Yes, it seemed like this in the early months of 2010, but there is a bit of  reversal now.  Luxury is back in, evidenced by purveyors like Tiffany and others posting 7% sales increases since 09.   All told, even with Snowmageddon on the east coast,  the 2010 Holiday season posted the best numbers since 2006.  We may cry wolf (and unemployment) but there is definitely an “I’m treating myself  because I deserve it” mentality out there.  Maybe it’s just plain un-American to sacrifice and suffer too much…

DEEPER COCOONINGThe Great Recession has re-popularized the practice. The result, according to AC Nielsen, has been that more than 4,000 restaurants closed in 09.  The average guest check also plunged more than eight percent.

While “staycations” may have been the norm in 09, we saw less cocooning  in 2010 and predict that folks will get out more this year and spend more on restaurants (but they won’t be high-end like in the past).  After all, they’ve just launched new cruise ships big enough to house 8000 passengers!  These guys must know something we don’t…  On the other hand, as far as home is concerned, well, we’re staying put.  We can’t sell it so can’t upgrade to swankier digs…so we’re going back to Home Depot for that new faucet…

SIMPLER, KINDER, GENTLER.   Along with the frugal, stay-at-home trend comes the desire for what is truly real. Marketers who provide homespun flavor enveloped in warm & fuzzy messages will appeal to consumers seeking comfort instead of crazy.

We’re really not sure about this one.  It felt like 2010 was a year of unusual violence and upheaval around the world.  But maybe that was just in the movies…  What’s your thought??

HEALTHIER EATING BY YOUTH. Pending the passage of the controversial health-care bill, Americans are showing increasing concern with nutrition and the legacy of obese children.

Yes, by golly, we GOT it!  The just-barely-squeaked-by food law was signed this week, but was eclipsed in overall impact by the First Lady’s earlier, boldly- executed Salad in Schools program.  Along with the removal of candy and soft drink machines from many educational institutions and even government cafeterias, perhaps the tipping point toward the good has finally occured here.

Well, about half predicted correctly ain’t half bad, right? 

Have a healthy and happy New Year!

SPECIAL SERIES-Post #5: Mastering Metrics

This is the fifth and final of a “back to basics” review series of the marketing process.  For series introduction, see 4/5 post.

We’ve often posted that being able to analyze and measure the effectiveness of a marketing program is critical.  We’ve also noted that industry experts say that about half of all advertising dollars spent is wasted:  the key is knowing which half (few do).  So, how do you know what works?

With most marketers today understandably concerned about keeping their jobs or clients, they may be loathe to actually find proof  their programs don’t work or have a negative ROI.  Yet knowing how to present metrics masterfully in this climate of fear can work to great competitive advantage. 

Every market researcher knows that it is not the actual study findings that count but how you present the numbers.  Statistics can be interpreted in numerous ways, and research firms are sure to present theirs in a manner that at least shows there is opportunity out there for their clients.  Or, at least they suggest a follow-up study to ensure they will be rehired…

There is also now the element of social media, where readily-available stats for websites, blogs and tweets are daily reminders of  direction.  Importantly, clients can easily access those too, so marketers are no longer the lone gatekeepers of metrics.  

In fact, the new social media metrics are a world unto themselves, with new lingo such as buzz rate (see post below re ambush marketing which beautifully illustrates this.  We’ll address the new social media metrics in a later post.  Remember:  this is a “back-to-basic” series…)

We’re also not going to address complicated econometrics and regression analyses here.  Leave those for the academicians or those pesky auditors.  

Then, there are clever analysis programs that come under the umbrella of  the “path to purchase” where each stage of the sales-actualization process is measured independently.  Good stuff for the big packaged goods guys, as many of the smaller marketers don’t have the time or tools to do this effectively.

Instead, below are some planning tools, plus analyses and metrics that  anyone can use to determine whether a marketing plan is delivering anything:

  • COST-PER-INCH ANALYSIS.  Perhaps one of our very favorites and a standard at PR agencies, it involves the counting of  total inches or minutes your product/company received in “free” publicity from press releases, feature stories, PSAs etc. sent distributed by you.  That is then coverted to actual dollars (based on the media’s highest card rate) to arrive at the savings from not actually buying that media.  Or, how we prefer to present it:  the value added to the program.  Works best if your program has no advertising component…
  • TOTAL IMPRESSIONS.  This is another one used often by PR agencies involving the addition of the total circulation, times the projected bonus readership (i.e. most  publications have what is termed “pass-along” readership).  Often marketers will call this IMPACT, using the standard equation of:  REACH + FREQUENCY = IMPACT.  This is one that only works with specific benchmarks (i.e.  you increase your goals each year).
  • COST PER STORE.  We kinda like this one if we are doing multi-store or chain programs where we can look at the store traffic count (# customers) and evaluate what it cost to post the POP, stage the demos or the promotional event. etc.   Dividing the cost of your marketing effort by the total store or traffic count can help determine which chains/stores deliver the best ROI.
  • CPU/CPM.  Standard measurement of media, the cost-per-unit  or cost-per-thousand (broadcast rate) is typically measured against sales gained via that media.  The goal is to show you spent mere cents or fractions thereof reaching your target audience. (the “which half of the ad dollars is wasted?” quandary…)  This is  traditional mass media measurement, slowing going by the wayside in the wake of social media…
  • COST PER CUSTOMER.  This is a common tool used by sales management, where the cost of servicing the customer via visits, phone calls, baseball tickets, etc.  is pitted against sales to him/her.  Then, typically strategies whether to up-sell, maintain or “divest” the customer are made. (The figure varies but most companies peg the average B2B sales call today at $500+).  Sales being a component of marketing, savvy marketers need to handle this delicately with the sales managers…
  • ACV.  We wrote about this recently:  how knowing the all-commodity volume of the market and chains you are targeting  makes clear sense before making a marketing investment.  Lots have been spent on only few,  just like some salespeople spend way too much time trying to sell widgets in Montana…(check out the state’s ACV.) Again, the key here is ensuring your efforts are in line with the potential of the market.
  • BDI/CDI.  Another potential-measurement tool is the Brand Development Index vs. Category Development Index.  This is a more complex matrix exercise where you plot, using sales data, the position of your product’s total category sales (all competitors, including you)  in the marketplace vs. your own product’s sales (your brand).  The resulting matrix illustrates whether the category is saturated or whether there is hope for your brand to grow.  More complicated, and deserves its own post, but suffice it to say that marketers should know about these tools even if they never (or pray they never) get to use them.

We hope you have found this small series of five posts helpful. (Selfishly, they will be part of a book by your blogger some time…time permitting)   Let us know if you would like some more of these series in the future and which topics are of special interest!

SPECIAL SERIES-Post #4: Minding the Media

This is the fourth of a “back to basics” review series  of the marketing process.  For series introduction, see 4/5 post

After your integrated marketing plan is nicely in place, the ACV assured and the complete program ready to roll, there is one area often neglected but which can mean sink or swim for you or your client. 

That area is media relations and, judging by the recent events with Tiger Woods and Toyota (see our previous posts on these hot subjects),  never make the mistake of assuming you are too “big” to learn this discipline… Importantly, good media coverage doesn’t just happen:  it requires careful planning.

Thankfully there are some experts willing to help us, like agency colleague Dee Munson, who is in the forefront of all this, having recently squired Olympian Apolo Ohno on a media tour. (Lucky lady!)  She shares her valuable insight:

“Much has changed in the several decades I’ve been doing marketing communications in the food area –especially the media.  But I do think some basics still apply now, as when I first started.  These basics are the foundation of successful communication.  It’s still the what, who, why, where and how.

First, what.  Know exactly what you want to say.  Call it ‘messaging,’ staying on point, focus, strategy, whatever.  Spend some time to really distill your message so that it becomes automatic.  You can add some subpoints and additional messages, but not until the key point has been made perfectly clear.

Second, why.  Why do you want consumers to know about you or your product?  Obviously, to increase awareness and sales.  But you have to commit to more than that.  Consumers today want you to be serving them, so determine what it is about your company and your product that will answer that “why” question.

Next, who.  There are two parts to this question.  Who is your target?  Knowing who you want to reach helps answer the remaining questions.  That target audience will be a major factor in determining the where, when and how, including the spokesperson, as well as the media for the spokesperson to deliver a message. 

For example, most food products have a common target – the woman who selects and purchases the food, and most likely for a family.  Research will help you determine more about this woman – her age, her education, where she and her family lives, what her media preferences are, how frequently and where she buys your product and more. 

The investment in research goes beyond value – it helps you know exactly who you are trying to reach.  And, in most with produce, the target audience who buys your products is not you!

If you’ve lots of bucks and can get directly to the consumer, advertising works.  Reaching consumers through channels that they use for information is less expensive and has the additional benefit of implied endorsement – from magazines, social media, broadcast.

Who can best deliver your message?  Here’s where spokespeople come in.  If you are going to use a spokesperson you need to vet that person as completely, if not more so, than a possible employee. 

After all, the spokesperson is speaking for you, standing for your product or your brand and will be the most visible representation of your product or brand. You can use focus groups, either formal or in-formal.  Or check out Q Ratings.  Q Ratings is a form of research that rates the popularity of spokespersons. 

 Also look at other products this person is representing and get recommendations, or warnings.  There’s always considerable financial investment, but the investment of your reputation with the spokesperson cannot be measured, except in harm done if you don’t do your due diligence. 

And here’s an important tip when budgeting for a spokesperson – remember that, in addition to the spokesperson’s fee you have to have enough money in addition to cover how you want to use that spokesperson: point of sale, media events, advertising, appearances and more.  Figure on at least double the spokesperson fee, or better yet three times or more.  This is investment spending.

Be perfectly clear about your expectations for a spokesperson.  You’ll be involved in a contract and working with an agent.  Be sure you have some legal guidance as well.  It’s good if you can be in love with your spokesperson, but it’s also good to have a “pre-nup”…

And it’s very good if your spokesperson is in love with your product.  Sincerity shows.  It’s important for your spokesperson to tour your operation, use your product, become familiar with your communications and be down pat on your messages.  Most professional spokespeople know that this is their responsibility, but it’s also yours, so don’t be blinded by fame or celebrity – make sure the spokesperson is yours.

Now, where.  This is where a media event comes in.  The event is an opportunity for you to bring your spokesperson face to face or computer to computer with influencers who will amplify and multiply your message. 

As you recently read in this blog, you “fish where the fish are.”  The media these days are overworked, understaffed and besieged by invitations to events.  They pick and choose, so your event has to be meaningful, attractive and convenient for them. 

Your invitation has to be specific about time and place but also about what the media will get from attending.  Familiarity with the blogs of some well-known editors can tell you just how selective they are. 

Remember that the media get many, many invitations to press events each day and yours has to stand out from the crowd.  An attention-getting delivery helps, but the substance of the information from the event has to be there.

When:  If your products are seasonal, you want to reach the media either in mid-season, or, in the case of magazines that prepare their features six months or more in advance:  far enough out that they can include our information during our season.  Broadcast, news and bloggers want immediacy.  You must decide which is more important for your product.  Ideally you’ll do both.

How.  Spend time to create a complete media kit.  It can be on a drive or disk or even the old-fashioned printed kit, and must have all the information you want to communicate, but concisely and in a format easy for the media to access. 

Photos? Absolutely!  Depending on the event, you’ll want a professional photographer there to capture as much as possible.  Following up with a photo for the editor gives you one more point of contact.

A few other pointers: 

  •  Don’t under-budget for an event.  You want enough staff there to handle all the details, to meet with the media, to assist the spokesperson and to make things go smoothly. 
  • Plan the event minute-by-minute to avoid any last minute needs and surprises, and get some professional help.  This is what we PR folk are for – we know what’s needed, what to expect and how to handle last-minute situations. 
  • Don’t assume you and a few company people can handle it; and there’s no need to be lavish, but don’t skimp.  Cheap looks cheap and reflects on your product and your company.  Again, here’s where a professional can help make a difference. 
  • Finally, it’s a positive personal relationship that can make a difference.  Make an effort to meet the media and to understand their wants and needs.  NEVER say: “We want you to run a story about our product.”  Provide the information based on all the points outlined above and trust that your planning and hard work and the right spokesperson are going to get the message across.
  • Always follow-up with more information, photos or just a thank you.  And continue to do so.  Produce people know that a successful crop starts with seeds, working the soil, ongoing attention and a thoughtful harvest.  It’s the same with media relations.”

(Dee Munson, is president of Seattle-based The Food Professionals, Inc.,  and is a veteran marketing communications professional, with experience as a magazine editor, commodity board marketing director, agency executive and spokesperson.   She can be reached at dee@thefoodprofessionals.com  (206) 463-5677.  Or visit her web site: www.thepfoodprofessionals.com )

NEXT SERIES POST:  Measuring performance!

SPECIAL SERIES-Post #2: Aceing ACV

This is the second of a “back to basics” review series  of the marketing process.  For series introduction, see 4/5 post

Now that your multi-element marketing plan is in place, you need to take it on the road.  The question is: where to?  

Allocating marketing dollars is one equation everyone struggles with at some point.  As one famous ad man quipped:  “Half of all advertising spending is wasted.  The key is knowing which half.”

We were gratified for the recent opinion of a blogmaster (those who write these for a living:  the easy life!) that echoed what we wrote about on 11/11 and then again on 3/10 about…fishing.  Daniel Scocco (daniel@dailyblogtips.com) guest-posted on Copyblogger, and we paraphrase that here because it is worth repeating…ad nauseum:

Go where the fish are!

What is the most important factor you need to have if you want to go fishing?
Most people will say the fishing rod. Others will say the bait, or a boat. Interestingly enough, they are all wrong.  The most important element of the equation is the presence of lots of fish.  If you have a lake full of fish but don’t have a fishing rod or bait, you can probably still improvise something that would let you enjoy a fish dinner tonight.  But no matter how great your bait or how cutting-edge your equipment, if there aren’t any fish, there’s no fish dinner…That means…[you need to] target known customers willing to spend money.

 

Remember that we wrote about on 3/10 how ACV — all-commodity volume — is the retail segment keystone because it measures actual sales activity, not just population.  When you target a market with high ACV, you simply have a larger number to bite your bait.  After all, 1% of  millions is something.
 
 Yet there are times when marketers want to go to smaller ponds.  Fact is, high-ACV (“A” markets) such as Los Angeles, Chicago etc, are expensive.  Media costs and, in fact, costs to implement promotional programs there are typically much higher than in B or C markets.
If your budget does not allow this, or if you have a very specific product niche, then focusing on a smaller market makes sense.  But here the key is to know the specific demographic of your target to ensure no wasted dollars.
We urge you to invest in market research (primary and secondary), scanner data and psychographic studies that tell you all about your target.
Segmenting the market is the key to success today, and one that giants like Unilever have down pat with their excellent studies on ethnic and generational groups.  Then, you can tailor your message accordingly.
In short,  if you want to be a successful fisherman today, you’ve got to ace ACV.
NEXT WEEK:   The retailer’s angle…