Subaru Wins Big with “Love”

I had a chance to speak with Alan Bethke, the director of marketing communication at Subaru Americas.  He presented a fascinating overview of how Subaru grew its share in the highly competitive auto industry with only a tiny fraction of the investment of the competition.  Subaru has been the only auto manufacturer to gain share and grow volume in each of the last four years.  

A Different Consumer

After years of following the big automakers, stressing the marvels of automobile engineering and the latest accessories, Subaru saw its market share and sales going nowhere.  With only 1% share of the US market, there was little downside to trying something new.  Against the wishes of its dealers who wanted more features and lower prices, Subaru marketers tried to gleen insight by listening to what core consumers said about their relationship to the Subaru brand. 

 

Memes and Marketing – Tapping the Cultural Conscience

“Meme” was not a term with which I was familiar until recently.  I did some digging. Understanding the power and speed at which these ideas move through the population make them of value to marketers - if you can can catch them. 

What is a meme? 

A biologist named Richard Dawkins, in his 1989 book “The Selfish Gene”, created the term to describe a cultural unit of measure that replicates itself through imitation.  A meme is an idea that is held in the collective conscious of many -- a(n) idea, video clip, snippet of music, crazy internet gag.  They spread at light speed through culture and are applied in, often, bizarre ways beyond their original intent.

 

Record Breaking US Auto Sales Despite Lackluster Advertising

The big news is that December 2011 was a banner month for the auto industry and led to a year of growth for most car manufacturers.  With the exception of Toyota and Honda,  suffering from earthquake-related supply problems since March, December set records for most of the major auto makers.    Consumers have held onto their older cars and the holiday deals were the tipping point for many to trade in. This is still a great sign for the US economy.
Automakers have now planted themselves firmly in the December holiday period as the new “must have” item.   However, the advertising for the holiday was lackluster for the most part according to experts and surveys. Most automakers were touting year-end clearance incentives, sign and drive programs, etc. to incent sales.  Few had breakthrough branding campaigns.  With December such an important month there is now much at risk if the creative is lacking punch.  The Super Bowl ads of last year were terrific - strong brand building and very creative.  This is what the industry should have been taken into the December period. 
Here are my favorite December car ads.
Chrysler - Chrysler’s sales were reportedly up +37% and were the best monthly retail sales in 4 years and best sales overall since May 2008. The flagship Chrysler 300 had the most creative approach bringing a sense of hope and spirit that still lives in Detroit.  After all, rooting for Detroit is now like rooting for all of us.

Chrysler–Good Things Dr. Dre

Media - Integration of Social Media with Traditional Media is Strongest

Social media has fast become an outbound marketing choice for businesses of all sizes. Measuring sales impact of social media with hard metrics, however, has eluded many marketers due to the difficulty in putting together a viable side by side test model to measure sales gains.

The advertising agency - Ogilvy &Mather conducted a case study in the Quick-serve restaurant (fast food) business and published their findings. The results showed the impact of social media alone and when coupled with other media outlets such as print, television and public relations. See the chart below taken from the study:

This study is “diary-based”, where consumers are asked to record any contact they may have had with the brand advertising and their associated intent to purchase or actual purchase over several days. Its impact is significant, but not perfect, as it is measures only what people want to record and remember. Marketers have very few measurable studies in this area.

Ogilvy’s key conclusions are that social media is best integrated with other types of media to be effective and, most importantly, that the results are measurable. The study also concludes that the impact of social media on changing brand perception is stronger than other forms of media and is far more immediate. Traditional advertising takes a long time with multiple exposures to accomplish this same goal.

There will certainly be more custom studies conducted by individual brands to determine the strength of social media in the marketing mix. If the results hold up to these, the movement of media dollars to social (media) will only accelerate.

Are these results in line with your experiences? Let us know.

Visual Marketing (and the Power of a Cute Spokesperson)

There is power in visual ideas – executed well. 

I am starting to see more and more info graphics charts everywhere on the blogosphere. I love facts and visuals. The chart on the left distills who’s who in the world of car insurance.

Visual cues are so important in the world of marketing. Car insurance has used visual cues tremendously well over the last several years. Car insurance companies used to be pretty boring advertisers. Messages were filled with safety and security laden jingles. Worse than that, most people don’t like insurance companies due to their high premiums. But the industry has actually become fun and it is due to some brilliant visual advertising ideas.

When Geico insurance launched great campaigns with the gecko and the cavemen, people took notice and starting moving in droves to their brand.  

“Flo” at the Progressive “insurance store” introduced us to her quirky personality and is kind of of someone you might want to hang out with.

 

 

 

 

“Mayhem” crashes face first through your roof or windshield and is similarly shaking up the stodgy image of Allstate’s “you’re in good hands” moniker.

 

 

State Farm could use some more interesting advertising. Their messages are generic and forgettable.

  

I don’t know what Farmer’s Insurance core message is in their advertising, but they have definitely caught our attention (just entering the Philadelphia market) with their quirky personality and strong jingle.

We all don’t have the massive advertising budgets of these companies, but don’t be fooled, the strength of these messages are in the strength of the visual idea, not how much is being spent.

The Importance of Trust When Choosing Advertising Media

The first exposure a consumer has to a product or service can have an enormous influence on that consumer's desire to begin a relationship with that brand.   If the consumer likes the message, and trusts the source, they are more likely to try the product.

The manner in which the consumer hears about the product, therefore, can be just as important as the message itself.  A global Nielsen study  showed the level of trust given to different types of media.  Personal recommendations are trusted far higher than most types of advertising on the internet and other sources.

It isn’t surprising that we trust and listen to recommendations from someone we know. Ads are viewed skeptically, whether they are on TV, internet, mobile phone, etc, and fall far below personal recommendations, websites and opinion, which are more genuine (not necessarily objective) forms of expression.  The words and the message might be similar, but we tune out when we feel that we are being “sold to”. 

In our new age of social media, we strive, as marketers, to make our messages more genuine,  personal, and rooted in a social community.  Social media can be harder to implement and not as easily measured since the original message (measurable) gets stronger the more it is passed along (not very measurable).  Consumers will trust messages which they deem genuine and come from a credible source.  The media choices change, but people remain emotionally connected to people, and trust them more than any other source.  

The first impression is important, so it is important that it comes from a trusted source. When building awareness, the messenger counts.

SUNTORY – The Advertising That Built a Powerful Japanese Brand

There are many wonderful brands all over the world, some which may not be so well known here in the US. One such brand is Suntory, a very successful Japanese brand of whisky that fueled the growth of a strong global company. 

Shinjiro Torii, Entrepreneur and Suntory’s creator, started the company, making wine, at the turn of the 20^th century. In 1923, he built a whisky-making facility in Yamazaki. He believed that this drink (not known in Japan) could be a success. Torii, like many successful consumer marketers, also believed in the power of branding and telling a story to the consumer. Suntory was one of the first Japanese consumer product goods companies to embrace Western advertising techniques – using high levels of television and magazine advertising to build awareness.

Consumer Target and Consumer Insight

Suntory’s brand success came after WWII when it focused its whisky’s marketing message toward the “salaryman” – the company man who worked tirelessly by day and was expected to be out in the evening with coworkers drinking and partying. Suntory likely believed that the salaryman saw himself as this century’s “warrior”, building a new economic powerhouse that would one day surpass the economies of the world. The insight might have been that the warrior, feeling a personal sacrifice, gave his all for a greater purpose. Suntory built an emotional and inspiring message about the whisky, and the man who drinks it. Advertisements used successful, well known personalities, sharing inspiring, vulnerable moments (maybe similar to that of the mysterious Japanese warrior).

Akira Kurosawa produced a series of famous commercials featuring celebrities such as Sean Connery, Peter Lawford, Peter Falk and many other. While this approach is a bit dated today, it established strong credibility for Suntory.

Sean Connery for Suntory Whisky

A famous product placement based on these successful commercials came in the 2003 movie, “Lost in Translation” where Bob Harris (actor Bill Murray) goes to Japan to film a Suntory advertisement:

Bill Murray in Lost in Translation 2003

Suntory remains the number one brand of alcoholic beverages in Japan (having also acquired Kirin beer) and is winning awards around the world for, both, its whisky and advertising. Suntory has also gone on to purchase non-alcoholic beverages, Pepsi bottling companies, food companies, restaurants and even flowers. Still, everything they do is rooted in great imagery and emotional connection – never giving up a belief in the power of advertising. Suntory told the Japanese man a story built on deep insight and used the power of emotional advertising to lay the groundwork of a thriving $12 billion global business today.

So what do we learn from Suntory’s approach today? Marketers today are gravitating away from traditional advertising towards social media in a search for brand loyalty. Loyalty, therefore becomes ever more fleeting, especially given the length of time these quick messages last. Suntory, like many great brands, was built on emotional imagery at a time when it was not in step with the fashion of business to use western advertising techniques. Building a brand is based upon a deep understanding and insight into your target consumers’ motivations. The results of this hard work can be inspiring and lasting

 

Suntory ad with Keanu Reeves

American Airlines TV Ads Celebrate Memorial Day The Right Way

Memorial Day is a day marked by family barbeques, beer at the pool and sales at the malls.  For marketers, the day marks the beginning of the very important summer season that can make or break seasonal categories. Advertising leading up to the holiday is focused on big sales and discounts.   It is all very commercial and that is unfortunate.  

So I happily share here some TV ads from American Airlines that capture correctly what this day is about – our fallen veterans and those who actively serve in the US Military.   These are very well done and emotional. They integrate flying on American Airlines, but most importantly, the focus is on those who serve.  Please view them.  Nothing more to say….

Putting Them First

Thank You

The Aging of the Media Audience

Ever wonder why the up-and-coming stars and contestants on American Idol (age 15 – 29 roughly) sing songs that were famous in the 1960s and 1970s?   I mean, come on, shouldn’t they be singing Lady Gaga and Ke$ha… (Not Motown and the Beatles)?  Well, the answer may be rather obvious to you.  Or maybe not.  The median age of the people watching American Idol is around 45.  Median means half below and half above. 

An recent article in The Economist on April 7th laid it out pretty clearly.  For those in the media business, it is not surprising that the median age of each of the major networks (except Fox) is now 50.  That is not all because TV is a bygone appliance. It is more to do with the fact that the population itself is getting older. 

I do remember the days that marketers looked at all demographics as male and female 18 – 49.  It was assumed that after that point, (known as “50+…. and irrelevant”) people were just elderly and unable to purchase things as they were likely in a wheelchair and homebound.   Really, that was the media and marketing thinking 15 years ago.  I was there.  Over the past years, however, marketers grew a little more wise and agreed that 50+ happens to have far more disposable income than the younger group, tends to shop more, and make bigger purchases (and likely not in a wheelchair until the early 80s). 

Now it seems that this viewer is a hot commodity – they tend to value brands, go online more than ever – even  pay for downloaded music (who does that anymore?) and trust advertising quite a bit more than the younger cohort.  Youth may still be enviable, but they are hard to pin down and are notoriously fickle as to paying for anything online. TV has become a friend to the 50-something consumer.  Networks proudly pitch their older viewership age demographics to the advertisers who seek this desirable target. 

So the next time you see Viagra ads on American Idol, realize that is why the artists are singing Beatles songs.

Pepsi Refresh Campaign - Putting the “Social” in Social Media

Pepsi is encouraging people to take on a social project in their latest “Refresh” on-line campaign – and they will in turn post your project and even help to fund.  Fantastic idea.  A brand the size of Pepsi can make this happen.  The viral implications are great, the example for the young generation is cool, and it just might make a difference in the world. 

So what’s the problem?  Well, Pepsi is not growing.  Actually, Diet Coke took the number 2 spot away form the flagship Pepsi brand.  That hurts.

The bloggers and advertising community are buzzing.  Pepsi took their eye off of the fact that they have to sell soda first.  Too many eggs (media dollars) in one basket.  They even skipped out on Super Bowl advertising to start this viral on-line campaign (sort of makes you long for the days of Cindy Crawford sipping a Pepsi in super slow motion).  Social media is an add-on, not a replacement, to the core media message.  Doing good rocks, but it comes on top of the core.  I agree and applaud.  Case study…closed.

In my humble, expert opinion; if what you are doing does not resonate with your sales team (I assume they had a few skeptics in that group), beware. Put yourself in the shoes of that team.  Are they applauding along with your consumers?  Are you driving sales and helping the team make bonus.  Successful brands do just that.  

Social media is a valid and bold strategy, no matter what the skeptics say.  Your consumers have to love you too.  Just watch out on how you allocate the messaging. 

Hats off to a great idea.  Now, lets sell soda.

Do Brands Suffer in a Recession?

Actually, no.  Recessions rarely have a direct impact on the strength of a brand. 

A brand’s strength is measured in its ability to maintain its identity in the eye of the consumer and how uniquely it delivers on its promise.  That is different than how much product gets sold. Certainly a business can suffer from slower sales due to consumers choosing not to purchase as many things, or even to purchase only at the lowest price, but a brand is measured in its strength of persuasion and loyalty.

Brands suffer when what they stand for is lost – usually to a competitor who is doing a better job of delivering on the promise. 

Here is an example.  A recent article on the beer industry shows that Coors Light beer is vying to take the #1 spot of beer sales away from Bud Light, which has seen its share decline for a couple of years.  While the market is declining –3% per year, Coors Light is seeing sales increases.  Bud Light is a well loved brand but has become somewhat interchangeable with others and has lost some its bond with its user.  Beer are measured by their consumer as to taste and how they fit in with lifestyle and friendships.  Coors Light has turned up the innovation (labels show when they are icy cold), and continued to hammer home with strong ad campaigns.

But these gains and losses in this category have little to do with a recession. A recession may cause consumers to act differently, usually by, more closely,  watching what they buy.  But the brand that stays relevant and tied to the consumer, in the end, will win.

How to Provide Feedback to Creative Ideas

One of the most uncomfortable but important moments for marketers and executives is in evaluating and providing feedback to creative ideas.  Whether the idea is advertising, media, web designs, packing or a promotional concept, – or any idea for that matter. 

After an idea has been presented by an agency or internal team, many times, the feedback is not constructive. It can be a long running commentary on the personal likes and dislikes of the idea that are not fully thought through and lack a clear point of view and direction.  Even worse, the feedback can be too short, too negative or disjointed if there are several people commenting.  Also, great work is great work, it should be seen and accepted as such without endless small nitpicks on improvement.

Good feedback takes practice and is an art to handle correctly.  But there is a very simple framework approach that makes the process easy and productive if followed in a step-by-step fashion.  Having sat through hundreds of these presentation, and still learning, I find this simple approach most effective.

5 Key Steps to Providing Feedback on Creative Ideas

1. Sincerely thank the people that worked hard on the idea – really, the presenters have poured a lot of time and energy.  You would be surprised at how rarely this is done
2. Point out first what is working well  given the brief objective.  What is inspiring?  What connects with you personally?
3. Which idea best communicates the key consumer idea identified in the brief, regardless of your personal liking.
4. What areas could be improved and what is missing – was anything unclear, confusing, etc.  Be specific as to elements you with which you are having problems.
5. Do not try to fix the creative with your specific suggestions – this will backfire and leave the creative team uncomfortable, uninspired and confused with what to do next. They are the creative group you have hired for their expertise, not your own.

By the way, I have also seen marketers take a short break and compose their thoughts before providing feedback against these points.  This is a perfectly acceptable approach and the creative team will appreciate your well-constructed feedback. 

This 5-step approach is perfect for feedback for any creative presentation and can be adapted to fit your own personal style.  It is simple and keeps comments focused, clear and useable.  The creative team will be more likely to hear the feedback and and feel inspired to take their work to the next level if needed.

Should You Outsource Your Marketing?

Outsourcing, for the small and mid-sized company, can be a very effective strategy to gain access to skills, and services at a fraction of the cost of hiring employees.  There is an adage that a company should outsource everything that is not a core competency.  For years, firms have taken this on in the areas of payroll, IT, distribution, and logistics.  Certain functions, such as sales, marketing, R&D, etc. have been held close within the organization as core competencies due their strategic ability to grow the firm and their intimate knowledge of the growth levers of the business. 

The time to reassess this practice may be here.  One of the largest components of any firm’s costs are in the compensation of its staff.  Even a small department of 2 – 4 people can cost the company hundreds of thousands of dollars in compensation alone, not to mention computers, phone and rented space.  This expense is also not flexible when topline sales may be temporarily weaker than normal.  What does outsourcing deliver?

1. Access to top talent
2. Latest thinking in the field
3. Methods and processes built and tested over time in other organizations
4. Ability to contract and pay only for services needed, rendered 

What About Marketing?

Marketing’s role in the organization is to first set the correct marketing strategy for growth.  Marketing will then take on any of a number of functions in the marketing mix (see insert) depending on the needs of the organization.  Marketers should understand and build the consumer insights that feed communication, and product development.  Marketing’ will also develop and execute the outbound functions of the communication with the customer.  This includes public relations, advertising, social media, market research, promotions, and provide customer and consumer direction for the company’s innovation pipeline.  Marketing staff typically handles even the tactical customer presentations, logos and letterhead, trade shows etc. Smaller organizations do not need all of these areas covered at any one time.

There is a small, but growing, field of contractors that specialize in the area of marketing and can assist management in setting strategy and developing programs typically handled by an internal marketing department.  They will develop these programs or work with outside agencies ensuring that each resource is delivering against the plan.  

Many small firms go directly to a PR, ad, or web design agency to fill the role of a marketing department.  There are drawbacks to this approach.  First, agencies tend to specialize in an area of execution.  This area may or may not align with the strategic needs of the company.  PR agencies will offer great PR programs, advertising agencies will look to advertise, web and social media will provide social media solutions.  Second, agencies still have a vested interest in you spending as much as your budget allows, where a marketer should only be interested in effective spend, flexibility and growing the bottom line of the company.

Many smaller- to medium-sized businesses must keep a keen eye on the day-to-day managing of their business.  Marketing can become a distraction taking up valuable time and energy away from the operational side of the business.  For many firms, outsourcing can be a very cost effective way to gain access to top notch skills to get the results needed.  

Pepsi Max and Snoop Dogg - Great Product, but Strange Ad

Pepsi and Coke are both going after the teen market with full flavor versions of the base brand in a zero-calorie option.  To target teens, you certainly can’t talk calories and diet.  More like – you better be cool and connect.

Which makes this a cute but rather odd commercial execution.  First we start with the familiar story of our over-eager Pepsi and Coke route sales guys (you know -- the Coke guy who really likes Pepsi better…) who meet each other in the store and go for broke to win the day with their new Zero products. Each is out to outdo each other by building the best in-store display while “Anything you can do I can do better” plays in the background.  This section of the spot seems like it would be interesting only to the sales division of Pepsi and Coke.

Ok, so after all this comes the cool teen part.  Snoop Dogg comes out on top of that big Pepsi display doing his “g-thing” rappin’ with the ladies.  This big surprise is cool, but…  did you lose the teens by this point? 

Pepsi Max is diet cola aimed broadly but going for the teens – the sweet spot for Pepsi versus Coke.  I love the product concept and I love to see cool diet products for the younger generation with big powerful taste.  To connect with teens, Snoop is a great way to go. While 30 seconds of Snoop rapping may not be the best start for this ad, I am not convinced that the Pepsi and Coke route guys are the right route either. Overall, it’s fun, and Snoop shines bright in a “just OK” ad.

Groupon Advertising Was Off Strategy First – Offensive Second

Companies, sometimes, overthink their messaging.  Groupon is a rather new on-line coupon service that is growing by leaps and bounds.  While they grow and have money to spend, what they need to do is to convince every mainstream mom in America to use their service.  While downloading coupons is not really new, Groupon needs to build massive brand recognition among a broad audience.  And what better place than a Super Bowl ad with over 100million viewers.

Groupon Super Bowl Ad

Crispin Porter & Bogusky created this ad, which was a bit irreverent in that it linked its money saving benefit to the plight of the Tibetan people who are being oppressed by the Chinese government.  What?? Well, actually it was intended to help build awareness to the plight of the Tibetan population. They might have been helped had they used their URL link to Savethemoney.org which was to bring donations to the Tibetan Fund.  But the advertising backfired, consumers did not get the humor, or the connection.  While Groupon’s sales did not decline (nor really grow either), the company’s CEO,  Andrew Mason, made the decision to pull the ads from further airing to minimize the negative exposure.  

Look, the reason to pull that advertising is simply because it was off strategy.  A simple lesson here is to stay true to the job at hand.  Groupon’s job is to become a household name, and it squandered its single largest exposure event trying to be outrageous and clearly overthinking what should have been a simple message and a huge opportunity. 

Writing Like You’re Smarter Than a 5th Grader

I recently read a new training procedure that was so jargon-filled and convoluted as to be completely unreadable.  I actually could not believe that the person writing it knew, himself, what it meant. 

Part of the beauty of good writing is simplicity. Some of the best journals -  The New York Times, Harvard Business Review and The Economist, for example -  write about very complicated subjects, yet simplify the content in order that you understand the true issues. 

Here are 2 statements that could be used to describe your company’s service:  

• We build CRM client interfaces for receiving verticals that contract our web-based ship-to platforms.  

Instead, try this:

• We write software that helps small companies deliver products that actually arrive on time so the owners can sleep at night.

Early in my marketing career, I learned that when writing for package or advertising, never use words that could not be understood by a 5th grader. We would agonize over wording to simplify everything to make it clear and easy to understand. I soon found that this had nothing to do with the education level of the American consumer, as much as it had to do with the fact that complicated wording is very often misunderstood and therefore loses all impact of its message.   This is not good in advertising.  This is also not good in training manuals. 

Complicated writing does not sound smart.  It is actually the symptom of cluttered thinking and/or a disregard for the person who must read it. 

So, even if you are smarter than a 5th grader, don’t write like you are.

Super Bowl Ads – “Car Wars”

How about the Super Bowl?  it was a clash of the titans – and I don’t mean the Steelers and the Packers – how about the car ads? These guys showed up with their game faces on ready to hit hard.  So which competitor got you most interested in buying their car (that’s what advertising is supposed to do) at the end of the day anyway?  So let’s look at the top commercials, as rated by yours truly, against the following criteria:

1. Was the ad fun/compelling/interesting to watch?
2. Do you remember what was being advertised?
3. Does it make you want to learn more or maybe even buy one?

The Kia Optimum   (out of 5)

Brilliant story, extremely compelling, surprising that it is a Kia.  Branding link is a bit weak so many might not remember the name of the car

#2  Volkswagen Passat 

Very, very compelling, and touching.  I only wish it were stronger on making one want to buy a car rather than the sweetness of the boy and his dad.  I wasn’t sure which Volkswagen they were advertising either.  But I could watch this ad a hundred times. 

#3 Chevy Camaro

This is actually a pretty cool ad –especially for guys who want a cool car.  Compelling, and good branding.  Makes you want to buy this car, and maybe go on a date with Miss Evelyn – Isn’t that why guys buy cars anyway…..?

#4  Chrysler 200 with Eminem

Great in-your-face attitude.  Detroit strikes back and looks cool.  I am a bit surprised that it is a Chrysler 200. Does it make me want to buy a Chrysler 200?  Not really, but I am rooting for Detroit’s comeback.

#5 Audi???

This one is the strangest ads and is so far out of left field, I don’t know what to say. It must have cost a fortune to shoot this spot.  I think you have to see this a few times to get all that is going on.  I give them credit, but I am not sure I am compelled to buy an Audi on the premise that if I chose an Audi, I won’t become locked in an out-of-touch “luxury prison” (Mercedes)

So there you have it.  There were some other good ones too, but these seem to hit the mark for me.  I remember them the next day, and that is probably saying a lot for a TV ad.

What is a “Consumer Need”?

Ever wonder why so many brands take such different approaches to advertising and packaging in their quest to entice you to buy them.  They seem to work so hard to stand for something unique.  Look at cold beverages.  While the function of a cold beverage is essentially the same for tap water as it is any soda in the store, the brands in this category try to stand for meaningful differences in the mind of the consumer.  For example, Gatorade and other sports drinks are satisfying the need to restore your body after working out.  Mountain Dew is inspiring an extreme active lifestyle.  Coke is the all-American classic, and Pepsi looks to be the drink for the “younger generation”.  These brands accordingly spend millions of dollars building these unique propositions.  Why?  Because when a brand satisfies a consumer need, it builds a powerful and lasting bond with that consumer.
The most important goal of a brand or business is to find a unique consumer need and fill that need with its solution.

Let me give you my definition of a “consumer need”

• Consumer Need - is a consumer’s desire for a product category’s specific benefit on a functional or emotional level during a specific time or situation.   

Consumer brands need to satisfy both functional and emotional needs, but the stronger is the emotional.  This is because functional improvements are easily copied or outflanked.  
Market leaders find and satisfy unique consumer needs
If two or more brands try to satisfy an identical need, then one of those brands or products is not needed.  These competing brands must rely on tactical thinking:

1. Modify / Improve functional performance.
2. Lower the price of offer short tem price incentives
3. Offer more variety, etc.

The better solution long term is to satisfy a different consumer need. Sometimes a brand has to dig deep with the consumer to find that need, but once found, that brand becomes the single solution for the consumer.
The classic case study of Mountain Dew is a good example.  Back in the 1940 – 1970s Mountain Dew was positioned to fill a need as a unique taste experience – a reminiscent refreshing taste of the rural mountains of Tennessee (Mountain Dew, as I understand, was an old mountain-slang term for home-made alcohol from the prohibition days).  Unfortunately this proposition was largely irrelevant and other taste experiences were springing up everywhere.  The brand worked with consumers to find an unfilled consumer need in the world of cold beverages.  Teenage boys (who consume a lot of soda) were becoming enamored with extreme sports and video games and were looking for brands in apparel, beverages, and other things that supported and complimented that lifestyle.  No other beverages at that time filled that consumer need, and Mountain Dew repositioned itself.  The result of this successful repositioning was that the brand owned this consumer need and grew to be the #4 share brand behind Coke, Diet Coke and Pepsi in the past 10 years. 
Uncovering and filling a consumer need that competition does not fill can mean leadership in a category and more growth potential versus fighting trying to beat another player already satisfying that consumer need. 

The Weight Loss Industry (and Public Health) Dilemma

January is generally a time of “belt tightening” after the holidays.  But in the U.S., belt tightening is not always easy.  The weight loss industry is one industry that always booms in January.  Estimated to be about a $60 billion business in the U.S., this business is on trend in a country in which almost 65% of the adult population is considered overweight or obese. Government statistics on obesity show a dramatic increase, from 20 years ago, in the percentage of the population that is overweight.

The New York Times published an article on the weight loss industry on Jan 6th.  Spending by the big three weight loss players is expected to grow by double digits.  Weight Watchers International spent close to $120 million last year and Jenny Craig spent another $34 million. 

Jennifer Hudson, the new spokesperson for Weight Watchers, looks great belting out a powerful ballad of strength “It’s a New Day” in ads that broke this fall, and dialed up big as the new year approached.  Ms. Hudson, who reportedly has dropped from a size 16 to a size 4 by losing 80 pounds on the Weight Watchers program, is known by millions from her American Idol days and then on to further fame in the movie Dreamgirls.  This is a very stylish campaign from McCann Erickson, a unit of the Interpublic Group of Companies, which began using Ms. Hudson in April 2010. Weight Watchers advertises in the Fall (Back to School), Spring (right after Easter) and Winter, (i.e., New Years resolutions), with Winter naturally being their #1 season to sign up new users at $40/month. 

Weight Watchers is a top-rate program driven on lifestyle change.  They use a simple points approach where consumers do not have to count calories, but just have to stay within their allocation of points.  Weight Watchers has overhauled its points program, now called Points Plus, with an emphasis on higher points for processed foods and fewer points for fresh fruits and vegetables (e.g. 100 calories of fruit or vegetables are free while 100 calories of potato chips add several points). There is also a clear recognition of the negative weight consequences of carbohydrates.

Weight Watchers however has struggled through 2009, declining 8.8% due to the company’s claimed effect of a bad economy reducing this type of discretionary spending.  Internationally, the declines have not been as severe as in the U.S.  Their one bright spot has been their on-line membership program that grew 5% in 2009, growing from 10% to 14% of revenues in 2 years, while all other memberships fell according to their respective annual reports.  Another issue the company faces may be that according to the research company, NPD Group, the percentage of women who say they are on a diet declined from 36% in 1991 to only 25% today. 

There seems to be more riding on Ms. Hudson and this new campaign than a great advertising idea.  It is taking more than traditional pressure to get folks to do the work of losing weight. 

Micheal Rosenwald, in a Washington Post article,  argued that our economy is structured in a way that will keep obesity on the rise for some time to come.  Our convenience foods products, fast food, quick meals on the go and large portions have replaced at-home food preparation of moderate size meals.  Our lives are sedentary, and we have come a long way from the days of true physical labor for workers where women prepared meals that required hours in the kitchen.  Women are in the workforce now.  We are an affluent society, and don’t want to go back to the lifestyles of old (where we were thin).  we are enjoying life, yet hate the result to our bodies.

So the weight loss industry lives on the promise of hope and quick results.  After we have indulged in far more calories and fewer workouts than our bodies required all year, we wake up with a renewed willpower and focus.  As if on cue, we are enticed with a success story from an admired celebrity who has a successful weight loss story and looks great.   

Is public health a victim of the shortcomings of the 30 second ad, sustained just long enough to sign up, attend a few classes, and stock our pantries with lean entrees?  As a marketer, I believe this marketing doesn’t seem to be working for the public health.  The goals of individual corporations’ sales targets seems not to be making material change in our waistline.  These ads are admirable in what they do short term, but these companies alone cannot make a dent in our growing problem.

Turning Online Advertising Into E-Commerce

Today JPMorgan predicted that global e-commerce will grow 19% in 2011 and is forecasting that rate to continue through 2013.  What's more interesting is that 52% of people make an online purchase at least once per month, and only 12% didn’t shop online in 2010 (down from 20% in 2007).  This is according to JP Morgan senior analyst, Imran Khan.  Wow. Those are big numbers.  This is a swift and significant change in shopping behavior, even in a recession.
However, there is a bit of a disconnect pointed out as well.  Online advertising spending has grown significantly in the US – it reached 13.7% of total advertising, which far exceeded the percentage of online retail sales to total retail sales (3.9% of US retail).  This suggests some level of inefficiency.

 So what to make of this ecommerce to online advertising gap?   A couple of thoughts:

1. We have not yet hit the tipping point of online advertising.  There is a barrier that must still be overcome that will take more years of advertising to close the gap.
   
2. Online advertising may have little correlation to online sales.  This could be due to the fact that online advertising is a media, rather than retail, choice.  I can advertise soup on the internet, but I wouldn’t expect you to buy it there.  The same is true for restaurants, gasoline, etc.
   
3. Or….advertising is not effectively convincing people that online shopping is a safe, quick, and viable alternative to putting your coat on and driving to the mall.