Friday, October 21, 2016

Regaining the Customer's Trust

Imagine being a marketer for Wells Fargo Bank right now, following high-profile revelations that for some time, employees opened accounts to achieve internal goals for cross-selling, not because customers wanted them.

The scandal has had a real impact on the bank's reputation and its business: It recently announced that new checking account openings are down by 25% compared with last year and new credit card applications are down by 20%, all since the news broke.

During mid-October, Wells Fargo placed full-page ads in the New York Times and other newspapers, and posted on part of its website with the headline: "Moving forward to make things right." The message ends with these words:
The trust you place in us means everything and we will work hard every day to earn it back.
Trust can take a long time to earn and be lost in a moment. Before this, Wells Fargo's scores among banks in the American Customer Satisfaction Index had been on the upswing, far better than the scores it had in the ACSI surveys of 1996 and 1997.

Now Wells Fargo faces the challenge of earning back customers' trust and convincing them that it will, as its ads say, put their interests first. How will customers respond?

Monday, October 17, 2016

Marketing the Mystique of Cuba

Coffee lovers can now try "the first Cuban coffee in the U.S. in over 50 years" (quoting a Nespresso ad). In limited supply at Nespresso stores, and priced higher than other Nespresso capsules, Cafecito de Cuba offers a "taste" of the island nation, given very recent changes in trade relations.

Cuba has a mystique: It captivated the American imagination during the mid-20th century--the vibrant night life, the music, the celebrities, the food, the heritage. By now, Cuba has been off limits for so many years that it is somewhat mysterious, and its island location has considerable vacation appeal.

Currently, trade restrictions are slowly being eased (significant barriers remain), and Cuban rum and cigars are being allowed into the US.

More and more businesses are using the mystique of Cuba to market goods and services.
  • American Airlines has an ambitious schedule of flights to various cities in Cuba, seeing future profit potential as tourism expands little by little. Jet Blue and Silver are also flying to Cuba.
  • Starwood has three hotels under its umbrella, again awaiting the influx of tourists.
  • Chanel brought a fashion show to Cuba, taking advantage of the mystique and novelty.
  • Carnival has cruises to Cuba and New Orleans is trying to establish its port as another point of departure for Cuban tourism.

Friday, October 7, 2016

Retailers Choose: Open or Closed on Thanksgiving?

Retailers are again navigating the pros and cons of whether to open or close on Thanksgiving. From a consumer behavior standpoint, some shoppers like to get an early jump on holiday shopping and Black Friday bargains. Others want an activity in addition to or instead of a big Thanksgiving meal. That's why the Los Angeles Auto Show is open on Thanksgiving, and it usually draws a good crowd.

Mall of America has already announced it will be closed on Thanksgiving, although individual stores may choose to open for all or part of the day. Costco is traditionally closed on Thanksgiving, Nordstrom will be closed, and Staples has announced it will be closed. Some major retailers will reportedly be open, as the list here shows.

On Thanksgiving Thursday and Black Friday 2015, the outdoor retailer REI famously chose to be closed and urged everybody to enjoy the outdoors instead of shopping. Its marketing campaign #OptOutside won awards and lots of publicity. Will REI repeat its decision in 2016? Expect an announcement soon.

Tuesday, October 4, 2016

Target Opens Targeted Stores

Target has long targeted college students and their parents with special events, social media content and products specifically for dorm life. Above, the retailer invited YouTube personalities to live in custom-designed dorm rooms featuring Target's home goods. Target has also sponsored buses to bring students to Target stores for shopping and social events. This year, it tested a chat-bot initiative with Kik, the messaging app.

Now the retailer has begun opening smaller Target stores near college campuses, stocked with the goods that students need and buy. It opened one such store two years ago near the University of Minnesota campus at Dinkytown, an experiment that has encouraged the retailer to open more units like it.

'A lot of college campuses have underdeveloped retail, so the students as well as the people who live around campus don’t have a lot of options to shop for a quick trip', explains a Target exec. Target's marketing strategy envisions hundreds of these small-format stores near campuses, a way to appeal to younger buyers and encourage brand loyalty after they graduate. Will these college-targeted Targets hit the bulls' eye?

Tuesday, September 27, 2016

McDonald's and Content Marketing

In 2016, McDonald's is serving up a lot of marketing content worldwide--at least 5,000 items of content, as estimated by the company. It's active in all the usual media (broadcast, print, etc.) and across the range of social media (FB, Twitter, Snapchat, Pinterest, etc).

McD's chief marketing officer observes: "Defining marketing by these channel-based labels is actually absurd in today's world." Having a consistent voice and message is challenging but critical in this marketing environment.

So is speed, which is why McDonald's has cut the number of meetings with its agencies and streamlined the process to, well, bring content to market faster. In the words of another McD's exec, "it’s no longer the big that eat the small, it is the fast that eat the slow."

Above, an example of how McDonald's Canada is using online content to support the launch of a new McWrap product. If you want to watch the video, be prepared for four hours of food preparation, a bit like watching a McWrap food channel. Actually, the video includes images captured for other content (such as commercials) and it became newsworthy because of its unusual length.

Friday, September 23, 2016

In the Autumn Marketing Plan: Pumpkin Everything

Marketers are implementing the autumn schedule of their marketing plans, which means it's time for pumpkin everything.

Starbucks has a lot to do with the pumpkin takeover every autumn: It introduced a seasonal Pumpkin Spice Latte back in 2003, kicking off a mainstream marketing tidal wave that has been felt around the world. It even has its own Twitter feed (114k followers)!

Other marketers incorporated pumpkin flavors earlier (such as Pumpkinhead Ale from Maine's Shipyard Brewing Company), but given the pop-culture status of Starbucks, its marketing is most likely what gave pumpkin spice a high profile in autumn.

Here's the thinking: Seasonal/limited time variations of products generate excitement and bring customers back for a taste and then for repeat purchases. Plus pumpkin builds buzz.

Of course food and beverage marketers have embraced pumpkin flavors, but so have hair salons.
When is pumpkin everything enough? Or too much?

Tuesday, September 20, 2016

Fast-Food Products Build Buzz and Brands

The big fast-food chains are busy testing new menu items, to sharpen brand differentiation, keep loyal customers returning to try new choices, build buzz, and possibly find the next new food trend.

  • Burger King is introducing a buzzy new item named Cheetos Chicken Fries which--as the name suggests--are "fries" made from chicken and coated in Cheeto-flavored breading. Co-branding adds a marketing hook too.
  • McDonald's recently tested a mozzarella - pesto melt sandwich in California. It's also fine-tuning its popular All-Day Breakfast menu, which is helping to boost revenues.
  • Chick-fil-A is testing healthy menu items featuring grains that aren't yet mainstream among fast-food rivals, such as quinoa and chia seeds, which will differentiate the brand.
  • Carl's Jr and Hardy's are adding steak to the breakfast menu, part of a trend toward beefing up (pun intended) the morning meal offerings to grab a larger share of breakfast revenues.

Wednesday, September 14, 2016

Airbus's Strategic Vision

Ten years ago, I began this blog by contrasting the long-term projections of Airbus and Boeing, and the effect on their strategic decisions. Airbus saw great potential in building a huge jet to fly 500+ passengers between hubs...Boeing saw more potential in not-so-huge jets for point-to-point flights.

On its corporate website, Airbus says this about the A380:
Designed for air transport needs in the 21st century, its unique size allows airlines to maximize their revenue potential through an optimized, segmented cabin. 
Now Airbus has learned that Singapore Airlines will not renew its ten-year lease for the gigantic A380 passenger jet. Other carriers are thinking about smaller Airbus jets instead. Filling so many seats on the A380 is one element of how airlines consider what planes to lease or buy. Fuel economy is another element. Each airline also has its own strategy for satisfying customers' needs and making a profit.

Emirates Airlines has successfully built high volume on the basis of its A380 jets. The President of Emirates tells Business Insider: "Airport congestion around the world is getting worse. And up-gauging aircraft is a solution for this." Meaning: Emirates uses A380s to fly a lot of passengers from one huge hub to another.

The double-decker configuration requires a special airport gate, which means airlines must schedule carefully. In fact, although Chicago's O'Hare has had runway capacity to fit the A380 for a few years, it has only one gate for the jumbo jet (more are in future plans).

So Airbus's strategic vision has faced turbulence in part because of infrastructure issues and in part because of how its customers plan for their customers.

Monday, September 12, 2016

Next Distribution Frontier: Drones

The idea of delivering orders via drone is catching on. Why? Because marketers see a lot of opportunity in same-day delivery, and drones can take a load off traditional mechanisms like trucks/vans/cars/motorcycles. The cost per package delivered is still being assessed, but likely it would be greener, cheaper, and much faster than delivery by traditional methods.

Domino's is already testing drone delivery of pizza in Auckland, New Zealand. 7-Eleven is also testing drone delivery, having successfully delivered Slurpees and food to a family in Reno this year.

Amazon has been championing this possibility for a while and conducting tests. It says: "Amazon Prime Air is a future service that will deliver packages up to five pounds in 30 minutes or less using small drones. Flying under 400 feet and weighing less than 55 pounds, Prime Air vehicles will take advantage of sophisticated “sense and avoid” technology, as well as a high degree of automation, to safely operate beyond the line of sight to distances of 10 miles or more."

Now Alphabet, Google's parent company, has been approved to test its drone delivery in selected areas. Project Wing, Alphabet's drone unit, is partnering with Chipotle to test delivery of burritos to customers on the Virginia Tech campus. The head of Project Wing observes: "It's the first time that we're actually out there delivering stuff to people who want that stuff." The test will determine how well packaging protects the "stuff" and whether the "stuff" arrives warm.

Tuesday, September 6, 2016

Transparency in Tweets

Advertising Standards Canada (ASC) is formalizing guidelines for advertising use of Twitter, Instagram, YouTube, Snapchat, and other social media. "Endorsement or testimonials must disclose any material connection between the endorser, reviewer or influencer and the entity that makes a product or service available," explains an ASC exec.

Canada wants to ensure that social media users can tell the difference between non-sponsored and sponsored tweets (or other posts that have been paid for).

The US Federal Trade Commission has already solidified guidelines for disclosure, but Canada's rules don't go into effect until early in 2017.

Meanwhile, the US FTC is pushing celebrity endorsers to be more transparent about being paid to promote products. It recently complained about Warner Bros using influencer-campaigns (paying social media celebrities to say something positive about a game, for example) that lacked "clear and conspicuous" disclosures.

Given the viral nature of celebrity opinions, this is an area where more transparency is needed to ensure that consumers get the full picture of who's behind that tweet or YouTube video or any other message promoting a product. As a result, marketers must stay updated on the regulatory environment to be in full compliance (and keep their endorsers updated on compliance standards, too).