Monday, November 30, 2009

CyberMonday Morning

It's the starting line for CyberMonday. During the weekend I heard lots of discussion about cyber bargains and some doubts that employees worried about layoffs and such would actually be surfing for deals at their desks (presumably while the bosses surf for deals at their desks). Maybe before or after work, they'll mouse around the merchant sites...

The buzz indicates that's CyberMonday blitz has been effective in spreading the word. Even if shoppers don't click through the official CyberMonday site, they're planning a bit of online bargain-hunting, achieving the promotion's goal.

In the UK, this is Mega Monday, also expected to be a very big day for online shopping. There's another reason for UK shoppers to click and buy today: Trying to get ahead of a possible postal strike.

Amazon UK expects its busiest Christmas season ever. Visa projects that UK shoppers will make 2.4 million online buys today with a Visa debit or credit card. Will CyberMonday and Mega Monday live up to expectations? Definitely--there's no question that buyers are increasingly comparing prices, researching products, and buying online (not just on computers but also on their now ubiquitous smartphones).

Saturday, November 28, 2009

Keeping Up with Kiva

The microlender Kiva's slogan is: "loans that change lives." I became a Kiva lender earlier this year and so far, the experience has been very positive. I still feel good about it, despite recent controversy over exactly how the Kiva model really operates.

Coverage in the New York Times, on Walletpop, and on other sites indicates that when people lend on Kiva, they're often "backfilling" loans that have already been made to entrepreneurs by microfinance institutions.

So when I clicked to loan money to a specific small business owner, I was under the impression that my money was going directly to her. Instead, my money was very likely added to an aggregate sum sent by Kiva to microfinance organizations in the field, which in turn have made or will make the loans to the entrepreneurs.

The difference is subtle, to be sure, but it could make all the difference when people are deciding whether or not to make a loan. To its credit, Kiva is striving to be more transparent about its model and now provides a more detailed explanation here. In all, Kiva has loaned more than $100 million in its first four years of existence. It feels good to be part of a movement that is helping so many people create a better future for themselves, and I'll be staying with Kiva.

From a marketing perspective, to keep the cash flowing in, Kiva must do everything in its power to build and maintain trust through its communications and its activities. Especially in today's tough economic times, the competition among charities is too fierce to risk alienating potential contributors. Transparency is a necessity, not a nicety.

Thursday, November 26, 2009

New Marketing Plan Handbook

And now for some shameless self-promotion: Amazon recently posted the cover image of my Marketing Plan Handbook 4th edition, to be published on my birthday. Look for expanded coverage of social media, metrics, crowdsourcing, mobile marketing, and much more. Also new: Cases and examples showing marketing planning in businesses and nonprofit organizations around the world.

As in the past, my book will be bundled with Palo Alto Software's Marketing Plan Pro software, ready for use in undergrad and grad courses in marketing, marketing planning, marketing management, and marketing strategy.

Wednesday, November 25, 2009

IKEA Engages on Facebook

When IKEA opened a new store in Malmo, Sweden, its agency used an unusual Facebook campaign to engage fan brands and build buzz.

First, it created a FB profile for the store manager, Gordon Gustavsson. Then it began uploading a series of showroom photos (12 in all) and let it be known that the first person to tag an item with his or her name would win it.

In short order, thousands of FBers posted links in their newsfeeds, signed up for interactive IKEA catalogs, and let their friends know about the giveaway. The promotion was unusual and wildly successful because it played on the engagement strengths of social media, particularly the highly popular photo tagging function. The video shows it all in action.

Monday, November 23, 2009

Black Friday Comes Early

Wal-Mart and Best Buy are showing their Black Friday sale specials early. One reason is to preempt other stores; another is to help shoppers plan their buying trips. This morning I was able to page through the Wal-Mart flyer online to see all the specials available in my area. The Best Buy flyer is also online, as this graphic shows. Want to shop while the turkey's in the oven? Log on and buy. Another holiday season of bargains for buyers, slim margins for sellers.

Sunday, November 22, 2009

Do You Zhu Zhu? Holiday Hamsters

Do you Zhu Zhu? Talk around town is all about those hard-to-find Zhu Zhu toy hamsters. They're among the hottest holiday items for kids and in very short supply, happily for the hype but unhappily for next week's Black Friday shoppers.

Here's a preview on YouTube, showing how the Zhu Zhu race around.

This is a breakout toy that will have parents scurrying around looking from store to store in hot pursuit. "Shop early, would be my advice," Carl Steidtmann, chief economist with Deloitte, told the Journal Sentinel. My advice: Click around, use your mouse to find a hamster.

Wednesday, November 18, 2009

Choosing Segments to Target: Q&A with Erika Bruhn

This is the last in a series of Q&As with Erika Bruhn, a partner with Sawtooth Technologies Consulting Group. Today's topic is how to evaluate and select segments for targeting. Thank you, Erika, for sharing your expertise!

Question #3 for Erika Bruhn:

What kinds of criteria do you use when recommending which segments a marketer should target, and why?

Erika's answer:
Typical criteria include segment size, market share (volume and dollars), alignment with your current products, and alignment with your distribution channels. However, there is not a "one size fits all" approach to choosing targets. Segment size should always be considered, but targeting a niche segment that the broader market doesn't serve can be a winning strategy, especially for a new entrant in a market.
There is typically an alignment between attitudinal segments and the brands in the market, meaning that certain segments skew strongly toward particular brand usage. This is a good place to start when choosing target segments. Where does your brand "live" today? These segments are a natural target. Where do competitive brands live? These segments may be more difficult to penetrate.
Which segments' values are a good fit with your brand and company? What investment would be required to target a segment of interest? (For example, do you have the capital resources to target an Innovation segment which expects a constant stream of new and updated products?) Is there a segment that is underserved by the current brands? These questions will help direct you to the most appropriate target segments.

Question #4 for Erika Bruhn:

Once target segments are identified, what comes next? How is the segmentation used?

Erika's answer:
In an ideal world, all of your products and all of your communications will be focused on your target segments. The products you develop will be aligned with your segments' values, and in fact, future market research can and should be done with consumers who fit your target segments. Brand messaging and positioning should be based on your segments' values, as well.

It may require a radical shift in thinking from seeing every customer as a target to focusing on those in target segments. But aligning your brand and products with a small number of segments, and "owning" those segments, is the ultimate payoff.

Tuesday, November 17, 2009

Segmenting by Motivation: Q&A with Sawtooth Technologies

This is the second in a series of Q&As with Erika Bruhn, a partner with Sawtooth Technologies Consulting Group. In yesterday's post, Erika discussed the importance of understanding the motivations of customers in different market segments. In today's Q&A, she explains how to use such motivations as you segment a market.

Question #2 for Erica Bruhn: How do you identify the attitudes and lifestyle preferences that affect customer behavior toward a particular product or brand?

Erika's answer:

First, you must identify the level at which to segment. If your client is a chocolate bar company, you may think that you should segment the market for chocolate bars. However, that would be a very narrow definition of the competitive space in which your client operates.

You need to go broader to include substitute products. How about a candy segmentation or a snacking segmentation? Either of those may be appropriate. How about a food segmentation? Now we're getting too broad. There is not always one right answer here, but the principle is to expand the thinking beyond the immediate product category to include products which represent substitutes.

Second, you must identify the segmentation dimensions. What are the broad "buckets" of attitudes which will likely define key differences across segments? The segmentation dimensions are hypothesized and can be developed in a team brainstorming session or through qualitative research, such as focus groups. Think of segmenting dimensions as the polar opposites which may define different segments of the market. Some examples are Price Sensitivity (from high to low), Innovative (from early adopter to late adopter), Convenience-Driven vs. Service-Driven, Status-Driven vs. Function-Driven, etc. These dimensions will vary from category to category.

Finally, you must express each of the segmenting dimensions in a variety of ways. A market research survey will be written with a long list of attitudinal statements with which the respondent must agree or disagree. These statements need to capture the nuances of what drives a particular segment and how segments differ from each other.

For example, let's focus on the Price Sensitivity dimension. A very simple price statement might read: "Price is very important to me." When we express price in a variety of ways, the list of statements will be broader and more varied, such as:
  • Quality is more important than price.
  • I always buy the lowest priced product.
  • I frequently use coupons.
  • I never buy anything on sale.
  • A low price means low quality.
These statements may come directly from qualitative research by asking consumers what is important to them and how they make purchase decisions.

Now that we have a variety of statements, when we have identified our segments, and one (perhaps) is a price-driven segment, we will have richer information as to which specific statements most drive that segment and which statements most differentiate our price-driven segment from other segments. This richness is the key to arriving at a full picture of the segments and their motivations.

The final Q&A post in this series will focus on selecting segments to target.

Monday, November 16, 2009

Q&A with Erika Bruhn of Sawtooth Technologies

Today's post is the first in a series of Q&As with Erika Bruhn, a partner with Sawtooth Technologies Consulting Group. The company is a leader in advanced quantitative market research techniques, including segmentation, conjoint analysis, and customer satisfaction modeling for consumer and B2B markets.

Erika specializes in developing insights to drive complex product development and pricing decisions. Given Erika's expertise, I asked her to talk about some of the key issues marketers face in segmentation and targeting.

First, a quick review: Segmentation is the process of grouping customers within a market according to similar needs, habits, or attitudes that can be addressed through marketing. Segmentation enables you to understand customers' needs, wants, and preferences, segment by segment, so you can focus your resources on the most promising opportunities--improving your marketing effectiveness and efficiency. In general, you can segment by customer behaviors, attitudes, demographics, geography, and/or psychographics.

Question #1 for Erika Bruhn: What are the benefits of segmenting a market according to needs, lifestyle, and attitudes, rather than relying on demographic and geographic variables?

Erika's answer:

Motivations drive behavior, and by understanding the motivations of different segments of the market, one can reasonably predict how those segments will behave. Products which save time will likely appeal to a high convenience segment, products with strong design will appeal to status-driven consumers, and so on. There may be demographic similarities of those within a segment, but demographics don't define a segment. So those valuing good design may skew higher income, but not all higher income people value good design.

Product development efforts in particular will be more successful when executed with a specific attitudinal segment in mind. How do you design a new shampoo for a woman, 50 to 65 years old, who lives on the West Coast? I don't know either. But now imagine there's a segment called the Whole Beauty segment. This (hypothetical) segment sees personal beauty as a larger part of the beauty and longevity of the Planet Earth. Can you imagine the type of shampoo which would appeal to this segment? The product's ingredients, packaging, and positioning would all be driven by the segment's motivations and values.

Tomorrow's Q&A will focus on segmenting a market according to customers' attitudes and lifestyles.

Sunday, November 15, 2009

Elf Yourself - Test Yourself

This month was the kickoff of the latest Elf Yourself campaign, with a flashmob event in Union Square, New York City.

Before you click to the Web site where you can Elf Yourself (always entertaining), test yourself: Who sponsors this promotion?

Now put yourself in the shoes of that company. What do you want to achieve, other than giving people a big smile during the holiday season? And how will you evaluate the results of your promotion?

Friday, November 13, 2009

What's Ahead for Holiday Shopping?

Deloitte sees a challenging holiday season ahead for the nation's retailers. First, a look in the rear-view mirror: Deloitte's chart of historical holiday sales results, based on US Department of Commerce figures, shows a lot of minus signs for last year's results. In contrast, during every holiday season since 1993, sales increased during November, December, and January. But then came 2008-9, when consumers slammed their wallets shut.

This year, Deloitte's annual survey of retail spending and trends indicates that consumers' fear of recession is starting to subside. Still, its survey shows that shoppers plan to spend less on gifts and will be looking for sales and bargains when they do open their wallets. The top destination: discount stores. The top gift: a gift card.

The survey suggests that mobile marketing is gaining importance. A growing number of shoppers say they'll use their cell phones to locate stores, comparison shop, and obtain coupons. MediaPost's coverage of the Deloitte survey points out that Facebook and other social media will be a factor in this year's holiday shopping, as well.

Retailers are already offering Black Friday specials to encourage early spending and grab revenue from competitors. What will the price promotions mean for profits? Sounds like tough sledding ahead.

Wednesday, November 11, 2009

Amazon: Much More Than Books

Amazon has successfully expanded well beyond books and media, as this chart shows, building sales and profits hand over fist in the process. Despite the difficult economic climate that's battered many other retailers, Amazon's reputation for sharp pricing, expanding assortments, and good customer service has carried it through the tough times.

Meanwhile, Amazon's Kindle e-book reader is being challenged by Barnes & Noble's Nook e-book reader, sparking a price war to go with the book and DVD price war that recently erupted among major retailers. But B&N can't keep up with demand (remember the long waiting lists when Amazon launched the Kindle?) and now it's scrambling to increase inventory ASAP. If Amazon has plenty of Kindles in stock, that could tip the balance in its favor for the holidays.

What's next for Amazon? More private-label products are on the way as the company leverages its distribution and branding strengths. The company is also pushing its cloud computing services and other B2B offerings, which helps it weather bumps in consumer spending. And Amazon's unexpected but savvy acquisition of Zappos is a great way to profit from the lessons of using super customer focus to cement long-term loyalty.

Tuesday, November 10, 2009

Coming Soon! Sawtooth Technologies Q&A

Watch this space for upcoming Q&A interviews featuring the experts at Sawtooth Technologies Consulting Group, leaders in advanced market research techniques, discussing market segmentation and targeting for insightful, effective marketing.

The Battle Over Early Termination Fees

Verizon Wireless has drawn fire for its latest move on early termination fees for cell-phone contracts. First, a bit of background. In 2006, the company announced it would prorate early cancellation fees by a small amount for every month a subscriber remains with Verizon. That change earned it some goodwill and helped to reduce consumer ire over the industry's cancellation fees and policies.

Now Verizon Wireless is doubling its early-cancellation fees (to $350) for smartphone contracts, effective November 15. The thinking seems to be that since the company subsidizes the price of these high-end phones, it would like to recoup some of that money in the event a customer wants out of the contract early.

Verizon Wireless's move has refocused public attention on the issue and brought the threat of legislative action. Senator Amy Klobuchar of Minnesota says the higher fee is "anti-consumer" and is preparing to introduce a bill addressing her concerns about the effect on wireless subscribers. However, given all the issues vying for Congressional action, this is unlikely to make it to the top of the legislative list in 2009-2010.

Still, the early cancellation issue is important because it reveals some of the inner workings and complexities of wireless phone pricing. It also contributes to customer confusion and dissatisfaction. Is there a way for marketing to bring more clarity to the situation?

By the way, if you've never read a Verizon Wireless customer agreement, take a look here and get ready for your eyes to glaze over as you scroll through clause after clause after clause. Let me add that I'm a Verizon Wireless customer--but, happily, have not had occasion to request early termination.

Friday, November 6, 2009

Join the Choir at IKEA

IKEA has kicked off its annual Soft Toys Aid campaign, donating $1 for each toy sold before Christmas to UNICEF and Save the Children. This program alone has raised nearly $17 million since 2003. And that total doesn't count the millions of dollars IKEA has committed to UNICEF projects through 2015.

Soft Toys Aid includes a fun social media component, with singing stuffed animals. Members of the public can "Join the choir" (record your voice and upload for one of the animals to sing) and "Share" (on Facebook, Digg, etc).

IKEA got involved with the children's nonprofits when it discovered that some of its suppliers were employing children. Instead of simply dropping the suppliers, IKEA asked the nonprofits for advice. Then it began monitoring its suppliers and established pilot programs to prevent the use of child labor. It became a strong supporter of children's rights and later created Soft Toys Aid, which allows shoppers to join the choir and feel good about helping children without spending an extra dime. Sing out for children!

Wednesday, November 4, 2009

The Future of PR

Whatever the future of public relations may be, it's not going to look like the past. In a survey of 401 corporate communicators by Ragan Communications and PollStream, only 49% said that press releases "are as useful as ever." One-third agreed that press releases are "a necessary evil that won’t go away soon."

So is the press release dead? According to Larry Weber, head of the W2 Group and author of Sticks & Stones, "I claim--not without a certain amount of opposition from my colleagues--that companies don't need press releases any more." Looking at the future of PR, he observes: "It's the craft of PR that is changing as the technology changes."

Weber emphasizes that one-way, static, corporate-controlled communication (like a press release) is not very effective in today's never-ending 24/7 global news cycle. Instead, he argues for harnessing social media and other always-on technology to listen to and engage audiences in two-way dialogue.

A recent Ad Age article notes that more companies are, in fact, side-stepping journalists to engage directly with consumers. The article quotes Sam Lucas of WPP's Burson-Marsteller: "The traditional one-way media model has definitely had its day. So agencies are talking to clients about these engagement models much more."

In other words, the future of PR is engagement.

Sunday, November 1, 2009

Influence in the Blogosphere

Technorati released its latest State of the Blogosphere report last week.

RaceTalkBlog's Kyle Austin analyzed the report in detail and his recent blog entry makes a number of important points. He says:
. . . the numbers probably don’t adequately represent the folks that are corporate blogging for the 16% of Fortune 500 companies active in the blogosphere. They most likely have other job responsibilities outside of blogging.
Austin has another interesting observation:
However, while professional blogging is on the rise, the report also illustrates that the “hobbyists” have a voice. In fact, 45% of the 5 million blogs tracked by Technorati have an authority ranking of at least 1. This makes at least a portion of the 72% of hobbyists (with some following) a growing challenge for brands, who must allocate most of their blog relations time for more influential bloggers.
In other words, marketers must identify "hobbyist" opinion leaders in the blogosphere and develop a dialogue with them. These "hobbyists" and their readers are an excellent source of information about markets, customer needs and attitudes, competitive issues, etc.

Don't just think in terms of influencing the influencers--carefully read their blog entries and the comments on those entries and factor that data into your marketing decisions. Who knows what insights you'll discover?