Tata's Nano Rolls Out Soon

The cheapest car on earth--the Nano, built by India's Tata Motors--will soon be on the road, after months of delay. The price is 100,000 rupees (just under US$2,000) and what you get is basic 4-wheeled transportation, even smaller than the SmartCar.

The car meets India's safety and emissions standards but would need extensive and expensive modification to be sold in European or U.S. markets. For starters, it would have to have seat belts as standard equipment.

Tata's target is the growing middle class in India. Can Tata encourage families to trade up from motorcycles to the Nano, given the current global economic crisis? And will Tata be able to export Nanos to China and other nations with growing middle-class populations? I hope so, but 2009 and 2010 may not be the right time. A lot depends on Tata's pricing and financing power.

LEGO Brands Everything

Branding extends to every part of the enterprise at LEGO, where execs use personalized LEGO people as their business cards. GizModo visited LEGO last year and brought back this video.

The company is 51 years old and going strong, with new products and new partners all the time. For instance, Disney is licensing LEGO for movie-related merchandise, a great idea. Iconic LEGOs are instantly recognizable and "translate" into every language and culture. The brand is a perfect example of a name that's easy to say, easy to remember.

Strong brand, strong financials: LEGO's 2008 results suggest that the worldwide market for these interlocking blocks is not yet saturated. The company anticipates smaller sales/profit increases in 2009 but still--people have to have their LEGOS even when the economy is in tatters. Go go LEGO.

Woe Is Mall

Shopping centers are suffering, as you certainly know. A few are closing, many are trimming operating hours, more are simply covering the windows where small boutiques or specialty stores once proudly stood.

On last night's reconnaissance mission to a nearby mall, I was able to park 2 spots away from the entrance--unthinkable just 6 months ago. The Bertucci's restaurant was busy but Macy's and other stores had many more employees than shoppers.

Saks--which kicked off a pre-Christmas discount frenzy among high-end retailers--admits profit margins are down but says the steep markdowns were necessary (but may be a thing of the past). Fortunoff's is running a giant going-out-of-business sale. The list goes on and on. Woe is mall.

Still, some malls are actively trying to attract shoppers by opening big sit-down restaurants, offering free Wi-Fi, setting up children's play areas, and more. One of my local malls has gotten rid of those by-the-week pushcart retailers and is attracting families with a bungie jumping activity.

America is over-malled and getting mauled by the economy. This is where smart marketing will weed out the creative from the ordinary. Here's one example of mall experimentation. Local stores and shoppertainment, anyone?

Google and Giving It Away

Corporate philanthropy is far from dead, even in this economic crisis. Instead it's being reinvented as a key element in corporate strategy and, by extension, in corporate marketing.

Alyson Warhurst (of Warwick Business School in UK, World Economic Forum faculty, and consulting firm Maplecroft) wrote an opinion piece for Business Week in December, saying the economy is forcing companies to trim philanthropy budgets and realign initiatives with their long-term business goals. "We will see investments targeted to help companies manage their risks, responsibilities, and reputation--what I call R3."

Today's New York Times reports that Google's philanthropic unit, Google.org, is fine-tuning its strategy. Now philanthropy will be more closely aligned with Google's goals and strategies "to ensure that we’re better able to build innovative, scalable technology and information solutions,” according to the executive who's stepping down from Google.org.

What does this mean for Google and the world? Professor Vaidhyanathan of the University of Virginia comments: “The habits and ideology of the company will lead the philanthropy rather than the needs of the communities or the planet.”

Even if Google's philanthropy is more narrowly focused, the company's image should remain intact. In fact, this move may reassure stockholders and fans that Google's social responsibility investments have a solid business basis. Sorry, Milton Friedman, this doesn't mean that the only business of business is business. It does mean that businesses can be socially responsible to the world and to their stakeholders at the same time, even during challenging economic times. That's still a strong marketing story for any company.

Tropicana Pkg: Emotional Connection or $?

A month ago, Tropicana introduced its new, very generic-looking OJ container, pictured at right (from Ad Age). My local supermarkets promoted the change by putting the OJ on sale for $1 less than competing brands. The best part about the new packaging was that the orange-shaped cap stood out, but that's not saying a lot.

Now the company is changing back to the old, distinctive container, shown at left. Good move. Although Tropicana's execs talked about not appreciating the depth of emotional connection that customers had to the old packaging, I believe the real reason was lost sales. I could be wrong, as reader Jack suggests--maybe Tropicana was really listening to its customers.

(April 2nd UPDATE: According to Ad Age, Tropicana's sales fell an astonishing 20% in the 7 weeks after the new packaging was introduced. Customer loyalty must have been part of the equation, but clearly bottom-line considerations provoked the switch back to the old packaging.)

Loyal Tropicana customers probably couldn't find their fave OJ in the sea of containers, so sales likely took a big hit. I noticed the new carton because of the price, not because the new packaging was appealing or familiar. What kind of in-store testing was the new carton subjected to before the switch? Were supermarkets allowed input? Who was really squeezed?

Fresh Direct Makes Mouths Water

If you live in or near New York City you've probably heard about FreshDirect, which (as its name implies), buys "directly from farms, dairies and fisheries (not middlemen), so it's several days fresher and a lot less expensive when it gets to your table."

This isn't your usual online grocery retailer. The site romances food with luscious photos and lush descriptions, making the pages a virtual feast for food lovers. Visitors can take a photo tour of the facility's food departments and browse mouth-watering photos of produce and premade entrees. FreshDirect also posts customer testimonials, a nice bit of word-of-mouth, and offers recipes too.

Not surprisingly, FreshDirect enjoys unusually high customer loyalty. Its ads and celebrity shopping lists have a distinctly New York flavor. Who outside of NYC still remembers former mayor Ed Koch? Warning: Don't look at this site when you're hungry.

Allergies and Fast Food

How do fast-food marketers help customers with allergies stay safe? Burger King publishes an interactive list of food allergens (wheat, milk, etc.) and shows which of its foods contain which allergens. McDonald's lists ingredients in its products and sends customers to a food allergy site for more info. Wendy's lists menu items without gluten and other details. Dunkin' Donuts says any of its products may contain peanuts or other allergens and refers customers to specific nutrition information. If Starbucks addresses this issue, it's not evident on its website.

Millions of people live with food allergies--up to 6% of youngsters and more than 3% of adults. Having reliable information on fast-food ingredients is really a matter of life or death for these customers. See the Food Allergy & Anaphylaxis Network for more info.

Privacy Policies--Huh?

Webkinz were the hot new toy a couple of years ago, stuffed animals that come with one-year subscription to web activities. My young informants (Ella and Amelia) tell me that Webkinz are only lukewarm these days, at least for the elementary school crowd.

Still, I wanted to see how Ganz, the parent company, uses information submitted by Webkinz buyers/owners. There are actually two privacy policies for the Webkinz site, one general policy written for adults and one written for parents explaining how kids' info will be used. Ganz also has a link to the FTC's Kidz Privacy page.

Are parents actually reading the fine print in all these privacy policies?

GM Edits Its Product Mix

As marketing textbooks like to say, GM is "editing" or "pruning" its product mix, shedding Hummer, Saab, Saturn, and moving Pontiac to within one of the other product lines. This is a long-overdue change that should help GM focus on strengthening its brands and its quality.

Most interesting is this statement from GM's press release about its plans for Saturn as it restructures for a hefty government bailout:

Saturn will remain in operation for the next several years, through the end of the planned lifecycle for all Saturn products. In the interim, if Saturn retailers or other investors present a plan that would allow a spin-off or sale of Saturn Distribution Corporation, GM would be open to any such possibility. If a spin-off or sale does not occur, GM plans to phase out the Saturn brand at the end of the current product lifecycle.

How many consumers are going to buy new Saturns now, even at fire-sale prices, knowing that support will be going away soon? Why would the retailers want to save a brand that lacks GM support and has lost its identity? GM might as well say goodbye to Saturn right now and get it over with. Bye-bye.

Fandango - Fun Commercials, Tons o' Trailers

Fandango ads make me smile--and are instantly recognizable, a plus for brand awareness. The site features many trailers for upcoming movies and clips from movies now in the theaters. And customers can personalize the site in several ways (My Fandango) or design a custom gift card. With the Oscars just days away, Fandango has a special section (and sweepstakes) for that too. Fans (that means movie goers) can vote for their favorite movies at Fandango, too. All in all, good customer engagement.

clipped from www.fandango.com

Netlog: How to Create Brand Ambassadors

Steven Kraal of Netlog says that the social network, based in Belgium, now has 40 million active members across Europe.

Adidas, Coca-Cola, Disney, Puma, and other brands are creating brand ambassadors through Netlog by providing widgets, discounts, information, brand pages, contests, and special content.

Netlog illustrates the power of social media: One Nike contest to design a personalized soccer shoe drew 1,550 designs and 10,000 visitors to the brand page--in just three days. It's not the designs as much as the brand engagement that really counts.

Is Industry Self-Reg of Online Ad Targeting Enough?

Yesterday the FTC announced it's sticking with industry self-regulation of behavioral targeting for online advertising. Translation: Companies like Google can continue to track consumers' Internet activities and collect data so they can serve up targeted advertising based on the sites and pages consumers visit.

Yes, the FTC wants marketers to obtain "affirmative express consent" in some situations--meaning they have to get consumers to specifically say "yes" to certain uses of their data. It also wants companies to have easy opt-out options for consumers to say "no."

Four industry groups (American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association, and the Interactive Advertising Bureau) are working on industry guidelines. Of course, self-regulation is voluntary, with no consequences for non-compliance (other than public exposure).

Here are several articles about the FTC's announcement: NetworkWorld, Ars Technica, ClickZ.

Trouble is, consumers don't really understand what web site privacy policies are saying: Exactly what's being collected? How will the data be used? How easy is it to opt out? And people are understandably nervous about use and misuse of personal data. If given the opportunity to do a blanket opt-out of all behavioral tracking, I suspect most consumers would do it in a heartbeat. It's up to the companies to make a strong case for the benefits of behavioral targeting.

Tsk Tsk Charter Communications

Too bad Charter is my local cable company. The top headline is from a news release on its web site (you don't get the news about bankruptcy until you read deep into the story).

The bottom headline is from the Wall Street Journal--and it doesn't sound like an April Fool's prank, just another nail in ... well, you know.

Charter often appears at or near the bottom of customer service ratings--for instance, in the March Consumer Reports feature about digital TV service, it's ranked #11 of 12.

Speaking as a customer and a marketer, competition in suburban cable/broadband services would increase the level of service, improve loyalty, and take the handcuffs off customers.

clipped from phx.corporate-ir.net Charter Communications Reaches Agreement in Principle with Certain Debt Holders to Reduce Debt clipped from online.wsj.com Charter Communications said it will file for bankruptcy protection by April 1 as part of an agreement with some of its debt holders to reduce its debt by $8 billion.

Twitter and the Shorty Awards

It was inevitable--awards are given for everything else, why not best Twitterers? WSJ has a good article about tonight's Shorty Awards. Already the marketing hype is on. For instance, here's a news release picked up by MSNBC about a Cardstore.com artist winning an art Shorty for the "Fail Whale," an error message. Awards for error messages! Will the whale be accepting its own award?

clipped from shortyawards.com The best producers of short* content in 2008

Retail Credit--Going Extinct?

Is retail credit about to go extinct? It's hard to believe, but once upon a time (until about 30 years ago) nearly every department store issued its own credit cards so it could fuel sales and promote to its best customers. The credit manager -- not a bank -- tightened and loosened credit standards, according to the store's strategic and financial goals.

Before 1976, only a handful of department stores even accepted bank cards, Amex, or Diners Club. Then, one by one, the department stores began accepting third-party cards. Still, the average sale charged on a department store card was usually higher than the average third-party credit sale. Retail credit was a vital tool, a "billboard in the wallet" for the stores.

As third-party cards became ubiquitous, department stores chose to accept them rather than risk losing any sales. Competition was a factor, too. During the 1980s, Citicorp (as it was known then) and GE courted retailers, looking to take over their credit-card portfolios. And one by one, the stores agreed, moving receivables and credit acquisition costs off their balance sheets by handing over their credit operations.

Today's New York Times reports that losses are mounting on private-label credit cards, a problem for GE and Citi, the two largest issuers. GE issues for Wal-Mart, for instance, and Citi issues for Macy's. Some analysts say things will get worse as the economy goes downhill and consumers put off repaying private-label debt so they can pay down more urgent debt first.

Is retail credit going to go away forever? It's the credit card of last resort for many people with spotty credit records, but it's also the first for many younger consumers who want to build a good credit record. At one time, store cards were actually a profit center (as Sears knows, from its 1970s/1980s period). But not these days.

The Tyranny of Design

Style vs. substance . . . form vs. function. As a customer, I want both. However, the ascendancy of design has put functionality on the back burner in too many cases. A couple of years ago, the Design Observer blog posted "What If Apple Is Bad for Design?" One of the complaints, which I don't necessarily agree with but I do find intriguing:

"But the problem with Apple may be that a software approach is being applied to the design of hardware: a seemingly economical application of default settings that progressively dissolves the integrity of each individual application of that setting or solution; and a paradoxical willingness to patch together case-by-case solutions that compromise the integrity of the overall composition in the interest of localized utility."

It's easy to find examples of web sites where design trumps function. Here's an entire list. Looks like the designers forgot that readability is important; also ignored the need to make navigation intuitive and easy. Which brings me to my last rant: DVD menus where the animation takes forever to settle down enough to figure out which word or clever object to click to start the movie or choose a scene. Design is good, too much is just too clever, IMHO.

How Much Ka-Ching in Celebrity Endorsements?

BusinessWeek reports that celebrity endorsers like Alicia Keys and Elton John (both endorse Yamaha pianos) are being asked to do more to earn their money. Makes the marketer's money go further, but it's also a good move from the perspective of reinforcing the connection between the celebrity and the brand through multiple exposures. And what celebrity wouldn't want more exposure? Still, in the current economic environment, I wonder how many buyers are lining up for the Elton John Limited Edition Signature Series Red Pianos by Yamaha, which are priced in the high 5 figures?

In this difficult economy, when customers are scarce and profits even scarcer, how do you think about Customer Lifetime Value (CLV)?

This Microsoft Office template shows some of the basic numbers you need to calculate CLV. Also check this Harvard Business School calculation tool for more detail. Both are a great start in determining the long-term bottom-line value of a customer.

Every business must have or be able to get these inputs--it's impossible to make informed marketing decisions and properly evaluate results without knowing acquisition cost, customer retention rate, and so on.

Customers are precious. No business can stay afloat in 2009 or through 2019 if it doesn't keep the C in CLV. So:

1. Emphasize benefits. Bring back the old USP (unique selling proposition) and tell customers what problem your offering will help them solve or what goal it will help them achieve. Sizzle is nice, but steak is nicer.

2. Take a fresh look at your competition. This is doubly important in a world where customers are counting their pennies and your competition is, in the larger sense, any other purchase that customers might make. What substitutes exist for your offering? Why should customers buy your offering, and why now? What makes it competitively superior? Be sure to communicate your advantage.

3. Resist the urge to handcuff your customers. Charter, my local cable company, called to offer me a special deal. The rep mentioned a 24-month agreement and I almost missed the part about the early cancellation fee. I didn't want to be handcuffed--do you? All those heating fuel customers who signed $4/gallon winter contracts are fuming about being handcuffed. How many customers will stay when the handcuffs come off?

4. Think long term. The whole point of CLV is to gain in the long run by satisfying customers the first time and every time they buy from you. Transactional thinking may keep your business solvent this year, but what about next year? It's expensive to acquire new customers and less costly to keep existing customers. The longer your customers stay with you, the more they buy, the higher their CLV and the more prosperous you'll be.

Marketing Laughs

Today a quick listing of links to marketing cartoons . . . just for fun.

Tom Fishburne's Brand Camp cartoons

Funny Times marketing 'toon archive

HubSpot cartoon (with links to more)

Andertoons marketing 'toons

And for cubicle dwellers who still have a cubicle to go to every day, Dilbert widgets galore for blogs, Facebook or LinkedIn pages, etc.

Twitter Metrics

Yes, you can count the number of Twitter followers and the number of following. But wait, there's more! Tweeple Twak helps you determine where your followers are, how influential they are, why they stopped following you, etc.

My question: Just how valuable are these numerical metrics? Numbers sound good but so did eyeball counts. And how "influential" a follower is depends on the audience, no?

IMHO, Twitter's power is not mainly in numbers but more in content and utility. It's a great way to know what customers are saying about you, reach out to help customers in a more immediate way, let customers know what's happening. Content analytics are at least as important as number of followers in terms of marketing metrics. And there are some companies doing Twitter conversation analysis. So numbers are nice, content analysis is better.

Doodle 4 Google on home page

The Google home page doesn't post extra links very often, so I took notice when it added a link to its student art competition, "Doodle 4 Google."

Involving students (especially new readers) and teachers is a very smart marketing move. And the prize--well, it reflects Google's culture and will get the lucky winner more exposure than a Super Bowl ad. Imagine writing about this prize for your college essay!

clipped from www.google.com Welcome to Doodle 4 Google, a competition where we invite K-12 students to play around with our homepage logo and see what new designs they come up with. This year we're inviting U.S. kids to join in the doodling fun, around the intriguing theme "What I Wish for the World."

Twitter Around Super Bowl

Lots of Twitter dialogues going on during Super Bowl. The Twitter/SuperBowl page was the official Twitter feed. The New York Times mapped tweets about the game.

Advertisers also got into the game, as WSJ reported, including: H&R Block (see image); Pepsi; Overstock.com; E*Trade.

Who had time to watch the game with all this tweeting? But seriously, good experimentation. Big question: Do these advertisers have a real strategy for building on these Twitter dialogues?

Top Five Ways to Doom Your Marketing Plan

Whether you've got the greatest product since sliced bread or the best tagline on earth, you can still screw things up with a misguided marketing plan. Here are the top five ways marketers can doom their marketing plans:

1. Assume that your customers think, feel, and act the way you do. If you write your marketing plan with YOU in mind, you might end up as your only customer. People are not all alike--that's why you need to do your homework to understand the market, identify and select promising segments, then target the most profitable. Research the attitudes and feelings of target-market members toward your brand and its competitors; find out how market members approach decision-making in your product or service category; and learn how market members actually behave toward your product or service.
   
2. Start with tactics. Got an idea for a killer ad or clever pricing promo? Great--just don't start with your tactics and work backward to your marketing strategy. Use your situation analysis to see the big picture first, set your goals, and then develop a full-blown strategy to drive your tactics and timing.
3. Touch up last year's plan and change the numbers. This is so tempting--and such a trap. The entire world can change in just a few months (or even weeks), as our recent economic crisis has shown. Instead, start from scratch every year (call it zero-based marketing planning) when you examine the external environment, look at the competition, assess channel possibilities.
4. Take sales for granted. Ever see a marketing plan where sales projections didn't move higher and higher over time? That's the way it usually works--on paper, anyway. In the real world, product trial doesn't necessarily happen on your desired schedule nor does it automatically lead to long-term product adoption and loyalty. You've got to win customers over one by one, starting with a value proposition that meets their needs, then earn their loyalty with every purchase.
   
5. Underestimate the competition. While you're eyeing that big competitor's every move, a little competitor could very well sideswipe you. In fact, the nimble little nobody might become a hot somebody by the time you notice. Watch what's happening at the fringes of your industry and give serious thought to how, where, and when new competitors might nibble at your market. Redo your SWOT (strengths, weaknesses, opportunities, threats) analysis on a regular basis, especially when it's not your normal marketing planning season. Your smartest competitors will spot your weaknesses and go after good opportunities when you're not looking.