Uncommon Carriers: John McPhee's Adventures in Distribution

Distribution is fascinating--at least if you read the very readable Uncommon Carriers by John McPhee (or listen to it, as I did).

McPhee gives readers an entertaining insider's view of transportation in all its glory: Watching millions of packages move by in orderly fashion inside the UPS Air sorting hub in Louisville; riding along with a trucker hauling hazmat; on the bridge of a towboat handling a string of barges longer than the Titanic; following lobsters from water to restaurant; and on and on. McPhee criss-crossed the continent researching this book to show how everything from coal to chemicals gets from one place to another, efficiently and effectively.

I didn't know that UPS planes sometimes carry Fort Knox gold in their cargo holds. That's only one of the interesting and timeless factoids I gained from Uncommon Carriers. My least favorite chapter was the one where the author and his son-in-law follow Thoreau's river journey from Massachusetts to New Hampshire, but that's a minor quibble. I agree with the reviewer who said this book could have been titled: Hmm, I Didn't Know That. McPhee packs a lot of entertainment into his discussions of how distribution works. Highly recommended!

Transparency and Digital Reputations

Marketing has been on fast-forward for some time--but social media is forcing companies to pick up the pace or be seen as less than transparent. Take recalls, for instance. Today's Ad Age reports that Toyota, J&J, and other companies may be announcing recalls more quickly than in the past because they don't want to hurt their digital reputations. It's just too easy for negative info to spread worldwide via the blogosphere or tweetosphere.

Announcements about product or packaging changes also have to be super-speedy. Early this year, after P&G developed a new "Dry Max" Pampers diaper, it put the new product in existing Pampers Cruisers packaging just until the rollout campaign could get underway. However, P&G didn't let Cruisers customers know about the change. Many Cruisers customers vented their displeasure online even before P&G's introductory campaign began--not the best way to lay the groundwork for a new product.

Showing that the firm both listens and responds will go a long way toward repairing customer relationships. Tropicana reversed course on new packaging for its orange juice last year after receiving a tsunami of negative customer reactions, via the Internet as well as through traditional feedback mechanisms. “You write an e-mail and in an hour, you’ve got a fan base agreeing with you,” a PR executive told the New York Times, explaining the speed at which customer reaction can spread. When the president of Tropicana North America announced the return of the original packaging, he said: “Those consumers are very important to us, so we responded.” Quickly.

Marketing Electric Cars: All Charged Up

According to a Consumer Electronics Association survey, 40% of US adults want to test-drive an electric car. No wonder Nissan has set the marketing objective of delivering 50,000 test-drives for its new electric Leaf (above) over the next year.

Competition in electric cars is all charged up, with various marketing partnerships laying the foundation for future sales. The state of Oregon, for example, has teamed up with Nissan and Portland General Electric to promote electric cars for green reasons.

The Chevy Volt has been in the news lately, with much speculation about how its $41,000 price tag will be received by the target market. Demand might initially outstrip supply, and one report says dealers appear to be getting a premium for their Volts.

The most upscale and elegant of the electric cars are made by Tesla, which has attracted investment from both Daimler and Toyota. Enthusiasts can join the conversation on the brand's forum or on the Tesla Twitter community.

Fan Your Mall

Malls don't just want your business, they want you to be social with them and interact. The humongous Mall of America has more than 100,000 people who've clicked to "like" it on Facebook. This is a busy Facebook account, with lots of wall posts, info, even a special surprise on the "exclusive" tab. And the mall asks for e-mail addresses to join its mailing list. Two tweeters manage its Twitter account, which has nearly 4,000 followers.

The Hanes Mall in Winston Salem, NC, welcomes Facebook fans with a colorful splash screen and links to coupons, Twitter, etc. It puts its e-newsletter signup right on the welcome page to encourage participation. Although its Twitter account is not as active as Mall of America's, I like that this mall's web site has a "coupons" page for bargain hunters.

Oakbrook Center (Illinois) is currently gearing up its social media strategy. Its Facebook page isn't active as of today, but it's started to tweet and, even better, it links to Yelp so shoppers can get unbiased peer reviews of its stores, a smart move.

The International Council of Shopping Centers, the industry group for malls, is represented on Facebook and Twitter, as well. 
 

Gift Cards: Big Business, New Rules

There's a gift card for almost everything, from flu shots to charitable donations to Major League Baseball seats and merchandise. Now the rules of the gift-card game are changing.

In the past, marketers set various expiration dates and fees for their gift cards. Effective August 22nd, however, gift cards must comply with a number of new federal rules. The biggest change is the expiration date: gift cards must be valid for at least 5 years. Where issuers charge a fee (for lack of activity, for example), only one fee may be assessed per month (not counting any fee charged at the time of purchase). And for transparency, issuers must provide clear disclosure of terms and conditions on each gift card.

Some of these rules don't apply to gift cards produced before April 1, 2010, but all gift cards will have to be in compliance by January 31, 2011. Until then, retailers and other gift-card issuers will be posting in-store signs or links on their web pages to appropriate disclosures.

Price Wars

Procter & Gamble is defending its market share with price cuts in batteries, shampoos, liquid detergent, and other categories. To get ahead of rival Energizer, it added more batteries to its Duracell battery packages, which meant customers were paying less per battery. Then Energizer fought back with lower prices, which drew P&G more deeply into what has become a battery price war.

But are price wars worth fighting? One classic Harvard Business Review article by Rao, Bergen, and Davis suggests that marketing managers pick their battles carefully:

It is generally wise to not stir a hornet's nest by starting a price war with a competitor that has a significantly larger resource base or a reputation for being a fierce price warrior.

Ralcorp, which owns the Post cereal brands, touched off a breakfast cereal price war earlier this year by cutting prices. Now Post's profits are hurting, as are Kellogg's profits.

Marketers of e-book readers have become embroiled in a price war that is bringing the category into the mainstream and pushing profits down, down, down. Only three years ago, Amazon's Kindle debuted at $399 and today there's a $139 Wi-Fi-only model. All the players in this price war are big enough to keep it going strong through the holiday selling season.

Watch for more price wars as the economy remains sluggish and marketers fight for every customer, dollar by dollar.

Expanding Archie's Brand

Archie, Veronica, Jughead, Betty, and the whole gang in Riverdale are part of an ambitious plan to expand the Archie brand into new media and new product possibilities. The buzz started last year, with news that Archie might wed one of his long-time girlfriends (actually, there were two "weddings" but neither was real). When these story lines appeared, Archie's comic book sales soared, and sales have remained higher than before the "weddings."

Parodies of Twilight and other pop-culture phenomena--starring Archie, of course--have been previewed on MTV's site. Now the Archie brand is on Facebook and Twitter and the characters star in online games and other digital fun. All of this is part of a broader strategy for updating Archie and his pals for 21st-century marketing by showcasing the brand for new audiences.

Coincidentally, the USPS recently released a new series of stamps honoring classic comics, including Archie (see above). Yes, the stamps show the old Archie, but they also raise awareness of the brand's authenticity and longevity, not to mention pushing nostalgia buttons.

Comics are a big and tough business. Archie the brand competes with a spectrum of characters and corporate owners, including those under the Marvel umbrella (part of deep-pocketed Walt Disney).

How far can Archie's brand extend?

Retailing E-books and E-readers--Welcome to the Revolution

E-book readers are becoming the trendy gadget du jour. Remember when hotels furnished iPods along with hiply-decorated suites? Now Fairmont Hotels offer Kobo e-readers to their best guests. Plus, when guests check out, they receive coupons for discounts on Random House titles.

Welcome to the revolution. The rapid rise of popular e-book readers such as Amazon's Kindle and multifunction devices such as Apple's iPad, accompanied by a sharp increase in e-book sales volume, has publishers and retailers thinking hard about the future. The price war in e-book readers such as the Barnes & Noble Nook (above) is helping to drive sales volume higher and faster. Which products and retailers will reinvent themselves and thrive--and which will dive?

Barnes & Noble, the largest US book retailer, tells the New York Times: "The growth in our e-books business is about nine months ahead of our plan." To cope with the unexpected timing of this shift in consumer buying patterns, the retailer is retooling its merchandise mix by adding games and other non-book products. Remember, Barnes & Noble stores have lots of shelves to fill, and the peak holiday buying season is just ahead.

Holiday buying brings up one more revolution spreading across the retail world: Gift cards. Lance Ulanoff, writing in PC Mag, suggests that Amazon create a mechanism for people to gift specific Kindle e-books. He also wants Barnes & Noble to create a similar card for Nook users. With consumers changing their buying habits and Black Friday still 15 weeks away, the retailers have time to follow up on Ulanoff's idea.

The State of State Marketing

With so many consumers choosing staycations or close-to-home getaways instead of overseas summer travel, states are investing in marketing to attract visitors interested in unique experiences, beautiful vistas, or specific activities.

• Michigan's campaign, Pure Michigan, focuses not on Detroit or industrial centers but, as you'd expect, on its "unspoiled nature and authentic character." The campaign includes the Web site plus social media such as a blog (vacationers are invited to "guest blog"), Twitter posts, YouTube videos, and Flickr photos.
• Massachusetts tells vacationers: It's All Here. There's something for everyone (fun, romance, exploration, experiences, family time/activities, a bit of luxury, and play opportunities). Both Facebook and Twitter are part of this campaign.
• Not the official campaign of New Jersey but worth mentioning is Jersey Doesn't Stink, which wants to counteract the negative perceptions that many vacationers have of this "Garden State." The campaign is on Twitter, Facebook, and Youtube as well.
• Hawaii showcases its alluring scenery to highlight its strength as a vacation destination on Go Hawaii. Each island has its own tab on the home page, and interestingly, Hawaii links to the independent TripAdvisor site, urging vacationers to "get advice from real travelers," a great way to let opinion leaders share their ideas and recommendations.
• Louisiana wants to reassure vacationers that there are still many opportunities to enjoy the state's natural wonders, music, food, and more. In addition to videos, the official tourism site has an "update" section with the latest news about the oil spill. Social media connections include Facebook, Twitter, FriendFeed, Vimeo, Flickr, blogging, and Youtube. The state has also created a mobile-friendly version of its tourism site for smartphone users. Very smart.

Pop-up Stores Fill the Void

Pop-up stores have been coming on strong for the past decade. (Even longer if you count Christmas tree markets and other temporary stores that pop up seasonally.) During the current economic difficulties, with many vacant storefronts seeking tenants, pop-ups have become even more popular.
 

• Inc. recently reported on how to use pop-ups to (1) get the word out, (2) unload inventory, (3) test new markets, and (4) vet new retail ideas.
• The Wall Street Journal just did an article about pop-ups for (1) generating buzz, (2) testing new concepts (especially niche businesses), and (3) testing new markets. 
• The New York Times reports that pop-ups may be open for a few days or a few months, depending on the product and the marketing objective.
• The Denver Post reports that a pop-up store recently opened to serve as "an incubator of creative ideas" by featuring local artists.
• Target is one of the largest US retailers using pop-ups to build excitement about specific products, brands, and new markets. 

What will be the next pop-up trend to pop up?

Tracking What We Do Online

The Wall Street Journal has started a fascinating series, "What They Know," about how advertisers and companies that offer Internet services gather info on online consumer behavior. It's no secret that privacy is, sadly, either non-existent or very difficult to protect. Although many marketers are listening more closely to consumers' concerns about privacy, this series shows why the issue has become so controversial.

The first article explained the background and extent of the tracking, with a sidebar showing, in detail, how consumers can try to block tracking technology.

Today's article discusses how Microsoft could have turned privacy protection on in its Internet Explorer 8 software as the default setting (as product planners intended). Instead, thinking of the future advertising revenue to be gained by tracking users' behavior and serving up ads as appropriate, the firm ultimately released the software with protection set to "off" by default; users must turn on the privacy protection every time they start the software. Not a user-friendly decision, IMHO.

This is a must-read series for marketers that want a multidimensional view of online privacy. The stakes are high--and if marketers don't do more to disclose and to give customers easy ways to restrict some tracking, the backlash will get ugly.

You can get updates from the Twitter feed based on the series.