Tuesday, May 31, 2011

The Light Bulb Law Wars

Today's traditional incandescent light bulbs are being phased out, little by little, following a federal law enacted in 2007 that will take effect nationwide in 2012. The key word here is traditional.

The intent was to give manufacturers a push toward higher energy efficiency and have consumers replace hundreds of millions of energy-hog bulbs with energy-saver bulbs. Now that the deadline is drawing near, however, some consumers and lawmakers are not happy.

As the law now stands, 100 watt incandescent bulbs that use current technology will be the first to disappear from store shelves, to be replaced by--what? Contrary to some misperceptions, compact fluorescent light bulbs (CFLs) are not mandated to replace any traditional light bulb.

A spokesman for the electrical manufacturers trade group explains: “Unfortunately, people do not yet understand this lighting transition, and mistakenly think they won’t be able to buy incandescent light bulbs . . . Incandescent light bulbs are not being banned, and the new federal energy-efficiency standards for light bulbs do not mandate the use of CFLs."

Light bulb manufacturers have been busy for the past four years, developing new technology for long-lasting, energy-saving bulbs. General Electric, for instance, developed the LED bulb shown above--priced at about $40 or so--to replace the traditional 40-watt incandescent. LEDs are one alternative to CFLs. Both CFLs and LED bulbs are much pricier than the ordinary light bulb. Although prices will come down over time as production expands, initial prices are sure to give buyers a case of sticker shock.

No wonder so many consumers are stockpiling cheap, traditional light bulbs just in case. Some legislators (state and federal) are protesting the switch, saying the government shouldn't be meddling in light bulb affairs.

And about the green angle: Because CFLs and other newer light bulbs shouldn't be tossed into household trash once they burn out, convenient and easy recycling must be arranged to ensure that products intended to save energy don't wind up polluting our planet.

Thursday, May 26, 2011

Kodak's New Marketing Picture

Over the years, Eastman Kodak has changed its marketing as technology advanced, consumer behavior shifted, and competition intensified.

The company was founded in 1888 to make simple box cameras for consumer use; in 1889, it introduced its first film product. Shelves full of Kodak's bright yellow film boxes were a familiar sight in photo stores and tourist attractions for decades.

Seeking new customers, Kodak began selling instant cameras and film in 1976, a challenge to instant-photo pioneer Polaroid. By 1986, after a decade-long fight with Polaroid over patent issues, Kodak stopped selling instant cameras and film.

By the turn of the 21st century, the digital photo revolution was underway. Film sales, once a source of steady revenue for Kodak, were dropping and the company finally refocused on a new digital strategy, including entry into the inkjet printer market. Inkjets have helped Kodak complete the transition to a digital product portfolio capable of attracting both consumers and commercial customers.

The company's recent ad campaign has put the spotlight on cameras that facilitate photo sharing--a key benefit for consumers connecting via social media. No more yellow boxes of film, just speedy image capture and click! posting to Facebook or YouTube or other popular sites.

Speaking of social media, Kodak is very active in that space, with blogs, Facebook pages, a YouTube channel, Twitter accounts, and more. It also offers free downloadable publications with social media tips and mobile marketing tips.

Can this new marketing picture, focused on younger consumers and featuring social media, return Kodak to profitability by 2012, its target date?

Wednesday, May 25, 2011

Where Is The Gap Going?

The Gap has been struggling with sluggish sales, a declining profit margin, and an uncertain economic climate. What's the future for this 42-year-old fashion retailer?

Cotton prices are rising, as are transportation costs (due to higher oil prices). Customers won't accept price hikes in line with these steep and sudden cost increases, so Gap's margins have shrunk to under 40%. Given the economy, customers are likely to remain bargain-hunters, leaving little opportunity for margin increases in the coming months.

Meanwhile, Gap's new logo, introduced last year, caused an upheaval among brand fans, igniting a social-media firestorm--and the company quickly reverted to its traditional logo.

What about social media? Gap has 1.5 million "likes" on its Facebook page, but only 354 followers on its corporate Twitter account. Its YouTube channel has a few videos but not too many views. GapMobile invites mobile browsing, buying, and store location functions.

Who, exactly, is the Gap's target customer and how does that customer feel about the brand, the shopping experience, and Gap's image? I'd be interested in finding out how many Gap customers take advantage of this special deal with Goodwill: From May 19-29, anyone who brings a donation to a Goodwill store or a Gap-branded store (Gap, BabyGap, GapKids, GapBody) agets 30% off Gap purchases that day. Will this social-responsibility project resonate with Gap customers?

What's next for the Gap?

Monday, May 23, 2011

USAA: Tops in Customer Service

USAA frequently ranks as one of the top US companies for top-notch customer service. The financial services firm, based in San Antonio, Texas, was #1 in a survey released just this week by Nunwood. Why?

One reason is that USAA's employees receive intensive training--not just in products but also in understanding their customers' needs and situations. Newbies receive weeks of training before they start to serve customers. And the work force is treated to ongoing development to keep their skills polished.

Another reason is that USAA has redesigned its back-office systems to allow employees to serve the needs of customers in a life-cycle way. In other words, customers don't have to think about whether they're contacting the banking department or the insurance department or whatever. USAA instead takes a broader perspective (the customer is being transferred and how will that change his or her needs and how can USAA help meet those needs?).

USAA is social media-savvy, with a presence on Facebook, a Twitter account, and a YouTube channel too.

Friday, May 20, 2011

Pirates of the Caribbean's Ubiquitous Marketing

Weeks and weeks before Johnny Depp made it to the big screen in this year's Pirates of the Caribbean adventure, Walt Disney's ubiquitous marketing was building excitement for the brand franchise.

One clever partnership was with Pirate's Booty, a snack with "healthy" marketing overtones. In stores that carry Pirate's Booty, limited-edition packages were faced out on end caps and other high-profile locations to showcase on-package tie-ins to the new Disney movie.

Disney is also using Yahoo! ads and links to trailers. When Disney put a link to the official trailer on Yahoo! in December, it attracted 2.4 million views in the first 24 hours.

Not coincidentally, the latest LEGO catalog arrived yesterday, featuring the official Pirates of the Caribbean sets on the cover and in spreads inside. If you visit LEGO's dedicated Pirates page, you'll see that the graphics echo Disney's movie graphics.

Of course Disney has a Facebook presence for the new movie. As of opening day, that page had more than 5.4 million "likes." With the big Memorial Day movie-going weekend only days away, the marketing has successfully created an atmosphere of anticipation and generated lots of discussion about the movie (and more). Arrrrrgh.

Fortune 500 Page Count, 1998-2011

Once again, this year's Fortune 500 printed issue is fatter than the previous year's issue, loaded with many more ads and articles than in 2010. I have the annual 500 issues going back to 1998 so I can compare the lists over time. Below is the page count, year by year.

2011: 316
2010: 308
2009: 276
2008: 356
2007: 386
2006: 384
2005: 410
2004: 478
2003: 410
2002: 402
2001: 474
2000: 630
1999: 510
1998: 506

Clearly, the size of the issue reflects the economic situation and, to some extent, the fortunes of the magazine business. Note that the peak for this period was 2000, when the issue had a whopping 630 pages.

Fortune now offers a Fortune 500 app, downloadable from its Web site.

If you need corporate statistics stat, look up this app!

Thursday, May 19, 2011

Domino's: Honesty IS the Best Policy

Click to the Domino's Web site these days, and you're likely to see a headline like the one I saw the other day: "You asked for better chicken, and we delivered."
Owning up to its shortcomings--and responding, in a very high-profile campaign--has helped Domino's boost sales and profits during the past 18 months.

There was a lot of buzz when Domino's announced via its ad campaign in 2010 that it was tweaking its products due to harsh customer comments such as "tastes like cardboard." The move was gutsy and risky. In fact, the company went a step further and began posting videos and photos of its Pizza Turnaround program, reinventing its pizza "from the crust up."

Honesty paid off: Domino's began seeing significant increases in revenues and share, a trend that continues to this day. And the company is involving customers in the message as well. It invites customers to post Facebook photos and videos of food they've ordered from the company, showing how it looked when delivered. The idea is to demonstrate that what you see in a Domino's ad is what you'll get in the box when you order.

I like the way the Domino's blog reinforces the "you asked for it, you got it" theme as well as announcing new products and special offers. Honesty is the best policy!

Tuesday, May 17, 2011

Apps: Privacy Protection By Design

Angry Birds does something few mobile apps do: It offers access to its privacy policy through a link on its user interface.

According to two recent surveys, very few of the leading paid mobile apps show their privacy policies on their sites or within their apps. There's no excuse--if Angry Birds can do it with no apparent negative reaction from users, any app marketer can (and should) do it.

Privacy is in the spotlight right now because of revelations about smartphones invading users' privacy, such as the news that Apple's iPhone has been tracking user locations and storing data unencrypted. Not surprisingly, many consumers and legislators are upset, and new regs may be the result. Rather than ignore the issue or wait for government intervention, apps should follow the high road and incorporate privacy by design, making customer protection the default position today.

Monday, May 16, 2011

Will Digital Wallets Catch On?

Visa recently announced the fall introduction of a new digital wallet service for one-click buying. Customers with a Visa card simply use a password and click to complete an online or mobile purchase on any Web site, adding convenience and speed to the transaction. Visa is also looking at a near-field communication payment system, in the mode of "wave your phone near the payment point" and enter a PIN to complete the transaction (above).

The digital wallet isn't a new concept. Google has been experimenting with a near-field communication payment system. Isis (owned by big telecommunications firms, among others) plans to test a near-field communication system in Salt Lake City next year. Intuit is working on a mobile payment system of its own.

Will any of these catch on with consumers? To become popular, any digital wallet will have to provide much more convenience and speed than existing payment methods. It will also have to be highly secure, a very important point for customers wary of problems such as the theft of debit/credit card information from compromised PIN pads in Michaels craft stores.

Thursday, May 12, 2011

Tupperware Goes Social: Back to the Future

Fifty years ago, Tupperware parties were "social:" a chance to chat with friends and neighbors while buying those now ubiquitous plastic storage containers. Tupperware was ahead of its time, and now it's gone back to the future with social media activities to attract buyers when and where they interact with each other.

If you're on Facebook, so is Tupperware, along with its various promotions (see left) and its social responsibility activities (Save the Children). If Twitter is your preference, you'll find a Tupperware account there, too. (Tupperware offers fundraising opportunities, as well, with the designated charity receiving 40% of the purchase price from items bought during a Tupperware party.)

However, to jumpstart its social media campaign by leveraging a built-in audience, Tupperware hired Kelly Clarkson. "Kelly Clarkson is the perfect ambassador, as not only is she an extremely confident young woman, but is hugely influential in the social media world, with over two million Facebook fans and almost 900,000 followers on Twitter," observes Tupperware's VP of Global Communications and PR.

That's important, because if you click through the links I provided for Tupperware's FB and Twitter accounts, you'll see that the follower and fan figures are very low. For any Tupperware message to break through in social media, much higher audience numbers will be needed. Will Kelly Clarkson be the key to Tupperware's social media success?

Wednesday, May 11, 2011

Who Needs the 2010 Census?

You, if you're segmenting your market on the basis of demographic variables such as age, family size, and so on. Although behavioral and attitudinal variables are often more powerful for segmentation purposes--because they describe how people act, think, and feel, not just their characteristics--most marketers apply more than one variable to identify and target specific markets.

So keep an eye on the US Census Bureau's data releases to learn more about the US population as a whole and state by state. This month, the Bureau is releasing demographic profiles for each state and the District of Columbia, offering a summary of age, sex, family size, and other facts, including house ownership vs. rentals.

The May 4th data release, for example, indicates that more people rent than own homes in Washington, D. C. (58% rent vs 42% own). That contrasts sharply with the situation in West Virginia, where many more own than rent (73% own vs. 27% rent). If you're selling goods and services directly related to home ownership, D.C. may not be the prime market for you.

If you're marketing goods or services for younger folks, however, think about D.C., because the median age there is 33.8, compared with the median age of 42.7 in Maine.

That's why you need the 2010 Census. Check it out!

Tuesday, May 10, 2011

The World's Most Valuable Brand Is . . .

According to BrandZ, the most valuable brand in the world is:


Apple was runner up to Google in BrandZ's 2010 ranking. Since then, BrandZ calculates that Apple's brand value has risen a stunning 84%. With a value of $153 billion, Apple's 2011 brand value outstrips the combined value of Microsoft's and Coca-Cola's brands. (Google is #2 in the world, says BrandZ.)

What accounts for this amazing increase in brand value? BrandZ points to the iPad's immense popularity and Apple's ability to continually introduce new generations of existing products like the iPhone. In other words, highly effective marketing.

Wednesday, May 4, 2011

Using Social Media? Engage!

The digital agency IQ set out to determine which of the Fortune 50 brands are most responsive to customers on Twitter. It sent tweets to the 34 companies that have Twitter accounts (not to highly topic-specific company accounts, however).

The goal was to see who responded, how quickly, and what kind of message was used. In other words, were these companies actually engaging customers in dialogue?

MediaPost summarized the agency's experiment, and the white paper is available from IQ's site.

But if you want to know who the winners were, read on:

HP, UPS, Wells Fargo and GM. 

HP, like many multinationals, has a number of Twitter accounts, one for the press, one for internal use only, one for its PC products, and so forth. The PC account has nearly 23,000 followers and is a very active account.

UPS also has an active Twitter presence and more than 4,000 followers. The day I visited, a good number of tweets were in response to customer inquiries about deliveries.

Wells Fargo, well known for its tweeting customer service, has nearly 8,000 followers. Interestingly, it posts the hours that the Twitter account is monitored and refers reporters to a special e-mail address for media info.

GM has a few Twitter accounts. Its GMblogs account has nearly 24,000 followers and a group of four (photos included) responding to tweets (and RTs). 

The bottom line, for these companies, is that engaging customers via social media makes bottom-line sense. Marketers, are you using social media to spark dialogue and respond to customers' inquiries, complaints, and comments?

Tuesday, May 3, 2011

Boeing vs Airbus: Whose Strategy Will Fly?

Five years ago, I compared Boeing's future vision of the customer experience with Airbus's vision. Airbus was focused on giant hub-to-hub jets, while Boeing was betting on smaller city-to-city jets. At the time, my vote was for Boeing, because I didn't think customers wanted to be herded onto giant 500+ passenger planes. What's the current situation?

Boeing is sticking with its vision. Although its older 737s are being reevaluated after a hole developed in the ceiling of one operated by Southwest Airlines, the manufacturer remains firmly committed to this size/type of workhorse jetliner. The only question is, will Boeing redesign the 737 or simply add a new, more fuel-efficient engine?

Also, Boeing's long-delayed 787 Dreamliner jet (which was in the early assembly stages five years ago) is now in test flights, with first deliveries finally expected in the third quarter of 2011. This next-generation, fuel-efficient plane will carry up to 300 passengers on both intercontinental and transcontinental flights.

The 787 will also be a test of the strength of Boeing's vision: How many airlines will adopt this approach? In its program facts about the 787, Boeing anticipates that more than half of the advance orders for the Dreamliner will actually become sales. However, until the Dreamliner goes into service--and the economy picks up--Boeing won't have a definitive indication of purchase intentions.

Airbus, meanwhile, has revised its market forecast and says that demand for super-jumbo jets such as its A380 will only increase, in part because of sharply higher air traffic patterns in the Asia-Pacific region. By 2029, Airbus says, one-third of the world's passenger traffic will be generated from the Asia-Pacific area.

As a result, Airbus is remaining focused on its A380 jumbo jets, each capable of carrying 400 to 800 passengers. Five carriers are currently flying the A380 and 14 more have placed firm orders. Airbus thus has a lead over Boeing in this regard.

The bottom line: I vote for Boeing's strategy in developed regions (where convenience is likely to be more important for passengers) and for Airbus's strategy in developing regions with mega-metropolis airports (where price is likely to be more important for passengers).

Monday, May 2, 2011

Pepsi vs Coke: Vending Machine Matchup

The decades-old rivalry between Pepsi and Coke extends to their vending machine technologies. In the past, the biggest difference was the look of the machines and the assortment of available soft drinks.

These days, the machines themselves incorporate technology that differentiates the drinks and allows some brand personality to shine through.

Pepsi has introduced a mobile gifting option that allows one user to "gift" another with a free Pepsi by paying for the drink at a networked Pepsi vending machine (at left) and entering the recipient's cell phone number for a text announcing the gift. The recipient then enters the gift code in any other Pepsi networked machine, and the gift will be dispensed. Users can even bestow a gift at random. 

Coca-Cola has its Freestyle vending machine (below), dispensing Coke your favorite way (106 choices in all). The Freestyle, launched in 2009, relies on RFID technology to track flavors and signal for replenishment.

Coke also offers a Freestyle game as an app. Another twist is Coke's Friendship Machine, which requires cooperation in order to get a soft drink dispensed.

Watch for more technological enhancements as Coke and Pepsi take their rivalry to the next level of distribution.