Friday, October 28, 2011

2011: Another Cut-Price Christmas?

Halloween hasn't arrived yet and already retailers are positioning themselves with discounts and promotions to capture share of wallet well in advance of the holiday buying season. Penny-pinching purchasers do care about price, but how much influence will the following policies have on actual buying?
  •  Toys 'R' Us is launching a new version of its customer loyalty program, featuring discounts and money-back after the season. The program has 24 million members and will doubtless attract millions more who will consolidate their purchases to achieve savings.
  • Walmart has a price-match guarantee to reassure shoppers that they won't find a lower price anywhere from Nov. 1 to Dec. 25. If they do, Walmart will give them a gift card for the difference in price--bringing shoppers back into the store to spend again.
  • Sears will beat a competing price by 10%, subject to the fine print of course.
  • Bed, Bath & Beyond will match's prices, which is unusual because very few in-store retailers include online merchants in price match programs.
One thing is clear: Customers will need to be even better shoppers than usual to get the best deal.

Tuesday, October 25, 2011

Netflix's Moments of Truth

Netflix has been so popular and resilient that it's hard to believe how poorly it handled its price increase and subsequent proposal to split into two companies, one for DVDs and one for streaming entertainment. (I've been a customer for years, DVDs being my preference, and after the price hike, I chose DVD-only rather than pay more for the privilege of streaming as well.)

Announcing that DVD-only subscribers would be shunted to a new division, Qwikster, caused such an uproar among inconvenienced customers that CEO Reed Hastings soon reversed this decision and did away with Qwikster. But the damage had been done.

Now that Netflix's latest quarterly earnings are out, it's clear that the company is losing subscribers--more than 800,000 defected in the last quarter. In other words, subscribers are voting with their money. And the defections may not be over.

As Netflix expands into other nations, its strong US base is not as sturdy as it was even 6 months ago. Plus Netflix's stumbles are hurting its standing in the financial community.

As the Washington Post points out, the battle for our living room is far from over, and once-dormant competitors like Blockbuster are scoring points. This year has brought several moments of truth for Netflix--and so far, the company is standing but staggering.

Wednesday, October 19, 2011

Planning with the Far Future in Mind

Marketing plans usually cover the next 6-12 months, with the exception of some new product intros, which may cover 12-24 months. But every plan must take into account developments that might arise months and years into the future--because those environmental shifts (technological, political, cultural, etc) can potentially derail even the best plan.

If Cisco had, for instance, taken a close, critical look at the eventual future of consumer pocket videocams, would it have bought the Flip business? As it turns out, video has become extremely important to Cisco's future marketing plans--in terms of videoconferencing for B2B customers, not in the consumer world.

So how do marketers stimulate creative thinking about future directions for their industries, technologies, customer needs, cultural preferences, and so on?

First, cast a wide net and think big. I like to listen to the FourCast podcast for ideas about how technology might change 3 or 5 or 100 years in the future. Sure, some of the predictions are outlandish, but they're also entertaining and imaginative. A lot of new ideas are packed into every podcast. The MIT Technology Review just published an interesting issue about the future, based on ideas rooted in science fiction.

Second, take advantage of all kinds of data for your markets, like the UCLA Anderson Forecast series for Southern California. Technical, to be sure, but broad trends are addressed and may help you think creatively about future opportunities and challenges.

Third, look beyond the numbers to uncover the reasons for what's happening. Are car-top luggage carrier sales going through the roof just as the economy is tanking? Thule had that situation, which turned out to be an indicator of how consumers would react to difficult economic times. Interpreting such changes isn't always easy but it will provide additional clues to broader trends you should incorporate into your marketing planning.

And, because the marketing environment can be disrupted by "once in a lifetime" events such as the nuclear problems in Japan, touched off by extreme weather conditions, consultants Booz & Company advise management to think about black swans, "high-magnitude, low-frequency upheavals" that can turn a business on its end.

Monday, October 17, 2011

PricewaterhouseCoopers's Power Pitch Contest

This week's Fortune carried a fascinating article about how the accounting firm PricewaterhouseCoopers stimulates innovation through an American Idol-like contest it calls Power Pitch.

PwC is the accounting firm that tallies the Oscar votes (see above), with great security and an unusual amount of secrecy to prevent leaks. All the glitz happens on stage when big-name celebrities open the envelopes.

Backstage is where PwC does its magic, but the firm is also ramping up its business possibilities by encouraging its own talented people to team up in an innovation competition. The team that came up with the best idea for PwC's next $100 million business would win $100,000.

This was no ordinary "employee suggestion contest." A panel of partners narrowed the field of initial submissions to 20, and a popular vote among employees sent a further 5 to the semifinal round. With help from internal advisors, these 25 teams refined their ideas.  Only 5 teams made it to the finals in New York City, to pitch their product ideas at PwC's headquarters--viewed via webcast by thousands of colleagues worldwide.

The winning idea was a proposed service that would apply sophisticated datamining analyses to help clients determine what their customers want or need next (think Netflix movie suggestions but in the health care or financial services field). Even if Power Pitch doesn't result in a new $100 million business, it has already generated internal excitement and helped the company's talented professionals to think big, think creative.

Friday, October 14, 2011

Pay Phones Are Still Around (For How Long?)

Cell phones may be ubiquitous, but pay phones still have a place--literally--at airports, subways, hospitals, and other locations. Wherever cell phones just won't work or non-cell users need to make calls, pay phones are a good but increasingly scarce option.

Verizon just sold a chunk of its dwindling pay phone business to PTS (Pacific Telemanagement Services), which sees "tremendous opportunity there." The last of the Baby Bells to offer pay phone service, Verizon is hanging onto a handful of its choice locations. Pay phones are also targeting prisons, where inmates must call collect or arrange a prepaid call. PTS is active in this market, as well. 

The pay phone industry was deregulated during the 1990s, in an effort to spur competition and keep phones in place. But with rapid penetration of cell phones, pay phone usage dropped (landline usage also) and companies began to withdraw from the market. Will pay phones still be around by 2020?

Thursday, October 13, 2011

Not Your Dad's Dole

Ever heard of red or baby bananas? Well, Dole--which markets all kinds of fruits and veggies from pineapples to packaged salads--is putting them in grocery stores for you to taste and enjoy.

This isn't the Dole of's the 21st century, and fresh is trendy. Dole is looking at niche markets these days, not just mainstream produce in bulk.

Social responsibility is definitely on Dole's menu, with initiatives ranging from water and soil conservation to community involvement programs around the world.

The Dole brand has also gone social. It's got its own Facebook page, with more than half a million "likes." It tweets (@DoleNutrition). And of course it has a YouTube channel.

Monday, October 10, 2011

YouTube Expands Movie Rental Business

Did you even know YouTube is in the movie rental business? It's already expanding into Canada and the UK market, after having started in the US. This development is not entirely out of the blue: Mashable, PC World, and others reported on it last year.

No need to be in front of a computer screen--YouTube movie rentals can stream to Android phones, naturally.

Comcast and other cable companies are feeling pressure from on-demand streaming movie rental deals like YouTube's and Netflix's (not to mention the new Direct/Blockbuster offer). Comcast wants to stream movies before the rental firms get ahold of them, but at a high price point, reportedly.

So pricing may wind up to be a key decision point for consumers. Go out to Redbox and get something for $1? Or stream via subscription from Netflix (which just dropped the Qwikster split-up plan)? Or rent on the fly anytime from YouTube? Lots of choices, and lots of changes on the horizon. Stay tuned.

Wednesday, October 5, 2011

Getting Consumers to Go Greener

A survey from GfK Roper and S.C. Johnson (maker of Windex, Ziploc, and other household products) shows that U.S. consumers are doing more recycling these days compared with 20 years ago--see below. One reason for this shift is that consumers are more informed about how recycling protects the planet and what can be recycled than they were in 1990.

Johnson has both a blog and a Twitter account devoted to greener choices. Its Web site also has a carbon footprint calculator for consumers to use as they consider how their individual choices and behaviors can affect the environment.

From switching to reusable shopping bags to recycling all appropriate bottle, plastic, and metal containers, consumers are increasingly going green through such everyday eco-friendly actions.

Despite higher awareness of recycling opportunities and activities, however, consumers can and should go greener, experts say. An important motivator is helping consumers see how they serve their own self-interest when they protect the environment. Watch for more marketing in the coming years to increase recognition of recycling benefits and motivate greener behavior.