VW Steers Toward 2018 Goals

Volkswagen has quite a fleet of automotive brands. The company that brought us the Beetle is about to acquire the part of Porsche it doesn't already own, and it recently bought Ducati, the Italian motorcycle manufacturer. In addition to the VW brand, it owns brands as diverse as the posh Bentley, lux Audi, super-premium Bugatti, speedy Lamborghini, economical Seat, and compact Skoda, not to mention VW Commercial, Man, and Scania.

To supercharge growth, VW set two challenging 2018 goals--first, to sell 10 million vehicles in a year; second, to achieve a pretax profit margin over 8%.

The top-end cars are going to be a big part of VW's growth. Audi is selling remarkably well despite sluggish economic conditions, and Porsche is quite profitable. Bentley has done a U-turn on profits and now, with demand for status-symbol cars increasing year after year in China, the brand is accelerating toward yet another record sales year.

VW's Beetle is one of the top three best-selling cars of all time. Now buzz is building about the November debut of the 2013 Beetle convertible. Will it be a tweaked version of the VW eBugster Cabriolet Concept car pictured here (from the Beijing auto show)?

Airlines: Families That Pay Can Stay Together

In the past year, airlines have escalated the trend toward slapping a fee on many things that were formerly free. Seat assignments are included in this ever-growing list of fee-based services. Among the many carriers that charge for window or aisle or other special seat selections are American, Delta, Frontier, Spirit, Allegiant, and United.

However, when this fee policy separates family members flying together, it really looks like "Plane Greed" (according to the headline of a story in the Daily Mail, a UK newspaper). Small wonder that legislators are getting involved in the issue. I've read that American and other airlines give gate agents some leeway in seating families together, a good first step.

JetBlue is one of a handful of carriers that encourages families with small children to board first. "We're in the business of flying people, not just planes," explains a spokesperson. "JetBlue's mission to bring humanity back to air travel, and that means we work to make the travel experience as comfortable and easy as possible for our customers."

Common sense should be a part of every marketing plan, and seating family members with or near each other on a plane should be common sense. Airlines that don't apply common sense will face negative reaction from passengers, the public, and government officials. JetBlue has it right when it notes that it's flying people, not just planes. And people can make their voices heard by voting with their wallets.

Of course airlines want to meet the needs of businesspeople (typically the core of the frequent flyer customer base and a highly profitable group). Does this mean that airlines can't make an effort to compete on the basis of being family-friendly, as well?

Yahoo--A Look Back, Previewing the Future?

Where is Yahoo! going to go under Marissa Mayer? Nobody knows at this point, but she's sure to focus on the brand and user experience, her strengths while at Google.

The Yahoo! home page has definitely evolved over the years, and it's clearly not Google-like. Above, what the top of the home page looked like in 1996 (according to the Internet Archive's Wayback Machine), just two years after it was founded. Remember, Google was just getting started at this point, but its search page was stripped-down from the start.

By 2000, Yahoo's home page was more crowded and shopping was clearly being promoted, as you can see from this screen capture at left (again, thanks to the Wayback Machine). The Yahoo! logo remained red...

In 2005 (right), Yahoo! was more graphically appealing (see right) and the subject directory easier to navigate. Still very differentiated from Google and the Google Doodle.


Now, in 2012, Yahoo shows trending topics at top right, some news in center, other Yahoo sites along left column, and "most popular" at mid-right. Note that the Yahoo! logo is purple, not red.

Yahoo! still has brand life left in it. After all, it has nearly 10 million Facebook likes. It just has to decide what the brand will stand for. What will its home page look like in 2013?

Back-to-School Marketing in Full Swing

The battle for back-to-school purchases has begun. Major retailers like Walmart and Target have been airing commercials and using digital and mobile ads to highlight their seasonal offerings. Walmart's Classrooms microsite brings together supply lists from thousands of U.S. schools, ready for printing or to consult via cell while parents are in the store. Walmart is also using loss-leader school supplies to attract price-sensitive parents.

Walgreen's is part of the "reverse showrooming" trend, in which retailers use mobile coupons or online coupons to bring shoppers into their stores. Showrooming occurs when consumers inspect products in a store and then buy from an online retailer instead. Using sales promotions to encourage in-store shopping, retailers hope that impulse purchasing will increase the size of each shopper's transaction.

Best Buy has a clever idea: "Buy Boards" on major college campuses invite students to use their smartphones and scan the code of electronics products they want to buy. Buyers can have the merchandise delivered to their dorms or ready at a nearby store for pickup.

Say Goodbye to Demographic-only Targeting

The reason smart marketers use segmentation is to avoid the waste and needless expense of targeting everybody--including all kinds of people who don't want or need the product, or who spend very little in that product category.

Despite all the tools for market segmentation and targeting that are available today, it appears that many businesses continue to buy media on the basis of demographics. Catalina Marketing's recent study of media targeting concludes that "for high-penetration categories, that’s a large percentage of money spent on people who are not spending much."

Social media may help. Facebook, for example, allows segmentation by school affiliation and many, many other factors. More important, it's a great tool for inviting customers to "raise their hands" to receive marketing attention from YOU. Even though General Motors may not find Facebook an effective tool for targeting, some marketers are finding it very useful and profitable.

Bulmers, a UK cider brand owned by Heineken, learned through research that its Facebook fans spend roughly $311 more per year on its products (at retail) than its non-FB fans. Bottom line: Demographics don't tell the entire story. Behavioral targeting and psychographic/lifestyle targeting are often more powerful than age, geography, etc.

Fragrance Bloat

The classic Harvard Business Review article about feature bloat comments on the strategy, common among marketers of high-tech products, of adding bells and whistles in a one-upsmanship contest to demonstrate who has the most features.

The consumer packaged goods industry appears to be entering a phase I'm calling fragrance bloat. Household products now feature all kinds of familiar and sometimes exotic scents.

For example, Procter & Gamble's Mr. Clean Magic Eraser bath scrubber now comes with Febreze "meadows and rain" fragrance. A sponge with a scent?

Febreze scents have, in fact, been integrated into a vast array of Procter & Gamble's household products, including Glad trash bags and Mr. Clean liquid cleaner (featuring Hawaiian and New Zealand scents).

Reckitt Benckiser, maker of Lysol cleaning products, offers household cleaners in Pacific Fresh scent, lavender scent, and the usual citrus fragrance. The list of added fragrances isn't as long as the list of what P&G offers...yet.

Spic 'n Span liquid household cleaners come in "Sun Fresh" and "Citrus Fresh" scents. That's it. No fragrance bloat here.

Marketing Space Tourism

This week, marketing dynamo Sir Richard Branson is showcasing his Virgin Galactic space tourism business at the Farnborough International Airshow.

Branson predicts that his SpaceShipTwo will take tourists into suborbital space starting in 2014, for a price of only $200,000 per ride. More than 500 people have submitted a deposit to hold their place for a two-hour ride 60 miles up, including a few minutes of weightlessness.

Space tourism has attracted the attention of another famous entrepreneur, Jeff Bezos of Amazon fame. His Blue Origin startup (rocket at left) is working to "lower the cost of spaceflight" so more people can have an out-of-this-world experience. Blue Origin is taking a lower profile approach than Virgin Galactic, so little is known about its target dates or pricing.

When Virgin's SpaceShipTwo blasts off for its inaugural flight, Branson and his two adult children will be aboard, making news and history at the same time. "It'll certainly be the most momentous moment of my life and my children's lives," Branson told CNN. "It'll be very difficult to ever cap it I think." I couldn't agree more. I hope space tourism becomes a reality in the near future!

Crayola Leverages Its Brand

Everybody remembers coloring with Crayola Crayons...the brand name and its colors are iconic. And that's why Crayola is licensing its brand for all kinds of imaginative products.

For example, you can color your nails with Crayola's latest brand extension (above), mini-nail polish in vivid colors like robin's egg blue and cotton candy pink. Or you can temporarily streak your hair with Crayola Hair Styx, with a three-pack of colors for streaking (Wild Blue Yonder, Electric Lime, and Razzmatazz) or Hi-Lights in two colors (Jazzberry Jam and Blue Bell). Or clip on colorful Crayola hair accessories.

Crayola has teamed up with Mattel to use brand names like Hot Wheels and Barbie on art supplies and markers with Crayola's crayon names. Coming soon: baked goods with Crayola Crayon colors, to be launched in 2013.

What's next for Crayola?

Zildjian - Made in America

Zildjian is legendary for its cymbals, used by the world's best drummers--not just in the rock world but also country, hip-hop, marching bands, classical orchestras, and on and on.

The family-owned company dates back hundreds of years to its Istanbul roots, passing from one generation to another in turn. Avedis Zildjian came to America in 1929 and brought the business with him to Massachusetts, where it's been ever since.

Cymbal manufacturing is alive and well in America. In fact, Zildgian's cymbals enjoy a 65% share of the market, and the firm rings up $50 million in annual revenues.

Social media communication is a big part of Zildjian's marketing: It has 190,000 Facebook likes and 10,500 Twitter followers, for example. Promotions that generate buzz are also important: To drum up business for its dealers, Zildjian periodically holds special events such as tours that bring musicians or one-of-a-kind cymbals to local stores. Made in America, yes, but known the world over.

Nordstrom and the Big Apple

Almost a year ago, Nordstrom opened an unusual store in New York City's trendy SoHo district. Called Treasure & Bond, the store donates all profits to children's charities. And as if that's not unusual enough, consider that Nordstrom didn't put its brand on this first New York City store. Why?

“It allows us to be way more nimble and to learn,” explained Peter Nordstrom, EVP of the department store chain. “If we opened something like this, and had it be Nordstrom in some way, it would end up disappointing — people would show up and say, ‘What’s this?’”

Just a year earlier, Nordstrom had opened a Nordstrom Rack outlet in Union Square, bringing its stylish off-price retail store to one of New York's busy shopping districts.
 
Nordstrom has spent the past couple of years analyzing shopper behavior in the Rack and the Treasure & Bond stores while negotiating for a full-size store in Manhattan. Finally, it has found the right location: On 57th Street, near Seventh Avenue, a shopping hot-spot for luxe brands. The grand opening is scheduled for . . . 2018, as soon as the residential skyscraper is built and Nordstrom can decorate the main level in its own way.