Friday, May 30, 2014

Truth and Trust in Advertising

Too-good-to-be-true pricing, too-perfect-to-be-true photos. No wonder half of all U.S. consumers don't trust ad content, as shown in the graph below from a study. In fact, 58% of U.S. consumers are in favor of stronger claim requirements to back what advertisers say or show in a message.

Truth in advertising is a legal issue; trust in advertising has important ethical implications.

Here are three recent developments in the area of truth in advertising:
  • Southwest Airlines recently paid a hefty fine for advertising $59 coast-to-coast fares that weren't actually available. Consumers could buy some $59 tickets, just not between all the cities mentioned in the ad. 
  • Nissan recently settled an FTC complaint involving an ad featuring a Nissan Frontier truck pushing a dune buggy up a hill, which the Frontier is not actually capable of doing. The case concerned misrepresentation of the Frontier's capabilities.
  • Critics want to call attention to altered photos in ads, such as when women models are made to look skinnier. The bill calls for the FTC to report on this practice and seek input from stakeholders on the effects. A petition supporting this bill passed 20,000 signatures just days ago.

Tuesday, May 27, 2014

Target Canada Targets Supply Chain Problems

Empty shelves? That's not the way to attract customers and build revenues, yet that's the unfortunate situation at too many of the Target's stores in Canada. Well known for its affordable, stylish products, Target has stumbled in its entry to the Canadian market.

Rather than begin with a few stores and expand gradually, Target acquired dozens of locations and launched a large-scale entry across the country. However, behind the scenes, the Minneapolis-based company was struggling with the physical distribution challenges of moving merchandise through its giant warehouses and into individual stores--and the equally daunting task of determining demand levels for merchandise in individual stores throughout Canada.

Merchandise was arriving at the warehouses, but the contents didn't always match what the electronic documentation said. Every box had to be verified by hand, a tedious and time-consuming task. As a result, store shelves were sparsely filled as merchandise piled up in the warehouses day after day after day.

In recent weeks, customers posted photos on social media and Canadian news outlets reported on the bare shelf situation, compared with fully-stocked shelves in U.S. Target stores. Just as bad are the news reports of Target Canada pricing some merchandise higher than the same merchandise in its U.S. stores, which the new Canadian head says he's prepared to address.

Now Target has decreed it will turn this situation around in 30 days. The brand started life in Canada with incredible goodwill because so many customers had shopped at U.S. stores for so long. This is a critical moment in its Canadian history and a lesson in the value of getting logistics just right. Of course, Target doesn't just have to get shelves stocked--it also has to learn what customers want in each local market and tweak its merchandise assortment accordingly.

Target is highly active in social media because its target market is tech-savvy and social. Target Canada has 1.2 million Facebook likes on its English page and more than 150,000 likes on its French-language page. Its Pinterest board has 170,000 followers. Another unique Target feature is its online mag, A Bullseye View, with fashion news, store innovations, new products, and more.

Target's mission statement "is to make Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences by consistently fulfilling our Expect More. Pay Less.® brand promise." It's working hard to turn that mission into reality by improving its supply chain and in-stock situation across Canada.

Monday, May 19, 2014

Marriott's Moxy Strategy

Twenty-something hipsters who want affordable yet stylish hotel digs when they travel are the target market for Marriott's newest chain of hotels, branded Moxy. Opening only in Europe, Moxy hotels are "designed for value-conscious travelers, which is not to say that all millennials are value conscious," observes Marriott's global brand officer for lifestyle and luxury brands. "But people in their 20s tend to be more cost conscious." In other words, this is often a price-sensitive segment yet demanding in terms of features and design.

Millennials also tend to be social and connected, so Moxy will offer digital amenities as well, including free Wi-Fi and outlets for charging electronic gadgets. Naturally, Moxy will have digital marketing to reach the always-connected Millennial target market.

Moxy is a partnership between Marriott and IKEA, the Swedish furniture retail chain. Although the hotels won't have IKEA flat-pack furniture, they will have some self-serve elements--reflecting the habits and expectations of the target market. How will Moxy affect the other Marriott brand strategies as Millennials expand their travel plans, increase their incomes, and change their behavior over time?

Friday, May 16, 2014

Kellogg's Segments the Breakfast Market

Here's a rear view of the Kellogg's Corn Flakes cereal package currently on local store shelves. It features a promo for Kellogg's to Go products, including ready-to-drink breakfast shakes and ready-to-mix breakfast shake powder.

Kellogg's is battling to regain its momentum in an evolving market where packaged cereals continue to lose ground, a problem for the industry overall. Marketing on the basis of health and nutrition is helping some Kellogg products, including Raisin Bran, to hold their own. Still, many consumers see breakfast bars, smoothies, yogurts, and other items as more convenient and speedier to eat than sitting down to a big bowl of cereal and milk.

The CEO points out that a good-sized segment of the market craves protein--and milk (in cereal or a breakfast shake) can satisfy that need. Another segmentation variable is lifestyle. As a result, the company's "to go" product slogan is "Rise and shine. In no time." The positioning is fast and easy and nutritious (need-satisfaction/benefit orientation), just right for today's on-the-go lifestyle (lifestyle orientation).

Kellogg's uses marketing research to segment the consumer market for breakfast by understanding what people eat, when, where, with whom, and why/why not eat. "Segments created in this way often tend to be far more insightful than just clustering consumers or their needs," says Kellogg's director of insights and planning for Asia Pacific/S.S. Africa. What other breakfast segments and niches can the company identify and target to fuel future growth?

Wednesday, May 14, 2014

Alamo Drafthouse's USP: Respectful Enjoyment

If you can't sit in a theater to watch a movie without sipping a locally-brewed beer, go to Alamo Drafthouse.
If you can't watch a movie without texting, avoid Alamo Drafthouse.

The brainchild of Tim and Karrie League, Austin-based Alamo Drafthouse is a fast-growing chain of movie theaters that serve food and drink. Last year alone, the company debuted 8 new locations.

Alamo Drafthouse says it's "a lifestyle entertainment brand with an acclaimed cinema-eatery." In other words, it differentiates itself on more than one dimension--dimensions that are meaningful to the target audience.

Its objectives are:
  • To share the movies loved by the founders with as many people as possible
  • To be a cultural center for each community it serves
  • Encourage viewership of classic, "golden era" films
  • Encourage viewership of foreign films
  • Encourage young and college-age viewers to become movie buffs
  • Help local video stores survive in the spirit of community cultural spots
  • Help save 35mm movies
  • Help save VHS movies
A key unique selling proposition of Alamo is respectful enjoyment of movies. No texting or talking allowed during the movie, no rowdy youngsters (kiddies are most welcome at special children's screenings). When customers attend a screening at Alamo, they can be sure of a quality movie-going experience. No wonder movie-loving customers (the target audience) are fiercely loyal.

Of course Alamo is heavy into social media, including its own blog and Facebook, Twitter, and YouTube (a must-see is its "no talking allowed" video with more than 2 million views).

Friday, May 9, 2014

Distribution Dilemma: Same-Day Delivery of Online Purchases

Click now, wait and wait for purchases to be delivered. That's the old model of online purchasing. Online retailers have been trying to solve this distribution dilemma by changing "click and wait" to "click for same-day delivery." Just this week, Amazon and Google both debuted or expanded same-day delivery in major metro areas.
  • Amazon's same-day delivery option offers same-day delivery in 12 areas, Monday through Friday (although San Francisco has 7-day service). The company initiated same-day delivery four years ago, and has been slowly expanding ever since. Las Vegas, one of the original test areas, is no longer in the mix, however. Amazon Prime customers pay less than non-Prime members. And by not using FedEx and UPS, Amazon changes its cost equation, which may help its profitability.
  • Google's Shopping Express offers same-day delivery in several areas, including LA, SF, and Manhattan. Google's retail partners (national and local, like Costco, Photojojo, Walgreens, Office Depot) sell the merchandise and Google's delivery partners deliver, using Google-branded vans (see above). The result combines "shop local" with same-day delivery, addressing the last-mile problem.
What's next for same-day delivery?

Tuesday, May 6, 2014

Hyperpersonalized Products Purchased with a Click

From Chroma Graphics:
Last week's Economist looked at the ongoing trend of consumers using window decals to personalize their cars, vans, and trucks. Above, one of the many decal kits made by Chroma Graphics, featured in the article titled Family portraits on wheels: Windscreens are the new Facebook. Below, a decal from Family Stickers, which will customize each order to the buyer's unique specifications.
From Family Stickers:

Mass customization is nothing new, but today's hyperpersonalization trend reflects both consumers' need for individuality and the widespread availability of personalized products purchased with a click. These are not your father's car decals ("Go Yankees! Honor student on board. My other car is a Jag.").

Today's decals reflect social and cultural trends as well as both affective and cognitive associations. Just like people tweet, blog, Instagram, and use other social media, they also communicate their thoughts and feelings and beliefs via decals and other hyperpersonalized products for attire, vehicles, homes, etc.

Of course, 3D printing is ushering in a new era of hyperpersonalization for an increasingly wider range of products. In March, Oreo used 3D printing to personalize cookies via Twitter for SXSW goers. Read more about hyperpersonalization and 3D printing here on the Interbrand site.

Saturday, May 3, 2014

It's a Small World After All: Disney and Competition

Last month marked the 50th anniversary of the debut of the famous "Small World" theme song that features in Disney's Small World attractions all over the globe. It was first heard at the New York World's Fair in 1964, in a pavilion saluting UNICEF that was operated by Disney and sponsored by Pepsi. The song has been part of Disney theme parks ever since.

Despite the widespread brand awareness and decades of positive associations with the Disney name, competition remains an issue for the company's theme parks:
  • Shanghai Disney is expected to open its gates in about 18 months, with marketing to draw millions of middle-income Chinese families year after year. A joint venture with a Chinese firm, Shanghai Disney will compete for share in what will be, by 2015, a $148 billion market for entertainment and media services. In addition to Hong Kong Disneyland, other theme park competitors include: Chimelong Happy World, Window to the World, and Beijing Happy Valley.
  • Tokyo Disneyland, highly popular with Japanese families, is to undergo an update and expansion as the operator works to meet the needs of the aging population. Opened in 1983, attendance continues to increase, and nearby DisneySea is also feeling the halo effect of improved economic conditions. However, Japan is the birthplace of Hello Kitty, who has her own theme park; other theme park rivals include: Universal Studios, Kidzania, and Huis Ten Bosch.
  • Disney World in Florida must contend with increased competitive pressure from rivals like Universal Studios, Legoland, and SeaWorld. Reportedly, Disney has lost market share in Florida since 2009, in part because of the popularity of Harry Potter attractions at Universal Studio's Islands of Adventure.
  • Disneyland Paris, drawing customers despite Europe's mixed economic climate, has high hopes for its upcoming Ratatouille ride. What draws customers? The COO of Euro Disney answers: "That curiosity that you had as a child you hope you never lose and that’s what drives people to theme parks." European competitors include Bagatelle Park and Parc Asterix, both in France.

Friday, May 2, 2014

Remember Coupons? Think Click, Not Clip

Decades ago, shoppers awaited the Thursday newspaper to clip coupons for Saturday's grocery shopping. In 1978, the dollar value of coupons issued exceeded $72 billion, and continued to rise year after year due to competition and shopper expectations.

Fast-forward to the great recession, when super coupon clippers became media stars and taught mainstream shoppers some tricks to save big. By 2013, an estimated 315 billion coupons were being issued in the United States...with less time between issuance and redemption deadline. Marketers clearly wanted to increase the sense of urgency and encourage consumers to buy now. Yet fewer Americans said they redeem coupons, mainly because they weren't able to find coupons for the products they prefer to buy.

Today, savvy shoppers looking for bargains appear to be in favor of mobile coupons, accessed via smartphone or tablet computer. Waiting in line in local stores, I often see cashiers scanning coupon codes on a customer's phone. With a click, not a clip, shoppers save money and stores avoid the hassle of bundling paper coupons for return to manufacturer. Fast, easy, and no more little pieces of paper to handle.

Yet another approach is card-linked couponing, which involves consumers registering their payment cards with the couponing service so that discounts are automatically applied after the shopping transaction. This couponing method streamlines the entire process for buyers and sellers. Just as important, it allows marketers to evaluate the results of every coupon offer and analyze who's buying, when, where, and how often.