Wednesday, 17 October 2018

Hire or buy clothing?

Two US entrepreneurs set the trend in motion when they opened Rent the Runway, a designer clothing-for-hire business in 2009. The idea was to offer women (and, later, men) the opportunity to hire a fancy outfit for several days, at a fraction of the purchase price.

The one-time hire price includes shipping plus cleaning as a complete package. Just choose an outfit, click to hire and return postage-free after the special occasion. Rent the Runway and other US rivals also offer subscription pricing, so customers can choose a certain number of everyday outfits per month at one low for-hire fee. In other words, for-hire isn't just for special occasions.

Now clothing for hire is going global. UK businesses that offer designer frocks include Girl Meets Dress. 'Customers had never hired before, so the main thing was getting them to do this', says Girl Meets Dress founder Anna Bance, whose data systems had to account for the time clothing spends in transit and in cleaning between hire periods.

In Australia, GlamCorner offers women's designer clothing for hire. The company, founded in 2012, markets via email and digital campaigns. It's experienced significant growth as more customers try for-hire clothing and appreciate the benefits.

In China, YCloset is growing as it educates the market about the benefits of clothing-hire and erases doubts about wearing clothing previously hired by others. A social-media influencer recently created a viral video in which she visited YCloset's cleaning facility, to reassure customers that any clothing they hire will be quite clean and presentable. Will consumers choose to hire more clothing or will they remain committed to buying?

Wednesday, 10 October 2018

How Tesco competes with deep-discount retailers

Tesco has a new weapon in its battle with deep-discount retail chains Lidl and Aldi.

It just opened two discount-price stores in a new chain it calls Jack, for Tesco's founder, Sir Jack Cohen. Short name, easy to remember, limited assortment, low prices, local merchandise. And the store openings coincide with Tesco's celebration of 100 years of low prices.

Most of the products will be branded own-label, but some will be well-known global brands like Coca-Cola. To reinforce the British origin of local merchandise, and the chain's British heritage, Jack signage features the Union Jack.

Tesco's CEO says the target market is 'economically challenged [consumers] that need a bargain and the affluent shopper that wants a bargain'. Adding a 'treasure hunt' element, the centre aisle of each Jack's store displays WIGIG promotions--bargain products that will go quickly, so 'when it's gone, it's gone'.

Lidl and Aldi have challenged Tesco and other full-service supermarkets in recent years, attracting price-conscious consumers willing to buy what they want at low, low prices in a no-frills retail atmosphere.

A few months ago, Tesco closed its Tesco Direct business, which sold non-food products directly to consumers. That business had been operating for nearly 12  years but was not yet profitable. Will Jack's enable Tesco to compete effectively in a highly pressured retail environment--and be profitable at the same time?

Thursday, 4 October 2018

Sleeping out to raise money on Byte Night

The next Byte Night fundraiser takes place on Friday evening, 5 October. This annual event supports the nonprofit Action for Children, a children's charity that helps those in need avoid homelessness. Participants sleep out (this year, in 12 different UK locations) to raise money for the charity, among other special fundraising events.

Founded by leaders in the UK tech sector, Byte Night has a strong social media  marketing element. The poster above shows not only the event's web address but also its Facebook, Twitter, and YouTube accounts. There is also a LinkedIn presence to catch the eye of professionals.

Byte Night's promotions begin months in advance, allowing time for companies and individuals to register and to recruit friends and associates for the fundraising effort. The event is on special event calendars and promoted by other nonprofits, councils and sponsors (Royal Mail, for instance).

In 2018, 1,800 sleepers are expected to participate. Wishing everyone a successful sleep out and successful fundraising!

UPDATE: The 2018 sleepout raised £852,999 for charity. Congratulations!

Wednesday, 3 October 2018

Brand marketing: relevance and experience

According to a recent ranking, the three most relevant brands in the UK are: Apple, Lego and Playstation.

More than 10k consumers responded to the survey, saying that--for the third consecutive year--Apple is the most relevant brand in their lives. What is relevance? According to the Brand Relevance Index, it means 1) consumer obsession, 2) inspiration, 3) innovation and 4) pragmatism.

Lego is #2 in this survey, a brand that understands consumer behaviour and knows how important personal experience influences relevance. Lego is using event marketing and other in-person experiences to compete in newer markets such as Hong Kong. The Lego House in Denmark is an in-person brand experience built from 25 million plastic Lego bricks.

In fact, more brands are marketing themselves through experiences. For instance, Converse--which makes athletic shoes--refashioned a London hotel into a limited-time brand experience earlier this year.

Watch for more brand marketing via experiences during the holiday shopping season as companies seek to build awareness, preference and purchasing.

Tuesday, 25 September 2018

Coca-Cola adds coffee with Costa acquisition

Diversifying its product and brand portfolio, Coca-Cola has moved to buy Costa, the UK-based coffee shop chain now owned by Whitbread. Currently, Costa has 4,000 locations in 32 countries, plus thousands of self-serve coffee vending machines.

This acquisition will enable Coca-Cola to build on Costa's strong brand identity and, at the same time, enhance the non-cola beverage elements of its product portfolio. The acquisition has implications for global marketing, as well. Costa does well in China, for instance, and Coca-Cola already owns the best-selling Georgia coffee brand in Japan.

But as consumer behaviour changes, and coffee consumption grows year after year, Coca-Cola sees Costa as a brand with significant potential for further global expansion. 'Costa has strengths in many countries and in many key distribution channels of the coffee business', says Coca-Cola's CEO.

Wednesday, 19 September 2018

The race to market electric cars

Although Tesla is one of the best-known electric car brands on the planet, many automakers have marketing plans that include the introduction of electric cars.

Especially now that Tesla appears to be having difficulty consistently producing its Model 3 mainstream auto in sufficient quantities to meet its objectives, other automakers see real opportunity to gain market share with their own electric vehicles.

For example, Germany's Mercedes recently introduced an all-electric SUV, branded the EQC (for 'crossover'). The interior has many familiar features, including a robust infotainment unit.

Porsche is preparing its Mission E vehicle for 2019 introduction, with the goal of having plug-in electric and hybrid vehicles comprise half of all of its vehicle deliveries by 2025.

Volkswagen is investing heavily to develop and market electric cars in global markets. Chinese carmaker Geely is also gearing up to introduce more electric cars in more markets, including its recently-launched SUV crossover.

As a result, Tesla will face global markets more crowded with electric cars than ever in the past. How will it keep its production and its marketing plan on pace?

This post updates the Marketing in Practice example in Chapter 6 of my Essential Guide to Marketing Planning.

Friday, 14 September 2018

Metro Bank continues its 'challenger' marketing

This post updates the preview and closer look at Metro Bank in Chapter 11
Metro Bank's marketing has, from its founding in 2010, encouraged customers to 'join the revolution'. This means, for example, an emphasis on retail hours that are convenient for customers, with lively and colourful branch interiors that have an attractive retail ambiance. It also means offering safety-deposit boxes when competitors are closing branches and eliminating boxes.

Despite intense competition, Metro Bank, as a challenger bank, has become profitable and is expanding its branch network, although a bit less aggressively than previously planned. The acquisition of a home loan portfolio is another way Metro Bank has added new customers in pursuit of growth. On the other hand, rising interest rates are putting pressure on profit margins.

Understanding that many customers want e-banking as well as retail banking services, Metro Bank has introduced a 'developer portal' for third-party developers who are creating apps to complement and enhance bank services.

At the same time, Metro Bank University is providing apprenticeship training to prepare new employees for delivering quality customer service in its busy branches--service that Metro Bank sees as being a differentiating factor in its competition for customers.

Tuesday, 11 September 2018

The global reach of Evolve Skateboards

More than 120k Facebook users 'like' Evolve Skateboards, more than 26k Instagram users follow Evolve Skateboards and nearly 16k people subscribe to the company's YouTube channel. Those social media interactions have helped accelerate word of mouth about this fast-growing brand of electric skateboards.

The Australian-based company founded by entrepreneur Jeff Anning and his wife, Fleur Anning, has an international customer base, distribution in multiple countries and many thousands of social media-minded brand fans. Target market: young professionals who see the boards as a convenient and fun way to commute on city streets.

The company was global from its first days in business. Two years ago, when Evolve launched a new product, it attracted A$ 1 million in orders in a single day. One challenge in growing so quickly has been signing with suppliers and manufacturing facilities that meet the firm's quality and performance standards.

Today, Evolve's annual turnover exceeds A$ 15 million as consumers worldwide are introduced to the product category of electric skateboards and come to prefer the Evolve brand. Thanks to social media, Evolve can stay in close contact with its target market in many nations, well beyond the firm's base in Australia.

Friday, 7 September 2018

UK advertising trends

The UK economy is growing, which helps the UK advertising business rebound. As of 2018's first quarter, advertisers increased investments in digital advertising by more than 10%, not a surprise. What was a surprise was the increase of 12.5% in spending on radio advertising by 12.5%, a very strong result for this medium.

Another surprise was the increase in national newspaper advertising. Newspaper advertising spend had been decreasing since the end of 2010--until now.

Digital is, of course, a major focus for many advertisers. Yet transparency and trust remain a concern. The UK Competition and Markets Authority recently warned several influencers that any sponsored/commissioned posts on social media must be clearly marked as such.

Because celebrities and social media stars have millions of followers, what they post can make a difference in brand recognition, awareness and preference. That's why, says the senior director of the CMA, consumers should be 'clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand'.

Meanwhile, the Advertising Standards Authority is looking closely at marketers targeting children. It recently told Cadbury, Chewits, Squashies, KFC and Kellogg's to stop targeting children with digital adverts for foods that contain large amounts of fat, sugar or salt. For more about how the ASA protects children and vulnerable audiences, and for examples of banned adverts, see its explanation here.

Tuesday, 4 September 2018

Discount train travel builds customer base

Italo (nick-named the 'Ferrari train') was founded in 2012 as a high-speed, low-fare direct competitor to Trenitalia, Italy's state-controlled railway system. The combination of low fares and speedy, comfortable travel has attracted millions of loyal passengers and given Italo a profit margin of more than 30%.

Some of these customers used to ride Trenitalia's trains and some used to fly Ryanair and Easyjet between Rome and Milan. Now Italo is adding more trains and extending its coverage to new destinations as its discount pricing structure has helped it grow to the second-largest train system in Italy.

Four price levels allow passengers to choose the value they're willing to pay for. Italo even has a frequent-rider loyalty reward scheme and a cobranded American Express credit card that offers upgrades and other benefits.

Watch for discount train travel to become more of a competitive challenge for railway systems and no-frills airlines in other European nations, as well.