Is the customer always right?

"The customer may be right, but is she in charge?" That's what Thomas A. Stewart asks in a strategy column today. He says marketers have three options: (1) to resist what customers want, (2) to appease customers and (3) to indulge customers (while making a profit, of course). In other words, he believes that the customer may be right, but she also may be too costly to serve.

Yet marketing simply can't succeed without good customer service. Companies that satisfy customers spend less to keep them and continue selling to them. Customers that are delighted by a firm's service will refer friends, family and colleagues.

So the question really is: Is the customer right for us? A firm can't be all things to all customers. Best Buy, the US-based electronics retailer that recently entered the UK market, analysed its customer base several years ago and discovered that some customers were much too expensive to serve (because they were bargain-hunters or returned purchases more often than other customers, for instance). As a result, Best Buy determined to target its "angel" customers and operate its stores accordingly, providing the best service to the best customers. The "angel" customers are always right.

Choco marketing

Because the sample marketing plan in my Essential Guide to Marketing Planning is about Lost Legends Luxury Chocolatier (a made-up firm), I like to watch for developments in marketing chocolate.

The Economist reports that during July, a London-based hedge fund arranged to buy a huge cache of cocoa beans. This is important because the fund actually had the beans delivered to warehouses around Europe, waiting for the right time to resell and profit from market dynamics. And, as the Mail Online notes, it's the largest single purchase of beans in 14 years.

Even before the fund made its move, cocoa prices had been rising, causing choco marketers to either accept slimmer profit margins or--more frequently--increase prices. Nestle projected, late last year, that the UK choco market would not grow in 2010, in part because of higher costs and in part because of consumers' ongoing concerns about the economic outlook. Nestle has a brief overview of its UK choco manufacturing history here.

Meanwhile, Divine Chocolate (below) has been quite successful in marketing Fairtrade choco sourced from West African beans.

Finally, check out the Times 100 business case study on creating a sustainable choco industry, available in .pdf and mp3 formats.

The marketing galaxy of Doctor Who

Finally, Doctor Who and friends (and enemies) will be available to play on Nintendo devices, starting later this year. Shown above, Doctor Who "Return to Earth" for the Wii, featuring (obviously) the Cybermen. For Nintendo DS, Doctor Who "Evacuation Earth" will feature the Daleks.

So far, these Doctor Who games will be available in the UK, Europe and elsewhere but not in the US.

The BBC's downloadable Doctor Who games have been extremely popular, especially the ongoing series of family-friendly interactive episodes featuring Matt Smith and Karen Gillian.

Doctor Who is the marketing engine behind all kinds of goods and services, as you can see on the official BBC site and other authorised sites that sell related action figures, magazines, books and more.

Doctor Who's marketability is as strong as ever, and eager fans worldwide await his Nintendo debut. What marketing galaxy will the doctor and his companion invade (or save) next?

Telly Ads

According to a recent study, consumers remember TV ads more than they remember online ads. (Even newspaper ads were more memorable than TV ads.) But most of those surveyed also said that when they record a TV programme to watch later, they skip through the ads.

So who's watching telly ads? You, if you click to tellyAds, where you can view ads from 2006-7-8-9 or even yesterday. And if you want to see older adverts, look at these tellyAds links. Not just nostalgic, also instructive. While you watch, see if you can determine the target audience, the action the advertiser wants the viewer to take, the specific benefits or attributes being featured and the brand image being communicated.

The wisdom of crowdsourcing

Companies large and small around the world are trying crowdsourcing for new-product ideas, brand fine-tuning, and other marketing efforts. Waitrose is crowdsourcing its newest dessert. Unilever crowdsourced a TV advert for Peperami. BT crowdsourced the next plot turn in its Adam and Jane campaign. Trek Light Gear, a small business, crowdsources new product concepts.

Crowdsourcing is a popular way to get customers more involved in brands, hear the 'voice of the customer' unfiltered, save money and support the marketing planning process.

Customers are also using crowdsourcing to sift through marketing claims, seek brand recommendations, get peer reaction to products and more via social media. With the click of a mouse or a few taps on their mobiles, they can ask the crowd (or be part of the crowd providing marketing thoughts to companies).

Remember, however, that customers don't always know what they would like in a product or communication, and they can't always articulate their thoughts in a way that marketers can interpret correctly.

The bottom line: Although crowdsourcing can potentially lead to good insights, don't over-rely on the wisdom of crowds when researching and executing a marketing plan.

How to price online news?

Newspapers and magazines have been experimenting with new business models for profiting from online content. Pricing content that was previously free can be a challenge, however.

The Guardian, for example, began to transition from free online content by selling an app (see above). More than 100,000 people have bought the app so far. From this fall, however, it will charge for a yearly subscription to online content that was formerly free. Will the Guardian be able to convince readers to pay a full-year fee instead of buying a much lower-priced one-time app?

The Financial Times (owned by Pearson, which publishes my textbooks) has been successful in pricing its online content at several levels. In fact, the paper is so confident in its subscription strength that it's publicly revealed its online and print circulation figures.

How many readers will pay for online content--and how much will they pay? Watch for more pricing experiments as the industry monitors reader reaction and searches for the optimal price point.

RFID, marketing and privacy

A few years ago, when the RFID (Radio Frequency Identification) tag was a new idea for tracking products in warehouses, toting tolls and taking store inventory, the cost per tag was high and consumers knew little about this technology.

Today, the price per tag is much lower, which means RFID can be a cost-efficient way to handle many marketing functions. As the price of RFID tags and readers drop, RFID will become commonplace in stores, factories, airports and other public places.

The Finnish furniture manufacturer Martela, for example, adds RFID tags in hidden areas of its products (see left). As part of its full service to business customers, Martela then returns to the customers' facilities every year to inventory the furniture and identify broken or worn-out items to be replaced. Thanks to RFID, this is a speedy process that saves business customers time and money--and gives Martela a competitive advantage over other suppliers.

Privacy concerns remain, however. Consumers don't want RFID tracking their movements or use of individual products. Security is another issue: because RFID tags communicate via radio signals, they might be intercepted and/or blocked.

Walmart, for instance, has added RFID tags to many clothing items in its US stores. Although the retailer plans to "turn off" the RFID when clothing is purchased, privacy advocates worry that some tags will be missed or that the tags will be used to link individual purchasers to specific items and transactions, raising the threat of identity theft.

Stay tuned for more on the future of RFID and marketing.

Grocery shopping apps go mainstream

Mobile grocery shopping is moving mainstream, thanks to new apps and increased consumer interest in using their mobiles for everyday tasks. Tesco has just announced an app--not for the iPhone but for Nokia handsets, because, says a senior exec, 'our core customers are busy mums who don’t have iPhones and we want to focus on them first'.

Ocada had an iPhone app and has added an Android app. The company is seeing a significant increase in orders submitted via apps, indicating that mobile commerce is gaining momentum.

Waitrose has had an iPhone app for some time, plus a shopping we site optimised for mobile screens.

Sainsbury's has not yet announced its m-commerce strategy. However, with competitive grocery shopping apps appearing all over the place, and customers looking to mobiles for convenience, it's only a matter of time.

Marketing to stamp collectors

Stamp collectors as a target market? Stanley Gibbons, the big UK stamp and autograph marketer, is doing well because of renewed interest in collecting stamps for personal enjoyment and, more importantly, for investment purposes.

Stanley Gibbons is particularly interested in expanding into China, where collectors have pent-up demand for local and international stamps, in part because collecting was banned for more than 25 years. Now, with rising household income, collectors in China are increasingly seeking to acquire rare stamps through auctions, for example.

What makes a stamp valuable? According to an expert from Interasia Auctions, which specialises in stamps, a stamp must be both rare and in demand to command a high price.

One New Zealand dealer observes that digital media (the Internet, Facebook and so on) make it easier than ever for collectors to connect with other collectors and with dealers and auction houses. As more people communicate without traditional letters or cards, stamps may be rarer and rarer--which will only add to their value in the coming years.

UPDATE 13 August: With the big auction of Chinese stamps scheduled to start in a few days, the head of Stanley Gibbons comments about stamp prices: "Collectibles are driven by the passion of the collectors, not the sentiments of gamblers."

Should detergent contain sat nav?

Unilever's Omo laundry detergent has a secret ingredient in Brazil, says Ad Age magazine: Some packages contain a sat nav device to track buyers home so the promo agency can follow and give them prizes.

"Try Something New With Omo" is the name of this unusual location-based promotion. The idea is to build excitement by surprising consumers with a free handheld video camera and tickets to a special event.

However, as one blogger points out, consumers may not want to open the door to strangers. Nor are they necessarily going to be pleased that the detergent they bought has a tracking device for following their movements.

Is this kind of promotion a good idea?