Saturday, 30 March 2013

Cadbury's chocolate eggs-pertise

UK families buy and enjoy 80 million chocolate eggs every year, mostly during Easter season. Cadbury's famous eggs account for about half of that market, an enviable share for the company and a sweet tradition for the customers. The company has been making chocolate for Easter since 1842, but its eggs came later.

Cadbury's Creme Egg is actually a rebranding of a product made by Fry's that was introduced 50 years ago. Cadbury acquired Fry's in 1971 and relaunched the creme-filled chocolate egg under the Cadbury brand. Below, a comparison of the original Fry's cream egg (now 50 years old) and today's Cadbury Creme Egg. 

Cadbury is now owned by Mondelez, the snack-food firm that once was part of Kraft Foods. With high market share, solid profitability and an eye on increasing turnover in developing nations, Cadbury is one of Mondelez's stars year-round, not just at Easter.

Monday, 25 March 2013

Marketers look to lower churn

Source: Accenture research
Churn is what happens when customers switch away from their current brand or service provider. It happens all the time, yet much of this churn can be avoided by paying attention to the basics, notes Accenture, the international consultancy. The graphic above, from Accenture's recent report, shows the top six reasons why customers would stop doing business with a firm.

Another study of satisfaction, by Capgemini and Efma, shows that a mere 30% of customers worldwide report a positive experience with insurance firms. In other words, 70% are dissatisfied or neutral about their customer experience, opening the door to switching if these customers accept the marketing overtures of other insurance firms.

Bank marketers are starting to implement new measures to avoid churn and improve satisfaction. For example, Lloyds is now planning to award bonuses to branch staff based on customer feedback.

Improving customer satisfaction and reducing churn opportunities is vital as the UK Payments Council introduces account switching rules that, from September, will make it faster and easier to change from one bank to another.

Look for more marketing programmes to strengthen loyalty as the economy improves and customers open their wallets even wider.

Saturday, 23 March 2013

Kellogg's: data-driven precision marketing

Kellogg's sees enormous benefits from 'data-driven precision marketing'--and that's why the company, known for cereals and snacks, is testing new ways to connect with its customers.

A few months ago, the firm established a Special K ecommerce platform (with tech partner Dotter) to learn more about brand interaction and shopping behaviour.

To streamline the purchasing process for people who search out brand and product data online, Kellogg's arranged to link this Special K site with leading grocery retail sites. Almost immediately, Kellogg's observed positive conversion rates--meaning that people who visited the Special K site were interested in buying.

Over the next few months, Kellogg's found that 50% of Facebook users who clicked on the Special K section then selected and browsed the site of a specific grocery store, indicating a high intent to purchase. For consumers who did not place a Special K product in their online trolleys, Kellogg's offered a coupon to be used in the store.

All these transactions provide valuable marketing data about shopper demographics and buying patterns, including which combinations of products shoppers look at and which tend to be ordered (and when). By analysing this information and correlating to brand advertising programmes, Kellogg's can see how its marketing efforts are working.

Another area for further development is mobile coupons. Here, Kellogg's would be able to send money-saving offers to customers who want these promotions...and be able to track the redemption of these coupons, providing even more data for precision marketing.

By the way, Kellogg's is a social media marketer. On Twitter, Kellogg's UK has more than 13,000 followers. Late in 2012, the company used a four-day pop-up shop called the Tweet Shop to promote the introduction of new Special K cracker crisps. By offering freebies to consumers who used the hashtag #tweetshop, Kellogg's boosted brand awareness, demonstrated its social media savvy and gave the new products a headstart.

Tuesday, 19 March 2013

Price promotions for luxury brands?

A ShopperCentric study, reported in Talking Retail and MarketingWeek, says luxury brands should consider discounting and distribution through discount intermediaries because of the 'democratisation of premium' trend. One quote:
Great (and proven) quality appears to lie at the heart of an unequivocal premium brand definition – but there is clearly also a role for expressing this, through price, packaging, image or even channel and in-store theatre. Care and attention on shelf also mark out a premium brand for many and poor housekeeping, or sloppy merchandising, can go a long way towards undermining a premium brand’s cachet.
Although ShopperCentric uses this as an argument for broadening distribution and offering occasional price promotions, it runs counter to the strategy that has supported many premium brands year after year. IMHO, price promotions and discount retailing are more likely to undermine a status brand. Making the luxe brand more affordable and more available would probably detract from rather than enhance its desirability.

I think the chief executive of Montblanc, a well-known upmarket brand, would also argue against discounting. In a recent interview, he said his 'high-end products are targeting a smaller group of customers and we are able to reach out to them in our own boutiques and through special interest magazines and digital media'. In other words, proper targeting is essential.

He also said: 'Quality, sustainable value and timeless elegance have their price'. His  target market appreciates the value of a Montblanc product and is willing to pay for it. Why discount? What marketing objective would that serve?

And remember, luxury brands have so far been largely (but not completely) recession-proof. The chief executive of PPR, which owns Gucci and other luxury brands, says his brands 'are a shield against price pressure and a weapon in which to enter new countries'. So the strong upmarket brand needn't discount because it delivers value to those who understand the quality and status of the offering.

With so many status-conscious consumers demanding brand-name goods in developing nations, turnover is generally strong, especially for products that are unique or produced in limited quantities. Here, discounting might damage the image of exclusivity and the perceived status because making the product affordable makes it more ordinary and less of a status symbol.

Monday, 18 March 2013

Lion Air flies high from Indonesia

Lion Air, based in Indonesia, markets itself under the strapline 'We make people fly'. The 13-year-old airline is flying high and growing quickly, ordering hundreds of new jets from Boeing (last year) and Airbus (this year) as it expands beyond 36 routes and 226 daily flights.

Buying from archrivals Boeing and Airbus means Lion Air enjoys competitive pricing for jets and replacement parts. And price matters, because Lion Air's marketing message to travellers is: we provide 'value for your money and better quality service, because travelling in a premium airline doesn't have to come at a premium price'. The new jets are highly fuel-efficient and therefore will have lower operating costs than older jets, a key consideration as Lion sets 'value' prices for consumers on holiday and businesspeople who must travel.

Currently, Lion Air is not allowed to operate in the EU or US because of safety concerns. However, the airline is launching longer-distance routes with its new planes and competing more directly with AirAsia and other well-established rivals. In fact, AirAsia is following its own expansion strategy to enter new markets with a budget positioning.

Price wars may emerge as local and non-local carriers fight for awareness, preference and market share. Meanwhile, if Lion remains on its flight path, it will become one of the world's 10 largest carriers (measured by size of fleet) by 2025.

Saturday, 16 March 2013

25th annual Red Nose Day raises millions

Yesterday's Red Nose activities have raised more than £75,107,851 and the donations are still arriving (by mail, by text, via app and electronically). The UK government will match £16 million, adding to the final tally of this 25th annual "do something funny for money" event.

Will the 2013 total beat last year's £108,436,227 in contributions?

This fundraising event attracted lots of media coverage, not just BBC but also newspapers (digital and printed) plus thousands of tweets, hundreds of thousands of YouTube views, Facebook posts galore and even Pinterest pins.

So many corporations, retailers and celebrities added to the fun and fundraising. Disney, for the first time, got involved. Wine Relief participants donated a percentage of their sales. Jessie J shaved her head to raise more than £500,000. Simon Cowell got married . . . to himself. Ricky Gervais rejoined The Office for one mini-episode. The list of people and groups getting funny for money goes on and on. Well done!

I had to include a link to one of the many videos of groups doing the Harlem Shake with red noses in place, and a link to a group doing Gangnam Style with red noses. A decade from now, people will wonder what these crazes were all about. For now, until the fads fade, enjoy.

Thursday, 14 March 2013

Oxfam goes 'behind the brands'

Oxfam International wants consumers to know more about how the world's biggest food brands approach ethics and social responsibility. The 'Behind the Brands' campaign is aimed at actually changing the way these big brands do business, using the public spotlight and consumer pressure to stimulate change.

Here's what Oxfam's chief executive says: 'Consumers have the right to know how their food has been produced and the impact this has on the world's poorest people who are growing the ingredients. The hundreds of brands lining supermarket shelves are predominantly owned by just 10 huge companies, which have combined revenues of more than $1bn a day while one-in-eight people go to bed hungry every night'.

Oxfam has developed scoreboards and applies seven criteria (including transparency, land use and climate issues) to rank these 10 big food marketers:
  • Associated British Foods (owner of Ovaltine and other brands)
  • Coca-Cola
  • Danone
  • Kellogg
  • General Mills
  • Mars
  • Mondelez (formerly Kraft)
  • Nestle
  • Pepsi
  • Unilever
Nestle was among the first to respond to Oxfam's rankings regarding its chocolate products. Among other actions, it is studying how to have a strong, positive impact on women in its supply chain. Oxfam welcomed this response and urged prompt planning and implementation.

Needless to say, social media like Facebook (where Oxfam GB has 128,000+ likes) will play a role in the success of 'Behind the Brands'.

Tuesday, 12 March 2013

Expanding the Angry Birds brand franchise

Angry Birds cartoon shorts debut this weekend, one zany new episode every week for a year. What new characters and plots could possibly be left for fans to discover, after 1.7 billion global downloads in three years? The YouTube channel for Angry Birds has more than 1 billion views and nearly 500,000 subscribers.

Now the brand is flying from mobile screens to big screens to extend the product lifecycle and make its name in broader entertainment. Parent company Rovio is releasing the weekly toons with selected TV partners worldwide, including Roku streaming. 

Consumers will need to update their mobile apps to see new episodes on the toon channel (accompanied by 15 seconds of advertising). Expect a torrent of brand-related offerings and revenue-generating opportunities now that Rovio has expanded its global advertising staff.

In advance of the first episode, Rovio changed its Angry Birds iPhone/iPad apps from fee to free a few weeks ago, attracting millions of new users and rebuilding buzz about the brand. A second season of cartoon shorts will soon be in the planning stage, and a feature-length movie is also in the works, possibly in theatres as early as 2016.

How strong is the Angry Birds brand franchise? Rovio aims to find out as it continues to approve new licensing deals and expand beyond the mobile game category. Stay tuned.

Friday, 8 March 2013

Marketing the Sochi Olympics

The resort city of Sochi, Russia, is the location of the Winter Olympics  scheduled to open on 7 February, 2014. As a figure skating fan, I'm looking forward to seeing the world's best skaters in four disciplines--men's, ladies, pairs and ice dancers--compete next year.

Located on the Black Sea, Sochi is being transformed to host the Olympics with massive investments in new venues, new hotels and new infrastructure. Media around the world are getting ready for this special event with coverage of local athletes and teams, as well as historical results of previous winter Olympics.

What about the business side? Global sponsors are busy preparing marketing plans for activities and adverts prior to the games and at Olympic Village.

Merchandising (both online and in stores) can be highly lucrative, so expect to see a wide range of mascots, pins, clothing and other products very soon. The leopard shown here is one of Sochi's official Olympics mascots, already being licensed for sale in 500 stores within Russia. By the time the Olympic torch reaches Sochi, 5,000 branded items will be available in 8,000 Russian retail locations.

It's still early for social media coverage, but you can check the official Facebook page, which has 71,000 likes at this time.

Wednesday, 6 March 2013

Keeping an eye on key performance indicators (KPIs)

'Our KPIs measure how we are doing across the Group in terms of both operational and financial performance in the context of the key elements of our strategy'. - Tesco 2012 Annual Report

Key performance indicators (KPIs) are specific measures that a company like Tesco uses to determine whether its marketing strategy is moving the organisation toward its short- and long-term goals. In the case of Tesco, KPIs include certain measures of profitability, growth in store sales, market share and customer satisfaction.

Royal Mail Group analyses results based on KPIs in four areas: people, performance, financial and customers. 'People' KPIs such as safety and customer focus relate to what Royal Mail's employees do on the job. 'Performance' KPIs such as revenue show how the organisation is progressing toward overall performance objectives. 'Financial' KPIs such as profit and costs measure financial outcomes that are vital to Royal Mail's long-term viability. 'Customer' KPIs, including satisfaction and complaints, bring the customer's perspective into an assessment of whether Royal Mail is successful.

BT monitors KPIs according to specific areas of focus, including: customers (such as customer satisfaction and average revenue per customer household), employees (employee engagement index), suppliers (ethical trading), improving society (investments in social responsibility), environment (reducing carbon footprint) and integrity (ethics/anti-corruption).

The choice of KPIs depends on the organisation's mission, goals, strategic choices and implementation. Because no organisation has unlimited resources, KPIs keep management focused on making a difference in vital areas--and help management pinpoint possibilities for improvement when actual KPI measurements don't match expectations.

Monday, 4 March 2013

Will UK audiences tune into product placement?

From February 2011, marketers have been allowed to pay for having their products or brands prominently featured within certain types of UK TV programmes. Programmes that include placements must be accompanied by a P shown on screen for three seconds at the start and end.

During the first year that placements were allowed, some industry experts watched for rapid growth in this marketing activity--yet fewer than 20 deals were noted by Ofcom, which regulates placement in the UK. During the second year, some high-profile deals like the Samsung placements on X Factor brought this technique more attention and some negative feedback as well.

Looking ahead, KPMG still expects rapid growth in product placement revenues. MediaVest's Rupert Britton also sees growth in the coming years. On the other hand, David Charlesworth of MirriAd says few marketers have plans for paid product placement right now.

Sainsbury's has a fresh take on this technique, cooking up live TV content that combines multiple placements within the traditional cooking programme format.  

What's Cooking from the Sainsbury's Kitchen features guest cooks and includes views of store-branded food and appliance products that relate to the menus (with recipes available for downloading from Channel 4 and from the Sainsbury's 'Live well for less' site). For the mobile minded, Sainsbury's has a free app, too, offering access to recipes, discounts and more.

Will product placement be more visible in the next year or two? Will it generate sales for the featured products and brands?

PS: This is my 400th blog entry!

Saturday, 2 March 2013

Little Red airline set for takeoff

Sir Richard Branson's new airline Little Red will soon fly domestic UK routes to help connect passengers to Virgin Atlantic's international flights. Little Red's initial plans call for flights between London and Manchester, Edinburgh and Aberdeen, as the route map below indicates.

Little Red is able to get to the runway because the parent of British Airways acquired bmi and then had to give up some takeoff/landing slots at Heathrow airport.

Now that Little Red is ready to fly, Sir Richard says it will offer 'domestic flights that deliver our rock-and-roll spirit as well as real value for money'. How many other airlines promote a 'rock-and-roll spirit'?

Little Red will not be a super-budget airline. Instead, its 'value for money' positioning will include reserved seating and free snacks that echo the distinctive Virgin touch, such as Rude Health granola and Krispy Kreme doughnuts. And being part of the Virgin brand universe means Little Red will be launched with flair and social media fanfare.