ASDA's EDLP brand promise

Everyday Low Pricing (EDLP) is the engine behind UK retailer ASDA's brand promise. ASDA's website promises: If we're not 10% cheaper on your comparable grocery shopping we’ll give you the difference.* (The * leads to the details of which competitors are covered by the promise.)

This brand promise reflects ASDA's strategy of competing on the basis of price in the grocery industry. After ASDA began advertising its price promise, it was followed by Sainsbury, Waitrose and Tesco. Price wars have broken out in several product categories, benefiting consumers but also putting pressure on marketers to be sure they live up to brand promises. The CEO of ASDA observes that this EDLP brand promise is more sustainable than voucher promotions that fluctuate daily or weekly.

ASDA's chief marketing officer tells Marketing Week: 'The priority is communicating EDLP and getting it to break through into a cluttered, gimmicky market'. All weekly promotions are also set up in the entryway of ASDA's head office, just as they would appear in a store--a good approach to internal marketing.

Understanding customer behaviour is key. ASDA recently began a Click & Collect grocery delivery service driven by mobile marketing. Shoppers order via mobile and then either collect their orders from a drive-through store area or from a delivery van parked in a commuter park-and-ride area. Pickup is free, and the EDLP price promise is in place for these orders.

'If you are shopping on the phone you can top up your basket and complete your order on the website on the laptop or you can do the whole lot on the phone. That convenience really resonates with customers', says ASDA's multichannel operations director.

The world's largest e-commerce firm

In terms of revenue, the largest c-commerce firm on Earth is . . .

. . . not Amazon.com or eBay or even Google.

Think East. Far East.

Alibaba Group, owner of fast-growing e-commerce sites such as Tmall, taobao.com and 1688.com, rings up more revenue than Amazon and eBay combined.

Its 1688.com is the world's largest B2B marketplace, with 100 million users.

Taobao (see screen shot), now a decade old, is China's largest online shopping market, with 500 million users and 24 million transactions every day. Taobao is already expanding beyond China into Taiwan, Malaysia, Singapore and elsewhere in Asia.

According to one estimate, e-commerce currently represents only 6% of China's total retail revenue. With so much opportunity for growth and profit, Alibaba has announced the construction of a new logistics system it plans to use for overnight delivery of purchases to any urban area in China. In other words, Alibaba is spending today to be ready for the shoppers of tomorrow.

Upmarket car brands go full speed ahead in social media

Lots of brands are active on Facebook, Twitter, and YouTube, but the luxe brands have been less active--until recently. Now upmarket car brands are using social media to reach out to consumers, get new ideas, engage in customer dialogue, listen for marketplace opportunities and polish their brand positioning. Here are four examples:

• Porsche recently used a special Facebook page for crowdsourcing its 911 Carrera 4S design (winning choices: aqua blue colour, 20-inch Carrera S wheels, sport package). 
• In its 100th year, Aston Martin is still going strong with the James Bond franchise and is on Facebook with more than 2 million likes. Sponsorships are part of the social media news for this venerable luxury brand. Yet Aston Martin's global marketing director also notes: 'Social media means the democratisation of information. Do you really want to do that if you’re at the top of the luxury scale?' Tone and targeting are key here.
• BMW has 13 million Facebook US likes, 246,000 Facebook UK likes and lots of YouTube videos showcasing the performance of its upmarket vehicles. The brand is also involved in Twitter and Google+. Selected dealerships are on Pinterest, as well.
• Rolls-Royce has more than 1 million Facebook likes, and often uses social media to present 'quizzes' to fans, testing their knowledge of the brand and the places it's associated with (such as the Alpine Trial of its Silver Ghost in 1913). RR's History Pin site features images of the iconic cars.

Metro Bank aims for market share

Remember Metro Bank's 2010 debut? It's a built-from-the-floor-up, new kind of bank that offers convenient hours and customer-friendly services to UK customers. But gaining market share with so many strong, entrenched competitors is a big (and expensive) challenge.

In three years of operation, Metro Bank has spent £100 million readying info systems, hiring employees and opening high-street branches month after month. The marketing plan emphasises new customer acquisition. In fact, its customer base is growing at a double-digit rate, a good indicator of progress.

A key element is the colourful storefront branches, which are open every day of the week. The bank is also introducing drive-through teller service, a point of differentiation that demonstrates its commitment to customer convenience. 'Dogs rule' is another point of differentiation: free water and dog treats are available at each branch.

In 2010, Metro Bank set a five-year goal of having 60 branches open around the country. Now, in the middle of 2013, it's approaching 20 branches and expects to have a total of 25 by yearend. Still, having dozens of branches or even a few hundred might not be enough to mount a serious challenge to the thousands of branches operated by the big high-street banks.

You can follow Metro Bank on Twitter or check out its website.
 

More marketing magic for Harry Potter

Just four weeks ago, a first edition of Harry Potter and the Philosopher's Stone sold at auction for £150,000 (proceeds to charity). This was no ordinary book--it contained drawings and notes by the author, J.K. Rowling.

Clearly, Harry Potter's marketing magic has a long life. Adults as well as children are buying books and movies, playing Hogwarts games and visiting theme parks devoted to the best-known wizard ever to graduate from Hogwarts. Social media marketing is helping to reach new fans and keep old fans interested. For example:

• LEGO fans are enjoying Hogwarts building block sets featuring Harry and his friends (and enemies). Did you know that the LEGO Harry Potter Facebook page has 270,000 likes? 
• The Warner Bros. Studio Tour The Making of Harry Potter continues to attract visitors to the northwest of London. With 250,000 Facebook likes and 66,000 Twitter followers, it uses social media to promote favourite characters, special tours and much more.
• Universal Studios Florida is opening a second Harry Potter Wizarding World area in its giant theme park. In addition, Universal Studios has plans for Wizarding World attractions in California and in Osaka, Japan.
• More than 450 million print copies of Harry Potter books have been sold around the globe. (J.K. Rowling's best-selling adult book, A Casual Vacancy, is being adapted for BBC TV.)

What's next for Harry Potter marketing?

Father's day marketing

Father's Day is 16 June, and marketers are reminding gift-givers not to forget Dad. Here's a sampling of Father's Day offers and promotions:

• LEGOS has a new advert featuring Darth Vader and . . . spoiler alert! . . . son Luke Skywalker. It's featured on the LEGOS Facebook page, where it has already been shared 2,000 times.
• Moonpig is celebrating Dads and all they do for the family, promoting its gift selections and more.
• Tesco's Facebook page features Father's Day posts promoting specific gifts such as sat-nav devices (at right).
• Thorntons is tweeting about sweet gifts for Dad, from its shops or ordered online.
• Marks & Spencer has a special webpage with gift ideas for Dad, everything from T-shirts and ties to sherry and socks.

Happy Father's Day to all Dads!

Hot market for single-serve coffee pods

The global market for single-serve coffee capsules is enormous, estimated at €9 billion  this year alone--with more growth on the way.

No wonder Nestle's Nespresso, which practically invented the industry, is about to feel even more of a competitive squeeze.

The company is known for its stylish boutiques (see left, a view of its Copenhagen store) and full range of feature-rich espresso and coffee machines.

Customers can buy from Nespresso's stores or order online for home or office delivery, an added convenience reflecting brand loyalty.

In recent years, Nespresso has faced a growing mountain of competition from companies that are making replacement coffee pods designed to fit Nespresso machines. Although Nestle has taken some of these rivals to court, it has lost its legal battles in Germany and in the UK, so far.

This week, Mondelez (formerly Kraft Foods), announced plans to introduce its own version of single-serve coffee pods to fit Nespresso machines. The Mondelez executive heading up the product introduction says: 'We'll see very strong growth coming out of this particular launch'.

For his part, Nespresso's CEO has a positive attitude about the market it dominated for many years. He says: 'Competition is an innovation driver for us' as his company continues to use quality as a key point of differentiation.

Using big data to analyse shopping behaviour

Loyalty card databases are big and getting bigger all the time: Tesco has 16 million Clubcard members, for example, and the grocery chain is always sifting through purchase data to detect patterns that will help it improve its marketing, customer by customer. A new initiative is in the works to encourage customers to buy and eat more healthy foods, for example.


Yet as the Guardian points out in a recent article, supermarkets don't need your loyalty card to track what you buy and how often. Many big stores aggregate purchases according to individual debit or credit card numbers (without linking personally identifiable details to that number). So if you routinely use the same piece of plastic to pay for your purchases, the stores have a good idea of what you're buying and when. They also notice when you don't shop in one of their branches, because no transactions matching your card number appear in their database.

'It means we know when customers are lapsing because we won't see their card for a week', a Morrisons spokesperson tells the Guardian. But when the card is used again, Morrisons can 'use it to measure the effectiveness of promotions and events'. In fact, product marketers happily pay supermarkets for the right to promote specific items to shopper segments that have purchased competing products in the recent past. Coupons issued to such targeted customer groups, as identified via big data, have extremely high redemption rates. Clearly, the more targeted the offer, the better the response--and this makes the proposition cost-effective for the marketer, of course.

In the future, retailers hope to use big data to assist in-store shoppers in several ways, such as finding the optimal grouping of products that are related to each other in some way. Big data can also help retailers plan for the right merchandise mix according to expected weather patterns, as another example, based on how shoppers have behaved during periods of similar weather in the past. Privacy remains a concern, however, which is why transparency is vital for maintaining customer trust in this era of big data.

High-stakes competition: The Ferrari Train vs Trenitalia

Until April 2012, travelers who wanted to ride high-speed trains from city to city inside Italy had only one choice: Trenitalia, the state-owned rail system (left).





Then Nuovo Trasporto Viaggiatori, a startup headed by Ferrari's chairman Luca Cordero di Montezemolo, began service with its own sleek, stylish high-speed Italo trains and other upscale amenities (right). The company is very 21st century, even managing its planning and scheduling data in the cloud.

Competition has been intense in a market that was once a monopoly for Trenitalia. Millions of euros are at stake in this battle for passengers and market share.

Now NVT has complained that Trenitalia is using its dominant market position to make things difficult for the startup. Italy's antitrust regulator is currently investigating whether Trenitalia has obstructed NVT's access to the railway infrastructure, charged unfairly high fees for access, blocked access to train station advertising opportunities and charged NVT higher fees for advertising in stations, among other charges. No decision is expected for months.

Transparency in marketing builds trust

In a world where consumers have more information, more choices and more power than ever before, transparency is needed to build trust and reinforce brand loyalty.

Transparent pricing is often a major concern, especially because different online sites may quote different prices for the same offering (airfares, for instance, and hotel rooms). Who can you trust to give you the best price?

'The transparency issue is not going away', says a vice-president of InterContinental Hotels Group. 'It's not only on our rates but also our company and who we do business with--corporate responsibility'. After InterContinental instituted a Best Rate Guarantee for customers who reserve rooms through its website, research showed that more than 80% of customers cited this price transparency as the main reason for their repeat purchasing and loyalty.

Yet pricing isn't the only marketing element that requires transparency. Scandals surrounding dangerous, deadly worker conditions in Bangladesh and China, and public outrage over horse meat found in food products, are only two areas that put behind-the-scenes conditions in the spotlight.

Customers, it turns out, really do care about ethics in the supply chain, starting with raw materials and moving through production and distribution. This is why Fair Trade food products are increasingly popular, and even smartphones made from ethically-sourced parts are starting to attract customers.

Transparency is a major point of differentiation for upmarket goods, in particular. Brunello Cucinelli, Italy's 'King of Cashmere', recently paid his 700 employees a significant bonus for their skilled work on chic cashmere knitwear (as in photo at right). 'Luxury consumers want to know, or will want to know, that their goods are made humanely', Cucinelli explains.

Connecting with pet owners

According to the Pet Food Manufacturers Association, nearly half (48%) of all UK households have a pet (or more than one).

In addition to the approximately 8 million cats and 8 million dogs, the UK pet population includes an estimated 500,000+ hamsters, one million caged birds and 300,000 lizards.

The industry is highly competitive and brands must differentiate themselves in a meaningful way in order to maintain or increase market share. This means segmenting the market to target specific groups such as consumers who prefer all-natural pet foods or those whose pets have specific nutritional needs, as just two examples.

So how are pet food manufacturers reaching out to pet owners? Through advertising, of course, but also via apps and social media.

• Mars, maker of Pedigree, Cesar, Sheba and Whiskas has just introduced a new UK campaign focused on health and nutrition. 'Nutrition is what makes dogs and cats healthy and happy and that’s fundamental to every owner', explains the marketing director. 'We know more about [dog and cat] nutrition than any other company out there and have developed a strategy that helps establish that expertise in an accessible way for pet owners'. The Pedigree brand hosts a Facebook page titled We're for Dogs.
• Nestle Purina's strapline is 'Helping pets lead healthy, happy lives for over 85 years'. Purina is targeting niches as well as the mainstream pet owner. With 'my dog uk', Purina offers an app that will show owners where dogs are welcome or help owners find a vet in a hurry (left). The firm also has a Facebook page devoted to battling pet obesity.
• Hill's Pet Nutrition is launching a new pet food available only through vets, promoting the benefit of weight loss for cats and dogs. Other products feature nutritional benefits geared to the pet's age, weight and sensitivity to ingredients. Yes, Hill's is social: See its Facebook page, for example.