Thursday, 26 September 2013

VW gears up for the future

Volkswagen's iconic camper-van, above, is not going to be part of the German company's product line for much longer. Because of the difficulty of adding airbags to protect all passengers, the van is being dropped in favor of newer models and technologies that will help in the drive for future growth. This is part of VW's long-term goal of becoming the world's number one automaker by 2018.

China is VW's most important market these days, so the company is boosting production of the Golf and other models to meet projected demand. It's also investing more heavily in its existing joint ventures inside China, where the ever-expanding middle class segment has the income to buy new vehicles.

Meanwhile, European car sales have been slow but as the economic recovery continues, volume is likely to rise. Thanks to VW's large portfolio of brands, it remains Europe's top-selling car company. Its truck brand, Scania, reports healthy sales as fleet operators get ready for stricter emissions rules.

Like other automakers, VW is increasingly active in engaging car buyers through social media. Its UK website has links to Facebook (404,000 likes), Twitter (63,000 followers), YouTube, and Flickr. VW US has a popular Pinterest board, as well.

Monday, 23 September 2013

Updating the marketing plan for chocolate

My latest edition of Essential Guide to Marketing Planning includes a sample marketing plan for Lost Legends Luxury Chocolatier, a fictitious startup that will market premium gourmet chocolates to adults in the United Kingdom.

No marketing plan can remain static, because the marketing environment is always changing. In this case, Lost Legends Luxury Chocolatier must update its marketing plan to take into account recent developments that can affect its business.

For example, higher demand for chocolate is pushing up the cost of ingredients, a factor that must be considered when setting price and calculating profit. In addition, dry weather in West Africa is affecting the cocoa crop, which in turn could lead to chocolate shortages as well as sharply higher costs in the coming year or two.

Another factor is social-cultural: Stronger demand for dark chocolate products is based on perceptions of health benefits and bolder flavours. Dark chocolate appears to have a calming affect when eaten, among other perceived nutritional advantages (such as anti-oxidants and the fact that dark chocolate bars often have lower sugar content than milk chocolate bars). Media coverage of trends in high-quality chocolate is helping to support the development of a "chocolate culture" that, like the "coffee culture," encourages consumers to be more discriminating in their buying decisions. What can Lost Legends Luxury Chocolatier do to make the most of these opportunities?

The economy continues to influence consumer purchasing patterns. "As the economy recovers ever-so-slowly, consumer demand for the affordable indulgence that chocolate provides is expected to remain and interest in chocolate as part of the larger food culture will continue," says one expert analyst. What does this mean for the company's positioning and pricing decisions?

Globally, premium chocolate consumption is on the rise. In India, for example, the amount of chocolate consumed by adults tripled in the 2005-2013 period. This is a positive sign for Lost Legends Luxury Chocolatier, which is considering expanding into the European market and then beyond in future years.

Thursday, 19 September 2013

Grand Theft Auto V sets sales records

Grand Theft Auto V, the new video game from Edinburgh-based Rockstar North, has set new sales records, both in units sold and revenues. Its first-day sales of £496m  surpassed the previous record, held by Call of Duty: Black Ops. 

With nearly 1.5 million Facebook likes, and widespread media attention in recent weeks, GTAV was eagerly anticipated by gamers in many markets. Online retailers such as Amazon accepted advance orders and tried to time delivery to the release date.

Many UK stores opened at midnight for gamers who wanted to buy this latest version at the earliest possible moment. "Our customers really want to get their hands on this game," explains a manager at GAME. "People are just really excited in terms of the things that they can do on GTA that they could never do before."

The original GTA was released 16 years ago. Then, as now, the game generated controversy, with critics complaining about adult content, drug references and extreme violence, among other issues.

Add up the development and marketing costs, and GTAV is among the most expensive games ever sold. How will the expected release of next-generation game consoles affect its sales in the coming months? And will GTAV inspire a new movie franchise based on its characters and plot?

Sunday, 15 September 2013

Dunkin' Donuts Returns to London as Coffee Culture Continues

US-based Dunkin' Donuts has been marketing doughnuts and coffee, with some menu additions, since 1950. Today, it has 10,000 franchised doughnut shops worldwide and also owns other brands, including Baskin-Robbins ice cream, that are popular beyond North America. The company has sales and profit momentum and big marketing plans for future growth.

During the 1990s, Dunkin' opened franchised doughnut shops in UK markets but closed them to concentrate on more profitable opportunities. It has expanded its Baskin-Robbins shops in the UK but, until now, has not marketed doughnuts again in the UK.

Very soon, Dunkin' Donuts plans to return to the UK with 50 new franchised doughnut shops throughout London. The timing is right, says Dunkin's management, because of the established strength of the coffee culture in the UK and because of Dunkin's expanded menu offerings, including breakfast and lunch sandwiches.

Specifically, the head of Dunkin' Donuts is targeting consumers who might otherwise go to Starbucks or McDonald's for coffee or breakfast/lunch. This time around, Dunkin' must carefully differentiate itself to effectively compete with Krispy Kreme, another US-based chain of doughnut shops that entered the UK a few years ago.

What role will mobile marketing play in Dunkin's strategy to return to London?

In the US, the company is promoting its easy-pay mobile app that not only speeds up transactions, it also gives users access to exclusive mobile offers (see ad).

Starbucks UK already has an easy-pay mobile app for iPhones and Android phones.

So it would make sense for Dunkin's London stores to offer mobile options when they open, don't you think?

Friday, 13 September 2013

Shopper tracking: Who's watching and why?

Retailers want to know who's in their stores, what they look at, how long they stay, which aisles they visit and which marketing techniques are likely to result in buying behaviour.

Some retailers are trying to track shoppers throughout the buying decision process, to learn about underlying needs and preferences as well as to improve offerings and service before, during and after the sale.

For example:
  • Waitrose is considering using the GPS in a customer's mobile to track the distance to its UK "click and collect" locations. By the time the customer arrives at the Waitrose store, having clicked to order groceries earlier, the sacks will be ready to be picked up, saving time and effort at the end of the buying process.
  • A Toronto supermarket installed RFID (radio frequency identification) tags on its trolleys as a test, to where shoppers went in the store, how long they lingered in front of displays and be able to compare actual product purchases to time spent in front of product displays. In the future, the grocery chain might make point-of-sale offers to loyalty customers based on where in the store they are standing.
  • American Apparel stores needed to plan staffing for its busiest hours. With cameras mounted above entranceways in US stores, it counted footfall hour by hour and used the data to be sure it had sufficient salespeople available when shoppers were browsing and buying--resulting in higher sales.
  • Synqera, in Russia, uses cameras in its checkout areas to analyse shoppers' facial expressions and tailor point-of-sale offers to the mood and behaviour of the moment.
  • Some US malls have been tracking shoppers via their mobiles. Reaction is mixed. The marketers want to better understand their shoppers' behaviour. But some shoppers object to this for privacy reasons. 
Privacy concerns may, in the end, be a major challenge, because some customers are uncomfortable about having their movements and moods tracked. In the interest of transparency, disclosure is vital to be sure shoppers know they're being tracked and have a way to opt out--or opt in, if they want special offers for those who have registered.

Wednesday, 11 September 2013

Metrics for sustainability marketing

When Marks & Spencer announced its Plan A for sustainability marketing in 2007, it set goals for reducing its carbon footprint, achieving zero landfill waste, buying from sustainable sources, fair trade practices and helping customers lead healthier lives. The UK retailer pledged to invest £200 million over a five-year period to achieve these goals.

According to the metrics, M&S has made significant progress towards its goals and created a net cost-savings to the company. The retailer sends nothing to the landfill, has achieved its lower carbon footprint targets, is developing additional sustainable sources for products and materials it buys and has established workable fair trade practices as well as provided consumers with tools for healthy living. For transparency reasons, M&S reports its sustainability results on a special site and in periodic reports.

One important element in the marketing plan to keep waste from landfills has been M&S's partnership with Oxfam, which encourages shoppers to 'shwop it'--bring in an unwanted piece of apparel that M&S will give to Oxfam for resale or recycling. This partnership has kept 3.5 million items of clothing from landing in landfills, and given Oxfam the opportunity to raise £2 million by selling 'shwopped' clothing. One last metric: Shoppers feel good about participating, and their positive attitudes affect the way they perceive M&S and Oxfam.

Monday, 9 September 2013

Stoptober: It's like October but without the cigarettes

Stoptober, the UK campaign to encourage smokers to quit for 28 days, will launch on 1 October. The campaign targets the estimated 8 million UK consumers who currently smoke. From a consumer behaviour perspective, smokers who give up tobacco for four weeks are five times more likely to permanently quit than smokers who quit for only a few days.

As a result, the Stoptober campaign isn't just informational--it invites smokers to change their behaviour by quitting for 28 days, during which they can draw strength from other participants.

In 2012, 160,000 people joined the campaign. What happened? Although not everyone completed the 28-day challenge, Devon's experience was very positive: the number of quitters increased by 15% during the second half of the year.

For 2013, the Stoptober campaign will be bigger and better, with more ways for participants to receive info and support. Traditional media such as radio and TV will introduce the campaign to the public and build interest. Involvement techniques include social media messages, mobile apps, text messages, e-mails, online videos, special events and local activities. Several websites will provide detailed info, tools for support and even stress-busting music.

Last year, celebrities such as former England player Ian Wright, Apprentice contestant Kate Walsh and make-up artist Gary Cockerill all put their fame to work encouraging smokers to quit for 28 days. Opinion leaders will do the same this year, in mass media and digital media.

The Stoptober Twitter account already has more than 10,000 followers. Tweets with hashtags such as #stoptober are building anticipation and participation. The NHS Smokefree Stoptober Facebook page, with 167,000 likes, is also active. Pinterest fans can browse pinned images on the Stoptober Pinterest account. And of course, YouTube videos are part of the marketing plan, as well. Watch for more messages throughout the month of Stoptober.

Thursday, 5 September 2013

Lego becomes world's #2 toymaker

Lego has just moved up in the toy world, passing Hasbro to become the second largest toymaker on the planet.

(US-based Mattel, maker of Barbie and American Girl dolls, remains the world's top toymaker.)

One big reason for Lego's continued increase in sales and market share: the global success of the best-selling Friends play sets for girls.

Another big reason: Lego's Chima sets, which feature animals--especially popular in China, a market being targeted for additional marketing attention. 'Asia has not been a major focus for us as a company up until this point, but we see now with the emerging middle class, more and more consumers that are really interested in our ... products', the Chief Financial Officer tells Reuters. Not surprisingly, Lego will be building a factory in China so it can meet growing demand for its bricks and figurines. 

Lego also has some highly popular brand licenses (Star Wars, for example) and marketing partners that have licensed its brand (such as Merlin Entertainment). The company's knowledge of customer behaviour, branding expertise, product development skills and distribution savvy have all contributed to its worldwide success.

In UK shops and online stores, Lego's products are often featured on special themed shelves and pages. Argos has web pages devoted only to Lego, as do Amazon and Toys 'R' Us. This allows display of the full Lego range and keeps the focus on the brand and its unique personality.

Tuesday, 3 September 2013

Should Microsoft Rebrand Nokia Phones?

Now that Microsoft is buying Nokia's handset unit, what should it do about branding the phones?
Microsoft's involvement with Nokia began two years ago as a strategy to put Windows software on as many phones as possible while Apple and Android were growing ever stronger. Since then, Nokia--which once was a worldwide leader in mobiles--has lost market share, and Windows hasn't become as popular as Microsoft had hoped.

The new deal puts Nokia's mobiles under the Microsoft umbrella. Moreover, the Nokia brand will be licensed to Microsoft for the coming decade. Should Microsoft rebrand the mobiles it now owns as Windows or Microsoft? Or should it retain the Nokia brand for as long as possible, given the history and brand recognition (as well as positive perceptions)?

One analyst comments: 'The Nokia brand still has a high value to people. That doesn’t mean the Microsoft brand is not known - but what does it mean to people?'