Burberry builds on core competence of digital marketing

Burberry (founded in 1856) is a 21st-century marketing star, not just because of its strong luxury brand heritage and fashion sense but because of its savvy development of digital marketing expertise as a core competence across the company.

Shopping in a flagship Burberry store is a multimedia experience, with screens, speakers, iPads, live streaming of fashion events and more. 'We wanted to totally merge the digital and the physical worlds', the creative director said when the redesigned store was opened in 2012. Rather than worry about showrooming, Burberry seems to be diving into multichannel marketing with the knowledge that customers are and must be in control of where and when they browse and buy.

Visitors to Burberry websites have many multimedia options--including participating by showing what your trench looks like on the company's Art of the Trench site. Want your own custom-designed Burberry trench? Since 2009, the company has invited you to design what you want online. The mobile site can stream fashion events and more so you can watch or buy from your smartphone or tablet. 

Burberry aims to have a digital presence wherever its brand fans are (or want to be). Just recently it opened a digital branch on China's Tmall shopping platform, owned by Alibaba. In short, Burberry's content engages customers and fashionistas on multiple platforms, including in-person, via mobile and online. Take a look at Burberry's integrated social media presence on YouTube, Twitter (3m followers), Pinterest (86k followers) and Facebook (17 million likes).

This is a brief update to the closing case in chapter 1 of Essential Guide to Marketing Planning.

Swatch waits on smart watches but goes social

Since its founding in 1983, Swatch has been a pop fashion accessory brand. Lately, however, it's been looking toward high fashion for more cachet.

Through its connection with the British Fashion Council, Swatch has participated in London Fashion Week and is using London's creative scene as inspiration for new products. Its pop-up shop inside Harrod's not only features upmarket Swatch watches, it also provides fashion advice (how to tie a bowtie) and a pinball machine for some retro fun.

Interestingly, in this era of smart watches that track fitness and read text messages, financial analysts still see strong demand for timepieces that simply tell time and look smart. Swatch constantly invests in research and development to stay ahead of trends and identify the next new thing. For now, Swatch is going to wait to see how smart watches do in the consumer market before introducing its own. The Group CEO says: 'If a market for smart objects on the wrist really develops, then we'll be there'.

Knowing that social media are popular with male and female fashionistas, Swatch is very social on:

• Pinterest (more than 4,000 pins to date). 
• Facebook (3.4 million UK likes--includes a store locator function for convenience in shopping!). 
• YouTube.
• Tumblr.
• Twitter (22,200 followers).

Latest smartphone feature: kill switch

Smartphone theft is a global problem, as the BBC reports, and growing worse year by year.

However, since Apple added a kill switch to its iPhone and iPad operating systems in September, 2013, fewer of its mobile devices have been stolen. Why? Because once owners activate the kill switch, the device becomes useless (except for its parts). Thieves can't get at personal data or use any apps or features, which protects the customer's privacy and makes thieves less apt to steal mobiles they can't easily convert to cash.

The Mercury News in Silicon Valley reports:

In the first five months of [2014], thefts of Apple devices fell by 17 percent in New York City while thefts of Samsung devices -- without a switch -- increased 51 percent from the same period a year earlier.

The pattern has been similar in other areas: Theft of Apple devices in London dropped by 24 percent after the kill switch was added, even as theft of Samsung mobiles increased.

Samsung added a kill switch earlier in 2014. Now, feeling competitive and legislative pressure, Microsoft and Google will add a kill switch to their Windows and Android mobile operating systems. As a result, more than 90 percent of new smartphones will be protected--if customers activate the kill switch mechanisms.

In other words, even with all the fancy apps and features available on sophisticated smartphones, the one that may be the most practical is the kill switch, if it can save customers from the aggravation and inconvenience of losing their devices to thieves.

Costa brews up supply-chain success

Supply-chain management is a vital ingredient for marketing success today--and Whitbread's Costa Coffee is perking up profits because of its careful planning.

Coffee prices are rising, but Whitbread has locked up supply until March, allowing Costa to hold the line on retail prices. That will undoubtedly put competitive pressure on Starbucks, among other rivals.

Costa Coffee is opening new stores as the economy improves and customers regain their spending momentum. The brand is social, with 1.1 million Facebook likes and 94,000 Twitter followers.

New products are launched with YouTube support on Costa's Coffee Lovers channel. And Instagram is another way Costa promotes its brand, its products and its special events.

Social media marketing and the World Cup

No other World Cup has ever been as social as the 2014 championship series, now underway. And that's opening new marketing opportunities for brands large and small.

Official sponsors such as Coca-Cola are spending huge amounts to associate with the World Cup and reach the hundreds of millions of people who follow the matches day by day by day. Coke has said its World Cup marketing will be on a scale with its Olympics marketing budget. The soft drink marketer's photomosaic Happiness Flag, being unveiled today, is one of its big social media events linked to the World Cup, with photos crowdsourced from 200+ nations.

Of course Nike and Adidas are using their marketing muscle to attract attention and boost their brands to football fans everywhere. Adidas's YouTube entry above stars football greats. Nike's YouTube entry below uses appealing animation. All these videos have attracted millions of viewers across the globe.

Brands worldwide are playing off World Cup themes to reach their target audiences. The UK plumbing brand Dyno has its own 'Rush to flush' campaign, offering plumbing services to help consumers keep their toilets operating properly even during crucial matches.

Top four reasons why competitors are stakeholders

Should competitors be considered stakeholders? (Stakeholders are people and groups that can directly or indirectly influence or be influenced by a company's performance.)

Yes, competitors are stakeholders. No, a company shouldn't consult with competitors when developing marketing strategy, nor should it replicate a competitor's successful strategy. But you, as a marketer, should carefully study what others are doing, anticipate trends and be ready to make adjustments as the competitive landscape changes.

Here are the top four reasons why competitors are stakeholders:

1. A competitive move can affect the entire industry. Whether it's a pricing change, a new product or a company going into administration, what a competitor does can significantly influence each company in that industry. Think of Apple's iPad and how the introduction of those innovative new devices affected competing firms. Suddenly tablet computers were the hot new category, and competitors had to race to catch up. Then Apple was feeling the competitive heat when competing devices flooded the marketplace with new features and functions.
2. A competitor that appears weak or small may become a strong or immediate influence overnight. Snapchat didn't make much of a competitive impact when it initially introduced its "disappearing" photo feature. Now that Snapchat has attracted millions of users, however, others want to add similar functionality for competitive reasons. So a startup that appeared on the periphery at first has now become highly influential and a factor to be considered in many competitors' marketing plans.
3. A competitor's unscrupulous move can affect other stakeholders who are critical to your company or industry. One unscrupulous company can make customers suspicious of an entire industry, which may hurt your business as well. One firm's unethical action can prompt regulators to change the rules, affecting every firm that serves the same market. Remember, you can't control what stakeholders such as competitors do, but you must be aware of their policies and actions and, when necessary, make your voice heard about the situation. 
4. A competitor can lead others to be better corporate citizens. Walmart gave its reputation a green boost when it began to aggressively support sustainability initiatives, in part by participating on industry councils with competitors. Now Walmart's marketing clout is behind many new products and services, bringing together suppliers and competitors for environmental improvement initiatives. Whether your firm supplies Walmart or competes with Walmart, the retail giant's sustainability activities will affect what you do.

One final thought: Monitor the marketing environment carefully. You never know where your next competitor may be coming from.

LEGO's marketing plan: new distribution, new products

On the last day of February, LEGO opened its largest European store on the grounds of Disneyland Village at Disney Paris. (The official Disney Paris site hasn't updated its 'coming soon' note about the new store, but the store's definitely open--it's listed in the LEGO store locator here.)

Increased distribution through company-branded stores is only part of LEGO's marketing plan for ongoing growth. The Danish company is also broadening its appeal by creating new minifigures featuring women as scientists (above, the chemist). The new minifigures were designed by a geochemist and submitted via LEGO's ideas crowdsourcing website, reviewed by the company's officials, and finally cleared for a new product introduction promotion in August.

Via this ideas website, several other new products are under consideration, including a Doctor Who block set, as shown above, and a set based on the US TV show Big Bang Theory. Watch for decisions in a few months. Given the immense popularity of these TV shows, new LEGO sets may tap into the adult market as a targeted segment, in addition to the traditional children's market for building blocks.

Inside the Grey Market

The grey market continues to be an issue for manufacturers worldwide. A grey market occurs when wholesalers or retailers sell a branded product even though they aren't authorised to do so. The product is legitimate, but the product was obtained outside the usual distribution channels typically used by the manufacturer in that geographic region.

Often, this situation develops when a manufacturer's wholesale price is high in one area but lower in another area (due, in part, to differing channel costs, distribution strategies and price sensitivities). Another reason for grey market activity emerges when a product is available in one region but not in another. Intermediaries may buy from grey market sources when they want to boost profit margins or seek a competitive advantage by stocking an item not sold in other nearby stores. This affects warranties, as well.

The grey market has been problematic for decades, one consequence of globalisation--heightened by the popularity of online retail and wholesale channels. Sony battled grey market goods when the PlayStation Portable was at its height of popularity. Canon is one of several manufacturers warning that some products in UK stores were imported from other areas without the proper authorisation. At the very least, Canon warns that such products aren't eligible for its 'cash back' promotions. At worst, grey market products may not contain all the right parts (such as functioning CDs).

Hewlett-Packard warns that grey market equipment may be cheap but it might not function properly. Apple iPhones have been sold in China via the grey market. Callaway, the golf club company, has battled the grey market, as well. Tesla Motors is also dealing with the grey market. Even beer has been sold on the grey market. All these products are real, not counterfeit.

What happens when a grey market purchase malfunctions? How does the warranty work, and who is liable for the cost? How does the manufacturer deal with customers' and channel members' reactions to the grey market?