Print books vs e-books

Nielsen's entire presentation is available at: http://www.slideshare.net/PublishersLaunch/the-changing-mix-of-what-sells-in-print-jonathan-nowell-nielsen-book

According to Nielsen Bookscan, the mix of print books sold in the UK has changed from 2004 to 2014. The graphic above shows that adult non-fiction and adult fiction are a smaller percentage of all print books sold, while children's books (including pre-teen and teen books) are a larger percentage of all print books sold today compared with 10 years ago. Nielsen's conclusion: electronic books are cannibalising print books in the adult genres.

Nielsen also says that print books sell well during the yearend holiday buying period, whereas e-books sell well during the first half of the year. One explanation is that print books are gifts, and e-book sales rely on gifts of devices received during the holiday period.

Waterstone's recent results pointed to the continuing interest in print books and confirm that print books are purchased for the holidays: The UK chain had a 5% increase in print books sold during the fourth quarter. Yet Waterstone says that Amazon Kindle purchases were less strong.

Last year, projections suggested that e-books would outsell print books by 2018. However, print books continue to sell (if not as well in every genre). And print books are the engine of profitability for many publishers (and, of course, book sellers). Now Waterstone is planning to open new book stores--a strategy contrary to the trend of book retailing in most recent years. What are the consumer behaviour implications of these trends?

What do businesses need to create value?

Mitsubishi Heavy Industries--which began as a shipbuilding firm and is now a global manufacturer of transportation equipment, energy equipment and other industrial products--included this chart in its recent annual report to indicate the inputs used to create value.

What is particularly interesting is that Mitsubishi Heavy Industries mentions five inputs, not the traditional four identified by Michael Porter in 1985.  

Social relationship capital is Mitsubishi's "extra" input that addresses stakeholder relations so vital to today's competitive, global business environment, as shown in this comparison.

Porter's inputs:

• Procurement--obtaining raw materials and money and other resources for the firm.
• Human resources management--attracting, training and retaining managers and employees for the firm.
• Technological development--creating or acquiring the technological know-how and equipment/services to transform resources into finished goods or services.
• Infrastructure--the internal organization of departments and functions (such as finance, legal, etc) to support the firm's operations.

Mitsubishi's inputs:

• Financial capital--money (assets, cash, debt and equity) to fund every aspect of the firm's planning and operations.
• Manufactured capital--buildings and investments in equipment and infrastructure needed to enable the firm to conduct business.
• Intellectual capital--patents and licenses, intellectual property of all types and knowledge needed to conduct business and in the future.
• Human capital--employees and managers plus partners, suppliers and distributors that have the core competencies to help the business achieve its goals.
• Social relationship capital--relationships with stakeholders and with the natural environment. (This set of inputs is not directly mentioned in Michael Porter's value chain, but its importance cannot be understated in contemporary business.)

Angry Birds: Looking for new momentum

Rovio, which aims to become a global entertainment empire akin to Disney, just reported lower profits on higher game and media revenues.

Its best-known brand is Angry Birds, and despite a number of new character and mobile game introductions, including the appealing Stella character shown here, Rovio could use a new blockbuster to regain momentum.

The new CEO sees a bright future for Rovio now that the firm has embraced mobile and free-to-play (freemium) games.

Looking ahead, the long-awaited animated 3-D Angry Birds movie will be released next year, with a star-studded voice cast. Will that revive the Angry Birds licensing and merchandising momentum?

World's biggest clothing retailer expands online

Do you know which company is the world's biggest clothing retailer?

Hint: The company is based in Spain and has 6,700 stores in 54 nations. It designs, manufactures, distributes and retails its own products using the 'fast fashion' business model.

Not only can this company make the most of emerging fashion trends, it can minimise markdowns and increase profitability because of its extraordinary ability to capture and analyse purchase data and because it controls the supply chain.

The firm's retail brands include Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Uterqüe, Oysho, Zara and Zara Home.

Yes, the company is Inditex, which has just reported excellent profits. Zara is its best-known brand in most countries. Knowing its customers' digital preferences, Zara is very social, with 3 million Instagram followers, 24 million Facebook likes, 735,000 Twitter followers and 125,000 Pinterest followers.

However, online-only fashion retailers are a threat to the parent company's retail sales momentum. That's why Inditex is expanding its online operations and also moving toward larger stores rather than smaller ones--to make a retail statement, offer more styles in more sizes and colours, and reinforce a strong competitive image in top metropolitan markets where fashion stores are almost everywhere.

Nothing is left to chance. Inditex has pilot stores where it tests marketing elements such as window displays and merchandise layout. Elements that test well are put into action quickly, and the company is always testing something new.

Colour's branding power

Colour is such an important part of brand identity for many products that court cases have been brought to protect signature colours. Above, Cadbury's Dairy Milk purple, the subject of numerous legal battles over the years.

The Direct Marketing Association recently posted a blog entry about the importance of being creative with colour rather than following-the-leader to use an established colour with established brand and marketing associations. The point: know what consumers associate with each colour, be aware of what emotions are evoked by each colour and be prepared to stand out.

Customers definitely recognize and react to colours--and marketers need to understand the power of colour to convey brand personality and image. Colour is only one element in visual branding, of course. Coca-Cola mixes both colour and packaging to distinguish individual product lines in its cola portfolio, for instance. Everybody recognizes Coke's vivid red. The other colours do have associations, and that's what Coke is counting on.

The best consumer and business brands in the UK are . . . ?

The Superbrands UK listing for 2015 has been revealed for both consumer and business brands. This is an annual ranking based on input from consumers and marketing experts. And the top 5 brands overall for B2C and B2B in 2015 are:

Targeting Consumers

1. British Airways
2. Rolex
3. BBC
4. Microsoft
5. Nike

Targeting Businesses

1. British Airways
2. Apple
3. Virgin Atlantic
4. Microsoft
5. Visa

As BBC News pointed out, Marks & Spencer is not in the top 20 overall listing of B2C brands, nor is Cadbury. Heinz and Sony aren't in the top 20 overall listing of B2C brands, either. And you won't find Marmite in the top 20 overall B2C brands. These brands have been highly ranked in some years but not this year.

It seems curious that Apple--a super-star brand with global recognition--is only #10 in the consumer listing, compared with Microsoft's #4 ranking on both B2C and B2B lists.

Zoolander 2 on Valentino's runway

Even if Paris fashion isn't your cup of Earl Grey, you have to smile when Ben Stiller and Owen Wilson stalk the runway for Valentino. It was a clever publicity stunt that had fashionistas gasping and reaching for their iPhones earlier today.

The stars made a surprise appearance during Valentino's Paris Fashion Week show to promote . . . well, the hashtag #Zoolander2 says it all: The Zoolander 2 movie debuts in 2016, starring Derek and Hansel, two models with attitude. The Zoolander Facebook page (1.1 million likes) also carried photos and posts as the stars completed their walkoff.

Both Zoolander2 and Valentino trended high on Twitter for hours after the stars left the runway. No promoted tweets needed, the photos and hashtag went viral worldwide through buzz. Think of the promotional value for the designer and for the movie when two well-known actors get into character and "perform" in front of a star-studded audience expecting a couture collection.

Bottom line: The promotion was effective because it was live, it was a surprise, and it took place in a setting where those characters would ordinarily be seen--a win-win for the designer and the movie.

Competitors are definitely stakeholders

COMPETITORS ARE STAKEHOLDERS

 

There are four key reasons why competitors are stakeholders that any business must consider when analysing the marketing environment for a marketing plan.

• What one competitor--the most innovative or the strongest--does can affect the entire industry. This doesn't only apply to price wars (such as those in the UK grocery retailing industry). It's also a factor in the digital payments world, where Apple Pay has made a big impact in a short time. Or look at the smartwatch industry, which Apple is about to enter with a lot of promotional momentum. Having Apple as a competitor will force every business to be nimbler and better in order to survive.
• New or tiny competitors may be the most innovative. Ella's Kitchen, a 2014 winner of the new product award by The Grocer, is an example of a startup with a compelling value proposition: all-organic, tasty baby foods. The innovator attracted the eye of a larger company, which bought Ella's Kitchen and is using the brand to expand into new products and markets. Imagine what competitors think about the combination of Ella's Kitchen's innovative ideas and the financial strength of Hain Celestial. 
• Competitive scandals can hurt the entire industry. The horsemeat scandal of 2013 caused some consumers to switch from supermarket meats to local butchers' meats. Frozen hamburgers didn't sell well for a time, either, although price promotions helped increase demand. Not every company was implicated, but all were affected by changes in consumer confidence and perceptions.
• Competitive pressure can encourage the industry to do more for people and the planet. Just look at the Fairtrade movement, which has improved the lives of many farmers and food producers and encouraged sustainability. When Cadbury Dairy Milk committed to Fairtrade cocoa in a big way, that put pressure on other mainstream chocolate marketers to show their Fairtrade support. Mars, another chocolate giant, is now embracing Fairtrade cocoa for its Mars Bars. Fairtrade fruit and vegetable and coffee products are widely sold in mainstream grocery stores, partly because of competitive pressure and partly because of consumer demand. One competitor that gets a lot of media coverage for social responsibility activities can be the catalyst for others wanting to follow suit.

Coca-Cola integrates marketing for consistent brand identity

Coca-Cola UK will participate in the company's centenary celebration of the iconic hourglass bottle, designed in 1915. The promotion, scheduled from 30 March, will feature both the distinctively-shaped bottle and famous people who have enjoyed Coke over the years.

The iconic bottle was originally designed to help differentiate the brand from competing colas and help the product stand out wherever soft drinks were sold. After a century of being part of pop culture, the packaging alone is enough to communicate the brand name.

Coke has long been careful to integrate its marketing efforts so that advertising, for instance, reinforces the brand's look (its packaging too) for a consistent identity. Even Coke's UK headquarters borrows the brand's colours and styling for a unique working environment.

When Coke began sponsoring the London Eye, it applied its specific brand of red to the lighting and other elements, conveying the brand's involvement with the attraction.

Coke UK reaches out to its target audience by being active in social media, including 20,000 Facebook likes and hundreds of thousands of YouTube views for its adverts and videos.

Unilever and Procter & Gamble crowdsource innovation

Unilever--known for its portfolio of food, personal care, and household products--has established a special crowdsourcing site to invite ideas for new products and new technology, as well as to invite applications for venture funding.

The Unilever Foundry is designed to accelerate acquisition and implementation of new crowdsourced products/technologies 'ten-fold' within 5 years. This Unilever site has a dedicated Twitter feed for news about innovation and venture funding.

Procter & Gamble, one of Unilever's key competitors, has its own innovation site, P&G Connect & Develop, also for crowdsourcing ideas to meet the company's needs, including marketing content.  P&G has a special Twitter account devoted to crowdsourcing, as well.

How far can companies go in crowdsourcing innovation?