Food for thought: pricing at two London cafes

Two London cafes have interesting (and different) approaches to pricing. Whether either or both will attract loyal, long-term customers is the biggest question--but the novel pricing is attracting attention now.

Caffix uses the strapline 'eat fresh, pay less' for its value proposition. 'Give people a great quality product and do it at a lower price', says the founder. The cafe's pricing strategy is simple: every menu item is priced at £1. Salads, sandwiches coffee, juices, everything is sold at the same fixed, low price. The portions are, of course, small -- but that allows customers to enjoy the variety and try new things. Follow Caffix's latest on its website,  Twitter page, Facebook or Instagram.

Ziferblat has a different approach: food is free. Instead, customers pay for the time they spend at the cafe, at a rate of 3p per minute. This pricing strategy originated at the founder's first Ziferblat cafe in Moscow, and now the company is spreading it around the world, to London and Manchester and beyond. The cafe's logo subtly promotes its pricing strategy through the use of the clockface. Follow Ziferblat's latest on its Facebook page or on Twitter.

Top UK brands--and branding insights

The 2015 Brandz study (methodology by Millward Brown) puts Vodafone on top as the most valuable UK brand of the year. In order, the top 5 UK brands, by value, are:

1. Vodafone (telecoms)
2. HSBC (financial services)
3. Shell (oil/energy)
4. BT (telecoms)
5. BP (oil/energy)

 The most valuable brands in the world are all US-based:

1. Apple (electronics)
2. Google (Internet/electronics)
3. Microsoft (electronics)
4. IBM (computers and services)
5. Visa (financial services)

Millward Brown's top 5 insights for increasing brand value are: Innovate and delight the customer; be meaningfully different (in ways that customers value); stand for a purpose; act according to the purpose; build and maintain trust.

How important is a great brand logo?

A recent BBC News article asked: How important is it for a company to have a great logo? The article pointed to Nike's swoosh as an example of a well-established, highly recognisable logo.

One of the brand experts quoted in the story says: 'A logo is a simple and functional signpost to help people find and identify your business. But for a logo to be successful, the company behind it must be a respected and trusted brand'.

Nike, whose swoosh shown here is its Twitter and its Facebook profile picture, has nearly 5 million Twitter followers and more than 22 million Facebook likes. The swoosh is enough to identify the business and its most famous brand.

Nike describes itself this way: NIKE, Inc. fosters a culture of invention. We create products, services and experiences for today’s athlete while solving problems for the next generation. For investors, it says: We create innovative, must-have products. We build deep, personal connections with consumers. And we deliver an integrated marketplace with compelling retail experiences.

Long-term studies of brand value indicate: 'brands that deliver a unique and compelling core proposition, a distinctive brand identity, and great advertising have recorded 168% brand-value growth on average over the past 10 years'.

So how important is a great brand logo? Very important if it conveys the brand's image, identity and core proposition. The swoosh isn't responsible for Nike's market leadership but it helps Nike's brand visibility every time a sports fan sees one on a champion athlete's hat, shirt or uniform.

Update: Marketing at Reckitt Benckiser

Reckitt Benckiser markets some very well-known brand names in health, hygiene and household products, including Finish, Strepsils, Vanish, Scholls, Mucinex and Airwick. This post updates the RB opening case on pages 1-2 of Essential Guide to Marketing Planning 3e.

Here's how RB's main product categories contributed to turnover in 2014:

• Hygiene products generated 41% of RB's revenue
• Health products generated 31% of RB's revenue
• Home products generated 20% of RB's revenue
• Portfolio brands and foods generated 8% of RB's revenue

Each RB brand has its own digital marketing strategy, including a distinct social media personality and presence. Shailesh Shukla, VP of marketing for RB, notes that consumer behaviour is what drives marketing strategy. How do consumers perceive each brand and how do they use digital media with respect to each product category? The answers to those questions are key to RB's media and content decisions.

Corporate RB is also social, with 236,000 FB likes, 13,000 Twitter followers, and a YouTube presence. In addition, RB pursues an active social responsibility and sustainability agenda.

Shopper marketing technology

'Shopper marketing' means communicating with consumers when and where they're in a store. The North American Effie Awards for Shopper Marketing recently honored retailers and manufacturers for using effective shopper marketing. According to the jury chair for 2015, the most effective shopper marketing will: 

• be insight driven.
• be category focused.
• be strategic and systemic.
• strive to drive an action/behavior.
• focus on overcoming purchase barriers around moments of truth when behavior can be influenced.
• have emotion.

In addition to traditional shopper marketing techniques such as displays, shoppers with smartphones are a key audience for in-store marketing via technology that either tracks or connects with phones. Many top retailers are already using beacon technology to improve shoppers' in-store experience by guiding consumers directly to a particular product, offering extra information and offering special discounts or other financial incentives. Not surprisingly, London's Regent Street has many beacon experiments ongoing at retail stores.

In late 2014, Asda installed beacon Bluetooth technology to test reaction in a limited number of stores. One idea being tested is sending competitive price comparisons to shoppers' phones while they're standing near a certain product or category. 

Now Philips has developed LED lights (see photo) that work through shoppers' smartphones to pinpoint shoppers' in-store location (relative to each LED light fixture) and communicate promotional details. The Philips lights are being tested in a Carrefour supermarket.

This is an alternative to beacon technology but, like beacons, it depends on shoppers accepting communications via app.

However, a small number of shoppers concerned about privacy may prefer not to allow access, which will limit the effectiveness of all these shopper-marketing technologies.

Marketing Thomas the Tank Engine's 70th Anniversary

Thomas the Tank Engine, a favourite toy and book for generations of children, is celebrating its 70th anniversary this year. This anniversary is an opportunity to build on the nostalgic appeal of Thomas and launch new products to keep Thomas on track toward new admirers and new sales.

Hornby's Thomas the Tank Engine

• Top, a special collector's edition book published by Egmont and sold at Waterstones.
• Funny or Die, an online humor site, features Neil Patrick Harris in a special video about Tankie.
• Toy marketer Hornby is introducing new Thomas engines for the anniversary. Above, one of the Thomas & Friends locomotives.
• For the inside story on why Thomas is engine number 1, click here.

Merlin Entertainments' awesome, balanced portfolio

From Merlin's 'About us' page

Merlin Entertainments is having an awesome year, thanks in part to the global success of the Lego Movie. Revenues at Merlin's Legoland theme parks surged by an awesome 13% last year.

Other attractions operated by Merlin include Madame Tussauds wax museums (where Star Wars exhibits are attracting attention ahead of the new movie), Gardaland theme parks, Alton Towers, the London Eye and Sea Life aquariums.

On the 'about us' page, Merlin sets out its marketing strategy:

To create a high growth, high return, family entertainment company based on strong brands and a portfolio that is naturally balanced against the impact of external factors.

Merlin is smart to plan for balancing the portfolio 'against the impact of external factors' in the marketing environment. For instance, the weakness of the euro is expected to keep some European visitors from vacationing at UK destinations in 2015. Weather is also an uncontrollable factor.

By design, Merlin has assembled a portfolio that spans four continents and includes a variety of brands. At any one time, one brand (such as Legoland) might be in the media spotlight and therefore attract an awesome number of customers. Building on that interest, Legoland Water Park Dubai is in the works, among other enhancements to the portfolio.

Unilever's sustainability strategy resonates with customers

Unilever is seeking to support sustainability through improvements in health and well-being (blue on the chart), reduced environmental impact (dark green), enhancing the livelihoods of communities (red) and making its businesses more transparent and sustainable (light green).

What does the multinational consider to be a material issue or opportunity? From 2010, when the sustainability initiative was implemented, Unilever applied four criteria:

• The degree to which an issue is aligned with our vision and purpose, brand portfolio and geography.
• The potential impact on our operations, or on our sourcing and consumers.
• The extent of Unilever’s influence on the issue.
• The importance of an issue to our key stakeholders.

Unilever now has evidence that progress on sustainability issues resonates with its customer base. Its brands most active in sustainability initiatives (Dove, Lifebuoy, Ben & Jerry's, Comfort) 'accounted for half the company's growth in 2014 and grew at twice the rate of the rest of the business' according to CEO Paul Polman.

In other words, a solid sustainability strategy can help save the planet, improve the quality of life for stakeholders and bring the company closer to growth goals.

Updated: Fashion for hire

One increasingly important aspect of pricing strategy linked to changing customer behaviour is the option to hire rather than buy. In Chapter 7 of Essential Guide to Marketing Planning, I profiled two high-profile high-fashion hire businesses. This post updates the mini-case on p. 131.

• Rent frock Repeat is based in Canada and markets fashion frocks and accessories for hire online. Like US-based Rent the Runway, Rent frock Repeat operates store showrooms for personalized attention and rentals. The company plans a third showroom and also offers Skype consultations, not just phone conversations, for customers who want to ask questions face to face. When customers know they'll need a certain outfit for a certain day, they can reserve that item up to four months in advance. Looking for ideas? Check the firm's Pinterest boards.
• Rent the Runway began in 2009 as an online-only marketer of for-hire upmarket fashion and accessories. Today it operates stores in Chicago, Las Vegas, New York and Washington D.C. One customer, browsing in Chicago, commented: 'This is a procrastinator's dream!' In fact, the stores offer in-person appointments with stylists who can help customers identify suitable fashions and demonstrate how to create an outfit for a special occasion. With weddings, graduations and other celebrations on the May and June calendars, Rent the Runway provides a cost-effective alternative to buying clothing that will be worn only once or twice. The company's busiest day is Wednesday, when it receives returned dresses from the previous weekend, cleans them and repackages them for the next set of weekend customers. Of course Rent the Runway has an iPhone app (see above).

Facebook sources for marketing plan research

Don't overlook Facebook sources for marketing plan research. Here are four content-rich FB pages to get you started in your search for competitive information, industry profiles, consumer behaviour insights and more:

• Chartered Institute of Marketing (CIM) posts content and links to interviews and articles of interest to marketers on its FB page. Take a look at the posts for #keepsocialhonest, for example, which reveal consumer attitudes towards brand behaviour on social media.
• Statista posts links to statistics about consumers, business and marketing on its Facebook page. A recent post looked at mobile use of news sites, which would be of interest to marketers planning for publicity.
• CMO.com's FB page covers news and interviews of interest to marketers who target consumers or B2B. One recent post mentioned how the ability to research vendors and products online is affecting B2B sales.
• E-consultancy's FB page links to valuable content such as surveys, summaries, statistics, critiques and news about digital marketing. New posts appear frequently so check this page often.