Marketing consequences of merging Sainsbury's and ASDA

Walmart proposes to sell ASDA to Sainsbury's, creating a UK retailing giant that would increase efficiencies--and possibly intensify the supermarket price wars.

Sainsbury's would manage the new entity, with Walmart as a shareholder and partner.

One marketing consequence is the ability for the combined company to pay less for goods and services purchased in larger volume. This will, in turn, reduce costs and therefore allow for lower prices--a key element in this competitive industry.

So far, Sainsbury's says it will slash prices by 10% and will not be closing any stores after the merger is complete. UK regulators may require the sale of some stores to rivals, which would be another marketing consequence of the deal. The marketing environment for all UK retailers could change as a result.

Finally, how will consumers react? Will the merger change consumer behaviour? We'll have to wait and see.

Earth Day Marketing 2018

Today is Earth Day, a day to focus on sustainability and protecting our ecological environment.

This is the 48th year of Earth Day celebrations, and the theme this year is education and action to eliminate 'plastic pollution'. Here is a small sampling of Earth Day marketing efforts:

• Google is raising awareness with its special Google Doodle, celebrating Dr. Jane Goodall and her work.
• Brother, which makes printers and toner cartridges, is promoting the 3Rs: reduce, reuse and recycle.
• The National Space Centre is promoting Earth Day with special events exploring the science of our environment. 
• H&M continues its clothing recycling project, encouraging consumers to drop off unwanted apparel at its stores, for sorting and donation.

Happy Earth Day 2018!

Grocery retailers battle for UK market share

Aldi and Lidl, both based in Germany, have been steadily capturing market share in UK grocery retailing. Recent numbers show that Aldi has increased its market share from 3.9% at the start of 2014 to 7.3% at the start of 2018. Lidl, meanwhile, grew market share from 3.1% in early 2014 to 5.3% in early 2018.

From the perspective of traditional UK supermarkets like Tesco and Waitrose, the battle for market share has another challenge: pressure on profit margins. Aldi and Lidl are deep-discount grocers with no-frills stores. Not so for Tesco and Waitrose, which are full-service grocers. To be sure consumers can see the value in shopping at a full-service store, price promotions are often highlighted--and that cuts into margins.

In fact, price is a key element in consumers' perceptions of a store. Not long ago, Aldi overtook Waitrose as the favourite supermarket of UK consumers who were asked about satisfaction. Affordable prices would naturally be important to satisfaction.

Meanwhile, UK supermarkets will continue to face pressure from the deep discounters as Aldi and Lidl both plan to expand their store networks. At the same time, traditional supermarkets are slowing their store openings to maintain cost control. Will online grocery shopping be the competitive edge for traditional supermarkets? Possibly, as a growing number of UK shoppers try or continue buying food and household products without going into a store. Consumer behaviour is changing, and grocery retailers are learning to adapt so they can compete more effectively.

Celebrities, influencers and brand marketing

David Beckham is a fan of scotch whisky...and if you're a David Beckham fan, you can buy Haig Club scotch and drink the brand that is his. Literally. Beckham partnered with Diageo to create Haig Club as a whisky with personality, modeled on the whisky preferred by his Dad. Not surprisingly, Beckham also stars in marketing for his brand. 

Beckham is one of a growing number of celebrities deeply involved in marketing their favourite products. Some invest money in products they like and use--such as Rihanna's investment in Vita Coca, one of today's up-and-coming coconut water products. Rihanna also has a beauty brand, Fenty Beauty by Rihanna, which is growing quickly.

Michelle Keegan, star of Our Girl, has her own celebrity-branded line of clothing with Very. Supermodel Gigi Hadid has a beauty product line with Maybelline, #GIGIxMAYBELLINE, which is heavily promoted during London Fashion Week. And of course, all these celebrities use social media and in-person appearances to market the brands they prefer.

Not every social media star who attracts followers and influences customer attitudes and behaviour is an actor or performer. The London fashion brand Kitri recently paid fashion blogger/Instagram influencer Charlotte Groeneveld to promote a green dress for summer. A month after Groeneveld posted an Instagram pic of herself in the dress, Kitri sold 200 units in less than an hour. Kitri now has a waiting list for this dress, demand is so strong. 

The marketing lesson: Know your influencers, know who they influence and know how they influence.

Happy 9th Blogiversary (Not April Fool)

My first blog post was on 3 April 2009. As shown above, the most popular post (by far) is Yes, competitors are stakeholders written more than 5 years ago and updated several times more recently.

Unquestionably, competitors are truly stakeholders of any marketing organisation, from the smallest single-person operation to multinational giants. Remember, stakeholder is defined as 'a group or individual that has an interest in or can potentially affect the marketer's performance and activities'. Surely competitors qualify because they have the ability to begin or escalate price wars, influence market share and marketing trends, influence customers and suppliers and so on.

An academic paper found six good reasons to include competitors as stakeholders. McKinsey has noted that organisations must try to anticipate competitors' strategies so they can plan ahead to deflect challenges.

At times, a marketer may want to collaborate with competitors on issues of mutual interest, such as industry standards or sustainability projects. Not on pricing--such collusion is illegal in most nations--but on larger issues that affect many stakeholders, including the public.

Which brands are tops in the UK for 2018?

According to the Centre for Brand Analysis, the #1 brand in the UK this year is not British.

In 2017, and for the previous three years, the top brand was British Airways. Not this year.

The survey asked UK consumers about brands' reliability, distinction and quality. The brands they cited were, mostly, long-established multinationals with strong customer loyalty.

Consumers said that the top 10 superbrands in 2018 are:

10. BMW (cars)
 9. Heinz (food)
 8. Boots (retail)
 7. Marks & Spencer (retail)
 6. Disney (entertainment)
 5. Coca-Cola (beverages)
 4. Andrex (toilet tissue)
 3. Apple (electronics)
 2. Gillette (personal grooming)
 1. Lego (toys)

Updated links to marketing planning ideas and resources

My list of links to marketing planing ideas and resources has been updated. Now you can click to see more than 50 sources of data, advice and news related to:

• Preparing for marketing planning and implementation
• Analysing the marketing environment
• Researching consumer and business demographics
• Marketing ethics, social responsibility and sustainability
• Branding issues and ideas
• Marketing mix issues and ideas
• Marketing channels and retailing trends

For instance, if you're looking for a marketing plan template, my list includes a link to the Australian government's business page with a downloadable guide and template.

So please browse the links the next time you're researching the background for a marketing plan project.

Mobile payment and consumer behaviour

One of the fast-growing trends in consumer behaviour is mobile payments, meaning payments completed via mobile--contactless-style.

One source says that mobile payments in the UK during 2017 exceeded £975m. Yes, that's nearly one billion pounds.

Another source shows UK mobile payments increasing by 365% during 2017. And it shows payments made via wearable devices (like smartwatches) grew by 129% in 2017.

More tests are underway as businesses and consumers grow accustomed to mobile payments. The Co-Op in Manchester, for instance, is testing a MasterCard app that allows shoppers to pay without ever queueing or stopping at the till.

Similarly, Barclay's Dine and Dash mobile app will enable UK customers to pay for restaurant meals by tapping a special point at the table. No more waiting for servers to bring the bill!

Pizza Hut in the UK is adding MasterCard's mobile payment app so customers can place orders and pay for meals without waiting for the server to bring the bill.

Have mobile payments reached a tipping point where they will now be considered mainstream? Will more payments be made via mobile than via plastic or cash? Marketers are watching consumer behaviour very closely to understand acceptance and adoption trends.

Unilever makes marketing more productive, transparent

How does Unilever make marketing more productive? Unilever has a broad portfolio of products and brands, from Axe/Lynx personal care products and Dove skin care products to Knorr soups and Hellman's condiments. Its overall marketing budget exceeds €7 billion.  

Higher productivity of marketing spend and assets would result in more efficiency and a cost savings that could be put towards more marketing, higher frequency or extended audience reach.

Firstly, the global company has decided to handle some promotional tasks in-house rather than paying agencies to do that work. Because its in-house experts know the products so well and can quickly check with decision-makers for approvals or changes, the company gains a bit more control over the marketing content and saves money at the same time. It also can handle its own pre- and post-implementation analysis, quantifying results quickly to assess marketing performance.

Also, Unilever is reassessing its digital marketing and will invest only in platforms that have a positive societal impact. In other words, it won't tolerate social media platforms that tolerate hate speech or other negativity. Unilever brands have built up consumer trust over the decades and won't risk losing trust due to a negative platform experience. This adds to transparency, as well as the company's blockchain initiative (with IBM) to improve digital ad placement info and combat fraud.

Apparently, Unilever will change its headquarters structure. For many decades, it has been an "Anglo-Dutch" multinational. News reports indicate the company may change to a single HQ in Netherlands. This should slim bureaucracy and speed decision-making, whether or not it's related to Brexit.

Burberry's digital marketing powerhouse

Burberry, the venerable UK fashion brand, has remade itself as a digital marketing powerhouse in the past decade or more. Above, Burberry's Instagram statistics as of today. Yes, 11 million followers worldwide.

One key aspect is adding to the company's online availability without diluting its high-style image. In addition to Burberry's own digital channels for promotion and distribution, the company recently arranged multinational distribution through Farfetch, a UK luxury-goods retailer with a robust online platform.

However, Burberry said it's working closely with Farfetch to ensure 'a consistent and curated digital experience' for customers that view product images and description online. In other words, Burberry isn't simply providing products for resale--it's actively involved in marketing to affluent consumers through Farfetch.

Another key aspect is streaming fashion shows and adopting new social media tools quickly. Burberry was among the first high-end fashion brands to promote itself on Snapchat, for instance.

Burberry has also used artificial intelligence (AI) to support marketing of its Cat Lashes mascara on social media, particularly Pinterest. The brand has nearly 9 million Twitter followers and 17 million Facebook followers.

Watch for more digital marketing innovation as Burberry leverages its brand visibility and image to engage consumers around the world.