Archive for the ‘Sales’ Category
China Business Review
This article can be found on the China Business Review website at the following link.
Alternatively, the B2B International white paper Marketing and Selling to Chinese Businesses can be accessed by clicking here.
An historic sales slump appears to be hitting the $100 billion United States brewing industry. According to the Beer Institute, industry shipments are down 4%, and SymphonyIRI reports that sales for 11 of the biggest brands fell in the four weeks to May 16. In fact, in this period, only four of the top 30 –Keystone Light, Modelo Especial, Yuengling and Pabst Blue Ribbon – posted gains.
It all boils down, it would seem, to people simply drinking less beer at present. A big factor behind this trend appears to be the ongoing effects of the recession. High unemployment rates, in particular, mean many people are cutting back.
The trend is typified by the Brewing Big Two: Sales of Anheuser-Busch’s Bud Light, the largest U.S. brand, are down 5.3% year to date – and, don’t forget, this is compared to 2009, which was the first negative year in the brand’s 28-year history. MillerCoors, the No. 2 U.S. brewer, is experiencing declines too, with Coors Light and Miller Lite down 0.5% and 7.5% respectively.
With many of us celebrating Valentine’s Day over the weekend, Simi Dhawan explains how, like all successful marketing, this event tries to tap into people’s fundamental needs and desires.
Across the globe, February 14th marks a special unity between individuals on numerous levels. For some, cards, flowers, chocolates and various other adornments are offered to partners and spouses as a gesture signifying their unwavering love for one another. For others, this national ‘holiday’ (which isn’t actually a holiday, let’s be honest) unites a sub-culture of individuals who would gladly take up watching paint dry as sport over entertaining this commercial frippery. So where on Earth (let’s remain within familiar parameters) was this tradition born?
Legend has it that St. Valentine (our customarily crowned patron saint of love) reacted to Roman Emperor Claudius II ruling that soldiers were to remain unmarried in a bid to keep them better focused. Our now hailed St. Valentine nobly (and romantically) defied Claudius’ demands by marrying some of the aforementioned young soldiers in secret, only to be later discovered by the emperor and imprisoned as a consequence. Whilst in prison (and clearly without much else to think about in the way of daily activity), St. Valentine fell deeply in love with his jailor’s blind daughter who often visited him there and in doing so, helped soften the ill-fate which was soon to meet him – his tragic death sentence. Shortly before this ominous moment, history was forever-changed when he sent a letter to his secret love signed ‘from your Valentine’ – the letter which would thereon be remembered as the first ‘Valentine’ in history all the way back in….wait for it….. A.D. 270….!
Today, centuries later, greetings cards have now replaced the traditional love letter, with an estimated 1 billion cards being sent each year (ranking in at second place after Christmas). Valentine’s Day is a universal event which is certainly not exclusive to one part of the world. It transcends ages and cultures. It is global consumer populations who buy into this profit-making love affair year in and year out. Country masses of devoted followers (possibly deluded under Cupid’s spell) loosen their purse-strings/wallet-chains much to the delectation of multiple industry beneficiaries. We’re not simply talking about florists, card and confectionary shops, but also restaurants, bars, cinemas, jewellers, producers and sellers of romantic goods, love songs and movies, beauty salons who pamper and preen many hopefuls (both in love and looking for love), various hotel chains and airlines who benefit from increased bookings of romantic trips away and………….well ok, you get the idea. The point is, there’s money in this and as much as the cynics (erm..us singletons) try to bury our heads in the sand and talk about ANYTHING BUT our ‘Valentine’s Plans’ (thank you colleagues, friends and family – oh and my hairdresser), it is nothing short of remarkable that love helps keep the economy going (at least momentarily)….or put another way, we ‘buy into love’.
Love it or hate it (and the theory is that there is a thin line between the two for those claiming the latter), Valentine’s Day is every marketer’s playpen. Its success is founded upon the very fact that it sells to the ultimate in people’s needs and vulnerabilities….the need for love and all the security it brings. Aptly described as a ‘Humanistic Psychologist’, Abraham Maslow knew only too well the multi-faceted emotional and physical desires that collectively make up the human condition. He clearly defined these within his ‘Hierarchy of Needs’ as shown below:
For Maslow, our basic (or intrinsic) needs at the bottom of the pyramid are the physical needs we require for survival from birth, whilst rising up his model, our needs become more emotional and sophisticated where we must successfully meet all of those listed at each level to ultimately progress to the top and reach an eventual state of happiness and fulfillment known as ‘self-actualization’.
In the same way, businesses everywhere (in fundamentally appreciating the fact that they are selling to humans not robots) do vigorously attempt to tap into the needs of both their market and the individuals which make up that market. In fact, just thinking about the nature of any business or personal relationship, there is always a rudimentary transaction which takes place – financial or emotional, and each is reliant on understanding your recipients’ needs. Taken further, we could even argue that in introducing and thus ‘selling’ us his theory, Maslow himself was a chief marketer!
Following this lesson, there is rarely a week that passes in our UK office when a colleague does not openly share a new marketing item or ‘gimmick’ that they have received from a company which seeks to promote its products or services – be it the white chocolate plaques with elegantly printed company images marked on the front (they did make for a divine mid-morning snack!) or a kick-off-2010 diary book planner (that was wasted on me – I’m personally a bigger fan of my ‘Office Outlook’, thanks very much), companies will try every which angle – the quirkier the better, to grab people’s attention. If there was a surefire way to increase profits through such ploys, then we would all be doing it. However, quite like Maslow’s slightly ambiguous pyramid journey, people’s needs and consequently market needs are always changing, and so this is a game where precise rules do not exist and cannot be learned, but one where you throw the dice and then make calculated, strategic moves based on the options available to you at any given time, in any given place (of work).
Pleasingly, this year was no exception, and whilst February 14th is usually solely ‘owned’ by the madness that is ‘Valentine’s Day’, for the first time since 1900, as many of you may have already experienced, it also shared its place with Chinese New Year (‘Kung Hei Fat Choi’ and ‘Xin Nian Kuai Le’ to all by the way!). This I learned of, much to my delight, as I strolled through Manchester city centre last Sunday morning trying frantically to avoid the endless parade of loved-up couples drifting smugly along the sun-filled streets. The sound of Chinese drums and oddly placed fairground rides – including the ‘teacups’ (how quaint) – offered some welcome respite from heart-shaped foil balloons and red rose street sellers (who smiled sympathetically), and whilst this year, Valentine’s Day – as always – ‘sold’ to the masses successfully, I was one very happy customer drawn in by an alternative market route, found ogling instead over the beautiful handcrafted Chinese lanterns which stood stationary whilst I floated away happily into my own world……………………….waiting for the postman to deliver my lost Valentine’s Day card…!
Colleagues in our Beijing, New York and Manchester offices have all been complaining about the cold weather of late. With much of the northern hemisphere suffering its severest winter for years, most of us are just trying to grin and bear it. Yet some savvy marketers are definitely making the most of the opportunities this bad weather presents. AdAge.com’s ‘Marketers Make Most of Falling Mercury’ article below tells us all about how some marketers are using the latest weather intelligence to feed into their marketing plans:
In Alabama, the night before the Crimson Tide took on the Texas Longhorns for the National Championship, it would normally have been tough to find chips and salsa, maybe beer. But, instead, Chris Hendrix, 27, found empty shelves where the bread should have been. Bottled water was also in limited supply, as panicky residents stocked up for a forecasted inch of snow.
Unusually icy temperatures are gripping most of the U.S. — according to Accuweather, this could be the coldest winter the country’s seen since 1985 — and that’s proving a boon for opportunistic marketers who target their media around the thermometer and have the wherewithal and ability to make their marketing more flexible and nimble.
Bad weather is, of course, relative: An inch of powder in Alabama may trigger mass panic and closures, while for Minnesotans it’s just another winter day. For marketers who understand these differences and capitalize on them, there’s money to be made.
“That’s where the marketing gold that needs to be mined is,” said Scott Bernhardt, chief operating officer at Planalytics, who said 40% of his clients are using weather intelligence to inform their marketing, up from 25% to 30% 18 months ago. “Marketing into a situation that’s favorable for your product [causes] the numbers to go off the chart.”
The brand team conducts weekly meetings with media buyers to review a 30-city “misery index” that Campbell has built using an algorithm that incorporates temperature fluctuations within a given day, the year-ago difference, the week-ago difference and extra credit for snow or “nasty” rain. When an area becomes miserable, it gets a positive ranking on the index (negative ratings ironically connote a relatively happy area).
John Faulkner, director-brand communications at Campbell Soup Co., said that when an area becomes about 5% miserable, Campbell will cue up chicken-soup radio ads from BBDO, New York, that typically last three to five days. Its current campaign, which underscores the 32 feet of noodles in every can, ties in neatly with freezing conditions. Mr. Faulkner would not comment on how sales have fared since the company put the “misery” index in place, but it’s clearly worked: Not only has Campbell kept the program going, it’s added a flu-tracking system as well.
Not all advertisers are set up to take advantage of events like the weather because of institutional and technological barriers — in fact, only 40% of Planalytics clients tie that information to marketing. But over the past year there’s been a focus on becoming more nimble — not just in reacting to weather conditions or news events, but also to economic changes and consumer behavior changes.
Boots made for selling
As marketers take advantage of the cold front sweeping the nation, they turn to media that can be swiftly adjusted such as spot radio, e-mail marketing and search advertising. Dan Schock, a retail industry director at Google, said that, for companies looking to buy against newly popular search terms such as “hot chocolate,” “weather forecast” or “long underwear,” his team can launch new search campaigns in just a few hours.
In the days before Christmas, for example, Google worked with several advertisers to geo-target the Northeast and adjust creative to capitalize on the impending blizzard by encouraging consumers to shop from home.
Weather-triggered campaigns are a specialty of the Weather Channel, of course. The cable network is working with advertisers including General Motors, The Home Depot and Nationwide Insurance to do just that, and it has benefited from bigger ratings as chilled consumers stay inside and keep an eye on the forecasts. According to a spokesman, viewership was up 24% in the first five days of the year, compared with the same period a year ago. And on Jan. 7, Weather.com experienced what was likely its biggest page-view day ever, with 82.5 million views. Ironically, it was tough to get those statistics from Weather Channel last week, as its executives were stuck at home due to icy, snowy conditions in its headquarters city of Atlanta.
While some advertisers moved to crank up their buys due to cold, the marketer of Snuggie went in the opposite direction. The mercury plunge caused a run on retail that resulted in an “extreme shortage” for the blanket-with-arms, precipitating Anne Flynn, VP-marketing at Allstar Marketing Group, to halt the brand’s marketing. That notwithstanding, the cold weather is generating plenty of free publicity, be it from local newscasts or appearances of college-themed Snuggies at Bowl Games. “It’s a nice problem to have,” she said, “but when people want their Snuggies, they want them now.” The company is ramping up production.
Classic Ugg boots that retail between $140 and $180 have been moving briskly. “We are hearing good reports from our retailers all over the country, as consumers are shopping with Christmas cash and gift cards,” said Ed Goins, VP-sales at Ugg Australia. “It’s safe to say that the cold weather is certainly not hurting our business and is most likely enhancing it.”
Indeed, cold temperatures appear be helping consumers forget about the recession, at least temporarily. According to Google, searches for “snow boots” began outperforming searches for “cheap boots” in the past few weeks, the first time that’s happened in almost a year.
A new academic study claims the average American consumes 34 gigabytes and 100,000 words of information every day. That’s not just a phenomenal amount of information to take in. It’s also estimated to be well over three times the daily amount that we consumed back in 1980.
The ‘How Much Information?‘ study, published by the University of California, San Diego, looks at media consumption today in the United States. Television is still the dominant information source, taking up 41% of the total time spent consuming media, followed by the internet, which takes 16% of total time. Other mediums covered by the study include cinema visits and computer games, talking on cell phones and listening to the radio, among others…
It’s perhaps difficult for us to really grasp the sheer scale of the amount of information we’re talking about here, but few of us would argue that we are not exposed to hundreds, if not thousands, of advertising, marketing, promotional and sales messages on a daily basis. But what does this mean for all those marketers who are competing to get their own messages across?
Well, there are many implications, but one of the most important would be that it underlines the absolute need to have a strong, clear and consistent brand. Mixed messages will not help you stand out; at best they will cause confusion and at worst they will be overlooked altogether. A strong brand will help to ensure that your customers know exactly what you offer, realize exactly what you stand for, and understand exactly what they can expect from you. The key then, of course, is to make sure the offering itself does not disappoint them, which is a whole new challenge!
Another important point to make can be nicely summarized by the famous John Wanamaker quotation: