Archive for the ‘Thursday Night Insight’ Category

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What Sandwiches Tell Us About Marketing

This week, Oliver Truman looks at a purchase decision many of us take every day, and how this reveals the fine line involved in getting marketing right.

Let’s talk sandwiches. It’s a topic that’s been broached a few times on the B2B Blog, and is a mainstay of British conversational repertoire. It’s also a subject that never ceases to provide insight onto the challenges facing your average marketer. A quick Porter’s Five Forces analysis of “the sandwich market” tells us that rivalry is intensely fierce because:

• Buyer Power Is High – Consumers are rarely stuck for choice as to where they can get one. People tend to be quite sensitive to the price of sandwiches, such is the routine with which they’re bought.
• Threat Of Substitutes Is High – It’s not too much of a stretch to bring your own Tupperware-entombed chow to the office. In pressing economic times like these, leftovers from yesterday’s dinner can be a frugal, yet hearty alternative. Moreover, there’s often little to prevent defection from one retailer to another.
• Supplier Power Is Low – The flipside of high buyer power, and the abundance of lunchtime options open to your average punter, mean that sales are often fragmented between many players. Suppliers have little latitude to charge a premium, lest they price themselves out of the market.
• Barriers To Entry Are Low – Premises and other overheads aside, making sandwiches isn’t the most difficult of tasks. Nor is substantial capital investment required to put something edible between two pieces of bread.

In some ways, my own buying behaviour bears out the above characterisation. Of a lunchtime, I like to maintain a balanced portfolio of sandwich suppliers, assiduously rotating them over the course of a week. Bramhall (home of B2B’s HQ) is blessed with a range of stores selling sandwiches (and other lunchtime fare), from retail behemoths like Tesco, through to quite a few independent delis.

The sandwich retailers’ response to this kind of promiscuity is typically to rely on the reliable crutches of the 4Ps in order to win business:

• Price: “Meal deals”, where several items can be chosen for a set price are a common strategy for getting people through the door. Even taking into account the price of a sandwich alone, this usually gravitates to a fairly-steady £2-3, at South Manchester prices (only tending to be more if you’re being really fancy).
• Place: Increasing numbers of retailers now offer the option of delivering sandwiches to the workplace, thus removing one of the few remaining excuses for unshackling one’s self from the office desk.
• Product: Tastes in sandwiches on these shores tend to be pretty staid. There are, however, signs of this entrenchment changing. Only the other day, the chap from the local deli asked my colleague Matthew if he could get his hands on the canteen menu from our office in the States. This, avid readers of the B2B Blog will remember, is an outlet offering around 9,600 unique combinations of sandwich. News clearly travels fast in the world of sandwich retailing.

Taking the final P – promotion – My sandwich antennae were recently drawn to an advert that’s cropped up outside the local petrol station forecourt. It was promoting the range of snacks that can be bought there – all of which are available under a “meal deal” promotion.

You have to admit that the brief of trying to promote a petrol station’s sandwiches to anyone other than fuel customers is a tough sell. Petrol and service station sandwiches are about as revered as the standard of catering found in most NHS hospitals, or at the zenith of British Rail. In short, there’s a credibility gap to be made up. Even so, someone’s had a go.

The advert I mentioned is worth further scrutiny, though. While it’s laudable that the oil majors are seeking to diversify into the Panini Pound, the execution of this campaign is so crass that I felt moved to include it below (click on the image to enlarge):

I should perhaps first draw your attention to the strapline – “Inspired by farmers’ markets”. With a claim like this, I bet you’re wondering what exactly it is that your local garage is selling nowadays – Homemade chutneys? Free range eggs? Organically reared pork and leek sausages? All sounds rather appealing…

Except it’s not quite these sorts of things. How about a 500ml bottle of Coca Cola? Or a Grab Bag of Walkers Salt and Vinegar crisps? Somehow, I can’t see these items being laid out on canopied trestle tables on the village green any time soon. Perhaps I’m being cynical, but I’m also guessing that these goods won’t also be presented to me in a rustically-adorned wicker basket.

Quite aside from the absurdity of the products involved, the message also seems to be that the mere process of selecting three items of your choice (a pre-packed sandwich, a bag of crisps and a carbonated drink) is somehow highly evocative of folksy, rural life. That’s besides the fact that the concept of “pick your own” has more to do with picking berries than it does buying farm produce at market.

All of this got me thinking – would I ever fall prey to the wiles of the marketer so easily? I was certain my answer was “no” until I returned home yesterday evening. Upon entering the kitchen, I saw several cans of Heinz “Farmer’s Market” soup on the side, which I’d bought only a few days earlier. I’d been had. There really was no sense in which this soup was any more a genuine slice of rural life than buying your lunch from a petrol station.

And all of this shows the difficulty of getting marketing right. There’s often a very fine line between good and bad implementation of an idea – both the oil company and the soup manufacturer started from the same premise – but only the latter had implemented the idea credibly.

The notion of credibility in a market is important. In launching any new product or service, companies must first establish whether their brand is well-placed to meet expectations. Even with the best product in the world, if you’re not seen as being a plausible choice, there’s a high chance of failure. For the record, the petrol station won’t be going on my roster of lunchtime venues any time soon.

Posted in Marketing, Oliver Truman, Thursday Night Insight |
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In The Drive-In Seat

A unique ‘new’ concept to hit the UK inspires Caroline Harrison this week to think about branding opportunities.

Having watched the movie Grease a gazillion times, I’m more than familiar with John Travolta belting out “Stranded at the drive-in”, having just tried to woo Olivia Newton-John and having had his over-enthusiastic advances rebuffed in a rather painful way.

Sadly, I myself have never had the chance to go to a drive-in movie. There doesn’t seem to be much of a market for it in the UK. Maybe that has something to do with our dismal weather. Or maybe it’s simply because I didn’t grow up in the 1950s… Either way, for me, there’s something eternally ‘romantic’, ‘cool’, ‘American’ or just plain ‘novel’ about the idea of a drive-in movie. All of which is leading up to my telling you about something that recently caught my imagination.

Apparently, a new drive-in movie concept has hit Britain’s capital. The Starlite Urban Drive-In, in East London, lets cinema-goers watch films while seated comfortably in one of a range of shiny new Volvos.

In a city where many people rely on public transport to get around, the good news is that the 25 Volvos are all permanently pre-parked, so (a) you don’t need to drive to the venue and (b) you don’t even need a drivers’ license. A maximum of two people are allowed in each car (how romantic!) and, for £25 per ticket, you get a drink and some popcorn as well as a seat.

Meanwhile, the film’s soundtrack is broadcast through the car’s radio and waitresses on roller skates wheel around taking and delivering food and drink orders (how cool!). The only downside is that tickets seem to be the hottest thing in town – two initial screenings of Grease and Dirty Dancing sold out online in 30 seconds – so my chances of going any time soon are fairly slim.

As the sole provider of the vehicles, Volvo sees the partnership as a good fit for the brand. It also provides a unique and novel opportunity to reach a younger audience that may not have been exposed to the Volvo brand before. So successful has this new concept been that several major film studios have apparently approached Starlite asking them to show their movie premieres, and a number of other companies are keen to get involved with future sponsorship.

When it comes to any kind of promotional, sponsorship or branding opportunity, companies do have to consider their options carefully. Obviously price and anticipated return-on-investment play a large part in the decision, but the arrangement must be relevant to the business, the brand or the company ethos. What’s more, it is also vital that the opportunity puts them in contact with, or firmly places them in the mindset of, their potential target market. But, beyond that, it’s also a great idea to associate your brand with something that’s unique, will have impact and is likely to create a real buzz.

As far as I am concerned, that’s just what Volvo has done here. And, who knows, next time I’m on the lookout for a new car, the fun and funky brand that Volvo would appear to be might just now enter my consideration set. Indeed, it might even prove to be “the one that I want.” (Sorry!)

Posted in Brand Strategy, Branding, Caroline Harrison, Thursday Night Insight |
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Budget 2011 & The Role Of Market Research

In Chrissie Douglas’ latest Insight, she reflects on the entrepreneurial focus of the latest Budget and the key role market research has to play.

Budgets…I have to admit…I have never really taken much notice of them. It just seems that each time the budget comes around, my husband reminds himself that he must give up smoking – I remember him saying he would give up when they reached five pounds a packet…and that was ten years ago! It was only after talking to a friend who recently lost her job that we got into a discussion about the recent budget. She has been a trainer for over 15 years but because of the range of new start-up incentives offered in the March budget (such as the extension of the rate relief scheme, business rate holidays, corporation tax reductions, entrepreneurs tax relief, R&D tax credits and the introduction of enterprise zones), she is now considering setting up her own consultancy firm. I know it’s only one example, but the government’s strategy which promises to “tear down the barriers to enterprise” may have actually got people thinking. We may be about to witness a new start-up boom.

This took me back 15 years to my undergraduate business degree. One of the things I remember (and there isn’t very much) is the huge failure rate in new business start-ups. I rechecked the stats and the gloomy picture remains. Depending on the source, the rate of business failure in the first year varies from 30% to 50%. Even worse, of those start-ups that do survive, as many as 95% will fail in the first five years.

The reasons for failure make interesting reading. They include a variety of factors such as overexpansion, overspending, poor location, bad management, failure to change with the times, ineffective marketing, underestimating the competition…the list goes on…but a recurring theme is poor business planning and lack of research. Basically, a failure to truly understand the market (i.e. customer needs and preferences, their decision making processes, price sensitivity, and who they are up against). As such, it is clear that market research has a critical role to play in the government’s plan for growth. Market research provides the necessary ‘intelligence’ on which to make more informed business decisions and minimise start-up risk.

But hasn’t this always been the case? Haven’t we always seen peaks and troughs in business start-up activity and hasn’t market research always had a key role to play? The answer, of course, is yes on both counts but often the major barrier to market research is both cost and perceived need. On the first point, and particularly for new start-ups, finance is often tight (especially in the current climate). On the second point, when an idea is borne confidence is often high. You have an idea, you believe in that idea, so why spend money to confirm that it will work?

The arguments for market research remain the same. It makes complete sense to test an idea in the market place and tailor the concept before making a sizeable investment. In this current cycle, however, we believe that market research is better equipped to play its role than ever before. Market research can now be carried out more cost effectively than in the past as a result of advances in technology and the use of online survey techniques. Online market research eliminates the high costs involved with face-to-face, postal and telephone data collection. It also offers the benefits of speed and data reliability and eliminates the barriers often associated with global research. For a business which needs to gain a general view from a large cross-section of the population, in as short a time as possible, there is no doubt that online research offers a viable solution.

Any new business start-up or new product launch is inherently risky as it is a venture into the unknown. B2B International has shown that thorough, well planned research can accurately pinpoint the richest areas of opportunity and therefore prioritise the most promising areas for new start-ups and new product development.

To learn more about how B2B International can help you, contact our New Product Development Research Team.

Posted in Chrissie Douglas, New Product Development, Thursday Night Insight |
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The Hardest Word

In this week’s Thursday Night Insight, Julia Cupman draws the link between the simple act of apologizing, and increasing customer loyalty.

Have you ever been upset or angry by the words or actions of someone, but been ready to forgive and forget if only they could say sorry? As Elton John has sung numerous times, sorry seems to be the hardest word.

A couple of months ago, I returned to my apartment building to find 3 fire engines, 2 police cars, and an ambulance outside, and a lobby that was totally flooded with water. I later found out that a major water pipe had burst on the second floor, leaking 250,000 gallons of 180 degree water (the equivalent to a quarter of the amount of water in an Olympic sized swimming pool, but boiling)!

As you can imagine, this flood caused extensive damage to the building, in that it destroyed walls and flooring, and ruined the electrics – including the fire alarm system and all 5 elevators. As I live two thirds of the way up this 35 floor building, I was one of the many people who had to take the seemingly never-ending stairs for weeks, while our incompetent building management couldn’t arrange for the elevators to be fixed quickly.

In traipsing up and down the stairs each day, I noticed a common theme to the complaints of the residents around me: the building management hadn’t written to say sorry for the inconvenience caused. It occurred to me that anger was surmounting, not so much at the problem the building faced, but at management’s apparent inability to effectively resolve the problem.

As a market researcher, problem resolution is an issue I come across in virtually every customer satisfaction project I work on. There is always an angry respondent bitterly recounting how a problem was inadequately resolved by their supplier. It’s inevitable that in any company, problems will occur, but I have yet to come across an organization that has a procedure in place to respond to problems effectively. Indeed, it has been estimated that most companies spend around 98 percent of their time reacting to problems and less than 2 percent of their time preventing them.

Why do these companies struggle saying sorry? It’s probably because we live in a litigious society in which apologizing for an error or incident is synonymous with admitting liability. Rather than face expensive lawsuits, companies choose to deny, deflect, or defer responsibility. Anything but say sorry!

What these companies don’t realize is that an apology is actually a powerful relationship-building tool, for studies have shown that customers develop greater loyalty to a company if they have experienced problems that were satisfactorily resolved, than if they had never experienced a problem at all.

Of course resolving problems entails far more than simply apologizing. However, key drivers of customer satisfaction and loyalty are so often these smaller, softer things which seem so inconsequential and yet are so impactful. As for the management of my apartment building, it wouldn’t have cost them anything to send an apologetic e-mail to residents. Words are indeed cheap, but when it comes to illustrating the importance and value of your customers, saying sorry is priceless.

Posted in Customer Satisfaction, Julia Cupman, Loyalty, Thursday Night Insight |
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If I think this, what do you think?

In this week’s Thursday Night Insight Paul Hague reflects on his thoughts on completing the UK census form.

I have been a market researcher all my life. 40 years in fact. I love the job. It fulfils my intellectual curiosity, it indulges my love of travel, and it satisfies my desire for constant change – and yet I find it really difficult to take part in surveys. In the main I am protected from this by the Market Research Society guidelines that recommend most survey designers screen out the likes of me, knowing that my professional knowledge will bias my answers in some small degree.

However, last week I got my come-uppance. I returned home to find 32 pages of questions had thudded onto our welcome mat, with an introductory letter that informed me I would be incarcerated if I didn’t comply. Yippee – it is decennial census time. I looked at this daunting instrument of torture and I couldn’t begin to think how your average 85 year old, single gypsy, now separated from a same-sex relationship, would cope.

Fortified by three large glasses of sauvignon blanc, I decided to fill it in online. It was so easy I sailed through, congratulating myself and secure in the knowledge that the analysts who look at these things would be able to see that the time I had taken to complete the questionnaire was a world record. That was until I came to question 43, which asked me how many visitors would be in my house on the 27th March. Since I was pretty certain there wouldn’t be any, I looked for the button to say this and move on. However, there was no such button to tick. It seemed I had to have a visitor on the 27th or I was stuck.

I wondered whether Alfie, my 11-year-old boxer, would qualify but I couldn’t see any space for pets and animals in the form. I clearly needed a human visitor and I decided that to get out of the impasse I would invent one (I know, I know – I was risking a jail sentence, but by now I didn’t care). We often do have a couple of elderly relatives stay with us so why couldn’t I imagine that they were on one of their stop overs? In went Rosie’s name to start with, and this prompted a question about her date of birth. I had no idea and this was beginning to look ridiculous. I shouldn’t be making this up and, anyway, the more things I invented, the deeper the hole I dug myself into.

It was at this stage that my conscience was pricked and my head cleared slightly so I decided to work out what was going wrong. As I tracked back through the questionnaire, it became clear that in my slightly inebriated state I had incorrectly filled in question H5, which I thought had said how many people will be in the house on the 27th and it had, in fact, asked how many visitors would there be. Since I had answered 2 people, it was quite clear that this was the reason the computer-aided questionnaire was routing me to the visitor question.

So, what are my insights from all this? The experience of completing the questionnaire was better than the anticipation of doing so – which I was dreading. However, I found myself wondering about the futility of some of the questions. Surely the census is a head count of the people living in households and not much more. If we need to dig deeper on my thoughts and feelings such as the state of my health right now, or how well I can speak English (??), this is the stuff of sample surveys. Over-complication is a crime and we are over-complicating everything, including the design of our questionnaires.

Isn’t it a reflection of the politically correct world that we have to necessitate a special questionnaire for Welsh speakers and weird combinations of answers to which people can say they are British/English, simply British, simply English, British/Welsh, simply Welsh and so on. And please guess how many will actually tick the box that says they are Gypsy or Irish Traveller. Minorities must be looked after in our daily life but, in the case of a census, we should not be designing our process around 0.01% of any population.

I know that we have been keeping tabs on our population since the Doomsday book, but the census as we know it in the UK began in 1801. I don’t think anyone will shed any tears over the fact that this is our last one and from now on we will rely on sample surveys. My saving grace is that my completed form will be kept confidential for 100 years. So, unless I tell you, you won’t know that I am a surviving partner from a same-sex civil partnership, living in a holiday home, of any other Black/African/Caribbean/Black British extraction, holding an Irish passport, actively looking for work over the last four weeks and whose main language is British Sign Language.

Posted in Paul Hague, Questionnaire Design, Thursday Night Insight |
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