- Published: November 13, 2013
As we discuss in the Product Decisions tutorial, one of the most challenging goals for marketers is building a recognizable brand. Yet those who successful do this are likely to realize significant advantages, such as finding it easier to introduce new products, building a customer base that is intensely loyal and growing a name that may, by itself, be a financial asset (i.e., brand equity).
Getting to this level, however, often takes considerable time. While today a new brand may be recognized quickly, thanks in large part to social media and the Internet, getting to the point where the name itself holds value may take many years. But once the brand reaches the status of being highly recognizable, it may take on a distinct identity to its customers. For instance, for some customers a brand will convey mental images of benefits the brand offers, such as excitement, strength, high quality, etc. The effect is that when a customer faces a situation where they make a purchase to obtain a certain benefit, they may be more likely to think of a specific brand.
However, reaching such a high level of brand awareness can also create problems. A good example of this can be found in this Harvard Business School story, which discusses how the identity of a brand may also restrict its ability to expand its market. Specifically, the story explains how some brands develop a gender identity because they become associated with either female or male buyers. Consequently, attempts to broaden the market by promoting the brand to the opposite gender often becomes problematic. The story offers excellent examples and lessons of how brands have handled this situation. It includes examples from Coca-Cola, Porsche and Gillette.
- Published: November 11, 2013
A Doomsday Prepper is the name given to folks who are making survival plans just in case a major catastrophe strikes the earth or some other event impacts their existence. You may have seen them on cable TV and may have concluded that such folks are a little different. On these programs, viewers see Preppers from around the world engaged in activities, which they believe will increase their odds of survival just in case something disastrous does happens.
For instance, they are shown building underground bunkers, where they stockpile food and water, and equip their potential future home with basic household comforts, such as bunk beds and power generators. Viewers see them practicing for End-of-the World-as-We-Know-It events, including protecting their own safety by engaging in “war games.” Preppers also are shown learning to be self-subsistent by planting and harvesting their own crops.
What a viewer may also see is the time this group spends going into stores and shopping for products. This is certainly something marketers are seeing. As discussed in this Fortune story, Preppers are a growing market segment with money to spend. There are even conventions dedicated to this movement, where a wide variety of suppliers display their wares.
As the story notes, most of the suppliers presenting their products at these conventions are small businesses. It would seem leading brands are steering clear of this segment right now. But that may change if this movement continues to grow.
- Published: November 7, 2013
We recently discussed how the online payment systems (OPS) market may soon be a battle between PayPal and Amazon, with its Amazon Payments product. Into this mix, you can also throw in Google with its Google Checkout service. While these three may be the kings of the OPS business in America and a few other countries, anyone looking to sell their products internationally should be aware of other payment options that may be more receptive to customers within a particular country or region.
This story from Internet Retailer presents a worthwhile summary of other companies offering OPS. It includes discussion of the leading payment services in China (Alipay), Brazil (Boleto Bancário) and Japan (Konbini). The story provides examples of online sellers’ experiences with these systems and includes several intriguing statistics.
Bottom line, while PayPal, Amazon and Google offer strong services that support multiple currencies, as the story makes clear, companies wanting to be global sellers may find what works in one market does not necessarily work in other markets. Clearly an excellent example of why effective selling on a global scale requires extensive understanding of what is happening at the local level.
- Published: November 6, 2013
Here is a story that may seem to be a bit of a head scratcher. Amazon has determined, that for its Kindle digital products, a worthwhile market to pursue in order to expand distribution of these products are brick-and-mortar bookstores. That’s right. Amazon is targeting its distribution to the same people who view the company as the 800 pound gorilla of bookselling.
On the surface, this certainly seems strange. Yet upon closer inspection this plan offers potential value for both sides. For Amazon, this move could lead to sales of their digital devices increasing for a couple of reasons. First, more customers become aware that Amazon sells different types of digital products. Many may know that Amazon sells an e-reader but may not be aware of its tablet products. Second, those who see the products have an opportunity to physically experience these before making a purchase. Obviously, that is something that cannot be effectively done if the products only are sold online.
For bookstores, one advantage is that customers who purchase an Amazon digital device may also purchase other products at the store, such books and magazines. Also, a customer who buys the Amazon product may actually enjoy the atmosphere of the bookstore and may return to socialize. Thus, the bookstore may benefit from their return by selling non-reading products, such as coffee and music. Additionally, a sale of Amazon devices also helps the bookstore build a mailing list of customers. Finally, and most obvious, the bookstore makes some money from the markup of the devices.
So while Amazon’s distribution targeting strategy may seem strange, there could be benefits for both the seller and the retailers.
- Published: November 4, 2013
With the countdown to Twitter’s IPO underway, it is curious to see how many supposed experts believe this company is well positioned to become the next Google. While the odds are that will not happen, there are many others who believeTwitter will easily surpass the stock performance of Facebook, Linkedin and other recent technology companies.
Yet, anyone thinking this should take a step back and critically examine what Twitter, in its current form, really needs to do to make money. Yes, advertising holds the key for generating revenue, especially in the short-run. But that has to make some investors nervous. In fact, perhaps more nervous than when they invested in Facebook a couple years ago. At least with Facebook, many users visit this social media site on computers or tablets, where ads of different sizes can be seen. While for Twitter, many access the service on relatively small smartphone screens.
Additionally, Facebook has a base of users whose age demographic includes many who are over 30 years old and have money to spend. The Twitter demographic seems to be skewed younger, and while these folks may have money to spend, the breadth of spending is not as broad as spending by those over 30. For instance, there may not be enough Twitter users falling into the target market for purchasing minivans to convince Honda to promote its Odyssey brand. However, Facebook’s more balanced age demographic may appeal to Honda and other advertisers seeking older target markets.
But the age demographic of users is not Twitters’ only challenge. According to this New York Times story, the company also faces problems in getting customers outside the United States to respond to ads. As the story notes, while 75 percent of Twitter users are outside the U.S., these markets generate only 26 percent of revenue. Additionally, the company faces competition in some important global markets, such as in Japan, where local social media firms maintain a strong position.
Overall, a good story for anyone thinking about investing in this high flying social media company.