- Posted by: Paul Christ
If product marketers are asked to rank the most difficult tasks they face, the most likely responses will be something like: "it is hard coming up with new product ideas" or "we struggle deciding on what is the best price to charge" or "it is challenging finding distributors that are willing to sell our product" or "we rack our brains trying to come up with a great slogan". It is almost guaranteed that way down on the "challenges" list is deciding on what name to give to a new product. This is because many marketers view product naming as a secondary decision that can always be addressed later. That is, the challenge of giving a name to a product is not considered as critical as other issues they face.
Yet, as we discuss in our Product Decisions tutorial, product naming is one of the most important elements in establishing a respectable brand. Along with creating specialized features, such as a unique design, the name gives products an identity that may help separate it from competitive offerings. The name is also the leading element in product promotion as it is repeated over and over.
Naming is so important it has led to the creation of specialized marketing companies whose key service is to come up with brand names. However, these marketing specialist mostly target big companies, who can afford the large consulting fees that are charged. Smaller companies searching for a brand name must do so in-house, and this is not always easy. They often lack the skills or research capacity to figure out what names may grab the attention of potential customers. They also may not be fully informed of the legal consequences for adopting a name that may infringe on the same name owned by someone else. Others find it hard to come up with a name because Internet trolls have swooped in and registered the domain name and potentially hold it hostage unless someone is willing to fork over large sums.
A good example of smaller companies facing naming challenges can be found in the craft beer industry. As discussed in this National Public Radio story, craft breweries are among the most innovative industries when it comes to new product. However, the proliferation of products has led to problems with name creation. In some cases brewers, who have named a product, are discovering that other companies have already trademarked the name, and this has led to legal battles. What is particularly interesting is that nearly all words that are associated with beer and brewing have already been trademarked to the extent that it is nearly impossible to name a beer with these words. The story also notes that the issue is not limited to words. Trademarked images appearing on craft beers is also resulting in legal battles.
- Posted by: Paul Christ
As we post for the final time in 2014, we prepare for next year by looking back on several topics we tagged as Marketing Trends that are bound to become news again in 2015. Here are a few of our favorite trends and some of the comments we made about these.
- Apps Get Even Bigger – In February, the future of retailing was discussed when we looked at how big restaurants were testing the use of mobile device apps to allow customers to place orders. Based on a USA Today story, the focus was on Taco Bell's use of a new app and we noted: "While this app offers many customer-friendly options, such as menus that update depending on the time of day and maps displaying the closest store, this technology also provides a number of appealing features for Taco Bell, including the ability to suggest (i.e., upsell) customers on additional items and the use of GPS tracking that will alert the restaurant when the customer is getting close to the store."
- The Robot Invasion – Since the dawn of the modern economy, sometime after the Industrial Revolution, it has been a never-ending goal of marketers to wring costs out of product distribution. Technology and process innovation are continual and, as we noted in a December post, Amazon's use of warehouse robots is a terrific example: "As explained in this National Public Radio story, Amazon is using specialized robots programmed to bring products to employees who fill the orders. According to the story, Amazon uses over 15,000 robots in its warehouses."
- The Need for Salespeople to Adapt – While robots are changing retail distribution, changes in who makes the final buying decision is affecting somes sales professions. As we discussed in a September post, a Wall Street Journal story examined this issue in the health care industry. They found that fewer doctors now make the drug choice decision and instead that role has, in some cases, shifted to non-doctors: "Because more and more doctors are joining health care systems, such as large group practices and hospitals, decisions on drug choice is beginning to shift away from doctors and, instead, is being handled by someone in management, who may not even be a doctor. In these situations, sales reps may find that speaking with a non-doctor about a drug may be more important than speaking with a prescribing physician."
- The Business of Marijuana – Another retail issue that caught our attention in May was the developing market for legalized marijuana that was discussed in a National Public Radio story. While many people in the U.S. are against legalization, there is no question that it is generating big money for the states that permit it to be sold. It is also creating marketing challenges for companies in this business: "As the market grows, it will also be fascinating to see the retail strategies marketers use to broaden distribution. Currently, these products are sold within small independent retail stores, but some day we may see marijuana sold in large corporate chain stores and retail franchises."
- Watch Out for Generation Z – In a post we made last week, we talked about the growing importance of the Millennial generation. However, back in July we mentioned the emergence of another generation that will also have a significant impact, Generation Z. Yet, marketers need to beware that this group may be quite different then those they currently target: "The Gen Z group represents consumers born after the mid-1990s. According to this story in Shopper Marketing, this group possesses certain traits that set them apart from previous generations with the most notable being that they are the first generation to have always been exposed to the Internet."
- Managing Social Media – Finally, there is no doubt about the power social media brings to marketing. By now nearly every company that cares about marketing is using some form of social media. And more are going a lot farther than just tweeting or posting to Facebook. For instance, in September we reported on another National Public Radio story that captured the importance sports marketers are realizing about controlling social media: "Copying the strategies undertaken by leading consumer products firms, these sports organizations have created social media command centers, which are supported by advanced data analytics software and are outfitted with multiple computer screens that display what is happening in real-time on social media."
These are just a few issues that caught our attention this year and that we suspect will be heard from again in 2015.
From everyone at KnowThis.com - Happy New Year!
- Posted by: Paul Christ
As we reach the end of 2014, many publications and informational websites are offering stories that look back at what has happened during the year and also provide a glimpse into what may occur in the future. At KnowThis.com we are not immune to using this journalistic approach, so with this post we also look back and look forward to a critical marketing trend: the Millennial generation. Back in 2010, we first discussed this group, which are generally defined as those being born between the mid-1980s and the early 2000s, and we noted that a distinct characteristic of of Millennials is the impact technology has had on their lives and how that may shape their purchasing habits. Nearly five years later, two stories offer even more evidence of the impact of this demographic segment.
As discussed in this Entrepreneur Magazine story, a large number of Millennials are college students. In fact, in the U.S. there are 12.6 million college students between the ages of 18 and 24. Moreover, their purchasing power right now is significant. Besides what they spend on direct college expenses (e.g., tuition, room & board, books), they spend a whopping $163 billion on so-called "discretionary items" such as food, smartphones and clothing.
Of course, leading marketers are well aware of the buying power of this generational group, and they direct considerable marketing dollars to gain Millennials' attention. For example, another story in Advertising Age lists the top 10 most popular advertisements among Millennials for 2014. It is likely not too surprising that six of the ten spots are taken up by food establishments, including Wendy's (#1), IHOP (#2) and Papa John's (#5).
While Millennials represent a healthy spending group that currently attracts the attention of select marketers, it will not be for another five or ten years before many other marketers consider them to be part of their target market. This is the time when Millennials will become an even more powerful force as they move into stable careers and begin to have families, thus leading to increased purchasing power. It will be interesting to see if the companies, who are presently doing well among Millennials, will continue to retain their support as Millennials grow older.
- Posted by: Paul Christ
At KnowThis.com, we love the idea of neuromarketing research. For those unfamiliar, neuromarketing is when marketers use techniques associated with neuroscience to help obtain information that may affect marketing decisions. As the name implies, neuroscience is all about the study of the brain. Thus, neuromarketing research is about understanding what is happening in customers' brains and then using this to produce positive marketing results.
We talked about neuromarketing research a few years back when we discussed different research techniques that fall under the neuroscience category. We also have listed several stories dealing with neuromarketing and neuroscience.
Now we have another example of neuromarketing research. This one comes from Knowledge@Wharton, and it discusses how price can impact customers' decision making. The researchers in this story evaluated customers (i.e., subjects) while they laid on a table hooked to an MRI brain scanner. The subjects were then presented with a picture showing either a price with no other information or a product with no other information. This was then followed by an image of the product and price together. Results were evaluated in terms of brain activity and indicated that, depending on whether they saw the price first or the product first, subject's brain activity was quite different when shown pictures of both the product and price together.
Following these results, the researchers continued their study outside the MRI scanner, and the results are quite interesting. We will leave it to you to see what they found, though the implications for marketers when it comes to when to lead with price is quite intriquing.
- Posted by: Paul Christ
Marketing research often gets a bad rap for being too analytical, too time-consuming and too complicated for the non-researcher to understand. There is no doubt, for the untrained, research can be tough to fully grasp, especially research intended to help predict how something will happen (e.g., how many customers will purchase of a new product). But, as we note in our Marketing Research tutorial, if marketers want to feel comfortable relying on the results of information obtained from research, then research must be valid and reliable. Only then can the data gathered be useful for helping with marketing decisions. Yet, understanding the concepts needed for research results to pass the necessary tests of validity and reliablity is not easy. It often takes a highly trained and experienced researchers to make sure this happens. If the research is conducted by someone with less experience or education, then the results obtained from research may prove to be useless.
While many critical marketing decisions require research be obtained using strict rules, there are many other types of research that offer insight into what is happening in a market without being highly scientific. A good example are studies of market trends, which look at actual results of something that has already occurred, as opposed to predicting future results. Most of the time these studies are available to anyone (albeit sometimes for a fee), rather than being something the marketer must collect by doing their own research. What is nice about trend studies is that looking back at where things were some time ago may offer hints about what will happen in the future. For instance, when looking at trends of market competitors and how they have fared over a specified timeframe, two big questions come to mind: 1) why have the successful ones succeeded and 2) why have the unsuccessful ones failed.
A great example of this can be seen in this story from the Washington Post. It reports on an 18 year history of the top 20 Internet properties in the U.S. by year going back to 1996. While the results are only for traffic rankings in December of each year, the information is still fascinating. Only two properties out of the top 20 listed from 1996 are still in the top 20 now (can you name them?). A number of the 1996 properties were educational institutions, which is not surprising since that is where the Internet was born, while a few others are long gone (remember Prodigy, Infoseek or Webcrawler?).
The information is presented in a table showing how sites have evolved over time. Overall, this is not only a fun stroll down memory lane, but also a good example of how market segments have evolved. For instance, the 1999 list shows four Internet search sites, Lycos, Excite, About, and AltaVista, that would be dead within a few years thanks to Google's innovative search platform.