MGM Casino is seeking marketing alliances with various gaming companies and other companies outside of Nevada as it is approaching the beginning/kick-off its new customer loyalty program. MGM is seeking potential alliances with other regional U.S. Operators along with American Indian Operators across various parts of the United States in an effort to extend it's customer reach and to add to it's customer database. It has realized that the market has changed and their business model/practices also need to change. Simply building new restaurants, renovating existing restaurants, new hotel towers, etc. are not going to attract new customers or existing customers as they did previously. For example, MGM has partnered with overseas casino companies, hotel groups, cruise lines and retailers to create marketing deals offering tailored rewards to attract players to Las Vegas. They feel that the incentive programs/deals with allow them to capture consumers attention and get them in their casinos gambling, enjoying shows, and staying in their hotels.
In addition, MGM is looking to revamp and redesign its customer database. They feel they failed in gathering relevant customer data in the past. The new database will track customer total spending and various customer preferences, this data will allow them to tailor incentives and make rewards more transparent and tiered. The company wants to boost loyalty by offering existing customers experiences they cannot buy, such as high-roller treatment and access to celebrities, chefs and backstage events. They want to make their casinos a unique and tailor experience that other venues can not provide.
I found this article rather interesting for many reasons. One, it deals with Casinos which are typically alot of fun, I will admit, I have visited the MGM in Detroit quite a few times. Two, it focuses on many of the concepts we have discussed and will be discussing throughout the course of this program. It stresses the importance of how the market is changing and how you have to adapt to retain consumer loyalty and keep them wanting to come back time and time again. By creating the new loyalty program, they are trying to increase/create value for their customers. In addition, they are focusing on a customer-centric approach by the utilization of their enhanced customer database. Through the database, they are able to obtain information and more accurately understand consumer spending and needs. They can use this data to tailor their casinos and facilities to better accommodate customer needs.
Questions to the Class:
1) Do you think the loyalty program is a good idea? Will it draw more visitors?
2) Do you think it's wise to track all visitor spending versus just gambling spending?
3) Would loyalty programs grab your attention?
Saturday, January 15, 2011
Thursday, January 13, 2011
Customer Service: Better than Advertising
Source: http://www.prnewswire.com/news-releases/customer-service-is-a-primary-factor-in-consumer-choice-to-buy-again-and-recommend-to-friends-finds-spherion-survey-113269094.html
This article discusses the increasing importance of customer service as it relates to repeat business, growth in market share, and customer engagement. A survey found that customer service is more important to consumers than advertising and second only to price and quality. The article echoes some of the very same concepts discussed in our class readings. Most notably: "[H]old employees of all levels...accountable to meeting customer expectations." Taken further, mass marketing may not be as effective or as crucial as the service quality traits of front line staff.
What traits make up good service? This passage says it all: "...the most important were also the simplest. Courteous and well-mannered treatment...clear communication...competency and knowledge...ability to resolve issues in a timely manner, attentiveness and expectations being met. "
The gravity of the issue becomes clearer when the following is considered: Almost 50% of clients that have a negative experience with a company demand apologies and/or monetary incentives before coming back. Over 10% of wronged customers will not come back at all. Further compounding this is a phenomenon that, as of recent times, is commanding greater influence than traditional mass marketing: Customers will share these experiences within their online social networks. The result is an information exchange between consumers and their friends (i.e. potential new customers) that can help a business grow its market share or, in the event of bad customer service experiences, may even prove damaging.
To my classmates:
1) I am curious if your organizations, b2b firms included, formally recognize these concepts discussed above.
2) What are the "simple" things that you or your employees do to provide great customer service? Are there ways to track/enforce the use of good customer service behaviors?
3) Have you ever apologized to a customer and, as a result, gained a "raving fan"?
4) How can these concepts be useful in non-customer facing positions (managers included)? For the back office, is this even on the radar? Does customer service, as described in the article, really matter in strictly b2b situations between massive corporations?
This article discusses the increasing importance of customer service as it relates to repeat business, growth in market share, and customer engagement. A survey found that customer service is more important to consumers than advertising and second only to price and quality. The article echoes some of the very same concepts discussed in our class readings. Most notably: "[H]old employees of all levels...accountable to meeting customer expectations." Taken further, mass marketing may not be as effective or as crucial as the service quality traits of front line staff.
What traits make up good service? This passage says it all: "...the most important were also the simplest. Courteous and well-mannered treatment...clear communication...competency and knowledge...ability to resolve issues in a timely manner, attentiveness and expectations being met. "
The gravity of the issue becomes clearer when the following is considered: Almost 50% of clients that have a negative experience with a company demand apologies and/or monetary incentives before coming back. Over 10% of wronged customers will not come back at all. Further compounding this is a phenomenon that, as of recent times, is commanding greater influence than traditional mass marketing: Customers will share these experiences within their online social networks. The result is an information exchange between consumers and their friends (i.e. potential new customers) that can help a business grow its market share or, in the event of bad customer service experiences, may even prove damaging.
To my classmates:
1) I am curious if your organizations, b2b firms included, formally recognize these concepts discussed above.
2) What are the "simple" things that you or your employees do to provide great customer service? Are there ways to track/enforce the use of good customer service behaviors?
3) Have you ever apologized to a customer and, as a result, gained a "raving fan"?
4) How can these concepts be useful in non-customer facing positions (managers included)? For the back office, is this even on the radar? Does customer service, as described in the article, really matter in strictly b2b situations between massive corporations?
Credit card trends: Higher rates, richer perks
After reviewing several articles with our favorite subjects, such as Starbucks, Apple, Cell phones and the like, I determined some diversity would be interesting. How about a product/service we all hate. Credit cards and credit. This article discusses some key trends that credit cards are marketing or implementing. Some will be perceived as positive and some negative from a customer perspective. Government regulations and credit issues are forcing some of the trends, but others are efforts by the credit card companies in order to grow or improve profitability and market share given these new regulations. Some of these trends could present an opportunity to customers to lower their costs.
First, offers via mail doubled in 2010 vs. 2009 which was the lowest volume in 16 years. Due to new regulations limiting profit off of less reliable customer there is a strong effort to increase share in the customer segments with good credit.
Second, incentives to switch are improving. Balance transfer incentives had been reduced through the recession but are on the rise again. Companies are holding 0% interest for longer periods as well as lowering balance transfer fees.
Third, rewards are getting richer, but more complicated. While this makes comparison difficult and time consuming, picking the right card may have significantly more rewards for the right customer.
Forth, higher rates are continuing due to regulations.
Finally, some companies are going with high tech solutions like making payments via a smart phones and cards that allow you to select pay by credit or from earned points depending on the button selected on the card.
Questions for the group:
1. How many of you have recently changed cards due to new credit card regulations and fee/agreement changes to an existing card?
2. What types of incentives are perks have caused you to switch card companies?
3. What types of issues have caused you to cancel cards?
4. What is a perk or service you wish your credit card company offered?
First, offers via mail doubled in 2010 vs. 2009 which was the lowest volume in 16 years. Due to new regulations limiting profit off of less reliable customer there is a strong effort to increase share in the customer segments with good credit.
Second, incentives to switch are improving. Balance transfer incentives had been reduced through the recession but are on the rise again. Companies are holding 0% interest for longer periods as well as lowering balance transfer fees.
Third, rewards are getting richer, but more complicated. While this makes comparison difficult and time consuming, picking the right card may have significantly more rewards for the right customer.
Forth, higher rates are continuing due to regulations.
Finally, some companies are going with high tech solutions like making payments via a smart phones and cards that allow you to select pay by credit or from earned points depending on the button selected on the card.
Questions for the group:
1. How many of you have recently changed cards due to new credit card regulations and fee/agreement changes to an existing card?
2. What types of incentives are perks have caused you to switch card companies?
3. What types of issues have caused you to cancel cards?
4. What is a perk or service you wish your credit card company offered?
Wednesday, January 12, 2011
Four Simple Steps For Better Online Marketing
The article referenced mentions four steps to improve online marketing.
1. Know Your Customer: This is important because ultimately they are the ones you want to target your advertising at. There are a few questions to consider when applying this step such as: Does my customer work out of the home or in the home? What is the net household income of my customer?
Relating this back to the lecture, this is all about customer analysis. Segmentation, targeting, and understanding the customers needs, wants, and decision making processes all tie into this step.
2. Know Your Marketing Options: After figuring out the market that you plan to target, a coordinated effort across several sites and avenues used by customers will be most effective. Repetition is important, along with considering the best option for what kinds of sites to use are both important in the strategy.
The lecture spoke less about advertising specifically, but overall the ultimate goal of customer analysis is to know how to reach them better. One thing that this step can allude to, however, is mass marketing. Blasting ads across a large number of sites is a product-centric strategy, where focusing on the customer is paramount.
3. Budget: This point deals mainly with setting a budget level that you are not willing to exceed. This can include considerations for what type of marketing you would like to do, as well as resource outsourcing or not. There are distinct trade offs to outsourcing in that relate to cost vs control and considering those is an important step.
In the lecture, One of the main sections of creating a marketing plan is scope. Budget is an important part of the scope of a marketing plan, but what is important to remember is that is still just a part of the scope. The scope of the marketing plan needs to include things such as the breadth and depth of the plan for each target market. It needs to include what product line that will be pushed for the plan. With a clear and distinct scope, you will get more out of this step that just a simple budget.
4. Measure What Matters: Develop key metrics for the marketing plan – gross sales revenue, (marketing) cost per sale, and ROI by each marketing campaign. don’t under estimate the value of customer feedback, even if it’s informally via forums or blogs.
Paralytics are important with any business endeavor, because without measuring how you have done, how do you know if you need improvement? The lecture does not specifically speak to analytics, but one would assume that after the execution of any marketing plan, quantitative and qualitative data will need to be collected to measure the success of the plan. Whether this is profits, sales, market share, customer loyalty, or brand recognition, measuring the plan is essential to continuing to improve your business's processes.
Questions to Consider:
1. This article spoke specifically about marketing tips for online sales. Do these intrinsically differ from marketing strategies in other mediums? (e.g. retail stores). What would one do differently, or how would a marketing plan change if your products were sold exclusively online?
2. The second point in the article spoke specifically about advertising across several sites. This alluded to the product-centric mass marketing techniques which we are trying to avoid. How could companies work to be customer-centric when exclusively advertising online? Do companies such as Amazon and Google take a customer-centric approach when it comes to marketing? Is it even possible to achieve this in an all online environment?
1. Know Your Customer: This is important because ultimately they are the ones you want to target your advertising at. There are a few questions to consider when applying this step such as: Does my customer work out of the home or in the home? What is the net household income of my customer?
Relating this back to the lecture, this is all about customer analysis. Segmentation, targeting, and understanding the customers needs, wants, and decision making processes all tie into this step.
2. Know Your Marketing Options: After figuring out the market that you plan to target, a coordinated effort across several sites and avenues used by customers will be most effective. Repetition is important, along with considering the best option for what kinds of sites to use are both important in the strategy.
The lecture spoke less about advertising specifically, but overall the ultimate goal of customer analysis is to know how to reach them better. One thing that this step can allude to, however, is mass marketing. Blasting ads across a large number of sites is a product-centric strategy, where focusing on the customer is paramount.
3. Budget: This point deals mainly with setting a budget level that you are not willing to exceed. This can include considerations for what type of marketing you would like to do, as well as resource outsourcing or not. There are distinct trade offs to outsourcing in that relate to cost vs control and considering those is an important step.
In the lecture, One of the main sections of creating a marketing plan is scope. Budget is an important part of the scope of a marketing plan, but what is important to remember is that is still just a part of the scope. The scope of the marketing plan needs to include things such as the breadth and depth of the plan for each target market. It needs to include what product line that will be pushed for the plan. With a clear and distinct scope, you will get more out of this step that just a simple budget.
4. Measure What Matters: Develop key metrics for the marketing plan – gross sales revenue, (marketing) cost per sale, and ROI by each marketing campaign. don’t under estimate the value of customer feedback, even if it’s informally via forums or blogs.
Paralytics are important with any business endeavor, because without measuring how you have done, how do you know if you need improvement? The lecture does not specifically speak to analytics, but one would assume that after the execution of any marketing plan, quantitative and qualitative data will need to be collected to measure the success of the plan. Whether this is profits, sales, market share, customer loyalty, or brand recognition, measuring the plan is essential to continuing to improve your business's processes.
Questions to Consider:
1. This article spoke specifically about marketing tips for online sales. Do these intrinsically differ from marketing strategies in other mediums? (e.g. retail stores). What would one do differently, or how would a marketing plan change if your products were sold exclusively online?
2. The second point in the article spoke specifically about advertising across several sites. This alluded to the product-centric mass marketing techniques which we are trying to avoid. How could companies work to be customer-centric when exclusively advertising online? Do companies such as Amazon and Google take a customer-centric approach when it comes to marketing? Is it even possible to achieve this in an all online environment?
Tuesday, January 11, 2011
7 Steps to Market Segmentation
As a core marketing concept, market segmentation can play a very large role to the success of the a comprehensive marketing plan. The article referenced in the link gave a 7 step process to improve the process of market segmentation.
1. Determine broad market- most companies have previously preformed this step and already know what market they would like to enter or they may already me a part of a market.
2. Collecting info about and determining customer needs- this step is basically putting yourself in the consumers shoes and detailing the needs of consumers in this broad market.
3. Narrowing the market- by creating sub-markets a company may be able to determine certain needs that they may be able to satisfy or not. Including demographics in the narrowing of the sub-markets often helps.
4. Determining dimensions- during step three the sub markets were created and there were certain dimensions of potential consumers that was a determining dimension that placed them into the respective sub-market.
5. Naming sub markets- naming the sub markets by their determining dimension can be useful.
6. Evaluate behavior- by looking at the consumer behavior of each market and what triggers it can be very useful to a company when looking at what products they may be offering to each market.
7. Estimating the market size- by estimating the market size the company can make sales forecast and start preparing their marketing mix to enter each of the selected markets.
Questions to consider:
Do these steps work across different industries? I work in health care and I'm not really sure that this steps could be applied directly to our marketing plan.
The steps listed above fail to mention "determining the most opportunistic markets for your offerings" as mentioned in the class text, which I feel is one of the most important to successful marketing, what other major steps to you feel the article is lacking?
1. Determine broad market- most companies have previously preformed this step and already know what market they would like to enter or they may already me a part of a market.
2. Collecting info about and determining customer needs- this step is basically putting yourself in the consumers shoes and detailing the needs of consumers in this broad market.
3. Narrowing the market- by creating sub-markets a company may be able to determine certain needs that they may be able to satisfy or not. Including demographics in the narrowing of the sub-markets often helps.
4. Determining dimensions- during step three the sub markets were created and there were certain dimensions of potential consumers that was a determining dimension that placed them into the respective sub-market.
5. Naming sub markets- naming the sub markets by their determining dimension can be useful.
6. Evaluate behavior- by looking at the consumer behavior of each market and what triggers it can be very useful to a company when looking at what products they may be offering to each market.
7. Estimating the market size- by estimating the market size the company can make sales forecast and start preparing their marketing mix to enter each of the selected markets.
Questions to consider:
Do these steps work across different industries? I work in health care and I'm not really sure that this steps could be applied directly to our marketing plan.
The steps listed above fail to mention "determining the most opportunistic markets for your offerings" as mentioned in the class text, which I feel is one of the most important to successful marketing, what other major steps to you feel the article is lacking?
Receiving Daily News Exclusively
With Apple and its ever expanding product line a focus in our case studies I thought this article and short announcement would generate some interesting conversation.
The article focuses on News Corp's launch of the IPad online news source, "The Daily". With the launch expected for January 19th after weeks of dry runs to a selected few IPad users it is creating some web as well as televised buzz. My question to you is can a news source that is created for an exclusive market (the IPad user) encompass a true daily news view or will "The Daily" become a marketing and political tool for this niche market share? Will "The Daily" survive amongst other news competitors who already provide this to IPad users and have a history with their readers?
The article focuses on News Corp's launch of the IPad online news source, "The Daily". With the launch expected for January 19th after weeks of dry runs to a selected few IPad users it is creating some web as well as televised buzz. My question to you is can a news source that is created for an exclusive market (the IPad user) encompass a true daily news view or will "The Daily" become a marketing and political tool for this niche market share? Will "The Daily" survive amongst other news competitors who already provide this to IPad users and have a history with their readers?
Monday, January 10, 2011
King of the Castle?
http://money.cnn.com/2010/09/03/news/companies/burger_king_buyout.fortune/index.htm?iid=EAL
Brief Introduction
Burger King is in disarray though it still remains the #2 competitor in the Fast-Food industry to McDonald's. It was bought out in the early 4th Quarter 2010 by a Brazilian-backed private equity firm, 3G Capital, amid a previous recessionary period of two years that should have steered more demand towards its cheap lunches and dinners. It doesn't help that McDonald's share value has risen 14% in the two-year period (prior to September 2010) while BK's has plummeted 36%. What new initiatives can Burger King's new ownership implement to put the King back on the throne?
Marketing Strategies to Analyze
Brief Introduction
Burger King is in disarray though it still remains the #2 competitor in the Fast-Food industry to McDonald's. It was bought out in the early 4th Quarter 2010 by a Brazilian-backed private equity firm, 3G Capital, amid a previous recessionary period of two years that should have steered more demand towards its cheap lunches and dinners. It doesn't help that McDonald's share value has risen 14% in the two-year period (prior to September 2010) while BK's has plummeted 36%. What new initiatives can Burger King's new ownership implement to put the King back on the throne?
Marketing Strategies to Analyze
- McDonald's has remained successful by augmenting its value offering with high-margin items such as the Angus Burger. Customers have responded tepidly with BK's Steakhouse XT and Fire Grilled Ribs.
- Burger King failed with the loss-leader approach of promoting $1 Double Cheeseburgers to generate higher-margin beverage and fries sales. This action infuriated franchisees because of the below-cost position they were forced to accept. A lawsuit shortly ensued.
- BK executives are blaming the economy on affecting its core market: young men. However, it continues to target this market while McDonald's is successfully pursuing a range of demographics from young men to families.
- Burger King is investing between $300K - $600K for all 12,000 of its stores to introduce rotating chandeliers, electronic-screen menu's, and brick/corrugate steel. Some question whether BK is also trying to compete with casual chains such as Chipotle, Panera, and Applebee's.
- Why has McDonald's thrived at the "Barbell Strategy" whereas Burger King has stumbled on a number of occasions?
- What price point position should Burger King follow (or continue to follow) to successfully compete with McDonald's? Value? Higher-margin item introductions? A combination?
- Should BK stick with its target market of young men? What should it do differently to win back this segment? Should the fast-food chain attempt to penetrate various demographics since McDonald's approach has worked?
- What is Burger King trying to accomplish by disbursing a large allocation of funds for its stores' makeovers while top-line growth continues to drop? Won't the new ownership look to cut costs? Why is this avenue being pursued if McDonald's can grow value without redesigning its restaurants? Does BK intend to compete with the burrito and sit-down restaurant chains of the world? For what purpose?
Starbuck's One More Time
What's one more discussion of Starbucks amongst MBA Classes and friends?
The article is interesting to the extent that the logo and transition can even register on the minds of corporate leadership at the level that it does. I found myself thinking, who cares? I suppose that is why I haven't had any offers to become a CMO lately, but then again, perhaps this is why they have the shortest tenure of any of the Executive Suite...However, I did find the last paragraph stimulating.
"Starbucks sees other changes ahead under its new banner: it's testing a system for customers to order and pay for coffee by mobile phone. It's seeking a way for rewards card holders to earn points buying Starbucks products at grocers or other stores. And it's considering offering beer and wine at night in some of its cafes. Starbucks also suggested it is looking at new food business opportunities, though company officials would not disclose details."
Are you kidding, beer, lounging, free Wi-fi, studying for PIM 862 with a beer in your hand. I'm in, how about you?
4 Internet Marketing Trends for 2011
This article discusses 4 trends of marketing to consumers through internet channels in 2011. I was interested in new and developing trends in marketing for the new year and I found this article pretty quickly.
In class, we discussed the difficulty in measuring the value of marketing and which form of organization a company should take to either implement or monitor its marketing strategy. The trends the article discusses are:
1. The Return of Direct Marketing - Here, the article discusses direct response marketing using the various internet vehicles in order to gain insight about your customers. The article discusses that 87% of adults spend time using "social media."
2. The Raise of Social Metrics - Here, the article discusses a few different ways to monitor internet marketing so that the campaign can be measured and "fine tuned" to reach your desired target market. The article specifically uses twitter activity to monitor topics that got the most attention. In addition, it explains that email can also be used to measure the effectiveness of communicating with your customer.
3. Focus Shifts from Tactical to Strategic - Here, the article predicts that companies will become more social embracing and utilize the "Hub-and-Spoke" organization to better reach customers.
4. Video Marketing Becomes Mainstream - Here, the article discusses that video marketing will be on the rise because the cost of video is decreasing, videos (like Utube) are watched more than searches are done on Google, and videos generally list first in Google searches.
At this time, I guess I will pose a few questions to the class.
Do you think more organizations will implement marketing plans in the "Hub-and-Spoke" model? Do you think a majority of companies are "Hub-and-Spoke" already?
Do you expect to see more video advertising on the internet? If so, where do you expect to see the increased videos as far as social media is concerned?
Disclaimer: Now, I am not sure whether or not this article, and its data, is reputtable, but it does make some logical points and I found it relevant to the class materials.
In class, we discussed the difficulty in measuring the value of marketing and which form of organization a company should take to either implement or monitor its marketing strategy. The trends the article discusses are:
1. The Return of Direct Marketing - Here, the article discusses direct response marketing using the various internet vehicles in order to gain insight about your customers. The article discusses that 87% of adults spend time using "social media."
2. The Raise of Social Metrics - Here, the article discusses a few different ways to monitor internet marketing so that the campaign can be measured and "fine tuned" to reach your desired target market. The article specifically uses twitter activity to monitor topics that got the most attention. In addition, it explains that email can also be used to measure the effectiveness of communicating with your customer.
3. Focus Shifts from Tactical to Strategic - Here, the article predicts that companies will become more social embracing and utilize the "Hub-and-Spoke" organization to better reach customers.
4. Video Marketing Becomes Mainstream - Here, the article discusses that video marketing will be on the rise because the cost of video is decreasing, videos (like Utube) are watched more than searches are done on Google, and videos generally list first in Google searches.
At this time, I guess I will pose a few questions to the class.
Do you think more organizations will implement marketing plans in the "Hub-and-Spoke" model? Do you think a majority of companies are "Hub-and-Spoke" already?
Do you expect to see more video advertising on the internet? If so, where do you expect to see the increased videos as far as social media is concerned?
Disclaimer: Now, I am not sure whether or not this article, and its data, is reputtable, but it does make some logical points and I found it relevant to the class materials.
Customer Lifetime Value vs. Lifetime Value for your customer........ So how much value do you really add?
_"What It Takes To Win With B2B Customers" by D. Keith Pigues
Read more: http://www.cmo.com/strategy/what-it-takes-win-b2b-customers#ixzz1AgJr9tF5
Customer Lifetime Value vs. Lifetime Value for your customer........ So how much value do you really add?
The topic introduced within this article should become critical additions when performing customer and competitive analysis's. Customer Lifetime Value for most of our employers represents how much we think we can sell them vs. how much we think we can make them as a result of being our customer. I feel the authors point is incredibly valid to helping reconnect and retain customers. One method I have attempted to implement at my last employer was to reallocate some existing sales resources and re brand them as the "Success Team". This team would engage once the deal was closed to capture some current "as-is" metrics, document what those metrics would need to become on order to be considered a success, also known as the desired "to-be". Then coach and mentor the customer to obtain some "success metrics" , and eventually a "customer reference". While my attempt at implementing change wasn't successful, this article proves the need to engage your B2B clients in this manner is very important.
Below are a few questions for consideration and open discussion:
- Does anyone have any examples of their company or companies you know engaging their client base using this authors approach to understanding how they win?
- How open do you think your clients would be to sharing "how they win or lose with you" ?
- At a glance do you feel your current sales force could pull this off starting next week or would you need to retool, retrain and or use a different internal or external group to gather this info?
-Kevin Robinson
Facebook's New Golden Rule
I found this article interesting and a good reminder to remember who your customer is and how they would like to be interacted with. You need to understand the demographic of the customers you are marketing to and meet them with the appropriate media type that fits their lifestyle. The article states that by doing so you can increase their customer lifetime value. This concept ties in with our first article Rethinking Marketing but even to a deeper level of understanding the type of media and media delivery they react with best. The takeaway of this article is to live a marketing media mix day in the life of your target customer.
Does anyone have experience with target marketing using social media or mobile apps?
Is anyone collecting metrics for determining their customers' lifetime value?
(Effectively) Define 'Displace' to Change Responses to Your Value Proposition
As a tie-in to our recent conversations about the Four P's and similar discussions on value propositions, I found a recent article in Harvard Business Review that highlights an often overlooked opportunity by marketers - effectively defining opportunity costs to change the way customers view your value proposition.
Shane Frederick makes the point that persuasively spelling out the implications of purchasing decisions through opportunity costs can make your promotions more effective, depending on what the consumer could imagine purchasing with that same dollar. However, Frederick does point out that if done poorly, spelling out opportunity costs could cause consumers to "downgrade."
"The same logic that leads people to choose the silver over the gold could lead them to choose the bronze over the silver," Frederick said.
Markets should also be careful to highlight something the decision maker actually values. He gave the example of an antiwar website describing the cost of war in terms of how many Twinkies/year taxpayers had given up to fund the overseas efforts - probably not the best link.
If you're marketing an expensive product, cast the opportunities given up as something unattractive or unimportant, according to Frederick.
In the end, marketers need to make sure they take the extra time to (effectively) define what is being displaced to shape the way consumers view a value proposition in a manner that provides benefit to both parties - while making the intended sale.
Are you currently doing any promotions that highlight opportunity costs? Have you done any in the past? Or, have you noticed any promotions of this type recently?
Product Placement – Advertising intelligently or offending the consumer
The attached article describes how the United Kingdom has recently decided to follow in the footsteps of the United States and allow product placement in television programming. The rational behind lifting the ban on product placement, also known as embedded advertising, is that it enables television programmers in the UK to compete against other European countries that do not ban the practice.
From a marketing student’s perspective I find product placement interesting because it provides an additional medium for the advertiser to remind the consumer of the value proposition. Brand value can be increased if the product is linked to an influential person or a positive emotional experience. From a consumer’s perspective I’ve always been aware of product placement and really didn’t mind as long as it remained limited to rap videos and American Idol. Unfortunately, it seems product placement is showing up increasingly in movies, songs, videos, and television and that it is impossible to avoid this unsolicited advertising.
What are your thoughts on product placement? Do you find it annoying, effective, or do you even notice it at all?
I’ll leave you with another stakeholder’s perspective on product placement – the artist. In the attached YouTube clip director David Lynch best summarizes an artist’s opinion of having their work compromised by product placement.
From a marketing student’s perspective I find product placement interesting because it provides an additional medium for the advertiser to remind the consumer of the value proposition. Brand value can be increased if the product is linked to an influential person or a positive emotional experience. From a consumer’s perspective I’ve always been aware of product placement and really didn’t mind as long as it remained limited to rap videos and American Idol. Unfortunately, it seems product placement is showing up increasingly in movies, songs, videos, and television and that it is impossible to avoid this unsolicited advertising.
What are your thoughts on product placement? Do you find it annoying, effective, or do you even notice it at all?
I’ll leave you with another stakeholder’s perspective on product placement – the artist. In the attached YouTube clip director David Lynch best summarizes an artist’s opinion of having their work compromised by product placement.
Apple Launches Mac App Store
Apple launches the App store for Mac. Taking a page from the wildly successful iPhone & iPad App stores, Apple decided to change the software delivery mechanism for computers. A complementary offering that will no doubt help to spur a few more sales of their computer line and of course, beats the competition to the punch.
WJS is also reporting that AT&T is now selling the iPhone 3GS for $49.
I also wanted to post a link from ConsumerReports that reviews tablet computers debuting at the Consumer Electronic Show (CES) last week. 2011 is the year of the tablet (slate) computer and they are all playing catch-up, once again, to Apple. These companies have all had almost a year to figure out a better "mouse trap" but it seems all are coming up short. Don't look for the iPad to loose it's dominance in the tablet market anytime soon.
http://shopping.yahoo.com/articles/yshoppingarticles/491/ces-2011-are-any-of-the-new-tablets-an-ipad-killer/
Sunday, January 9, 2011
Goldman May Never Change Their Ways
Goldman Sachs might be trying to publicly improve their reputation after the financial meltdown brought many unethical and fraudulent charges against the company and its employees. But just recently as stated in this article, Goldman Sachs may just be back to their old ways. In the highly publicized deal with Facebook, Goldman might be continuing the same acts that they were scrutinized for during the financial meltdown. This all goes to show that things might never change on Wall Street. Greed will always be there and no matter what a Wall Street firm might do to change their reputation for the better, as Goldman is trying to do through its creation of a business standards committee, their actions will still define them. What Goldman needs to do is change their actions which will aid their ability to improve their reputation.
Ryanair- CEO O'Leary and his antics
I read this article in Business week, it was interesting, since we did a case study on Ryanair in strategic Management with Wiseman. This CEO is off the cuffs with his antics, but he must be doing something right. Looking at the Ryanair website, they flew over 65 Million passengers last year. So even though he is out there, people are still flying Ryanair!!!
Read the article below for a good smile and some lessons on how not to run a company.
http://www.businessweek.com/magazine/content/10_37/b4194058006755.htm
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