Capability and Culpability

This article demonstrates the effectiveness of capable marketers and the impact that their work has on popular culture. The impact may be in harmony or conflict with the values that society holds at a given time. Here, we can see the full world of the "princess" fantasy marketed to young girls and parents of girls. The conflict is in the message that young girls receive about an identity of dependency and helplessness against the empowered and self sufficient women that society espouses to value and elevate. The mixed messages are sent to young girls whom may not have the ability to reconcile the conflicting values. What responsibilities and how much culpability do marketers have to society in executing their craft?

Drive less, pay less, but at what price?

A growing trend for insurance is to tailor policies specifically to customer’s needs, in order to reduce premiums. For example, Progressive is at the forefront of this marketing strategy with their “name your own price” campaign. This article discusses another tailored approach, a growing trend known as usage-based auto insurance.

Usage-based auto insurance can offer lower premiums to customers who drive less. For customers that qualify, and depending on location, their premiums could be reduced by 10%-15%. There are various reporting mechanisms insurance companies have employed to track mileage: commute to work, honor system based on odometer readings, or technology to track mileage and driving habits. Insurance companies have reported this trend is spreading across the country as an incentive to “leave that car at home more often”.

Companies mentioned in the article that offer usage-based insurance include Unigard Insurance, Safeco, and Progressive. Leading the pack for individuals is Progressive, who offers usage-based policies in 29 states through their “Snapshot” program. Progressive utilizes a mileage tracking device that plugs into the car’s on-board diagnostic port. The device records and sends driving data to the company, who uses the information to calculate the policy rate after 30 days. Customer’s rates can’t go up with Snapshot and the discount is not based on location or speed.

1. Do you think usage-based policies will influence consumer behaviors?
2. Would you be willing to use a mileage tracking device in order to obtain lower premiums?
3. Do you think other companies should leverage the trend for usage-based policies?
4. Why do think insurance companies would offer this program? Is it to satisfy customer needs or track driving habits?

The Most Desired Brands In America

Using Neurotypes to Measure Consumers' Relationships with Brands

Buyology, Inc., the "world's leading strategic neurological marketing company," recently published their research in which they rated over two hundred global firms by the consumers' relationships with the respective brands. To compile their rankings, Buyology tested 5,000 consumers, both consciously and unconsciously, on four established categories or "neurotypes" in order to classify the consumer's feelings toward a particular brand. These "neurotypes--awe, superiority, harmony and exploration--were paired to give a total of 16 possible combinations" that could be quantitatively ordered.

The research shows that Johnson & Johnson was the top pick for females, followed by Sony, Kleenex, and National Geographic. Men rated a toothpaste, Crest, as their top choice, followed by BMW, National Geographic, and Panasonic. The findings suggest that consumers are most likely to select products that appeal to them both consciously and unconsciously. Armed with this information, Buyology believes that "marketers who know exactly how their brands resonate with customers will have a sustainable advantage over competitors."

The report reveals several other noteworthy cases:

• Amazon (#7) beats Wal-Mart (#22) as the most desired retailer for women
• Google (#6) beats Apple (#45), Microsoft (#12) and Facebook (#69) as the most desired internet/technology brand
• For men, auto brands dominate the top 10 Most Desired with BMW (#2), Hyundai (#5), and Lexus (#10)"

The Buyology research is certainly intriguing but it does lead to several questions.

Does a consumer's relationship with a brand relate to brand loyalty, share-value or repeat purchases ?

In that regard, in what ways does this research relate to that of Reichheld's "The One Number You Need to Grow" as a way of measuring brand loyalty? Can a correlation be made?

And finally,do you believe that testing on feelings of awe, superiority, harmony and exploration are the best primers for consumer relationships? What other primers could be included?

Do You Believe in Bad Publicity?

Is there any such thing as bad publicity? Well, if you talked with Madonna several years ago, during an interview, she shared that “there’s no such thing as bad publicity...as long as people are talking about you.” Well, within a recent Financial Times article, Toyota was linked with the Taliban fighters in a camera shot that displayed the Taliban holding their weapons while on top of a Toyota vehicle. This was not the first time Toyota had been fighting against bad brand imaging. Notably, the recent negative publicity around sticking accelerator gas pedal problems and other previous Afghanistan warlord photos.

Toyota ultimately tried to put a positive spin on what was the negative imagery from the video of the Taliban being seen in their vehicle. They did this by trying to highlight that the same ruggedness and dependability the Taliban used the vehicles for would be important to all people that would be interested in their vehicles. The article points out that what Toyota attempted to do was a good strategy; turn a negative into a positive. The article stated that many companies often find themselves in the same position when their popularity grows unexpectedly outside of the target group. Toyota had an advantage because its target group is not as exclusive as with luxury brands.

The article mentions some of the problems luxury brand companies like Burberry and Cristal champagne have had in the last few years with their products being used by groups do not fit into their typically exclusive cliental. These luxury brands have to be more strategic in their approach then someone like Toyota. Part of a luxury brands appeal is its exclusivity and the status it signifies. The luxury brands have to make sure that its brand won’t loose its equity and run off its core target market of customers.

During our course, we have discussed the importance of a successful brand image and a lot of money goes into building a strong brand. Subsequently companies protect their brands with much resolve. Kotler & Keller have defined the brand promise as, “the marketers vision of what the brand must be and do for consumers.”

It is difficult for companies when undesirable demographics become very profitable but also offer unwarranted exposure because this undesirable demographic likes your product and/or service. The articles states ‘A principal isn’t a principle until it cost you money.’ The company will ultimately have to decide how to navigate this press. But the dilemma warrants the following questions:

1. Is there any such thing as bad publicity when free advertisement is attached with it?
2. Should Toyota or any major company try to restrict controversial or undesirable groups from using their products?
3. Do you feel Toyota’s response to the Taliban photo created a positive spin on the situation with their product?

Super Bowl Ads: Who will score

For marketers, Sunday's Super Bowl wager looks promising...the National Football League is on a TV ratings roll, dominating prime time all season long. Last year's Super Bowl set an all-time TV record in the U.S., with 106.5 million viewers.

Traditional commericials from companies you typically see during the Super Bowl are PepsiCo, ETrade and Mars (Snickers) will all be present but there are some newbies to the big game. Best Buy joins the ranks of Super Bowl advertisers for the first time this year and takes the celebrity road, with a new spot featuring pop stars Justin Bieber and Ozzy and Sharon Osbourne.

The risk for Super Bowl advertisers is that their message gets lost in the star's glare.

$2.8 million to $3 million on 30-second ads they hope will pay off with high ratings.

That is a lot of money to spend on 30 seconds, companies have to be sure that they are reaching the target market and not get caught in the trap of mass marketing to such a wide audience.

1. How do your companies market themselves? What media (radio, internet, TV, etc.) are they marketing with?
2. What is the marketing philosphy of your company?
3. Do you think super bowl commercials actually generate more business and why or why not?
4. What are your past favorite super bowl commercials?

Available: Cheap Life. Any Takers?

Source: http://www.economist.com/node/17961922

In recent years, rising healthcare cost has become a disconcerting issue. This has given rise to plenty of ideas being tossed around from left, right and middle. In all frankness, the issue at hand is quite complicated, and there doesn't seem to be a magic pill that can cure this "illness".

This article from Economist talks about how the healthcare costs are being kept low in countries such and China and India. This happens mainly due to necessity. Most people in those countries simply cannot afford the expensive equipment that are being marketed in western countries. So the manufacturers and innovative companies have come up with devices that cost a lot less, but still can perform the tasks that they're supposed to. There could be at least two reasons for similar low cost devices not being adopted in the US. One is the general association of high cost with high quality - and when it comes to life, people trust only the best. The other is resistance by these device manufacturers to market low cost devices which could erode their margins.

Imagine the fact that a night's stay in an American hospital can cost 25 times as much as in an Indian, Chinese or Brazilian one, and that a heart bypass surgery costs 50 times as much as it does in a reputed hospital in India. Doe this really mean the care that we receive is 25 or even 50 times better? Probably not. (Kotler & Keller p49).

Faced with the paradox of needing cheaper healthcare but unwilling to cheap out, things will need to change sooner or later. Some of these low cost techniques and devices will perhaps be adopted in US as well. Inevitably, there will be resistance from multiple directions - manufacturers, public, politicians etc. Given all these factors, please chime in with your thoughts on the following. Keep in mind that this is almost a non-existing market in the US that can have a huge growth potential.

1. How can an established healthcare manufacturing company position itself in the low-cost market? Does it make sense to do so, given that they're currently positioned well in the high end "Cadillac" market?
2. What will it take to win over the public opinion? How about the healthcare providers/hospitals? How can they be attracted to the cheaper alternative?
3. Who would be the target customers to be marketed first? Is it people receiving government care? Or those with private insurance?
4. Do new innovative companies with low cost devices stand a chance in entering the market?

Srini Narayanappa

Can old dogs partake in new tricks?

During the North American Auto Show in January 2011, Buick launched their “Quest for the Keys” campaign. This campaign will be an interactive scavenger hunt that utilizes social media networks, such as Facebook and Twitter in seven target cities. The cities include: Miami, Los Angeles, Atlanta, Chicago, Minneapolis, New York and Austin, Texas.
The online hunt will last for three weeks, while finishing with an offline play in the seven cities. This final day will be played out “in the streets”, and will require location-based social networking applications, e.g. Foursquare, Gowalla, or Facebook Places. Each city will have six keys, worth $2,000 and a chance to win a new Buick. Three winners will be given their choice of any Buick model in November 2011.
This program was designed to build excitement over the Buick brand, while encouraging exploration of local cultures and passions. Buick describes its line as a modern luxury brand, with increasing North American sales.


Questions:
1. Given the average age of Facebook and Twitter users being 38 years old, and the average age of a Buick owner being 65 years old (down from 72), do you think this will be a successful strategy to attract a younger buyer?
2. With well over 150 million Facebook users in the United States, and only 78 thousand Facebook users who “like” the Buick Facebook site, would you consider this a worthwhile endeavor? Is this the right tool for Buick to reach its target market?
3. If you were in one of the target cities, would you participate in the scavenger hunt? If no, is there any product that would entice you to participate in such an activity?

This Bud's For You

The article discusses the recent decline in sales of Bud Light beer, and the change in advertising strategy Anheuser-Busch is using for this years Super Bowl. Everyone in America grew up watching the many advertisements of Budweiser and Bud Light on television. The classics range from the famous clydesdale horses, the Budweiser frogs, and Spud Mckenzie, a Bull Terrier nicknamed the "The Original Party Animal," which included marketing items such as plush toys and t-shirts (who would dare suggest a beer company was marketing to children).

The Super Bowl has historically been one of the most expensive ad campaigns managed by Anheuser-Busch. Anheuser-Busch plans to focus on the typical game-day ad, but also utilize social networking to increase customer interaction. This year Anheuser will invite all of its "fans" on Facebook to view snapshots of the commercials and guess the story lines. In addition to this, they will also offer a fourth, internet only, commercial available to its Facebook community.

By focusing on social networking, Bud Light can focus on the customers that "like" its beer, and thus would ideally be a more captive audience to the advertisements. Additionally, by increasing the interaction online, Anhueser-Busch hopes to draw more attention to its advertisements during the Super Bowl to see if the "fans" have guessed the storyline correctly.

Some questions on the strategy:
1. Will it entice current customers who "like" your product on Facebook to view more ads and to interact about upcoming ads? And will the added attention to the product increase the overall sales? Aren't the customers that "like" your product on Facebook already customers who buy Bud Light?
2. Facebook has many users under the age of 21. Is Anheuser-Busch socially responsible to audit the people who "like" its product on Facebook, or can they be construed as marketing to minors, as many groups complained during the Spud McKenzie era.
3. If you are on Facebook, and you "like" a product or company, would you find this interaction entertaining? Annoying? (for example, too many updates) Do you see any possibility of this strategy increasing your purchases of Bud Light?

Foresquare Using Customer Loyalty to Generate Loyal Customers

Foresquare is an App that uses your GPS enabled phone to let friends know where you're at and what businesses you frequent. By "checking-in" when you visit your favorite local establishments you also earn points and awards, earn enough awards and get a badge, check-in often enough and become "mayor" thereby turning the whole thing into a game.

In the article Foresquare is targeting business owners to purchase services that allow the client to see who is already posting about their recent visits. Additionally the Merchant Platform and Merchant Stats dashboard allow Foresquare clients collect data about customers and track customer loyalty.

So what's in it for the client-businesses? By using Foresquare tools businesses broadcast to potential customers that are walking or driving near the store. Some businesses use the App to broadcast special offers for users and some have augmented the traditional loyalty programs to include customers that check in (visit) often.
Think gorilla marketing via your iPhone.
Customers can also leave reviews of the establishment, which can be useful especially for business travelers and tourists.

Don't think this is a valuable tool, or viable business model? Last summer Foresquare raised $20m and check-ins increased 3400% over the course of the year. Currently there are more than 5 million users worldwide.

Questions for you:
What social media tools does your company use to gain / retain customers?

Acknowledging this is a great tool if you own a pub; how can manufacturers of capital equipment use social media tools to increase customer loyalty?


Article http://www.pcmag.com/article2/0,2817,2376884,00.asp#
Resources
http://www.pocket-lint.com/news/27779/what-is-foursquare
http://foursquare.com/

The secret of success is not universal

Competing based on differentiation is a delicate affair. What works for one company may not work for another, and getting the right product into the hands of consumers at the right time is critical to success. Apple has become wildly successful by putting design at the forefront of its corporate strategy. In an interview with Cult of Mac, John Sculley, former CEO of Apple, described how the company was founded upon and driven by design (http://www.cultofmac.com/john-sculley-on-steve-jobs-the-full-interview-transcript/63295 ). Despite Apple’s design success, the same approach delivered unintended consequences for Lego.

In the late 1990s, Lego stepped away from its traditional design and attempted to create new products based on action figures and their stories. The toys required little imagination and skill; rather, they were essentially standard action figures which could be partially disassembled. The company created a cartoon to tell the story of the action figures, but creating complete story lines was precisely what Lego was not good at. Lego’s success had derived from giving children creative props with which to create their own stories. Lego’s foray into action figures faded quickly.

At the same time Lego had given free rein to its designers. The idea had been to create new products which would spur sales. Unconstrained, the designers devised increasingly complicated, expensive models. In seven years the number of components that the company produced to support the models nearly doubled. Unfortunately the models also failed to resonate with the company’s core audience. Adults found the models intriguing, but children were nonplussed. One of the most successful product lines at Lego dropped from 13% of revenue to 3% of revenue as children failed to connect with the new designs.

While designers at Apple are famed for working in a customer vacuum, the designers at Lego failed to understand their target market and could have benefitted from a dose of customer feedback. Ultimately that feedback arrived in the form of sinking revenue. Although near failure came from design, so too did redemption. Management at Lego still encouraged creativity, however they chose to temper creativity with collaboration. Designers now vote on their favorite designs, the marketing department reviews designs to assess how well they will resonate with children, and the manufacturing department assesses the cost implications of potential new designs. Good design is the hallmark Lego, but could not carry the company on its own. Lego has discovered that creating successful products is a collaborative process, and is much too important to be left to the designers alone.

Can the Apple Stay Shiny and Bright?

While other businesses rely on market research, focus groups, consumer surveys and other marketing tools to stay abreast of what current or targeted markets want, Apple relies on Steve Jobs. Jobs possesses an uncanny knack for knowing what consumers want even before they know it themselves. Analysts agree that Jobs is the driving force behind Apple’s continued success.

Perhaps it’s his attitude that “it is not the consumers’ job to know what they want” that is behind his success. Although not all of his projects have earned success, so maybe it’s because he does not fear failure. Maybe his success can be attributed to the fact Steve Jobs is a “cool guy” as the article quotes and he can’t help but design “cool products.” Or maybe his success is due to time spent in the Palo Alto Apple store as mentioned by a former Apple consultant, Regis McKenna. As McKenna points out, Apple has access into user habits and needs through its stores.

Whatever the source of his success, Jobs’ upcoming medical leave is causing much speculation of the impact on Apple if he is unable to return full time.

------------------------------------------
The article stresses Jobs’ talent for designing products his customers want without relying on techniques and methods we are currently studying – gathering information, scanning the environment, conducting research, but yet remarks made by McKenna, the former Apple consultant, sounds contradictory to this. He mentions data gathered by stores and Jobs’ grasp of technology trends and popular culture. Does Steve Jobs’ have a unique talent or is he really utilizing marketing tools?

What, if anything, can the marketing department at Apple do prior or during Jobs’ absence to curtail any negative impact his absence may have?

Phone-Wielding Shoppers Strike Fear Into Retailers

Phone-Wielding Shoppers Strike Fear Into Retailers
(Wall Street Journal - By MIGUEL BUSTILLO And ANN ZIMMERMAN)

http://online.wsj.com/article/SB10001424052748704694004576019691769574496.html

Over the break I came across a great article in the Wall Street journal on how smart phone applications are changing the way consumers shop and significantly altering the way retailers will have to market in the future. The article details the power of these new “price comparison” applications. This applies to many of the topics we have discussed in class including; the continued evolution of marketing, the adoption of technology and the changing dynamic of the competitive environment. The following are some key quotes from the article:

…”smartphone reckoning represents a revolution in retailing—what Wal-Mart Stores Inc. Chief Executive Mike Duke has dubbed a "new era of price transparency"—and its arrival is threatening to upend the business models of the biggest store chains in America.”

“A 10-country study by management consultant Accenture this year found that 73% of mobile-powered shoppers preferred peering into their phones for basic assistance over talking to a retail clerk.”

"That is an opportunity to steal a sale right when someone is in the throes of making a decision. That is what makes mobile so powerful," says Best Buy Chief Marketing Officer Barry Judge, who believes retailers must "dive in headlong" into the new environment.”

This article raises some important questions:
1. Will smart phone applications change the way we shop? and how?
2. Will traditional retailers find a way to keep their competitive advantage despite this new technology?
3. How do smart phone applications impact you and your organization?

The Next New Tidal Wave: Mobile Phone Marketing?

Pandora: Unleashing Mobile Phone Ads (By Tom Lowry, Bloomberg Businessweek)

As we learned in Chapter One, today "the marketplace is isn't what it used to be", in result of key societal forces that have generated new consumer behavior and opportunities. Network information technology, above all, has created an Information Age - chiefly marked by a gain in accuracy of information and ability to perform targeted communications (for the seller) and a greater buying power than ever before (for the end user). Still, marketers must focus on where the end customer spends most of his or her time of the day.

Pandora Radio (27M total users: web & mobile versions) is an automated music recommendation service and custodian of the Music Genome Project. For those that are not familiar to this website, Pandora is a free online service that builds customizable radio stations that suggest songs based on your liking: its listeners can view lyrics as the songs are being played, and the streaming music service even ties itself to Facebook, allowing its users to making sharing easy with their social network.
The article maintains that more and more companies (e.g. Kraft, Nike, Domino's, Best Buy, Docker's, Puma, Target) are turning to Pandora to promote their product, since direct positive results to their advertising experiments are being realized. Together with the proliferation of web-surfing mobile devices and their applications, time spent on the mobile phones have increased substantially in recent years. According to Email Marketing Reports (http://www.email-marketing-reports.com/wireless-mobile/smartphone-statistics.htm#smartphones), Nielsen reports that smartphone sales accounted for 25% of the US mobile market in Q2 2010, and expect smartphones to become the majority by the end of 2011, while Morgan Stanley Research estimates that sales of smartphones will exceed those of PCs in 2012. This clearly signals that people, including myself (a newly converted smartphone user) are devoting more and more time on their mobile devices and giving it more and more attention.
For its advertisers, Pandora has demonstrated a High Customer Response (see article for details). While most companies do not realize this yet, some try to do too much (i.e. build too sophisticated sites to adapt to mobile phones, ignore simplicity and details in their advertising schemes to adequately catch the customers' attention, etc). Mobile marketing has not launched in full scale, but more and more companies are coming to the realization to the above-mentioned details.

Can mobile advertising really "take off"? How much attention you give the mobile phone ads when you surf the internet on your phone?

What are some "guidelines" for successful mobile phone marketing?

The end of traditional marketing

Is it the end of marketing as we know it thanks to social media? Today the speed of information to a large breath of consumers can be a terrifying thing for businesses that have difficulty in delivering products and services correctly on the first attempt. Failing to deliver quality products and services or comply with the companies mission and values will quickly erode customer loyalty. Even thought this can cause difficulty for poorly managed companies the article in the December 2010 edition of HBR suggest that this change in consumer behavior should be treated as opportunities.

Many companies have embraced social media as a method for engagement with consumers such as American Express (OPEN Forum), Procter & Gamble (Beinggirl.com), etc. These firms have benefited greatly from listening to customers needs, concerns, and ideas. These are great examples of how to use social media to the benefit of your company however it is also critical that these methods are also incorporated into the marketing and communication groups. With the growth of social media, one mistake could severely and quickly ruin a company’s character. Analysis from the article suggests that there are four basic philosophies behind managing and protecting a great brand:

1. Offer and communicate a clear, relevant customer promise

2. Build trust by delivering on that promise

3. Drive the market by continually improving the promise

4. Seek further advantage by innovating beyond the familiar concepts

In summary the article suggests that social media should be used to gain insight into the customers wants and needs and not as a selling tool. It is also critical to understand the implications of social networking to protect a brand’s reputation.

Many people have heard the phrase that people learn from mistakes and that can make you stronger and help you learn new things. As social media continues to grow do you believe that companies will reach a point of complete fear of failure? If so, how will this effect innovation?

How can the structure of marketing departments be organized to best handle social media while continuing to work as a traditional market? Should these be separate departments due to skill sets and/or conflict?

CUSTOMER AND COMPETITOR ANALYSIS: Home Depot’s Make-Over

CUSTOMER AND COMPETITOR ANALYSIS: Home Depot’s Make-Over: "With a decline in big ticket sales, Home Depot has opened its doors to Martha Stewart. This move is an attempt to boost sales by targeting ..."

Google Needs Focus on Client Delight

Google a Technology company which believes in innovation as its core competency announced that CO-founder Larry Page will take over the CEO job from Eric Schmidt. It is seen by industry analysts as an effort to counter competition from younger, nimbler startups like Facebook, and get Google back to its start-up roots. This change is also happening at a time when its wide range of products such as Android, YouTube and Safari are fast capturing the market and world’s Attention.

Like many large companies Google is also struggling from the traditional management fallacy of growth at the expense of customer service. Due to decentralized nature of the leadership the Google employees have freedom to come up with whatever they like and the results are not always very impressive as they have come up with some failed products such as Google Wave, Google Buzz, and Orkut which did not delight the customers.

Yet while Google understand and even embrace the concept of customer centricity through their algorithms to some extent, it fall short when it comes to executing customer-centric agendas in a way that delivers sustainable results. Google’s new leadership is dedicated to rooting out bureaucracy and rediscovering the nimble moves of youth.

Google’s success will depends on how it will consistently deliver a differentiated experience designed to satisfy the intentions and preferences of the target users--a feat that can only be accomplished with a deep understanding of the customer base and market; distinctive capabilities to execute on the basis of customer insight and the processes and systems to enable high performance.

Questions:

1. Given the global reach Google has, Will the change in management structure help Google to maximize customer lifetime value?

2. Will Google regain its lost market share and survive the social-networking onslaught?

3. Should Google focus on creating new line of business to sustain its competitive advantage? What should Google do to delight customers?

Smart Appliances Get Smarter

Can you imagine hosting an executive party with your refrigerator playing Pandora, while downloading mixed drink recipes for display as the cocktail shrimp and wine are chilled to a perfect fifty-five degrees?

Technology is rapidly changing the value proposition for consumers, and Smart Appliances can deliver more value by providing new services and performance features. Whirlpool leads the industry in market share and maintains brand loyalty through reliable innovative products, such as Smart Appliances that automatically improve performance. Smart Appliances are getting smarter as emerging competitors are introducing products that are bundling consumer electronics to deliver more benefits of convenience. Samsung and LG are gaining market share in appliances using similar concepts that resulted in achieving market dominance in the cellular phone industry.

Samsung and LG bypassed Motorola as the top cell phone providers in the U.S. in just a few years through disruptive technology in smartphones, and now have competitive advantage for integrating complementary products. Their next objectives are to exploit the technological demand of consumers, and expand to become appliance brand leaders. Customers are expected to delight in new capabilities to network complementary electronics for remote control of household appliances in order to achieve new levels of convenience through technology. Connectivity among the various consumer electronics allow for more “creative destruction” of baseline products as two-way communication between consumer and appliance allow for higher efficiency and increased multi-tasking.

Smartphone applications continue to rapidly proliferate and accelerate the pace of change for expectations of appliances that are network compatible. What if traffic extends the commute home after a long workday? LG ovens have the capability to send a text message on cooking status, and receive instruction to lower the temperature to align with arrival times. Application developments for service and technical support also expand connectivity back to the manufacturer for relationship marketing to build customer brand loyalty. Market competition for appliances is experiencing the same trend as other segments of consumer electronics as the value proposition is increasingly defined by bundling of features. The forecast for Smart Appliances completely replacing traditional machines by 2020 provides a near term opportunity for all companies competing for market share, as the George Jetson concept becomes closer to reality.

Questions:
1. Do smartphone applications add value that you will consider for your next household appliance purchase?

2. Is brand loyalty enough to maintain market share for appliances, or will technology prevail similar to smartphones?

3. Do you believe that Samsung and LG could become market leaders in the appliance industry?

WINDMADE may soon join other feel-good labels

WINDMADE^TM may soon join other feel-good labels

By Eric Pfanner – New York Times – January 28, 2011

A consortium of international organizations and companies interested in promoting the use of clear energy has introduced the new “feel good “ label, WINDMADE^TM, to show that a product was made with power from sustainable resource, wind. This private initiative, led by the Danish wind turbine manufacturer, Vestas, is trying to address consumer demand for increased focus on the environment in the face of lagging governmental action.

While the standards under which a product could qualify for the label is still under development, expectations are that the first “WINDMADE^TM” products will reach stores by the end of 2011. Companies such as the toymaker, Lego, are actively engaged.

The consortium is confident that this new label will resonate well with environmentally conscious consumers. One of the concerns is that products with similar labels (e.g. Organic or “Fair-trade”) often are perceived as costing more than conventional and could alienate ordinary shoppers who tend to be price conscious. Another concern is that WINDMADE^TM could also signal products to avoid for foes of wind power.

My initial reaction is that this is a very interesting initiative which could benefit from deeper marketing research to ensure the appropriateness and positive impact of the WINDMADE^TM label.

Do you think that this new environmentally friendly label will be well received? Could such an initiative encourage customers to go green? Should this label practice be expanded to other products and services? How would your proceed to gain more customer and market insights?

Submitted by Eric Zahrai

Charged For Battle

I have worked in the automotive industry for the past 15+ years, mostly selling powertrain components to OEM engine manufacturers and with any luck I will do so for another 20+ years. So when I came across this article, I read it more out of personal interest to learn more about how the electric vehicle market could have an impact on the future of the internal combustion engine and my career, not as an article that I thought I would use as part of our marketing class assignment. However, as I was reading the article, I was surprised at how much of what was being discussed was related to our marketing class material, from the extensive marketing research that has been done to bring the Nissan Leaf and GM Volt to market, to the advertising that is now taking place to expand this new technology. I was also struck by the magnitude of the decisions that are being made and the new industries that are being created, as a result of marketing research both from within the automotive industry and independently, that is responsible for launching this new vehicle segment and the new industries needed to support the future of electric vehicle.

Early in this article the author quotes the worlds very first Nissan Leaf customer, stating "It all started, when I saw an ad for the Chevy Volt." This particular customer is very environmentally conscious and was interested in buying a low to zero emission vehicle as soon as one was available. Shortly after learning that the Chevy Volt has a 4 cylinder engine, to extend the Volt's driving range of the electric motor and battery, he decided to buy a Nissan Leaf because it is a 100% electric vehicle. According to the article the customer, states that "As soon as I found out about the Leaf, I forgot about the Volt. The Volt wasn't going to project the image I wanted. It has a tailpipe". I found that statement very indicative of what I believe is the limited demographic of the current electric vehicle consumer. With gas prices above $3.00 per gallon, most of us are interested vehicles that are fuel efficient, but they have to reliably meet our day to day driving habits, while delivering safety and performance. The market for the current electric vehicles seems to be limited to consumers that are driven more by environmental concerns and will most likely have multiple vehicles, one being an EV for "image" and around town trips and a traditional vehicle for practicality and extended driving.

The article also points out that EV's are not just a new fad and that vehicle manufactures have been trying to bring them to market, since as early as 1910 with ad copy that targeted women, touting " the quietest and most refined electric cars." Back then the car company's targeted woman who wouldn't have to manually crank a starter or tolerate the noise and soot of gas powered cars. Vehicle manufactures have attempted to bring EV's to market several times since then, the most recent being GM between 1996 - 2003, which had to finally abandon their EV-1 project after $1.0B investment and suffering what the article calls a PR nightmare.

Another intriguing comment from this article is a quote from Nissan's marketing boss. "The big prize for me is not how many Leafs I sell. It is, how can I use the Leaf to build and improve the Nissan brand?" Maybe it really is all about image after all...

While I believe that with current government regulations to increase fleet fuel economy and reduce vehicle emissions, that electric vehicles are here to stay and that as the recharging infrastructure becomes more available, the EV market segment will expand. Will I still be selling powertrain components to engine OEMs 20 years from now? Fortunately, I believe yes, but the likelihood that my grand kids will be driving an EV seems somewhat inevitable.

Questions for all of your input:
1. What do you believe is the current demographic of the electric vehicle consumer?
2. Is an electric vehicle in your future?
3. Can marketing and advertising persuade you to make your next vehicle purchase an EV?
4. How important is "image" in your purchasing behavior?
5. Are electric vehicles here to stay?