Business Clips

The ACLU is getting a make over. Using a Lady Liberty logo, the same marketing firm that has built the Guess and Swatch brands will unveil a print and TV campaign this spring. With ACLU membership up 12% since the 9-11 crackdowns, the timing may be right. The campaign will attempt to position the 82-year-old organization with a younger market that has grown up assuming basic freedoms. The campaign will focus less on specific issues that quickly become dated and more on the generic and timeless message of liberty for all.

Remember the Seinfeld episode in which Jerry and Kramer work on a box of Junior Mints while watching a surgery? How many boxes of mints do you imagine were sold as a result of that exposure? Product placement in movies and television shows historically has been hard to evaluate. Is a 3-second shot of All detergent in the background (Sex in the City) worth less than a 7-second close-up of Sunlight (Everybody Loves Raymond)? How about when the cast of Friends holds and makes reference to Snuggle? How does a product placement compare with the cost of a traditional ad?

For the first time, someone is trying to attach value to various "levels" of product placement. iTVX is developing a strategy ranking placements according to the type of exposure the product gets. In the iTVX example, the lowest level might be a clear product logo in the background. Level 3 would include a close-up of the product. Hands-on by a cast member gets the placement to a level 6, while a verbal mention might earn a 9. When the script is written to focus on the product (Seinfeld and the Junior Mints), we’re looking at 10+.

Product placements, according to the iTVX people, are significantly more valuable than traditional advertising because a) more people see the show than see the show’s ads, and b) recall of the show’s product placements is often higher than recall of the ads. To lend some perspective, iTVX values the Sex in the City episode at $3,389, Raymond and Sunlight at $22,980, and the Snuggle placement on Friends at $226,536. The Junior Mint episode on Seinfeld? Off the charts according to iTVX.

The Coke v. Pepsi war is about to return. Maybe you’ve not noticed, but cola advertising since 9-11 has been way down That’s about to change to the tune of a combined $500 million. Coke Classic will play a major role in the new ads. (Coke has done well without any new campaigns as it introduced new flavors–e.g., Vanilla Coke – new packaging, and new cartons that fit better in the frig.) A thousand or so miles north, the Pepsi people are planning to take on "real coke" with a "real people" strategy. Britney’s exposure (no pun, here) will be reduced as Pepsi tries to position itself as the drink of choice for all of us. By summer, Pepsi will be focused on a tie-in with one of the reality shows, more support of live events (concerts, etc.), and a hook-up with "The Hulk." No one is explaining how hooking up with The Hulk is more real than Britney.

Scheduled for testing in 2003, a new speaker technology working at very high frequency allows the broadcast of sound in a very narrow path. Think of it like a spotlight in the theater that puts a bright light in a very narrow beam. The HyperSonic sound system creates sound waves at a frequency that allows such tight focus that you only hear it when you stand within the beam–for example, when you stand in front of a display of fresh-baked cookies at the grocery. Since the advertising message is only heard by one or two people at a time, it’s possible to place dozens (or hundreds?) in a store without raising the overall sound level. Applications being considered other than the grocery store include gas stations and vending machines. (The in-your-head analogy is because the sound is broadcast at ultrasonic frequencies that humans can’t hear. It becomes audible only as it travels through the air and vibrates against the body, making the sound seem to come from within your head. Sounds like a real headache.)

Owning a McDonald’s in Omaha might be a bit more straightforward than owning the franchise for Paris, or Egypt, or Saudi Arabia. Americans and things American are taking a bad hit these days. Few icons are more American and permeate the community more than a McDonald’s restaurant. So, what does one do when a French farmer trashes a local McDonald’s and is applauded by his community?

The response: Ronald sits back and lets Asterix take the lead. Asterix is the cartoon character that defends French independence. At the same time, McD launches an ad campaign with cowboys bolding announcing that McDonald’s France refuses to import American beef "to guarantee maximum hygienic conditions." (For additional examples, see AlwaysNEW on our web site; either LAP: PM-006 (branding) or LAP: EC-004 (international).)

It’s not your father’s...

In fact, it’s not even your older sisters.’ While car manufacturers spend zillions on network TV, the youngest buyers are looking elsewhere. Image this: Eighteen-year-old John Varner got the first glimpse of his dream car not on TV or in a magazine, but in a video game. You read right. It’s the Suburu Impreza WRX and it was featured in Gran Turismo, a game for Sony’s PlayStation. Seems that the high-powered marketing message that worked on the Boomers, and on their kids, are not working so well with the grandchildren. A Key Honda designer makes it plain: If it looks to them like some old guy is trying to sell them something, they’ll run for the hills.

Two problems: The first challenge is reaching the 18 - 22 age group. They don’t particularly like network television, will not sit still for high-pitched advertising, won’t talk to dad’s favorite salesperson, and don’t trust the dealer that sold mom and dad that thing in the driveway. Manufacturers are struggling. Some successes seem more luck than good planning. What seems to be working are experiential strategies such as the video game, Internet access to European or other more esoteric settings, virtual test drives, and anything else that’s different from the "old" way.

Second problem: What to make that they’ll like. They’re young, hip, cutting edge, and far out in their design preferences. Maybe not. They hated the radical Aztek (Pontiac), Echo (Toyota), and the nostalgic retro designs (e.g., Beetle, PT Cruiser). What they do seem to like is what they find on their own (VW), that they can customize to make their own (Honda’s Civic), that’s fundamentally practical and inexpensive (Pontiac Vibe), or that meets a unique need (Honda’s Element that’s kind of a clubhouse on wheels for guys reluctant to enter adulthood).

Watch: Toyota Scion (summer 03) with suped up sound system; Mitsubishi Outlander (summer 02, a sort-of-sport-utility; BMW’s Mini Cooper (now), billed as the world’s first street-legal Go-Kart.

Why it’s important: Who can forget their first car? Love it and start a long-term affair with the brand. Hate it and who can go back?

Ronald Steps Up

Smile. is the goal. McDonald’s will be attempting to make kids across the world light up as they see more of the highly-recognized clown. Ronald McDonald will take on new importance in the company’s 2002 ad campaigns. McDonald’s will in effect return to its roots with advertising designed for youth appeal. Even the tagline will change a bit. Remember We love to see you smile? Focused more directly at kids, it becomes simply: Smile.

On the adult side, McDonald’s continues to test (and grow) its McDonald’s with a Diner Inside concept. Along with the traditional kids’ menu, the newer concept adds grown-up food such as meatloaf, chicken fried steak, and the like. Why the change? In a Kokomo (IL) test of the new concept, store sales are on track to move from $1.4 to $2.3 million in annual sales. Extra gravy, please.

Coming soon in a store near you: offices?

Could be. Most retail experts believe that the nation has too many retail stores for them all to survive. In fact, during the 90's, retailers added 3 square feet for every single person in the nation–that’s a 20% growth rate, double the growth of the population. Who will survive?

As always, branding and positioning are key. Think Sears: Hardware, right? And yet Sears is renewing its focus on casual clothes. Why? Margin. But in doing so, it must compete with Kohl’s on the discount side, Target on the chic side, and Federated, Dillards and Lord & Taylor on the full-service department store side. Tough spot to be in. At the moment, Kohl’s appears to have the edge with newer, smaller, free-standing stores. Easy in, easy out. Clear, easy-to-understand image. Will Sear’s find a way to compete or will it’s big, mall-based store in the older part of town be converted to a medical center, office, housing for the elderly, or an entertainment complex?

Life is not much easier for drug stores where Walgreen’s is adding a new store every eighteen hours (475/year), even as Phar-Mor files for reorganization and CVS slows its growth in response to declining profits. In the discount store arena, Kmart will add a net of 10 new stores this year (7 next) as Wal-Mart adds 199 (248 next).

Will there be empty buildings? Since total sales growth is faster than same-store growth, it’s likely that the new stores are stealing business from the existing stores. The likely result will be mergers, and store closings. Don’t be too surprised when that once-hot regional mall is converted to a branch campus or community center. It’s already happening in a city near you.

Dot-Com Not

In the past 90 days, more than a dozen Nasdaq-listed dot-coms have taken steps to drop the dot. Seems it scares away investors. Examples: Autobytel, Thinkpath, and Netpliance which become TippingPoint Technologies.

I am an American

E pluribus unum. You’ve seen the television ad featuring dozens of diverse Americans of all ethnic and national backgrounds looking square into the camera and stating clearly: "I AM an American." Stranded in Annapolis on September 11, staff of GSD&M, an Austin-based advertising agency, found themselves driving the distance. En route, they cooked up the ad campaign, convinced freelance directors and film crews in seven cities to gather the tape, and in a matter of days had the finished spot delivered through the nonprofit Advertising Council to 3,000 media outlets nationwide. The praise has poured in. One viewer seems to have said it all: "It gave me goose bumps. I haven’t seen anything that comes close since the tragedy to expressing so clearly and poignantly what it is we are trying to defend."

Just Ducky

You've seen the Duck.  He screams AFLAC! at many different people in many different situations.  Can a silly, irritating ad like that really work? Would you spend $35,000,000 on a campaign featuring a nameless duck?  For insurance, no less?  You would if you could get the kind of results AFLAC is getting:  up 28.5% in the second quarter to a record $168,000,000.  AFLAC
premiered the squawker in the first quarter of 2000.  The result:  more sales leads in the first two weeks of the year than in both of the prior two years combined.

Multiple Personalities

Many of us have separate work and personal e-mail addresses. The wave of the future, however, may be many different addresses, each used for different purposes or different groups of friends and colleagues. Earthlink has recently announced plans to allow up to eight different addresses for each individual. In the corporat world, it is increasingly common for an executive to use a variety of "personal" addresses that actually go to different assistants for response and follow-up. This multi-address strategy provides increased flexibility and, therefore, opportunity for improved customer service through more carefully targeted relationship management.

CRM for Happy Customers

Customer relationship management is perhaps the strategy of the decade. Although the goal of satisfied customers is nothing new, the use of technology to achieve the goal may be viewed as truly cutting edge. In short CRM means storing data in a way that information is accessible to anyone who can use it to create satisfaction. The most obvious application of CRM technologies is the data provided the representative taking a call. With access to the customer name and all pertinent information (even before saying "hello), the representative is prepared to be responsive to a particular customer’s needs. However, the use of technology to manage the relationship can go much further. Examples include:

Consolidating information from contacts with different parts of the organization (e.g., accounts receivable, sales, customer service).

Assigning calls to specific representatives on the basis of who the caller’s characteristics (e.g., better customers wait less and reach the most highly qualified representative).

Analysis of how a customer uses his/her purchase (e.g., frequency of service visits by a new car buyer)

Visits to and experience with a company’s Web site (e.g., nature of searches, points of abandonment)

Storage of relevant phone conversations

Interestingly, even as the technology grows in its capacity, the cost is dropping dramatically. What might have been a $200,000 investment five years ago may now require as little as $2,000 - $3,000 up front and less than $1,000/month for a comparable Internet-based service.

(NOTE: CRM is one of many aspects of contemporary customer service to be addressed in the National Customer Service conference for Marketing Educators: June 28 - 30, 2002; Austin, TX.)

Get the Buzz?

Maybe you’ve heard the term: Buzz Marketing. Think of it as a more formalized strategy for encouraging word of mouth promotion. With the challenges of cutting through the advertising clutter, cutting edge marketers are looking for ways to encourage the opinion and trend-leaders in a given community to talk up their products. Some carefully planned examples:

Vespa scooters: paid models ride their Vespa in and around Los Angeles hot spots this summer.

Hasbro Games: "deputized" fourth- and fifth-graders as "secret agents" to show of the new POX electronic game.

Ford: loaned their new Focus to trend setters in selected markets for a free six-month "test" drive.

Lucky Strike: offered beach chairs, cell-phone calls, and cofee to smoker outcasts at selected officees.

DaimlerChrysler: stragegically placed its PT Cruiser in retal-car fleets around trendy Miami Beach.

MarkED: all beta testers received a complete CompuTest 1.1 and a complete series of 3,000+ test questions at no additional cost.

With the unique success stories of TheBlair Witch Project, Harry Potter, Razor scooters and the like, buzz marketing is beginning to become a successful element of many integrated marketing strategies. Get trendy and maybe you’ll be invited to drive the next Harley or Mercedes?

Multiple Personalities

Many of us have separate work and personal e-mail addresses. The wave of the future, however, may be many different addresses, each used for different purposes or different groups of friends and colleagues. Earthlink has recently announced plans to allow up to eight different addresses for each individual. In the corporat world, it is increasingly common for an executive to use a variety of "personal" addresses that actually go to different assistants for response and follow-up. This multi-address strategy provides increased flexibility and, therefore, opportunity for improved customer service through more carefully targeted relationship management.

CRM for Happy Customers

Customer relationship management is perhaps the strategy of the decade. Although the goal of satisfied customers is nothing new, the use of technology to achieve the goal may be viewed as truly cutting edge. In short CRM means storing data in a way that information is accessible to anyone who can use it to create satisfaction. The most obvious application of CRM technologies is the data provided the representative taking a call. With access to the customer name and all pertinent information (even before saying "hello), the representative is prepared to be responsive to a particular customer’s needs. However, the use of technology to manage the relationship can go much further. Examples include:

Consolidating information from contacts with different parts of the organization (e.g., accounts receivable, sales, customer service).

Assigning calls to specific representatives on the basis of who the caller’s characteristics (e.g., better customers wait less and reach the most highly qualified representative).

Analysis of how a customer uses his/her purchase (e.g., frequency of service visits by a new car buyer)

Visits to and experience with a company’s Web site (e.g., nature of searches, points of abandonment)

Storage of relevant phone conversations

Interestingly, even as the technology grows in its capacity, the cost is dropping dramatically. What might have been a $200,000 investment five years ago may now require as little as $2,000 - $3,000 up front and less than $1,000/month for a comparable Internet-based service.

(NOTE: CRM is one of many aspects of contemporary customer service to be addressed in the National Customer Service conference for Marketing Educators: June 28 - 30, 2002; Austin, TX.)

Get the Buzz?

Maybe you’ve heard the term: Buzz Marketing. Think of it as a more formalized strategy for encouraging word of mouth promotion. With the challenges of cutting through the advertising clutter, cutting edge marketers are looking for ways to encourage the opinion and trend-leaders in a given community to talk up their products. Some carefully planned examples:

Vespa scooters: paid models ride their Vespa in and around Los Angeles hot spots this summer.

Hasbro Games: "deputized" fourth- and fifth-graders as "secret agents" to show of the new POX electronic game.

Ford: loaned their new Focus to trend setters in selected markets for a free six-month "test" drive.

Lucky Strike: offered beach chairs, cell-phone calls, and cofee to smoker outcasts at selected officees.

DaimlerChrysler: stragegically placed its PT Cruiser in retal-car fleets around trendy Miami Beach.

MarkED: all beta testers received a complete CompuTest 1.1 and a complete series of 3,000+ test questions at no additional cost.

With the unique success stories of TheBlair Witch Project, Harry Potter, Razor scooters and the like, buzz marketing is beginning to become a successful element of many integrated marketing strategies. Get trendy and maybe you’ll be invited to drive the next Harley or Mercedes?

Silver Screen Ads

Used to be a novelty when an advertisement was shown before the movie started –except for the popcorn and "shh" promotions. Sometime in the 80's, advertisers figured out that the movie theater presented a captive audience. By 1992, advertisers spent $40 million on movie theater ads. Today, the number is some $200 million and growing at 20% per year.

Advertising is growing because 1) it can and 2) it works. Acceptance of commercials has not always been a given. In fact, some chains still refuse to play. Others, however, see ad sales as a way to generate profitability in the midst of serious competition. (Most cinema chains limit commercial time to 3 minutes.) Theater advertising works because the advertisers themselves are beginning to understand the medium. Increasingly, they are able to target the ad to the expected audience (SUV ads before a family movie, perfume ads preceding a romance film, etc.).

Advertisers are still learning, however. People pay to go to a movie and are easily irritated if they’re forced to watch the equivalent of one more TV ad. The best, then, are creating high-appeal, soft-sell ad that are creative, subtle, and take advantage of the setting.

Follow that Cab!

Imagine if that ad board on top of the taxi actually said something of interest to you. Soon, it just might. Two companies (Vert Inc in Massachusetts and Adapt Media in New York) are experimenting with electronic billboards on the roof of local cabs. Using wireless technology, the message on each board changes as the taxi moves throughout the city. (The systems use Global Positioning System technology.) As the cabs works its way from the mid-town hotel to the airport, the messages change on the basis of its location. Cruising past a college campus, it’s a nightclub ad. As the cab passes through a major shopping district, it promotes a sale at the local retail outlet. The message even changes according to the time of day. Imagine an ad with today’s lunch special for a restaurant within two or three blocks that switches from lunch to happy hour to dinner–all on schedule as the day progresses–and for different restaurants as the cab moves across town.

Top Ten

Quick: Name the top ten global brands. Brand development is the market strategy of the moment. You teach marketing, right? Not to worry. It’s a hard question. But, the answer is worth billions to the brand’s owners. So, using a complex, involved process, BusinessWeek has ranked global brands according to their potential value in terms of future earnings potential. Interestingly, nine of the top ten have decreased in value (using Interbrand’s valuation strategies). The only one with increased value: GE. The top 10: 1) Coca-Cola, 2) Microsoft, 3) IBM, 4) GE, 5) Nokia, 6) Intel, 7) Disney, 8) Ford, 9) McDonald’s, and 10) AT&T. All are U.S. brands except Nokia which is based in Finland.

The U.S. Internet?

The U.S. owns the Internet. Right? First, no one entity owns the Internet. That’s what makes it special. Second, the U.S. is only a bit player if you evaluate usage in terms of page views per person (per month). Leading the charge, believe it or not, is South Korea (2,164 Web pages per month), followed by Hong Kong (1,123). U.S. Netizens average only 678. Koreans also lead in some e-commerce penetration: For example, more than 60% of all stock trades in South Korea are done online.

One on self.

Team sports decline. Extreme sports is where the action is. Snowboarding grew 51% between 1999 and 200. Skateboarding increased some 49%. Football and other team sports grew much more slowly (e.g., football by 15%). "Blood" sports were the big losers: pigeon shooting (down 24%), target shooting (down 14%) and bow hunting (down 11%). It’s the Gen Y guys making the change to sports where speed is the thrill.

Where we advertise.

Sometimes it seems like there is an ad on everything. Could be. Miscellaneous advertising expenditures are up 45% since 1997. But the action is still with the traditional media. The top five in 2001:

What about all those Internet interruptions? Expenditures in 2001 were still only 5,120,000,000–but with growth of 753% since 1997!

Sears Going Soft?

Sears is working to improve its bottom line. In doing so, management considered dropping its apparel (soft goods) business and focusing on products like tools and appliances (hard goods for which Sears is well known). Apparel has been a struggle for Sears as rivals like Kohl’s grabs market share of moderately-priced clothing. What to expect? They’ll keep apparel for the cash flow and to maintain a presence for the time being. Expect more casual styles and fewer choices overall. In the hard goods arena, Sears plans to eliminate unprofitable lines like bicycles, basketball and pools. They’ll add to fitness equipment, and digital electronics.

College Bucks

It’s one of parents’ most frustrating challenges: How to pay for Johnnie’s and Janie’s trip to the U. With even the least expensive college educations running into the tens of thousands of dollars, many families feel extreme pressure to make good on the promise.

At the same time, corporations the world over have struggled to build a base of return customers–frequent customers if you will. Frequent flyer programs have worked extremely well for airlines and some related industries, but have had limited success with your everyday merchant. Dozens of other frequency programs have failed or had very limited results.

Meet UPromise. Rolling out nationwide this month, companies such as Citibank, Salomon Smith Barney, AT&T, Coca-Cola and others have teamed up with the latest in major frequent-shopper programs. This one touches consumers both emotionally and in the pocket. The concept is simple: sponsors contribute a percentage of an individual’s purchase to a special college fund. The fund can be redeemed when it’s time for John and Jane to move into the dorm.

Based on preliminary data, UPromise is one to watch. Its unique blend of targeting would-be upscale consumers with both a practical and an emotional appeal is drawing rave reviews from both the consumer and the sponsoring businesses. More information at www.upromise.com

All New Workplace (Again)

Remember when business dress meant suit and tie? When people worked in the office? When Boomers where hot? In the new, new economy...It’s back. They’re back. What’s in:

Suits
In-house coffee bars
Emotional commitment to work
Offices
Humility

And rapidly leaving today’s ultra world of work:

Casual
Home offices
Gen Y
Job hopping
Signing bonuses

BusinessWeek’s "Working Life" has more.

Work and Eat

Time is of the essence. People are busy. Deadlines are tight. No time for "doing lunch." Restaurants take note: only 19% of employees eat lunch in a restaurant; 45% bring lunch from home, while 24% depend on carry-out. Want to sell them lunch? Think speed, convenience, and ease-of-eating while multi-tasking at the computer or in a meeting.

ePrice

In the early days, say 1998, Internet-based businesses used pricing as the key positioning statement: come to our site and we’ll sell it for less. It’s been generally assumed that for an eBusiness to be successful, it must offer the lowest prices available anywhere. After all, it was thought, with price comparisons only a click away, aggressive, price-conscious consumers would flock to the cheap and eventually drive the higher-priced companies out of business. Such has not been the case. Look for example at Amizon.com who seldom offers the lowest prices on a given item and yet remains a front-runner in the on-line world. Based on data from Media Metrix, only eight percent of active online consumers are genuinely aggressive price shoppers. The lesson: consumers still want good value as opposed to lowest price. Service, brand, selection, etc. all continue to be driving factors in both brick and click-based environments.

Retailers Turn to Marketing

Used to be you bought low, sold high. Then came discounters: buy lower, sell less high and watch the expenses. Then came Wal-Mart: control sourcing and distribution to the max. Now, there’s parity among the major retailers. What to do? Get back to understanding the customer and responding to his or her wants. It’s called marketing. Companies like J. C. Penney, Circuit City, Kmart, Amazon, Walmart.com and others are paying attention. One by one, they’re establishing "chief marketing officer" positions–assigning a very senior executive the responsibilty of understanding the customer and using that understanding to manage everything from merchandising to customer service training. Kmart may be the most fun to watch. A one-time leading retailer, Kmart has suffered big time in recent years. The company’s newly hired marketing guy, 40-year old Bren Willis, expects to start rebuilding by spending time in the stores trying to better understand the Kmart customer and what does or does not work. Expect changes in the Kmart store near you.

 Better Selling

Mohr Development (Ridgefield, CT) compared the top third against the bottom 2/3 of business-to-business salespeople (in terms of productivity) and identified seven skills in which the two groups were significantly different. Rated on a scale of 1 to 5 (5 = high) here are some examples:

Lube and a Latte?

What would you do if you were responsible for growing the Jiffy Lube brand? After all, it’s not too tough for nearly any automotive-related company to offer $30 oil changes. As we learned in our first marketing class, being first to market is important, but maintaining a competitive edge is what keeps the company profitable. Back to Jiffy Lube: The company’s recent research says that women are the majority of the fast lube customer base. Jiffy wants its share of them. Hence, a major test of upgraded waiting areas that the Jiffy people believe will be especially appealing to women. Ideas include satellite TV, fashion-oriented reading material, comfortable (plush) leather seating, upscale coffee bars, etc. Coming soon: Web kiosks and CD listening stations. The rollout will be tested in Chicago and San Francisco.

Sales & Marketing Management

Measuring Marketing

They call them metrics. In plain language, here are one researcher’s top ten ways of measuring the impact of marketing and its likely impact on a company’s future:

To Yourself, be True...

...and pick your new favorite business frequently. Loyalty marketing is one of the fastest developing initiatives in consumer marketing. Companies are increasingly recognizing the challenge of keeping a customer in the days of Internet price comparisons and the like. Here are ten important trends:

• Consumers are smarter and expect more
• Use of Internet reduces loyalty
• Low unemployment adds pressure to providing good customer service
• Price-based switching promotions (e.g., long distance) change expectations
• Global market adds competitors
• Customer-focused marketing technology is changing fast
• Deregulation complicates offers and choices
• Mergers and acquisitions result in changing offers, brand identity
• Mass media costs are increasing
• Competitors are getting on the loyalty band wagon

Electronic Grocery Shopping

Internet-based grocery shopping and home delivery is old school. In fact, Peapod and HomeGrocer struggle to make ends meet. Challenges include frequency of use (averages are once or twice a month), time demands on the internet (including the slow connection issues), and many issues revolving around consumers’ "need" to see, touch, and feel many grocery store items.

Introducing iOn Shopper, developed by Odyssey Technology and being tested by Penn Traffic and other grocer chains. From the consumer perspective: the hand-held device similar to a Palm Pilot allows customers to prepare a shopping list by scanning items as they’re used, by selecting meal plans/recipes for fulfillment, through voice recognition (say apple, then select from apple pie, apples, apple fruit snacks, etc.), or by keying in individual selections. The consumer gets access to the entire Penn Traffic product data base. The device remembers brand preferences and can suggest alternatives such as store specials. Once at the store, a customer may simply use iOn as a shopping list (organized according to the store’s floor plan), or download the list for a store employee to pick while the customer selects produce, baked goods, and so forth.

What’s in it for the store? Assuming the iOn Shopper adds the degree of convenience promised, the customer is highly motivated to return to the same store for most purchases. (Grocery customers typically split their purchases among 2 - 5 different stores over the course of a month.) Add to that the detailed data based that the list provides and the company has an invaluable source of information on each individual’s shopping habits and preferences. It allows an opportunity for real-time customer research, interacting with customers as they shop and offering incentives and information, while tracking their response and purchasing decisions. As a customer’s data base develops, and the iOn Shopper is increasingly helpful in speeding the overall shopping experience, the likelihood of increased use and store loyalty is expected to increase significantly.

Odyssey will test the concept with Penn Traffic’s four regional chains (Ohio and east) and a Northwest chain this winter. If all goes as planned, iOn Shopper, or a similar device, is likely to find its way throughout the nation in the coming two years.

Grab ‘em when you can seems to be the overarching strategy for cutting-edge, technology-driven media. What’s a driver to do while filling up at the local self-serve? How about some news headlines and a couple of ads? Same for the two or three minutes a mid-manager may spend in an elevator each morning. Or, in line at the supermarket. The concept is simple, straightforward, and made possible by wireless technologies that permit media companies to capture a market with frequently updated messages with minimal expense compared with paper billboards and the like. Billed as "alternative outdoor," these creative uses of video screens, often with audio, are small, but gaining steam. (In 1999, these creative media outlets probably accounted for less than 1% of the $6.6 billion outdoor industry. However, with advancing technologies the numbers continue to grow.) What else does one do while waiting for the ATM machine? And, what better time to suggest a purchase than during the few moments a viewer is deciding how much cash to get?

Great time to be in marketing!

After a stellar 1999, and a terrific first half in 2000, sixty percent of executives survey say they will increase the size of their sales staff during the second half of 2000. Some examples: (Percentages indicate the percent planning increases in sales for the specific industry indicated.)

• Information Technology 80.5
• Electronics 79.4
• Food 57.1
• Pharmaceutical 55.9
• Transportation 50.0
• Health Care 48.5
• Chemical 46.4
• Financial Services 38.9
• Printing 30.0

Gender Equity

Men make more, right? Yes, but according to the latest findings of the Census Bureau, the salary differential is not a gender issue. Women make some 76% of what men do, but according to the Employment Policy Foundation, the issue is not gender but child-rearing. According to the study, there is no gender pay gap between full-time workers age 25 - 35 who live alone. The difference between genders for those who are married without children is only 3%. Bottom line: women spend an average of 14.7 years of their pre-retirement adult lives away from work, compared to just 1.6 years for men. Men tend to have advanced degrees; many of today’s highest earners went to college and graduate school in the 1960s, a period in which few women trained for high-pay careers. The income gap, then, appears to be more an issue of child-care responsibilities than of bias or other variables. Since 51 percent of full-time students today are women, the pay gap is likely to continue to close for women who choose a career lifestyle over a "family" focus.

More About Women

Women are 49% of managerial and professional specialty positions
Over half of the associate, bachelor’s and master’s degrees are held by women
Nearly 12 percent of corporate officers are women (+37% since 1995)
Only 3.3. percent of top-earner spots are held by women (up 175%)
Women of color represent only 1.3 percent of corporate officers.
Fortune 500 companies with at least one female board director is up 21 percent.

Various sources as reported by

Remember Video Stores?

Used to be if you wanted to see a movie you went to the movie theater. Then came VCR’s, Blockbuster, et.al. The problem with video rentals, as most addicts know, is that one must either plan ahead or spend 15 minutes driving to the store and back. And, after all, this is the 21^st century; one should not have to waste 15 minutes going to the store or, for that matter, planning ahead. Enter "video on demand."

The hotels have been experimenting with it for two or three years. (Pick your movie and in 10 or 15 seconds, its up and running on the TV in your room.) Since last spring, so have the local video companies. Charter, in Atlanta, for example, offers a a similar service. In fact, their service includes full control of the tape: stop, rewind, and pause.

What’s a poor Blockbuster to do? (It’s an $11 billion dollar business.) Their plan is simple: Buy into the concept. Blockbuster is teaming up with local phonies and Enron Corp. to provide its own servcie in early 2001. Blockbuster is so impressed with the potential of the technology that the company is predicting that rentals will double as the service rolls out nationally. Pop’s Video Corner, on the other hand, is likely to become just a memory.

Big Spenders Spend More

Think you have a sense of advertising? Ask yourself how much was spent on media purchases during the first six months of 2000. Write down your answer. Hint: Media spending is up. Who’s buying? The top five categories for the half:

• Automotive ($4.1*)
• Retail (2.3)
• Telephone (1.5)
• Financial (1.5)
• Food (1.5)

What did they spend it on?

• Network TV (10.1)
• Newspapers (9.0)
• Magazines (8.4)
• Spot TV (8.0)
• Cable TV Networks (5.2)

And, finally, which companies are spending the most? 

• General Motors (1.4)
• Phillip Morris (.89)
• DaimlerChrysler (.78)
• Procter&Gamble (.64)
• Ford Motor (.62)

*billion dollars

Need to revise your answer? Total spending on media, first half of 2000, was up some 14.9% to a total of $47,660,000,000.

Do Coupons "Cut" it?

There’s more of them. But fewer of us are cutting on the dotted lines. While coupons remain critical to many company marketing plans, the environment is changing. As marketers learn to focus their efforts on smaller audiences with more tightly targeted messages, the need for coupons decreases. Still, shoppers redeemed some 4.7 million coupons in 1999 (down from 4.8 million in 1998) of the 256 billion distributed (up from 249 billion in 1998). What product gets the most coupons? In 1999 it was household cleaners, taking the place of breakfast cereal which was the 1998 winner and runner-up in 1999.

(Non-) Smokin’ Phones!

All the well-intentioned advertising to discourage teen smoking has had, at best, modest impact. Teens being teens revel in defying logic and adult appeals. Enter the cell phone. Seems that a pair of British researchers are finding negative correlations between teen smoking and their use of cell phones. Their hypothesis: The cigarettes in the hands of British teens "are being replaced by an equally addictive–albeit healthier–obsession." The argument is that teens cannot afford both habits (and have only so many hands). Teens like cutting-edge technology. And, the cell phone is associated with some of the same traits that attract kids to smoking: individuality and sociability, rebellion from the adult world, bonding with friends for example. In Britain, at least, cell phone ads focus on promoting self-image and identity–much like ads for smoking. (Possibly all that coughing isn’t cool on the phone?)

Bricks v. Clicks

Large, traditional retailers are (slowly) learning to take advantage of the web. It’s not been easy. Wal-Mart, for example, formed a separate company (Walmart.com) that literally shut down and started over for this Christmas season. The company’s new eCommerce strategies include:

Skip the bells and whistles, at least for this year, and focus on reliability and ease-of-use.
Drop product that make little sense for the web (e.g., $0.25 plastic cups).
Expand categories that complement limited store offerings (e.g., patio furniture)
Integrate stores with the web (e.g., let customers buy tires on the web and at the same time, schedule installation at a nearby store).

Major (traditional store) retailers with significant web presence include (in order of use in September, 2000):

• - barnesandnoble.com
• - jcpenney.com
• - sears.com
• - bestbuy.com
• - bluelight.com
• - staples.com
• - officemax.com
• - officedepot.com
• - target.com
• -toysrus.com
• -walmart.com

Business Week
November 6, 2000

Nike: The Soft Side

Here’s a classic study in positioning through advertising: Nike ads are best known for edgy, aggressive, controversial approaches to grabbing attention. Remember the chain saw spoof? Targeted primarily at young men, Nike’s ads have struggled to deliver the goods, with gains of just 2.5% in its most recent fiscal year. Enter the women’s market. Currently only 20% of the Nike U.S. total, Nike women’s products are among its fastest-growing categories. Watch closely as Nike attempts to broaden its ad appeals with female athlete endorsements, "real" poses to which everyday people can relate, and a continuing series of "touchy-feely" ads intended to appeal to the female buyer. Making the positioning challenge even more difficult is Nike’s effort to build the feminine appeal without losing its core male business. Can the softer appeal work on young men? It’s an emotional balancing act with lots of risk. If the newer ads muddle the image, it will make Nike’s comeback that much tougher. Conversely, if the positioning effectively appeals to a wider audience–both male and female–it may be the key to competing with a reinvigorated Reebock and a range of new lines carrying brands such as Gap, Tommy Hilfiger, Prada, Ralph Lauren (Polo Sort RLX) and Adidas. Stay tuned.

Business Week

October 30, 2000

eDirect

It used to be direct mail. Then came the Internet and banner ads. Now, with increasing costs for hard copy mail deliveries and increasing questions about the effectiveness of banner ads, e-mail addresses have become a hot property. eMail lists of consumers grouped by interest and geography is a much more effective method than running banner ads, according to some analysts. "Internet marketing has moved through generations of new media., and when a new medium like email marketing is announced, it creates a lot of attention," says David Tolmie, CEO of Yesmail.com–an organization that maintains a list of some 13 million e-mail addresses. Experts predict that more than 10 percent of all messages received in 2001 will be marketing messages, compared to 6 percent in 2000 (Jupiter Communications).

SME-I Daily Breaking News

October 18, 2000

Beyond Fries at McD

Advertising Age reports (unconfirmed by McD) that we’ll soon be seeing some new and fresh ideas from the land of the quick-burger. Look for two new concepts:

"The Diner at McDonalds’s" or something similar with a concept that allows customers to order from a kiosk, followed by table service.

Attached to a conventional McDonald’s, a deli and ice cream shop featuring deli meats, artisan breads, soups, and fountain deserts.

Both concepts are expected to be tested and possibly rolled out in limited areas over the coming year. If it sounds like McD is playing up to an aging crowd, it’s just possible they’ve been looking at what’s happening to the traditional "boomers" eating-out habits. McDonald’s "official" word on all of this: "for competitive reasons the company, the world’s largest fast-food chain, does not publicly discuss tests or ideas unless it has something to announce."

SME-I Daily Breaking News

October 16, 2000

Work v. homework

There’s more than beer and philosophy on most college campuses today says Postsecondary Education Opportunity, a research publication of the Center for the Study of Opportunity in Higher Education. According to 1998Census data, 14 percent of full-time students work full-time–up from 8 percent in 1987. Another 38% work part-time, bringing the total of full-time college students who work at paid jobs up to over 50%. (Among part-time college students, some 71% work full-time.

American Demographics

October, 2000

Outdoor goes alternative

"Outdoor" advertising is on a role, so to speak. Expected to reach $7.6 billion by 2004, the latest in alternative media include ad messages on private cars, telephone kiosks, trucks, airplane overhead bins, elevators, gas pumps, restrooms, and more. FreeCar is a classic example. One of the company’s strategies includes identifying a "typical" member of the advertiser’s target audience and then providing, in effect, a free VW Beetle fully decked out in the appropriate logos and ad messages. A young, active, on-the-move, health-conscious Mark Fernandez, then, drives his "Jamba Juice" Beetle throughout his 1,300 miles/month routine–all at the expense of the juice company. The trick for the advertiser is to find the exact alternative outdoor medium that will effectively reach a very narrow niche market.

American Demographics

October, 2000

eDemanding

Online buyers are tough. They expect freebies, lack loyalty, and purchase on price. Research by Laurie Windham of Cognititive, a San Francisco consulting firm suggests that marketing via the web has a long way to go. Her data suggest that eBuyers are "shoppers" in that they use the net for comparisons of price, service, shipping charges, etc.-- and then pick the best of the offerings across the system. All admirable from a consumer perspective, but eShopping creates a very difficult environment for an eRetailer to generate a profit. This "empowered, impatient customer who has a short attention span" is not the loyal customer that business craves.

The challenge, then, is to create marketing and branding programs that build loyalty on the web without giving away the computer, so to speak. Businesses will need to lower expectations, especially in terms of price and freebies, while building new and more creative loyalty programs. And, while they worry about the front end of the marketing program, they also need to be concerned with the back side-fulfillment. The entire eRetail business model relies heavily on logistics and is often dependent on other companies (e.g., UPS) for the final step in satisfying the customer. In short, there are plenty of challenges (and opportunities) in the foreseeable future.

FORTUNE
October 2, 2000