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What should I do on your birthday?
Fri, 03 Jul 2009 21:37:00 -0700
On July 4, birthday of the USA, we're supposed to blow off fireworks, eat hot dogs and buy a Chevrolet. On Columbus Day, birthday of an early imperialist, we're supposed to shop and march in a parade. On Martin Luther King Jr. day, marvelously, we're supposed to participate in a national day of service. So, what should we do on your birthday? With all due respect to Hallmark, the idea of sending people cards and presents on their birthday seems both selfish and small-minded. It seems to me that we could think bigger. On the birthday of your company or brand, what would you like your customers to do? On your birthday, what should your friends do? Let's say you have a shoe buying fetish. Perhaps on your birthday, your friends could buy shoes--for themselves, not for you. Share the joy, right? Or perhaps buy shoes for their friends? On my birthday, it would make me really happy if people started a project, launched an idea or engaged in a difficult interaction that made something good happen. Make a difference day. What's your story?  |
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What to do with special requests
Thu, 02 Jul 2009 22:20:00 -0700
The bike shop is busy in June. If you bring your bike in for a tune up, it will cost $39 and take a week. A week! What if someone says, "I have a bike trip coming up in three days, can you do it by then?" At most bike shops, the answer is a shrug, followed by, "I'm sorry, we're swamped." The problem with telling people to go away is that they go away. And the problem with treating all customers the same is that customers aren't the same. They're different and they demand to be treated (and are often willing to pay) differently. So, why not smile and say, "Oh, wow, that's a rush. We can do it, but it's expensive. It'll cost you $90. I know that's a lot, but there you go." Outcome: Maybe they'll still leave. But maybe they'll happily pay you for the privilege of doing business with you. Why should this be your choice, not theirs? If you do tax accounting for mid-size businesses, why not offer a special last-minute service? A service in which you process shoeboxes filled with unsorted papers? A service that costs less but happens during your slow season? There are two really good reasons to turn down special requests: 1. because you're marketing yourself as extremely busy and perfectly willing to turn down good work. 2. because you want to market yourself as someone who is a rigid artist, a stick in the mud or a crotchety perfectionist. This works great for pizza places.  |
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The purpose of a book cover
Wed, 01 Jul 2009 23:11:00 -0700
(and I think it works for lots of products) Is the purpose of the cover to sell books, to accurately describe what's in the book, or to tee up the reader so the book has maximum impact? The third. It's the third because if the book has maximum impact, then word of mouth is created, and word of mouth is what sells your product, not the cover. Tactically, the cover sells the back cover, the back cover sells the flap and by then you've sold the book. If those steps end up selling a book that the purchaser doesn't like, game over. So you have to be consistent all the way through and end up creating a conversation after the purchase. Books are better at creating conversations than most products (when was the last time you talked about a pool cue), but there's lots of opportunity here, no matter what you make. Some ways that a book cover can accomplish its mission: - Iconic (because iconic items tend to signal 'important')
- Noticeable across the room (you see that lots of other people own it, thus making it likely that you'll want to know why)
- Sophisticated (because this helps reinforce that the ideas inside are worthy of your time)
- Original (why bother reading a book you already know)
- Clever
- Funny
- Generic (reminding you of a genre or another book you liked, not generic as in boring)
I don't know about you, but I judge books by their cover every day.  |
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The risk/reward confusion
Tue, 30 Jun 2009 23:13:00 -0700
 It's easy to to adopt the policy of avoiding risk at all costs, that whenever possible, the products you launch or the engagements you have should be flawless and without downside.
Here's the problem: in most endeavors, a small increase in risk can double the reward. It's the second doubling of reward that brings serious risk with it. But the first leap is relatively painless. In the chart above, notice that going from point A to point B brings almost no incremental risk. It might feel scary, but rationally, it's not. Doubling reward again from B to C, though, brings significant incremental risk. It's this second doubling that gets you through the Dip, that leads to a breakthrough, that makes you remarkable. But I'm not even talking about that. I'm just hoping you'll warm up by making the tiny leap of avoiding all risk. Riskless is hardly worth your effort.  |
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Paul Williams: The Five Stages Of Idea Acceptance
Fri, 03 Jul 2009 07:53:23 -0700
You feel a little jittery. Is it the presentation? Or the pot of coffee you drank this morning while rehearsing? You gather your laptop and index cards and head to the conference room. This is the big day. You've been working on the plan for weeks now. You're ready. It's time to present your big ideas for the Summer 2010 plan. The team is there. Laptop syncs with the projector. You're hitting your key points beautifully. You pause for questions... And then... it starts going sideways. John, at the end of the table casually mentions, "You know, we tried an idea similar to this in '98 and it didn't work." He is followed by Julie, "Do you think this is a good idea in this economy?" Matt chimes in... (*phew* a friend). He corrects... "Sure, in any economy, Julie! And, John...'98 was '98 - that was last century. I think this is a good idea. The only problem with it is...." Noooooo! You've just witnessed the Idea Killers. Killjoys armed with their favorite invisible weapon - killer phrases. In his book, What A Great Idea! 2.0, Chic Thompson writes about - among other things - how new ideas are often struck down with killer phrases. These phrases reflect the lack of acceptance of something new or different. He also points out that killer phrases "are as inevitable in the innovation process as ideas themselves." Psychologists say the human reaction to a new idea unfolds something like below, which Chic calls the Five Stages Of Idea Acceptance.

The door-lock analogy is pretty accurate... You can have four of the five locks open, but the door won't open until all five are unlatched. How To Apply This
By knowing the stages you can either:
(a) have already figured out how to...
- make it relevant,
- prove it,
- make it safe, and
- show it is saleable
...when you present it. Or at least:
(b) be aware each of these need to be unlocked as you champion the idea. Happy locksmithing! |
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Paul Barsch: Why Capacity Management Matters to Marketers
Wed, 01 Jul 2009 07:19:25 -0700
In a challenging global slowdown, the world seems awash in capacity. Scans of major business publications show airlines reducing flights, companies furloughing or firing employees, and manufacturers closing plants. If you agree that it appears there is more unused capacity than demand, why should capacity management matter? It would seem in the “Great Recession,” capacity planning and management should be a minimal consideration. In fact, capacity utilization for many industries is at an all time low. For example, from January 2008 to January 2009, according to the Financial Times, the demand for automobiles in the United States fell from 15.9 million to 9.6 million per year. And Wall Street Journal reports Federal Reserve Chairman Ben Bernanke told the House Budget Committee recently, "The slack in resource utilization remains sizable". As companies attempt to cope with a “new normal,” painful restructuring processes have included reducing “capacity” in human resources, plants and equipment, information technology, number of brands, distribution channels, and even debt covenants. All this restructuring is intended to pare down capabilities to what is perceived as a new reality in market conditions. Indeed, observing macro-economic conditions, it’s tempting to write off “growth.” However, “growth” is far from dead. Take for example, the exponential growth trends of Facebook and Twitter. In January 2009, Facebook touted its 150 millionth user, and in May 2009 surpassed 225 million users! One site projects Facebook to have 300 million users by the end of the year. Twitter’s growth has also been phenomenal—audiences grew 40% in just 30 days (March-April 2009). In fact, “growth” exists (often exponentially) in areas such as data volumes, populations, energy usage, Moore’s Law, GDPs of select countries (India, China etc), education expenditures, and unfortunately—state and national debts! Growth also can be found in micro-segments and categories such as increases in market share of private label brands vs. national brands on grocery store shelves, or Apple’s share of the smartphone market. Once our eyes are opened to growth trends, it’s quite easy to see signs of expansion everywhere! The ability to meet the needs of your customers now and in the future is a critical function of any business. That’s what capacity management is all about. Spikes in demand could mean that your company is leaving money on the table and/or failing to meet customer needs. Need proof? For customer reaction, simply perform a web search on keywords “Twitter down time” or “Twitter outage” and you’ll gain evidence of how important capacity management really is. Indeed, capacity management isn’t a one-time, annual event. It should be a continual process of making sure your business can scale up or down to meet customer needs. With a thumb on the pulse of demand, marketers have a responsibility to help establish a well documented capacity plan and process that considers future business requests. Sound like simple, common sense, right? Properly predicting demand is anything but easy. Considerations must include a clean and accurate set of historical data, an analytical infrastructure to compute and analyze data, an understanding of the current state of the business and its capabilities, future growth projections based on applicable trends, and then a gap analysis of what it would take to scale based on various “what-if” scenarios. Capacity management is all about reducing surprises. Take a good, hard look at your business. What’s growing? Something surely is. What marketing campaigns are you preparing? What happens—for goodness sake—if they’re too successful and demand exceeds available supply? McDonald's in India had to scale back marketing campaigns for Chicken McNuggets because they couldn't keep up with demand. Good marketing is making promises your company CAN deliver. Can you accurately predict if and when you’ll run out of resources to meet customer needs? Can you afford not to properly manage “capacity”? Questions: • There appears to be a glut of capacity worldwide (i.e. shipping, telecommunications, manufacturing etc.). Should marketers be concerned with the concept of capacity management?
• What are the ramifications of getting capacity management wrong?
• Businesses are adding flexibility to meet spikes in demand through vehicles like cloud computing, temporary labor and outsourcing. Can you think of others?
• Suppose “capacity management” is built into the function of an annual strategic planning exercise. What might be a pitfall of this approach?
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Engaging Influentials: Twitter and Beyond
Fri, 03 Jul 2009 17:10:00 -0700
With the rapid adoption of social media, we have accelerated into a network economy. In a network economy, connectivity enables value to be created and shared by network members. The larger the network, the greater the potential benefits. In the digital world, network activities take place on an open platform that enables participation and cloud computing (think Wikipedia and widgets). In networks, some members are more connected and active, and therefore have more influence. These influentials are important members because they add significantly more value to the network. In the digital world, they blog, twitter, upload videos, experiment with new gadgets, and create widgets. As early adopters, they tend to be trendsetters that are followed by their friends and sometimes the masses. The book, the Whuffie Factor, talks about Social Capital, and how our society is increasingly motivated to become more useful and creative. Today, more people want to be influencers, and they want to be enabled. In 2009, Twitter has emerged as one of the most talked about platforms in the network economy. Indeed, there is a simple network exchange on Twitter: influencer creates bite-size content, and follower discovers new information. Here are a few examples of the exchange: • Gavin Newsom, mayor of San Francisco and California Governor Candidate, has over 500,000 followers. He keeps his followers informed about upcoming events and fundraising, and enables them to interact with him directly. • Mike Massimino, a NASA astronaut, has over 400,000 followers. He combines his human life story with a behind the scenes look at being an astronaut. • And of course there is Oprah, approaching 1.4 million followers. Twitter makes it easy to share your voice and build your presence in the community. RegularGeek’s comment sums up the value: “Even someone like myself, and I do not have a huge social media presence, can talk to and possibly influence about five thousand people. If I have two thousand subscribers on the blog, Twitter, FriendFeed and Facebook, the number of unique people could be around 5,000. That is direct contact, and the network effects could create an audience much larger.” While we are all familiar with Twitter, there are many more communities that engage and enable an influential audience with network principles. One of the key elements of a network is the idea of reciprocity. The idea of “I win, you lose” doesn’t work in a network, or it will fall apart. Instead, there must be mutual win-win exchanges. One such example is at Triggerstreet, was founded in 2002 by Academy Award Winner Kevin Spacey, which is a community for emerging artists. The promise of the network is to democratize exposure and offer a career boost through a network of peers who review your work, rate it, and provide feedback. Further, the network has engaged influentials in the form of participating judges, including Michael Myers, Sean Penn, Snoop Dog, Sheryl Crow, and Liv Tyler. It is this very concept of participation by influentials that is becoming increasingly important with each passing day. In our world of choice and overcapacity, influentials are an important element of the decision making process. As we de-emphasize paid media such as television commercials and print ads, the power of earned media and word of mouth is amplified. As you consider new ways to share your story and build your reputation, learn from entrepreneurial initiatives that listen to and engage the influentials. Our first example is Jodangle which helps you listen to and monitor the online chatter by influentials. In an environment where influential content originates from an exploding number of information sources, Jodange provides intelligence on who and what is influencing customers, competitors, and the overall marketplace. In April 2009, Jodangle received $1.2 million of investments. Our second and third examples are currently in development at DreamIt Ventures, which helps entrepreneurs launch their ventures and build great companies. Trendsta is a new way for trendsetting teens to test and review the latest hot products. Like BuzzAgent, the principal is that word-of-mouth marketing is powerful. Trendsta has even more of a laser focus on the influentials by engaging trendy teens in the digital world. Our final example is Scribnia, which is a rating and discovery engine for bloggers and columnists. Much like Triggerstreet, the promise is to build an influential community that is engaged in sharing creative work and providing feedback. Consider your role in the network economy. How you are going to add value to and expand your network? As you build your presence and your reputation, listen to the conversation around you, pursue authentic participation, and engage influentials who can amplify your message.
Contributed By: David Capece, Sparxoo Sponsored By: +2 Marketing Consultants  |
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Days of the Logo Numbered
Thu, 02 Jul 2009 18:30:05 -0700
“Make it bigger,” the executive screamed from the corner of the room as I desperately sought a sign-off for an ad featuring a major fashion brand. This wasn’t the first time such a situation came up. In fact, every meeting I had always ended up in discussions about the placement and size of the logo – it was as if that one by one inch space, over time, had become the holy grail of branding – the rest was more or less an ad-on. Let’s be frank – we live in a logo obsessed world. Pay a quick visit to Times Square and you’ll see what I mean. But is the magic still in the logo as we are exposed to some 2 million television commercials throughout life until we reach the age of 66 – or do we continue to be caught up in a format which once worked but, with the passage of time and the changed media picture, is now out of date? I decided to find out. Over the years I’ve been stunned by the fact that we smoke more – not less. Admittedly the biggest increase of new smokers takes place in Asian and Eastern European countries. That said, even in the U.S. increases in smoking remain steady – not decreasing as we all want to convince each other it is, and all this despite the fact that we all know it is unhealthy. It is almost impossible to light up a cigarette indoors. Remember that advertising in most countries were banned decades ago, still brands like Marlboro rank in the very top, over the most expensive brands in the world – why? The only way to find out was to understand what really goes on in our subconscious mind. Project Buyology – the largest NeuroMarketing project of its kind in the world – scanning some 2,000 consumers worldwide – wanted to answer exactly that question. What are the tricks the tobacco industry knows which the rest of the world somehow has missed? Estimates today claim that 85 percent of everything we do, every minute, takes place in our subconscious mind. Was this where the battle was taking place? The answer was to be found in a small region in our brain called the neuclus accombens – also called the craving spot. It is a small area in our brain which controls our pleasures – and addictions too, such as smoking. It is a lie detector. It may be that you claim not to be affected by ads for tobacco smoking – the neuclus accombens however will tell you the truth. Over the years I’ve observed (and admittedly admired) the way tobacco companies have crafted their clever brand strategies. Marlboro’s solid sponsorship of the European Formula 1 – a race somewhat similar to Nascar race in the U.S. – had become iconic for the brand with it’s red Ferrari cars. Can cigarette cravings be triggered by images tied to a brand of cigarette but not explicitly linked to smoking—say, the sight of a Marlboro-red Ferrari or a camel riding off into a mountainous sunset? Do smokers even need to read the words Marlboro or Camel for the craving spots in their brains to compel them to tear open a cigarette pack? In the U.S. the cowboy did its job. Joe Camel or the Camel Trophy race – not to mention the Camel or Marlboro merchandising line – all seem to play an important role in building a brand under circumstances where advertising was totally banned. But how powerful was it? With the support of one of Britain’s leading scientists, Dr. Gemma Calvert, of Oxford – and by the using the MRI – arguably the most sophisticated brain scanning technique in the world our objective was to discover the answer. One by one we would expose smokers, former smokers, and people considering smoking – in short a raft of different scenarios all with some relationship to smoking to the iconic pictures while we scanned their brains in order to understand the activation in the neuclus accombens. Over a two-month period, our smokers filed in and out of Dr. Calvert’s Oxford laboratory. What parts of their brains would light up as they watched these logo-free images? All of our subjects were asked to refrain from smoking for two hours preceding the test, to ensure that their nicotine levels would be equal at the start of the experiment. First, both groups were shown subliminal images that had no overt connection to cigarette brands—the aforementioned western style scenery, including cowboys, beautiful sunsets and arid deserts. Next, to establish a comparison, they were shown explicit cigarette advertising images like the Marlboro Man and Joe Camel on his motorbike, as well as Marlboro and Camel logos. Dr. Calvert and I wanted to find out if the subliminal images would generate similar cravings to the images generated by the logos and the clearly marked Marlboro and Camel packs. To no one’s surprise, the MRI scans revealed a pronounced response in the volunteers’ nucleus accumbens—the area we now know to be involved with reward, craving, and addiction—when they viewed the actual cigarette packs. But what was more interesting was that when the smokers were exposed to the nonexplicit images—the red Ferrari, the cowboys on horseback, the camel in a desert—over a period of less than five seconds, there was an almost immediate activity in the craving regions of their brains in the exact same regions that responded to the explicit images of the packs and logos. In fact, the only consistent difference was that the subliminal images prompted more activity in the volunteers’ primary visual cortex—as might be expected, given the more complex visual task of processing those images. More fascinating still, when Dr. Calvert compared the brain’s responses to the two different types of images, she found even more activity in the reward and craving centres when subjects viewed the subliminal images than when they viewed the overt images. In other words, the logo-free images associated with cigarettes, like the Ferrari and the sunset, triggered more cravings among smokers than the logos or the images of the cigarette packs themselves—a result that was consistent for both Camel and Marlboro smokers. But why is that? Come with me – we have to go to the doctor’s office – let’s say you have a terrible headache. Let’s imagine we enter the consultation room which to our surprise is packed with Panadol logos, on the wall, on the desk, there’s even a neat decoration of the latest Panadol packs displayed behind the doctor as he’s sitting writing notes wearing a Panadol hat. As you explain about your terrible headache – the doctor in response replies – “hmmm – I’d probably recommend Panadol to you.” What would your reaction be? Guards up! That’s exactly what happens in today’s world of advertising. In order to survive our guard goes up – this is not just the case with tobacco smoking, but for almost every category – this is our defence mechanism. So what does this mean in practical terms? Let’s take an express train back to the year 1915 – the year the original counter Coca-Cola bottle was invented. The original brief was to develop a bottle so smart that if you dropped the bottle on the floor and it smashed into thousands of pieces of glass you’d still be able to recognize the brand. Grab any iPod and you won’t be able to find the logo on the front – yet the iconic look is enough for you to know what brand it is. The same is the case with any picture from United Colors of Bennetton, a McDonald’s roof, a Tiffany’s rubine blue box or Marlboro’s cowboy. I call my theory Smash Your Brand – a theory which simply aims to move on from the logo – and begin to have what I call “Smashable” components. A color, a shape, a sound, a smell – you name it – indirect signals which all tells a story about the brand – without having to show the logo. So why is this so much better – because you bring the consumer with you on a journey – you engage the consumer in figuring out who’s behind the message – and most importantly you talk to the subconscious mind. The logo is not yet dead but I would claim that its days are numbered – the fact of the matter is that the battle ground is no longer to take place in our conscious mind – instead the true decision making process will happen at a level in our brain which, until recently, was impossible to reach – thanks to the marriage of science with marketing we’ve now finally begun to understand what our true Buyology is all about. Sponsored By: +2 Marketing Consultants  |
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Marketing Luxury Brands Q&A
Wed, 01 Jul 2009 17:10:00 -0700
Not too long ago I was interviewed by Amanda Tattam of Melbourne University's Up Close program. Here's the discussion that transpired. Amanda Tattam The massive growth of luxury goods has now extended deeply into China, India and other markets. Estimates vary, but some say the luxury market is worth between 60 billion and 20 trillion US dollars, including consumers who are trading up. That is, the increasingly wealthy middle classes, who 30 years ago, would have thought it luxurious to have two TVs in a household. Mark, can you explain how a luxury brand distinguishes itself from other brands? Mark Ritson The question today of what makes a luxury brand a luxury brand and how do we distinguish it is very hard to answer. The standard business response is to say, ‘they are more exclusive’. And we get exclusivity by having high price and relatively small amounts of the product available. The reality, however, of luxury brands is that they are sold in their millions, and in some cases, are not priced that much higher than the standard output. The only way I can really answer your question is to say, it is all relative. As you said in your introduction, it wasn’t that long ago in Australia that we would have considered two televisions to be a luxury, or even further back, one colour television. And you can make a strong argument, for example, that Starbucks in China, right now, is a luxury purchase – because of its cost, because of how frequently it is purchased by many people. So, I think the long answer is a complicated one, but the answer is, it depends who you talk to. I think in the business community what we would say, is that there is a small cluster of ‘more expensive brands’ which have a distinct strategy that we would identify as being ‘luxury brands’ and they start with the Rolls Royces and the Tiffanys and the Louis Vuittons of the world. And, I think that tends to be how we see them. Amanda Tattam Okay. So, what is the difference between ‘old’ and ‘new’ luxury for example? Mark Ritson It is an interesting one. It isn’t actually related to the age of the brands. So, two of the new classic luxury brands would be Coach, which is more than 60 years old, and in many cases would refer to Burberry, as using new luxury strategies. And Burberry is 151 years old. So, it isn’t their actual age. The term, ‘new luxury’ refers to a different approach to marketing luxury brands. A different approach in the sense that there is more focus on customers, greater production of the numbers. So, they might still have higher prices, but if you look at the typical Coach handbag, which is a well-known brand Japan, China and America, Coach would be making significantly more of it than the ‘classic’ old luxury brands like Gucci or Prada. And the final limit of new luxury which is of, I think, great distinction, is the new luxury brands have embraced production in China, far more so than the older luxury brands that continue to make most of their products, in some cases, in the traditional European artisan centres. Amanda Tattam Okay. When you market a luxury brand, what instincts and desires are you really appealing to and has that changed over time, do you think?
Mark Ritson Clearly, when you are marketing luxury brands, you are selling more than the functional product itself. No one buys a Louis Vuitton bag for four or five thousand American dollars, simply because they want a bag. And, indeed, if you look at luxury watches, we spend, in many cases, tens of thousands of dollars for these items. Clearly we don’t need that, because our phone tells us the time. There is usually a clock in the room. We could buy a one-dollar watch, which would do an equally good job. So, beyond the function there is something else, and it is clearly the symbolic. Clearly, it is the identity, which the brand confers upon the owner. You might see that as being a sense of superiority, perhaps. But we don’t think so within luxury brands. We like to think – and I think it is true of most of the customers that we bring into luxury brands that the real attraction has always been a link to ‘something special’. A link to a story, or a founder, or a creator or a time, that is something a little bit special. And I think it is that ‘authenticity’. When one buys a Dior handbag, there is a strong line of authenticity, going all the way back to Christian Dior, 1947, this incredible moment of fashion. So, I think what we are really appealing to in a world where most people feel dislocated from any sense of authenticity, here is something which is ‘pure’, here is something which has a ‘specialness’ to it and you can be a part of that. Amanda Tattam You’ve noticed that there is a proliferation of these cheaper imitations, the fakes, especially with jewellery and shoes and handbags and so forth, this doesn’t seem to damage the genuine article, though, why is this so? Mark Ritson It is a very complex picture. And, I think, before we get onto these counterfeits and talk about why they don’t damage them, let’s also be clear that it isn’t a legal practice and certainly it is true that all the luxury brands have worked together with various different countries and law forces to attempt to reduce them. Now, having said that, from a business point of view, counterfeit goods have absolutely no impact whatsoever on the success of luxury brands. In fact, they may even work to their favour. The reason, first of all, why they don’t damage a luxury brand, is very simple, I don’t think that, in the history of Gucci, they’ve lost a single customer who bought a counterfeit rather than the genuine item. Now, do people buy the counterfeits? Absolutely, in their thousands. Would any of those people bought the genuine article? Absolutely not. If one is paying ten thousand dollars for a bag, it is certainly not because one is attracted to just the bag. It is the brand itself. And when one buys a counterfeit bag one is not buying the brand, and the consumer knows that. So, the first thing to say is that, I don’t think it cannibalises the sales. Now, another argument that is often used with counterfeits, is ‘yes, but it damages the brands exclusivity, to see all of these Louis Vuitton, Gucci, Prada bags walking around the streets’. Again, that may be true, but I’d offer an alternative explanation as well, which is: you’ll often see someone walking down the street and you might think in your own mind, ‘that’s not someone who should be carrying that beautiful Gucci bag. It must be a fake.’ In reality, perhaps it is not. And yet, that counterfeit mindset often allows us to offset, the ‘non-exclusive’ image of the brand. So, are counterfeits a problem? Yes. Do they cause a major impact on these brands? No. And in fact, many of the luxury brands use them very strongly to measure market demand. One of the reasons you know that a luxury brand is healthy, is when it has attracted a good deal of counterfeits.
The black market is much quicker, much faster, much leaner, much more entrepreneurial. So, when they start to copy your bags in Canal Street or in the markets of Shanghai, it is because they’ve recognised that market demand for that brand is growing. But it is fair to say that we spend a lot more time in luxury brands worrying about what is called the ‘gray market’. The black market is when you sell fake or counterfeit or stolen goods. The gray market is when you sell genuine products but through non-affiliated or non-endorsed channels. Everyone has bought luxury products through the gray market, they just don’t know it. It is a genuine watch, but it is sold to you through someone who isn’t one of the approved sellers. And he has bought that watch, from either a wholesaler from another country, he has got them in a cheap job lot, and he is selling them to you in a discount price in a non-appropriate way, in a non-appropriate place to a non-appropriate customer. These are the people that damage our brands. Because, over time what happens is, the prestige and exclusiveness of these brands is damaged when they are sold at discounts in the wrong places to the wrong people. Amanda Tattam You touched then about fashion and so forth, how does gender influence things, are there different ways that you market to men and to women and what about in different parts of the world, do Asian women respond differently to advertising, than say, western women, I know we’re using very broad terms here, ‘Asia’, ‘west’, but – and also the other demographics, age and race – I know there are some big topics there, but- Mark Ritson Gender is not as important as we might think. Luxury has always been a predominantly a female market; age is incredibly important. And it has become more important in the last five to ten years. We see a group of – to use the common phrase, Baby Boomers – but, essentially this demographic group that we see across the world, these people are now in their 60s and beyond. They have a large amount of money. They have limited amounts of time. Still, they like to travel and they know they are not going to be around forever. These people are discerning. You know, if you’re going to buy a bottle of wine and I’m 65 years old and I’ve 250,000 dollars in the bank, you know what? It is going to be a good bottle of wine. The final issue of race is an intriguing one, particularly in North America. I personally believe that the face of luxury in America is ‘black’. The group that leads luxury is not this WASP community of very well off middle aged Americans – who do buy their luxury brands – but the people who lead that market, are, for me, for the most part, African American. It would be a mistake to see, for example, the hip-hop community as being not consistent with the luxury brands. If anyone has grasped the true meaning and heritage of luxury brands, it is that African American community. So, I think there, race plays an interesting role to. Amanda Tattam Sure. So, in Asia, what brands or products do customers identify more strongly with? Mark Ritson It is interesting and I think if you look at the Asian region, there are a couple of different stories playing out. The first and the one we shouldn’t forget is the story of Japan. Japan has, for at least the last forty years, been the leading market for all things luxury. It is a generalisation, but it holds true almost every time, that all great luxury trends, all great brands have found success first in Japan. Very simply because the Japanese are probably the most discerning and tasteful customer on the planet. They love heritage. They appreciate the finer things in life. And it is very hard to find any example of a luxury brand that has not first had success in Japan. Amanda Tattam Even in good times and bad? Mark Ritson Especially in bad times. So, one of the intriguing things about luxury brands and Japan is a notable example, they’ve had a very tricky ten or fifteen years, only now really have they come through what has been one of their worst times in their postwar economy. And yet, during this time we have seen sales of most luxury items, whether it be luxury wine, watches, jewellery, leather goods, fashion, all of these products have sold spectacularly well. So yeah, even in good times and bad. Look, aside from Japan within Asia, clearly the other story is the story of China. And we are seeing in China a remarkable revolution in luxury. All the research that has been done, all the indicators we have so far, suggest that the Chinese consumer, is as, if not more interested in luxury brands than the Japanese consumer. So, once you do the maths on that one, it becomes pretty obvious where the future of luxury will be. And of course, one of the things that is feeding into that is that when, a new economy, like the Chinese economy, really gets going, it begins with luxury. It doesn’t start with small, domestic brands. It trickles down from the top. We saw that in Eastern Europe 15 years ago. The first stores to open in East Germany, for example, were the Versaces of the world. So, in that sense, I think there are two stories. The oldest story in the world, that is, of Japanese discretion and the story of Chinese growth. And yet, both I think represent the two, most important poles of the luxury consumption. Amanda Tattam So, you’ve talked about these demographics, what kind of market research and methodologies are used before you decide how money should be spent in a marketing campaign? Mark Ritson There are many so-called ‘old luxury brands’ that would perceive research to be the wrong thing. And will have a long, 200 year old history of being very successful and doing absolutely no research of any kind at any time on anyone. They would believe that their brands are about creativity, about fashion, and the definition of fashion is not about giving people what they want, it is about changing things. The creative directors make the decisions and the consumers will follow them. It is fair to say, however, that in the last five years, we’ve seen a revolution – and I don’t use that word lightly – from some of the brands who have used extensive market research. Similar to the kinds that we would see in the consumer goods: focus groups, surveys, the analysis of sales data. So, it isn’t the most advanced research. But there is a growing focus on doing it. And I think that is probably the biggest question mark right now for most luxury brands: to what degree should we ask the consumer what they want? Amanda Tattam So, as high-end consumers become more discerning and ethically driven with their purchasing, how does the luxury industry handle concerns for example, the use of sweatshop labour or sustainability issues? Mark Ritson It is an interesting one and for once it is not that relevant to luxury brands. And I say that because, the luxury brands have never had a problem with sustainability or with sweatshop labour. They’ve been playing a very sustainable game for a very long time. The idea of using sweatshop labour would be literally impossible for a luxury brand. Not because of any ethically driven decision making, but simply because of the quality and the huge necessity to produce the very best clothing or products – you simply wouldn’t use people who weren’t artisans, that weren’t very heavily remunerated, that spent a lifetime working for you. I think on the environmental issues again, there are some key questions. Specifically, I think in the areas of fur and in the way that animals are treated and in animal testing. But again, with those to one side, you can again argue if you look at the way that premium wines are grown and the way in which the land is respected, if you look at the relatively small amounts of product that are used, in a very sustainable way because they’re very expensive products, actually the luxury brand industry, I think, has something to teach the consumer goods industry on sustainable business practices too. Again, not because there has been any ethical orientation within these companies, simply because when the raw materials are so expensive and the need to produce quality is so paramount, a sustainable approach tends to be the one that is adopted. Amanda Tattam Finally, I would like to ask you about the expansion or contraction of the market for luxury goods, does making luxury goods more affordable to more people actually diminish their value – because, a lot of people want to buy them because they know only a small number of people have them, aren’t they always going to be by their very nature, exclusive and only available to a very small group? Mark Ritson It is absolutely true that in the original histories of most luxury brands, there was a natural limitation on the number of products that were available. So, exclusivity originally was, in the case of Champagne, for example – Champagne is an area, it is not a grape – there weren’t that many fields in Champagne, and the original manufacturer of champagne was a problem, because many of the bottles, almost 40% in some years, would explode. Because, in the early days, they hadn’t worked out the correct manner of storing the champagne. This is way champagne became a luxury wine. Because there wasn’t that much of it. There was natural exclusiveness. In the global world we live in today, we certainly sell a very large amount of these so-called exclusive brands. So, if it was purely being based on the number being sold, it would be very hard to claim that a brand like Bollinger, for example, is exclusive when it is selling two hundred or three hundred thousand cases of champagne a year. So, the trick is to get as many sales as possible, but while maintaining a very high level of quality and also using price to maintain that exclusiveness. So, if we were to begin to lower the prices of these luxury brands, combined with their large sales, it perhaps would begin to tarnish their images and that is where, I think, you will see luxury brands in trouble, when they begin to sell – not just a lot of these things, but at lower prices, not monitoring the quality carefully enough.
The reality for most luxury brands is their shareholders these days, or their families demand enormous global sales. So, while they are certainly more available than they once were, in terms of where you can buy them and in what numbers, price prevents you from going out and drinking a bottle of Bollinger everyday. Simply because one cannot afford to do it. So, in that sense it is a balancing act. The numbers sold these days are extraordinary, of course, but the price, the quality, the creativity, if they remain leading and in the appropriate place, then, as we have learned over the last fifteen years, a luxury brand can sell extraordinary large numbers and still be seen as extraordinarily exclusive.  |
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When The Brand Appeal Just Isn't There
Tue, 30 Jun 2009 17:10:00 -0700
This weekend, if the papers are to be believed, we might see the first British men's finalist at Wimbledon for more than 70 years. I am not convinced that Andy Murray will make it to an apparently inevitable final against Federer on Sunday, but, irrespective of his performance on the courts this week, the bigger marketing question relates to the potential appeal of 'Brand Murray'. The concept has reached a peak in recent months, fuelled by both the player's short odds to win Wimbledon and his decision earlier this year to join 19 Entertainment, David Beckham's agency, which is widely portrayed as the epitome of brand-building expertise in relation to celebrities and sports stars. A source close to the agency, quoted last week, confirmed that work on Brand Murray had begun: 'The ambition is global. The potential is enormous.' Yes, and the bullshit is plentiful. Despite predictions that Brand Murray will soon be worth £100m a year, the harsh reality is that Murray is a fine tennis player, but a hopeless prospect as the next Beckham, no matter how advanced the brand strategy applied to his future career. Let's start with a fundamental commercial limitation for Brand Murray - he is not exactly a looker. For all the talk of Brand Beckham, the fact remains that David was beautiful long before the agents and brand gurus came calling. Former Wimbledon champion and cultural diplomat Pat Cash got himself into a bit of trouble last week when he pointed out that Murray was not in the same league. According to Cash, Murray is 'never going to be eye-candy' and has 'the most boring, monotone voice in the history of the planet'. Cash went on to extol Murray's ability on court, but his comments highlight the importance of aesthetic appeal when you are up against the likes of Nadal and Ivanovic. Another potential obstacle for Brand Murray is his personality. In a series of public gaffes, he has managed to alienate far more than he has attracted. There was the unfortunate criticism of himself and his opponent in 2006 that 'we both played like women'. Last year's flexing of muscles on court after each victory did not go down too well either. Last week, Murray continued the trend with extended criticism of the new Wimbledon Centre Court roof. There is none of the mystery of Borg or the positivity of Agassi. Just a miserable, slightly annoying petulance. The biggest problem, though, is his nationality. Murray is a proud Scot. He made that clear in 2006, when he jokingly refused to support England in the football World Cup, for which Scotland had failed to qualify, and claimed his sympathies lay with any team that faced England in the competition. FutureBrand marketing director Tim Hill might think that linking Murray with a 'quintessentially English' brand like Fred Perry is 'very clever'; I think it is stupid. How can Fred Perry hope to boost its brand from a tie with a player who, to his credit, has never made any secret of his love for Scotland, or his sporting enmity for England? The endorsements that will get their ROI from Murray are those that better match the player's dour personality and national associations. It's no surprise that brands like Royal Bank of Scotland and Highland Spring currently occupy valuable positions on his shirt. David Beckham was a once-in-a-lifetime occurrence, and let's remember that he has never won a thing for his country. Not every sports star wants to be, or can be, a megabrand. Becoming a great tennis player would be enough for most people, and, I suspect, for Andy - not Brand - Murray. 30 Seconds On…Fred Perry * Fred Perry was born in Stockport, Cheshire, on 18 May 1909. Despite his northern, working-class background, he went on to win three Wimbledon titles in the 30s and is still one of only six men to win all four Grand Slam tournaments. * Perry was first a table-tennis player, becoming world champion in 1929, and took up tennis at 18. He was world number one for five years, the first three as an amateur. * He was almost as famous for his looks and urbane personality as his tennis. He was rumoured to have had an affair with Marlene Dietrich. * After retiring as a player in 1939, Perry invented the sweatband, then launched his polo shirts in 1952. * The laurel logo, which appears on the left breast of each shirt, was inspired by the old Wimbledon logo. Fred, a smoker, initially considered a pipe as his emblem. * His father Samuel was a cotton worker who became the first general secretary of the Co-operative Party and had two brief stints as MP for Kettering in the 20s. Sponsored By: +2 Marketing Consultants  |
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10 Cool Ways To Get People To Know More About You & Subscriber To Your Twitter Page
Thu, 02 Jul 2009 12:15:49 -0700
When it comes to Twitter, subscribers or “followers” are your key to building popularity. And popularity is a fundamental and very important concept to grab hold of. The idea is that by following someone, they’ll agree to follow you back.
The following are other ideas which can help with subscriptions:
1) Connect your blog or social network [...] |
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How to Get Great Photos for Your Blog Posts
Fri, 03 Jul 2009 04:35:06 -0700
This content from: Duct Tape Marketing
How to Get Great Photos for Your Blog Posts
I like to use to use images to help illustrate the theme or point of a blog post. It’s a proven “best practice” in blogging and I highly recommend that every blogger do it.
One trick for easily finding and properly using images [...] |
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What Really Generates Referrals
Thu, 02 Jul 2009 08:23:24 -0700
This content from: Duct Tape Marketing
What Really Generates Referrals
So much of the literature on the subject of referrals focuses on the proper ways to network, ask for referrals, and create incentive programs for referral sources. While some of these more tactical things do indeed produce referrals for the organizations and salespeople that employ them, they [...] |
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Yahoo Pipes a Smokin Radar Tool
Wed, 01 Jul 2009 06:13:09 -0700
This content from: Duct Tape Marketing
Yahoo Pipes a Smokin Radar Tool
Yahoo Pipes is a powerful composition tool to aggregate, manipulate, and mashup content from around the web. Frankly, it has been around for a couple of years now and while it’s advanced a bit, I don’t think it has ever really caught on in a [...] |
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