We're starting off the year with a big critique on some epic fails of 2011. This blog entry sheds light on some of the worst, poorly-executed products of last year. I'm not going to even mention Qwikster of Netflix because that's clearly a given. So just sit back and get your cabbage and tomatoes ready for some throwin'.
1. Chevy Volt
This EV came out with high anticipation and buzz from consumers. However after seeing the mediocre features and hearing about the killer lithium-ion batteries (that spontaneously set the cars on fire), people seemed less stoked. Chevrolet tried to ameliorate the issue by loaning alternative vehicles while they recalled the Volts back for repair. When you look at the cost-benefit for this faulty car, I don't think people thought it was worth it! Chevy ended up selling only 125 models in July 2011.
2. HTC Status
The market research for this product was fine. Yes, people do like going on Facebook on their phones! HTC just lacked common sense. Why did they think consumers needed a phone solely to "like" something on Facebook when other smart phones that have better features and are much more practical can get the same job done?
3. Fiat 500
Maybe it was that they used JLo as their spokesperson. Or maybe they just targeted the wrong market. While Fiats are useful in most cities in Europe and Asia where streets are tiny, parking is nonexistent, and commute length is <5 mi on average, in America, we embrace the gas-guzzling cars that will protect us from automobile accidents (and help us get through zombie apocalypses). Sales got so bad in 2011 that the company fired the head in America, making this car the little engine that coudn't.
Saturday, February 18, 2012
Wednesday, December 14, 2011
One way of working that's becoming more and more popular in corporations and businesses is the idea of collaboration. A collaboration between two businesses is very much similar to a mutually beneficial relationship, where both parties have greater benefit from working together and putting in efforts from both sides. Originating from biology, this phenomenon also known as "mutual symbiosis" and is captured between bees and flowering plants, where the bees help flower pollinate and the flowers help bees with a tasty meal. On a more macro-level, a similar example would be XBOX 360 teaming up with Microsoft to create a unique television experience. Both parties couldn't have achieved their means without each other, and both parties are reaping what they've sown together.
A good example of a great mutually symbiotic relationship in business is the linkage between Pixar and Disney. Disney had all the lovable characters and Pixar boasted advanced animation. As they worked together, they produced many critically acclaimed films such as "Toy Story", "Wall-E", and "Finding Nemo". Pixar gave Disney the means to move into the future with enhanced and visually striking animation, while Disney launched Pixar into stardom and turned it into a household name.
Another wonderful marriage of different organizational entities is Mad Men and Banana Republic. In August 2011, the Banana Republic clothing line launched its limited edition Mad Men collection. The pieces were designed by the costume and wardrobe staff of the Emmy-winning show Mad Men and inspired by what the characters wore. Mad Men gets more publicity from Banana Republic fans, and vice versa: Banana Republic gets more attention from Mad Men fans.
So does it really pay off to seek a friendly organization for a collaboration? Based on most of the cases in the past, absolutely. Collaborating with others will allow you to share information, network with the unfamiliar, and create something that you never could have done on your own.
Wednesday, November 30, 2011
In my last week's entry, I made some predictions for Black Friday 2011. I think it's only fair that I do a before and after piece on the topic. As it turned out, this year's Black Friday was more crazier than ever. There was certainly many good deals, most notably on Amazon kindles, XBOX Kinect, and big screen TVs. Millions of Americans sacrificed sleep for $2 waffle toasters and $10 Playstation games. Consequently, mass chaos (and a little financial boost in the stock market) ensued.
While the hype was expected, the increased levels of violence were not. Customers were pepper sprayed, shot, and trampled over by other customers in efforts to get their preferred merchandise. In Mesquite, Texas, a woman was "almost crushed to death" by a mass of deal-hungry shoppers; the evidence is in the video below (Drell, 2011). Meanwhile in Los Angeles, a woman spewed pepper spray at another Walmart injuring at least 20 customers, including children (Jablon, 2011). Over the past years, Black Fridays have been getting more and more belligerent, beginning with the trampling and death of a Walmart employee in 2008 by crowds pushing in the store. Black Friday 2011 had a record breaking number of violence.
Despite all the violent crowd behavior, some consumers are getting more technologically involved with making purchases on Black Friday deals. This year, many people flocked online for deals instead of waiting in line at an actual store. Cyber Monday, the Monday immediately following Thanksgiving week dedicated to online deals equivalent to Black Friday, had a 33% jump in sales compared to last year (Olivarez-Giles, 2011). This increase in sales is the highest out of all previous Black Fridays. More and more people are also using their smart phones and tablets to hunt for deals. The same source also reports that "a record 10.8% of people used a mobile device to visit a retailer's site, up from 3.9% in 2010". From the figures, it's clear that last Friday was the most technologically fueled Black Friday in history.
One good thing that came out of Black Friday 2011 was a slight boost in the economy from all the irresistible (and deadly) deals retail companies had to offer. Many retail company stocks rose solidly - Nordstrom rose 2.6%, Tiffany & Co. rose 5.9%, and Coach went up 6.7%. In addition, the Dow-Jones rose 2.6%, bouncing back from a chronic decrease since the beginning of this November (Hamilton & Li, 2011). If a few hours of sales paired along with conventional marketing could patch problems such as a sluggish economy, what could a lifetime of sales and intelligent marketing produce?
Drell, L. (2011). Black Friday shoppers destroy Walmart displays. Mashables. Retrieved from: http://mashable.com/2011/11/26/black-friday-walmart-video/
Hamilton, W. & Li, S. (2011). U.S. Economy: Strong holiday sales help push up stock market. Los Angeles Times.
Jablon, R. (2011). Walmart Pepper Spray. Huffington Post. Retrieved from: http://www.huffingtonpost.com/2011/11/25/walmart-pepper-spray-black-friday_n_1112548.html
Olivarez-Giles, N. (2011). Cyber Monday sets new sales record. Los Angeles Times.
Monday, November 21, 2011
Many Americans say it's the most wonderful time of the year. Retail companies and shop owners couldn't agree more. One of the biggest and most profitable retail marketing schemes around the year is Black Friday. This year's retailers seem to be trying their utmost hardest to get customers in to buy as many products as possible. Here are some tactics that are currently used to lure in those shoppers and get them spending.
It's All About the Hype
Black Friday is already (in)famous as the day where retail stores put out insane deals. Consumers around the nation know this and treat it as a fact, much to retailers' delight. To fuel the excitement and frenzy, many stores such as Wal-Mart, Target, K-Mart are choosing to open on Thanksgiving evening instead of their usual early morning hours this year (Li, 2011). And while the usual Black Friday print ads are continued being distributed through mail, new web content has been generated to accommodate smart phone and tablet users. Finally, retails use to their advantage that Black Friday is only one day out of the entire year. This creates a sense of urgency and time limit for customers to make their purchases. With attractive offers for a very limited time, who could resist the hype?
Accommodating the Shoppers
No matter how awesome the deals are, there are still some aspects on Black Friday that are still annoying. Whether if its waiting in a 2 hour line, combating sleep deprivation or Thanksgiving food coma, or fighting for the last toy on sale, shopping on Black Friday can be nightmarish. To promote the best possible experience, some retail stores are going above and beyond to make their customers happy. This year, Best Buy is showing the latest Harry Potter movie to customers queuing in the cold for their after-Thanksgiving sale. They're also provided with giveaways and refreshments to make their wait out the freezing cold (and snow for some states) worthwhile. Free wifi will be offered by Nordstrom and Macy's so that shoppers can shop and browse the internet at the same time. It's almost as if they're trying to keep customers in the stores for as long as possible.
Taking Advantage of Technology
Nielson's 2011 data on the penetration of smart phones on various age groups.
This year several online merchants are offering online mobile-only deals to customers waiting in line to purchase their Black Friday deals. According to Nielson, about 43% of American's, the vast majority under 44 years of age, with cellphone services have smart phones. As participating customers anticipate the long lines, they'll be bringing their mobile phones and tablets. Many of the online retailers, such as Gilt Groupe, Amazon, and HSN, are offering deals only at 6 AM, right when shoppers are expected to be at a frenzy at traditional retail stores (Clifford, 2011). Smart phone apps have even been created to compare prices between major retailers both traditional and online merchants. That way, customers are able to see if the merchandise they grabbed are the lowest prices while waiting in line. One person describes "if we can even save $5, $10, it makes it easier for us in the long run."
A Final Note
For this upcoming Black Friday, it's expected that shoppers will be bombarded with all types of marketing strategies. We can even expect to see some new things such as free movie screenings and free wifi. With the recession, customers are beginning to do their homework and compare prices before heading off shopping. Also with technological advances such as the rise of smart phones and wifi accessibility, the shopping environment is changing rapidly. Consequently, marketing campaigns are more competitive than ever this Black Friday.
Clifford, S. (2011). Mobile Deals Set to Lure Shoppers Stuck in Line. The New York Times.
Nielson. (2011).[Smart Phone Penetration by Age Group Nov 3, 2011]. Generation App: 62% of Mobile Users 25-34 Own Smart Phones. Retrieved from:http://blog.nielsen.com/nielsenwire/online_mobile/generation-app-62-of-mobile-users-25-34-own-smartphones/
Li, S. (2011). Black Thursday is Replacing Black Friday. The Los Angeles Times.
Tuesday, November 8, 2011
Ever since the Mad Men days, the ad industry has been using celebrities to endorse products. Chanel had Marilyn Monroe, Nike had Michael Jordan, Pepsi had Britney Spears, and the list goes on... Companies put in millions of dollars to get these famous and well-liked sponsors, but is it really worth it?
The concept goes back to using credibility and attractiveness to persuade a point of view. Simple psychology tells us that if someone is appealing and trustworthy, it's easier to relate to them and be on their side. One theory called the Halo effect explains that one trait might influence the perception of another trait. This could, for instance, occur when a consumer sees a celebrity hold the product and transfer their positive feelings about the celebrity to the product being advertised. You could also go as far as comparing it to classical conditioning. Initially, the product could be a neutral stimulus while the popular celebrity serves as the unconditioned stimulus. As the ads become distributed, consumers would associate the celebrity with the product, and soon after the product alone could evoke a (hopefully) positive conditioned response from the consumer.
Michael Jordan promoting Air Jordan XX3 in 2008
These concepts insinuate that feelings about the celebrity will be transferred or associated with the product as a function of ad exposure. This can very well be a positive thing in celebrity endorsements. The Air Jordan sneakers brought along the concept that you can be like Michael Jordan and soar through the basketball court to make your shot if you wear those shoes. The sports shoe line was first released in 1985 and still thriving to this day with Jordan's endorsement. Also another example, as the face of Chanel No. 5, Nicole Kidman had been a major success to the fashion fragrance as she reportedly helped raise their business to 16% (Ruiz, 2008).
Sharon Stone in a skincare print ad from Christian Dior
On the other hand, the Halo effect and classical conditioning could work as a double edged sword in marketing. As the prominence or respect of a celebrity spokesman decreases, the attitudes towards the product suffers as well. An infamous example of this is when actress Sharon Stone made a statement about how the 2008 earthquake in China was "bad karma" for the country after it had colonized Tibet. At the time she was the face of one of Christian Dior's skincare line. Immediately after her controversial comment was made, Christian Dior pulled Stone out of the campaign because of the negative attention (Olson, 2008). One other example was with golf-pro Tiger Woods and the Swiss watchmaker company TAG-Heuer. The infamous infidelity and secret-life revelation from Tiger Woods caused a lot of bad press and hurt many of the endorsements he was invovled in, which included TAG-Heuer (Buteau, 2011). Consequently, the watch company quickly ended business with Woods as soon as his contract terminated.
So as we can see from those examples, choosing a celebrity to represent your brand or product has its pros and cons. One things for sure, you need keep a sharp eye on how the public perceives them because that perception will be reflected right back on to your brand. Another thing is to invest in less volatile marketing strategies, such as directly tracking your consumers perception and attitudes of your brand.
Buteau, M. (2011). Tiger Woods Dropped by TAG-Heuer. Bloomberg. Retrieved by: http://www.bloomberg.com/news/2011-08-08/tiger-woods-dropped-by-tag-heuer-from-watch-endorsement-deal-as-rank-falls.html
Olson, P. (2008). Sharon Stone's Own Bad Karma. Forbes. Retrieved by: http://www.forbes.com/2008/05/29/sharon-stone-china-face-markets-cx_po_0529autofacescan01.html
Ruiz, N. (2008). Can a Star Sell You Style? Forbes. Retrieved by: http://www.forbes.com/2008/04/18/style-star-ad-forbeslife-cx_nr_0418style.html
Tuesday, November 1, 2011
When most people hear of the word "mathematical", they usually cower and go in fetal position. Yes it's true that it's a tough discipline- Calculus was never my favorite subject. But a lot of the techniques and analyses that successful companies use for marketing are often integrated with various mathematical and statistical methods. In this week's post, we'll go over some of the most popular math methods used in marketing research.
Conjoint analysis (with the emphasis on the "joint") is an unnecessarily intimidating algorithm used to optimize the attractiveness and value of a product or service based on consumer judgments of different combinations of their specific attributes. Although conjoint analysis originated from the deep bowels of mathematical psychology, it is used in many of the applied social sciences today, one of them namely product marketing. And within marketing, conjoint helps in product positioning, product design, and assessing appeal of products.
The easiest example to give on conjoint implementation is for a mobile phone. Say the marketing team at a popular cellphone company needed to do some research on how consumers would respond to a new model. The researchers choose to analysis the following attributes: weight, battery life, and price. They hypothetically invent a Phone A, which weighs 3 grams, has a battery life of 13 hours, costs $250, and a Phone B, which weighs 4 grams, has a battery life of 15 hours, and costs $300. Then, they ask potential consumers to rank order what mix of attributes they prefer from either Phone A or Phone B. Which ever phone the consumers rank highest, theoretically has the more "valued" attributes. Of course you can expand this design with more attributes and levels within the attributes with more hypothetical phones, but I think you get the picture.
This type of analysis is mostly associated with segmentation. Since everyone knows that the process of defining your consumer segments is so important, it's safe to say that doing a proper factor analysis is just as crucial. A factor analysis is a statistical method used to infer correlation and relationships among many variables. The point of using this method is to find groups of people with common characteristics, beliefs, and attitudes so they can be seen as one entity instead of individually. This way, market researchers can cater to a specific consumer group rather than aim at millions of individual people.
Sounds like the scariest and craziest thing next to a David Lynch movie. Well, it kind of is, but it's useful! The most simple definition of Bayesian analysis is the assessment of prior information through statistical and probabilistic models to infer the likelihood of a particular outcome. Bayes theorem mostly deals with uncertainty. But for the purposes of applying it to marketing research, we'll discuss the inference part of Bayesian analysis. You can think of it in terms of predicting the future. For instance, if the weather has been sunny and hot for the past 30 days, a Bayesian inference will tell you that there's a high chance that its going to be sunny and hot tomorrow. However, if you say the same information but also note that it's actually winter time and supposed to be gloomy and freezing, a Bayesian model will account for that extra information on the season and lower the probability that tomorrow's going to be sunny and hot. With that being said, Bayesian analysis does a good job in factoring extra information into the output.
So conquer your fears in math. Because math is so important to getting quality data and insight to a successful marketing campaign.
Rossi, P. & Allenby, G. (2002). Bayesian Statistics and Marketing. Marketing Science, 22, 3, 304-328.
Monday, October 24, 2011
1. Don't be inconsistent. Geico insurance company has more than six spokesmen representing their brand. These are including but not limited to: a lizard, caveman, and a wad of money with eyes. The company's rationale for so many spokesmen is "I thought we might be able to build a deeper relationship if we built on multiple fronts." Epic fail, Geico. There is no way that most people can connect any of your spokesmen to your brand. Any basic psychology text can tell you that source amnesia, where people can recall certain information but NOT where they obtained the information from, is prevalent among most people. It's better to just have one clear spokesperson to represent your brand to increase the "stickiness" of your company's message and image.
2. Don't be kitsch. The first thing that comes to mind when you see the Lap Band ads is "oh great another one of these ads". These ubiquitous billboard ads are usually clad with cliche taglines such as "Lose weight fast!" or "Get the Lap Band!" next to a very troubled overweight person. They clutter the beautiful blue skies and are more drab than helpful. If the Lap Band company really wants to be taken seriously they should be more healthy than cheesy. For instance, they should consider approaching physicians to evaluate and recommend the brand to their patients rather than advertise it to everyone sitting in traffic.
3. Don't include unreliable research facts. This print ad from cosmetics company Lancome includes a graph depicting levels of beauty measurements such as "Positively luminous" and "Cushiony soft". It makes me wonder what kind of research they've been doing with the product to get a result of 91% cushiony soft. Not only are they distributing low quality research results, I bet nobody really knows what the heck they're talking about in the ad. Unless if it's a medical brochure, avoid cluttering the page with research related graphs. Since Lancome is a beauty and cosmetics company, they should emphasize on the beauty image itself rather than a clump of fine text.