Product do-overs difficult... do it better the first time

The comparison is stark:

• Apple sells approximately 200, 000 iPads every 2 days.
• RIM sold approximately 200,000 Blackberry Playbook tablet computers over 90 days this past summer.

The problem(s) with the Playbook?

First (and probably foremost), it doesn't have an Apple logo on it.  However, there are non-Apple issues.  The Playbook was introduced with just a fraction (40,000 vs. 1,000,000) of the available content and apps available to its adopters compared to competing Apple and Google Android tablets. In addition, the Playbook did not come with Blackberry's popular e-mail and collaboration service (Blackberry Enterprise Server).

RIM's proposed fixes to bolster Playbook sales?

1. Encourage app makers to get really busy.
2. Release a "major" software update.
3. Cut prices.
4. Keep telling prospective buyers the Playbook is just as good/better than the iPad.

The outcome? Consumers will soon decide

However, recapturing any momentum that came with the introduction of the Blackberry Playbook will be difficult (impossible?). While a staple of recreational golf, mulligans are in short supply in the business world.  A better path is to hit a quality shot on the first swing.

Don't overlook the details

Michael Jordan + humor + a continuing TV campaign = a promising ad -- but please get the other guy a pair of pants that fit!

Hanes has done several significant things promotionally to benefit their brand:

• sign Michael Jordan as a spokesperson
• drop Charlie Sheen as Jordan's sidekick (reportedly to avoid any linkage to Sheen's persistent negative press)
• developed a lasting humor-based campaign to promote the benefits of their product as well as highlight Jordan

If this is how Hanes make you look, maybe he should try Fruit-of-the Loom...
After all that, why not give the actor in the current ad a pair of pants that fit?  His pants are stretched so tight that the white liner on the front pockets show, the front of the pants have a very unflattering pull and the pockets are puckered. While some viewers would recognize the problem is with the pants, others might not. The question is why take the chance when a little more attention to detail would have made the issue a non-starter?

Opening a new range of apps

Square mobile payment app blends software and hardware

The Square Mobile Payment System is early on the curve of a new wave of applications for phones (iPhone and Android) and other mobile technologies like tablet PCs (iPad, etc.).  These emerging apps go beyond current ones as they integrate hardware into the systems.

Plugging Square's hardware into a device's audio jack allows the user to use the app to pay by credit or debit cards, gift cards and prepaid cards.  These payments can go to businesses or individuals who also have Square.

Crystal ball

A couple things will be interesting to watch for:

• When will consumers adopt these types of apps?
• How quickly will businesses adapt to the such new apps?
• When will other types of apps that integrate hardware be offered?

Rapping rodents phat for Kia

Rapping hamsters boost image but without product improvement, how long will it last?

Unlike many businesses, 2010 has been good to Korean automaker Kia.  Sales were up 15% through October -- on pace for a record year in sales.  The company has benefited from a "perfect storm" of circumstances:

• a bad economy
• offering a line of low priced vehicles (approx. $8,000 lower than  competitors)
• public acceptance of rapping hamsters in a television campaign (see below)

The big question...
With product quality sliding in consumer-based rankings (from 15 to 25 place in a recent J.D. Powers  survey), how long will the rodents be able to prop Kia sales up?   In the long-term, it is hard to imagine consumers trading vehicle quality for a formulated image.  American auto buyers have shown in the past that even low prices cannot make up for a poor vehicle (remember the Yugo?).

The current good sales situation offers time for Kia to get their product "house in order".  It will be interesting to see if they take advantage of it.

Power of a brand part II -- Call of Duty: Black Ops

Increasing brand positioning via association (to a video game).

In an earlier post, the integration of Apple's iPad into a product offering to increase product brand position via association with the iPad was discussed.

Now the popularity of Call of Duty: Black Ops is being used by Jeep in an attempt to influence prospective buyers.  If there is any surprise, it might be that the COD: Black Ops brand would be deemed so attractive to enough of Jeep's target market.  Jeep's consumer research would be interesting to see.

     

                                                                             Jeep Wrangle Call of Duty: Black Ops Edition

If video game can scan body -- what could be other uses?

No TSA-like body scan.  Rather scan of "outer body" only.

The Xbox 360 Kinect video fitness game Your Shape Fitness Evolved has the ability to scan user bodies as they participate in exercise routines. During exercise, the game monitors for pace and proper body positions (below).



With this type of technology already in homes...
When might online clothing stores offer at home personalized body scans that allow consumers to "try on" clothing in virtual dressing rooms that link specific body shapes/dimensions to actual clothing sizes and styles (that the retailers have digitized as well)?

iPad's growing ecosystem

More businesses are integrating iPad into their offerings -- and hoping to attach their products to iPad's high brand positioning.

By any measure, Apple's iPad is a successful product on its own.  However, it is increasingly being used by businesses as part of their product offerings.  As much as the iPad might actually improve these products, the biggest benefit might be linking the iPad to the products... if consumers think so highly of the iPad, maybe some of the "love" will rub off.

NOTE: This goes beyond merely adapting current offerings for the iPad -- although iPad apps for existing products are extremely popular.

Some recent examples:

• The owner's manual for Hyundai's Equus model is an interactive digital owner's manual on the iPad that comes with the luxury car. See the magazine advertisement below.

          

• Delta Air Lines has installed 200 iPads in their gate area at New York's JFK International Airport. Delta customers can use the iPads for entertainment and to order food at airport eateries.
• News Corporation is developing a new digital newspaper centered around the iPad. The Daily is scheduled for an early 2011 launch. 

Apple continues to reap the rewards for their great products.

Retro comfort factor

In these challenging economic times, companies give consumers "comfort" via retro offerings

It's comfort food without the calories... products that remind one of the "good ol' days". Here are a few more recent examples. There are many more.

ThinkGeek's retro style blue-tooth headset (handset?):

Pepsi's temporary return of the retro can labels (even with "real sugar"!):

Marketing the start of a new year

Finding marketing opportunities in calendar events

The new year is only a half-day old but marketers have already begun integrating the start of 2010 into their marketing efforts in areas including pricing,

HTML e-mail featuring special pricing

Web site -- new product features

Television advertisement -- special event re: product

Wait 'til next time
Obviously it is too late to take advantage of New Year's Day 2010.... but the calendar has many other days that might become part of a successful marketing campaign.

Answering consumer questions

Starbucks does not leave consumers wondering why to buy new instant coffee

If anyone had doubts why to buy Starbucks' newly introduced instant coffee, they only needed to open the two-page advertising spreads in the October 23, 2009 editions of The New York Times (A24 & 25) and USA Today (8A & 9) to get some suggestions.

Starbucks gift cards... they really ran out?

Stock outs equal sales lost... that may never be gotten back.

Needing a gift for a business acquaintance this morning, I stopped by a local Starbucks to pick up a gift card only to be told they had run out -- "come back in two days when they might be in".

Undeterred, I proceeded to a second Starbucks and found that they too were out. Upon being asked how this could happen to multiple stores, a worker stated that there was a delay in getting the new Fall themed gift cards. The worker then suggested buying one at a local Walmart or grocery store (they might not have run out of the old style).

The end result today? A local competitor to Starbucks sold a $20 gift card. That does not sound like much because it isn't... but add that to how many other gift cards sales were lost due to this multi-day stock out snafu and Starbucks might be out a decent amount of sales.

In any event, although a minor consumer matter, it was not very impressive marketing effort by Starbucks.

A formula for increasing sales during a recession

Competitors are hurting - how does Hyundai do it?

September 2009 sales statistics tell a grime story for U.S. auto sales... as soon as the summer federal auto bailout program ended, auto sales plummeted... except for Hyundai and Kia (which Hyundai has a significant ownership stake in).

Read it and weep
While September '09 auto sales declined for General Motors, Toyota,Honda, Chrysler, Nissan and Ford, Hyundai sales were up 27%.

How do they do it?

Hyundai has implemented a fundamental tenet of marketing -- an attractive product with high quality offered at a "good"(in the eyes of the customer) price = customer value. And if that value is judged significant enough, consumers will buy -- even in a down economy.

...........

This is not the only strategy option but it is the one Hyundai chose and is delivering on.

...................................

Two decades ago, Hyundai was a 'dirty' word in the U.S.

The introduction of the Hyundai brand in the U.S. was less than successful. A butt of jokes, quality issues negatively impacted the brand to the extent that Hyundai abandoned the U.S. auto market. After correcting quality flaws, Hyundai restarted U.S. sales... but had to offer 10 year warranties to induce consumers to buy a brand they remembered as inferior. While still offering the warranty, an increasing number of drivers are attracted to the combination of product, quality and price.

...............................................

Truth in advertising

Hyundai's current slogan describes it well: Hyundai Momentum

Profiting from local "super bowls"

Businesses need to maximize benefits from local happenings.

With the kick off of Super Bowl XLIII just a few hours away, the vast majority of game-related purchases of flat screen TVs, food and drink have been made.

But before sitting back and watching the game and commercials (or should that be commercials and the game?), a bit of marketing reflection is in order.

What's in it if your business is not a Pepsi, E-Trade or Budweiser?

How can a local business benefit from the Super Bowl if you don't sell chips, pizzas, drinks and television? It's pretty limited if it's only the real Super Bowl. Either you sell "game" items or you don't.

The wider lesson is what can be learned from the business of the Super Bowl.

What local events provide a "super bowl" for the customer base served by your business?

The area I reside in hosts:

• a street 3-on-3 basketball tournament that draws tens of thousands of players
• a 7 mile run with over 40,000 participants annually
• a wide range of events in the main city park - from concerts to fireworks, food-fests to theatre.
• events at the convention center
• sporting events of the local universities and high schools

These are just a few of the many events... most of which are smaller events targeting a tightly focused group of customers who share many traits -- a true target marketing opportunity.

Businesses should identify and benefit from events in their areas that offer mini-super bowls. Consider sponsorships, participation in as vendors, offering products for participants, special pricing, event ticket sales for a discount price when bought at your business, and so forth.

The opportunities for your business to benefit from a (local) super bowl are there. Consider taking them.

Every store can't be Walmart

Every business cannot offer the lowest prices... so what else can be done to increase the chances that customers will buy?

Two January 2009 shopping trips, two very different scenes.

Trip #1 to a local mall on a Saturday afternoon. Few shoppers. Even fewer buyers -- it was startling how few people were carrying shopping bags with purchases.

Trip #2 to a local Walmart on a Saturday afternoon. Hard to find an empty parking spot (picture just below). The store was packed with shoppers. 35 of 38 cash registers were open and all had lines.














Fact: In the current economic climate, shoppers are attracted to low prices.

Fact: Not all stores can compete price-wise with the Walmarts of the world.

Question:
Beyond low prices, what are businesses doing to increase customer purchases?

Note: While not new tactics, the following are examples of methods some firms are employing in attempt to keep customers buying.

1. Bundle current products together for a "deal". Recently, Jack In The Box announced the new "Jumbo Deal" (picture below) that combined a sandwich, tacos and fries for $2.99. Even if the price covers only costs, the fast food restaurant can profit from the likely sale of a highly profitable soft drink.



2. Reduce purchase risk by offering attractive warranties and guarantees. Already tightening their purse strings and wallets, even willing consumers are looking for methods to minimize risks of unwise spending on products. Businesses can increase consumer confidence in purchases by offering strong (as perceived by the buyers) product warranties and guarantees (money back if not satisfied, you will not find at a lower price, etc.).
   
   
3. Allow consumers to try the product before purchasing. More businesses are finding ways to allow customers to "test drive" their products. Starbucks is offering free trials of two new Tazo tea drinks (with a coupon from a USA Today advertising insert -- picture below). This allows customers to be more sure that they like the product before purchase thereby increasing their buying confidence to overcome risks of spending money that is in short supply.
   
   

The "surprising" state of brand perception at General Motors

GM's recent television spots seem to be an admission of what the company knows too many consumers think about their vehicles

During the holiday season of 2008, General Motors ran a series of television advertisements for a "Red Tag" sales event (that would run through early January 2009). As would be expected, these spots were visually appealing and conveyed various logical GM branding points to consumers --such as vehicle safety, high resale value, good fuel mileage, and appealing / attractive vehicle makes and models.

However, upon deeper examination, it was not these points that were most revealing. Rather it was a tag line and story line that gave a glimpse into what General Motors understands how their products are perceived by the car buying public.

Example 1: "Made by GM... Surprised?"
One set of commercials for multiple GM makes and models highlighted product value points -- safety awards, resale value, fuel mileage -- of the featured vehicles. It is worth noting that after listing such a good vehicle attribute comes the tag line of "Made by GM... Surprised?".

These four words reveal what GM knows about the state of their brand. Should consumers be surprised that GM can make a quality vehicle? Apparently GM thinks so.

Here are three of the spots.

Example 2: Customer at Saturn dealership can't believe his eyes

Another television spot shows a customer walking into a Saturn showroom, then upon seeing attractive vehicles there, looks back outside at the street sign to make sure he was at a Saturn dealer. He is surprised to learn that Saturn has attractive vehicles. From the comments of the salespeople, many others share his surprise.

This glimpse into what GM understands -- that consumers perceive Saturn product offerings as non-appealing design-wise and that consumers will be surprised that Saturn can build attractive vehicles.

It is amazing to think that good vehicles from General Motors should be surprising to American consumers.

Business is about today and tomorrow

Sole focus on the "here and now" can hurt in the future.

Premise #1
Businesses need products and services that are attractive to consumers in the "now". If a firm cannot sell enough in the "near-term", the "long-term" may not arrive for that organization.

Premise #2
Businesses cannot be so focused on their current product offerings that changing trends and consumer preferences are not recognized and acted upon.

Premise #3
Successfully balancing both premise #1 and #2 is difficult.

The example of the parking lot
While sitting outside a Starbucks in Burbank, CA (see 8-29-08 entry), the issue of balancing the near-term with long-term business perspective was parked right in front of me. Literally parked.

There were 24 vehicles in the parking lot on this Saturday morning at 7AM.
- the largest 11 vehicles were all from US automakers
..(12 SUVs/vans/pickups and 1 very large car)
- the remaining 13 smaller vehicles (all cars of various sizes)
..were from non-USA automakers

With gasoline around $4 per gallon, Toyota and Honda reported vehicle sales at very high levels during the summer of 2008. During the same period, American automakers' sales were poor. What caused US automakers to be in the position of not offering more fuel efficient vehicles when US consumers were craving them?

The lure of the high profit margins from larger vehicles (per unit profitability of pickups and SUVs have been - until recently - very high) was too tempting and became the prize of American automakers. Such a limited focus blinded executives from American automakers from possible opportunities and threats -- including the prospect of high fuel prices and the increasing green attitude of American auto buyers.

The impact of higher prices of fuel is not unprecedented. One only has to recall the high priced gas (with accompanying long lines at service stations) of the 1970s. Since such uncontrollable variables impacted the auto industry before, why were they missed by American automakers just 30 years later? The answer: too much focus on the "here and now" to the detriment of watching for (and reacting to) events and issues that would shape future consumer behavior, wants and needs.

Simplicity can be bliss

Product innovation and continual product improvement are two of the main mantras of US business. In many industries it is "improve or die".

However, product improvements and innovation for their own sake can be a strategy misstep and should be aligned with consumer desires.

Take In-N-Out Burger, for example. This western (California, Nevada, Arizona & Utah) burger chain has maintained a simple and stable menu (see picture) for many, many years and their customers love it. They offer just a few items but they do them all exceedingly well. No chicken sandwiches, roll-ups, salads or breakfast here. Just how many hamburger patties and do you want cheese? Only one size in servings of french fries, shakes and coffee.

.....

Obviously In-N-Out does not try to be the fast food outlet for every fast food buyer. They know their customer base and focus on them.

.......

Living in an area of the country without any In-N-Out Burger outlets, I continually get comments like "wish we had them here" from complete strangers when I wear one of my In-N-Out t-shirts.

.......

In-N-Out keeps its customers in mind and those consumers want few (if any) changes. Such simplicity and limited product assortment is not for all firms but businesses need to take care not to innovate their products away from their customers' desires.

"Shoot straight" with customers

Be accurate,
.....don't overpromise.

On a recent trip I had the opportunity to eat at Pret A Manger -- a sandwich shop with locations in London and New York City. These busy eateries specialize in preparing "natural, tasty food".

One item I noticed was Pret A Manger's promise (see photo) that states:
"Just Made" organic when we can, always
preservative-free and "Just Made", of course

This product statement is straightforward and clear. It promises without overpromising -- note the "when we can" clause. From the crowds at the several locations we passed and/or ate at, it is a hit with customers.

No tomatoes = competitive advantage?

Salmonella in tomatoes should be turned into opportunity for eateries.

Over the last few days many eating establishments have been posting signs with the news that they are not serving tomatoes (due to the current warnings regarding salmonella food poisoning in raw tomatoes).

Obviously this is not the doing of fast food or sit down restaurants and customers seem to not be holding the issue about possible bad tomatoes against them.

However, no businesses that I've seen or heard about have tried to take this situation "by the horns" and do anything good with it.

For example, why not promote something like "while we have no tomatoes (like everyone else!), we'll give extra meat on your ham sandwich". The "extra" could be more fries, a price reduction on the order (due to lower costs due to no tomatoes), and so forth.

The point is... why not use this situation that is beyond local control and develop some offer of value to current customers and also be an incentive for new customers to give your business a try?

Be basic. Be creative. But at least consider doing something proactive.

Closed for training... differing perspectives on Starbucks

Starbucks decision to close over 7000 company-owned USA locations for several hours on the evening of February 26th in order to implement training in customer service and the making of their varied coffee drinks has caught the eye of new outlets... and understandably so. Starbucks reports that some 135,000 baristas were on the receiving end of the training effort.

Two viewpoints

1) The "How could Starbucks afford to do it?" perspective
.....Those with this point-of-view focus on a range of variables including the:

• lost sales during the closure
• "unproductive wages" (just consider the 400,000+ hours of barista training)
• opportunities for competitors to access Starbucks' customers (for example, Dunkin' Donuts offered heavily discounted lattes, espressos and cappuccinos during this Starbucks evening training)
• attention on negative issues at Starbucks given through media coverage of the training event

2) The "How could Starbucks NOT afford to do it?"
.......perspective
.. ..Those with this viewpoint -- and it seems to be a somewhat lonely place judging from what is currently read or heard -- wonder, even considering the possible negatives listed in #1 above, why wouldn't an organization be willing to take unconventional measures to refocus on its customers, if such methods were deemed productive?

Comparing the two sides
While those in the "how could they" camp focus on short-term negative outcomes that might result from this event, they seem to not consider the longer term negatives if Starbucks does not do something significant to counter some disturbing trends impacting their customers. One question begging to be asked is: "How much would continuing such current practices impact their profits if left unchanged". Two such practices that Starbucks reportedly focused on Tuesday night were in the areas of: (A) coffee drinks that are not prepared up to "Starbucks standards" and (B) not offering the desired consistent customer service that was a hallmark of the chain in earlier years but had been slumping recently.

Lift your cup high
Although Tuesday's closure of their locations surely had some short term negative consequences, let's hope that Starbucks customers lift their venti lattes (or espressos or macchiatos or whatever) high to toast the Starbucks management for their willingness to take a bold (and expensive) step to get the shops back to where they felt they needed to be. It will be interesting if Starbucks' customers taste and experience a difference (and for how long).