dey gru ^ txtN -- w@ wl biznessz nd 2 do?

Translation: "they grew up texting -- what will businesses need to do?"


Cross-posted @ Generational Impact blog

(http://generational-impact.blogspot.com)

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.

The last shopping days before Christmas

'Twas the last days before Christmas, when all through the stores
Not enough customers were coming thru the sliding front doors.
The shopping carts were arranged in a tidy neat row,
Awaiting frenzied shoppers to spend lots of dough.

The registers were staffed by an anticipating crew,

With hopes that paying shoppers were surely soon due.

And the manager with keys and the new hire named Don,

Had just checked the front sign to make sure it was on.

When out in the parking lot there arose such a stew,

Employees rushed to the windows to see the new view.

Away from the panes they returned to their places,

With not a grin but frowns on their faces.

For it was not future buyers making the fuss,

But just a trash truck and a big passing bus.

Now time was short to start making sales,

Discounts and coupons should cure all that ails.

But customers still did not buy in quanities sought,

Retailers scared of low revenues from products not bought.

Wishing but knowing that holiday earnings wouldn't be stout,

But in the back of their minds, Congress might bail them out.

Maybe this is a time to just try to scrape by,

And come back December 26th to give it another try.

For then unwrapped gift cards will be burning a hole,

In wallets of shoppers ready to give it another go.

To get what they want, to make post-Christmas hay,

Let's hope they spend until this New Year's Day.

Retailing is tough, this holiday season two thousand-eight,

Let's just survive and see next year's fate.

So from the advertisements giving it one more last try,

"Happy Christmas to all, and please from us buy."

Marketing the "when and where"

Taking into account the when and where you are should influence marketing tactics

Scenario #1
If you were a dentist at the opposite end of of a strip mall from a coffee shop, how could you get new patients?

Scenario #2
If you sold coffee, how could you compete with Starbucks on its home turf in Seattle (or any place else, for that matter)?

Though there are various methods to approach each of these scenarios, the marketing tactics selected should take into account where and when the firm is dealing with customers.

A "where" approach to scenario #1
With the drive-thru lane of a popular coffee shop directly behind a dentist's practice, the dentist used the "where" of the practice as an opportunity to communicate with potential patients.

A "when" approach to scenario #2
McDonald's is taking a direct "when" tact in promoting its espresso via billboards in the Seattle area with messages such as "four bucks is dumb". The current economic climate provides an interesting "when" opportunity for McDonald's to move into Starbucks turf with a lower priced product.

Image from 12-15-08 USA Today, 4B

____________________________________

Addendum to original entry -

December 17, 2008:

Another example of a "when" situation dealt with via marketing

What does a retailer do when a major winter storm stops consumers from coming to a major sale? (At least that's what the retailer hoped was the reason.)

Last weekend, a major winter storm negatively impacted a major pre-Christmas sale at a local Macy's as shoppers failed to brave single digit temperatures. Macy's announced a continuation of the sale... and even blamed it on the storm! Below is a portion of the newspaper advertisement announcing the extended sale.

Lower prices plus

This holiday season, consumers are being flooded with so many "price deals" that it is difficult for a business to stand out from competitors.

Economic news is making consumers skittish. It seems that little is certain in the financial arena except that the values of their homes and 401k plans are both down. Bail outs of American business institutions seem to come on a daily basis.

Some good news... Gas prices have dropped by more than half from the summer highs of over $4 per gallon last summer.

The bad news? While nice to have more money left in pocketbooks and wallets after a fill-up, it has not been nearly enough to bolster shaken consumer confidence.

A textbook business response
In an attempt to attract such jittery customers, many businesses have lowered the effective prices on various products by offering sales and coupons. However, since so many retailers are doing the same, buyers have numerous options offering lowered prices. In addition, an environment of intense price competition -- where competitors keep lowering prices to match or beat other stores -- can "teach" consumers to wait to make a purchase. In this type of situation, consumers learn that postponing a purchase results in better (from their perspective) prices by giving retailers more time to keep lowering their prices.

Offering more than just lower prices
Some retailers have started to offer consumers "lower prices plus". The "plus" can be wide ranging -- including higher quality products, more service, better product selection, a better return policy, and so forth. In our lower price retail environment, the purpose of the "plus" is to give prospective buyers a reason to buy from that retailer and even possibly give consumers a reason to buy sooner rather than later.

Currently, Best Buy is doing this.

Best Buy is in a highly competitive market space... they compete with a wide variety of businesses such as Walmart, Costco, national department stores, and local electronics stores. Lower competitive prices are widely used. This retail space is so competitive that former Best Buy competitors Circuit City and CompUSA are either downsizing or are no longer in business.

Best Buy's current television advertising campaign "You, Happier." exemplifies the "plus" strategy. The thirty second spots each feature a "Blue Shirt" (Best Buy employee) sharing a brief story that shows how their product knowledge and empathy for people helps their customers. With Best Buy's assistance, you can be happier. Now that's a "plus".

Example A: Connecting grandpas and grandkids

Example B: Needing the perfect gift

Example C: Great gift ideas

Does the early store get the customer's holiday cash?

Christmas was in the air at the Walmart store in Hadley, Massachusetts...

• An instrumental version of "The First Noel" played on store speakers.


• The check out area was adorned with wrapped gift boxes above the cash registers.


• Christmas decorations, clothes and gifts were stocked on shelves and aisles.


• The entry area inside the front door was decorated with a Christmas Tree and wreath decoration (above).

It was looking a lot like Christmas.

It was November 9, 2008.

A "quiet" change
Moving the holiday shopping season earlier and earlier is a relatively newer phenomenon. Not too many years ago, Christmas shopping really started after Thanksgiving. Over the last decade, retailers have started stocking holiday decorations and gifts before Thanksgiving. It was not uncommon to see such sights prior to Halloween.

However, this was done more on the sly... with little promotion and fanfare. It just happened. Things seemingly just appears on store shelves. If shoppers bought holiday items, it would be great. If not, there was still a lot of time until the holidays for them to do so.

It is different this year
This year, there is a reason for retailers to have an earlier holiday shopping season. Economic concerns are impacting consumers' spending. The prevailing thought is that consumers will have smaller gift giving and holiday decorating budgets... and be more likely to stick to them this year. So, when the allotment is gone, consumers are done spending on the holidays. Therefore, retailers fear that, if they do not get the early Christmas spending, coal will be in their holiday sales stockings.

Questions

• What issues are affecting your customer base?


• How are you addressing these issues?


• What will be the impact on your business if such variables are not dealt with effectively?

Tough marketing for tough times

This is not the time for timid marketing

There is a lot of news on how consumers have quickly closed their wallets in response to the barrage of recent negative economic announcements. The 10-20-08 BusinessWeek cover story (right) on how U.S. consumers are tightening their spending is representative of most stories.

What we've been taught
It is accepted business practice to "get lean and mean" when revenues fall. It has not been uncommon for businesses to cut, or at least slow down, expenditures on variables such as new hiring, customer service, advertising, product improvements, sales promotions, sponsorships, and hours of operation.

A recent study of the 400 member Association of National Advertisers found that more than 1/2 anticipated decreased spending by their businesses for marketing and advertising over the next 6 months.

But what we've been taught is not always right
However, business history shows that economic downturns might be an inopportune time to cut marketing efforts. Businesses have found significant success by increasing their marketing campaigns (or at least keeping their marketing stable) while competitors shrink theirs.

In the midst of financial uncertainty, consumers tend to be more open to trying different brands, stores, restaurants, products and price points. While some competitors cut the very resources that allow them to communicate and retain their current customer base, other businesses increase marketing expenditures to reach out to these abandoned consumers. Such firms take advantage of the decreased advertising and promotional clutter that makes communication with customers more difficult and expensive.

Examples of successful marketing campaigns started during economic downturns since the 1950s include Crest toothpaste, BMW, Calvin Klein jeans, and IBM personal computers.

No one says it will be easy
Building a brand during an economic downturn is not for the faint of heart. Devoting dwindling financial resources to marketing efforts is not an easy decision to arrive at. But the payoff can be significant. Not only might the hard times be lessened by increased sales in the short-term, the firm can enjoy greater brand awareness, customer loyalty, as well as, increased sales long after the economy strengthens and consumers loosen their spending.

One final note: such marketing efforts must be wise and judicious. The changes in consumer behavior that result from financial hard times must be understood and reflected in how firms relate to customers. Marketing "the way you've always done it" will not be enough. Consumers have new concerns and desires that businesses must recognize and appeal to.

Tampa Bay Rays offer perspective on building multi-generational workplace

Key question: Do you make younger workers adapt to your culture or are you willing to adapt your culture to younger workers?

Whether small or large, most U.S. businesses are dealing with differing generational expectations, attitudes and values brought into the workplace by their employees. These differences are causing misunderstanding and strife between employees, as well as employees chafing at corporate culture and policies. The cause of such misunderstanding and irritation is that the generations currently comprising the vast majority of the U.S. workforce –from youngest to oldest: Millennials, Generation X, Baby Boomers and the Silent Generation – are retaining more of their generational “personalities” than previous cohorts.

The three teams remaining in the Major League baseball playoffs (Philadelphia Phillies, Tampa Bay Rays and Boston Red Sox -- the Los Angeles Dodgers have been eliminated) offer varying approaches to building multi-generational workplaces. Consider that:

• Players are Millennials, Gen Xers and even a Baby Boomers (Phillies pitcher Jamie Moyer).
• Middle management tends to be Xers and Boomers.
• Top management and ownership includes Xers and Boomers.

Try to change workers
or change some for workers
While the Phillies and Red Sox have taken a more traditional approach that integrates their younger players into their culture, the Rays have made more adaptations to their organizational culture to better reach, involve and maximize the performance of their younger workers.

Some examples of how the Tampa Bay Rays have adapted their organizational climate to maximize younger workers include:

• Hiring a manager who is open to the differing style of younger players. Whether their music, haircuts, or understanding that younger players want some work-life balance, Rays manager Joe Maddon recognized that such work style differences are not bad... just different from what other generations of players did.
• The Rays showed significant trust the organization's younger players. Management was criticized in many quarters for not acquiring more of a "veteran presence" late in this season as a precaution if their young team wilted under the pressure of making the playoffs.
• Over the last several years, the organization made significant investments in younger workers. Early this season, Rays management made a very unusual decision to sign a player who had been in the major leagues for only one week to the longest contract in team's history -- 9 years with six of those guaranteed! It should be noted that the player, third baseman Evan Longoria, was bound to the club for many years at a lower salary due to the rules agreed upon by the players union and Major League Baseball.
• In addition, the ownership showed trust in the team's president and general manager -- both in their early 30s -- in making such key decisions.

No matter the outcome of the playoffs and World Series, the Tampa Bay Rays have shown organizations can benefit from examining their cultures, practices and climate and understanding that a "that's the way we've always done it" philosophy might not be the right fit for today's workers or the business environment it finds itself in today.

Why portray customers as clueless?

An objective of advertising is to endear a product to current and potential customers. Allowing them to "see" themselves in advertisements is a basic tenet of marketing. Such groups should be able to identify with the commercial... that the advertisement hits their situation so closely that it could be them in the ad.

A good classic example of this was the long running advertising campaign by Michelin Tire that ended several years ago. Perhaps you recall the advertisements (above right) where babies and tires were featured with the slogan "Because so much is riding on your tires." People "saw" their babies -- no matter how old -- in the advertisement . The message and images related to their lives. A part of them was identified in the ad.

Portraying customers as foolish to attract new customers... it does not make sense.
While humor is a powerful tool in advertising and promotion, care must be taken not to cross the line where humor goes from attracting to repulsing. For example, in television advertisements over the last two years (below), Holiday Inn uses their own customers as the butt of the joke... making them look silly. So the message is: see our customers... don't you want to be just like them?

What do customers see in your ads?

• Does it relate to them?
• Is it attractive to them?
• Do they want to be a part of it?