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.

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

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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.

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Truth in advertising

Hyundai's current slogan describes it well: Hyundai Momentum

Instilling consumer confidence

Always remember -- consumers pick up cues about businesses from a variety of inputs.

Does this sign instill confidence that you want this repair shop to work on your car?

Retailers... let customers know about your services

It is a great service that I had never heard about. In fact, it is a bit difficult to get information about the service from the retailer's website. Bed Bath and Beyond allows you to shop and order online or at a store and then have the order waiting for pick up at a different store -- even if that location is across the country.

The service worked well for my family as we shipped a child off to college... no need to stuff a car full of items bought at home or pay for extra suitcases to carry more things on an airplane. Just order and have the products waiting at the local (to where ever the university is) Bed Bath and Beyond store.

The only problem was we found out about this valuable service by chance. We never heard or saw any ads about it. Even the retailer's website does not make it clear -- even on their "Shop for College" web page.

Using the service worked out great for us... I just wonder how many more families would have used it if they would have only known?

Don't add confusion to marketing effort

I actually like the commercial. It's just that the choice of Dunkin Donuts, used as an example to emphasize a point in a nationally televised Sprint commercial, that is interesting .

While Dunkin Donuts is well known in various parts of the county, the chain is only in 34 of the 50 states (68%). The region where I live happens to be one of the areas without them.

I asked some people who I saw the commercial with whether they "got" the Dunkin Donuts reference. It did not mean much to any of them -- though several had heard of the donut chain.

Does it hurt the advertisement? I do not know. But such a brand non-recognition or attachment to a "hook" in your commercial sure can't help.

Impress customers, not yourself

If you have thoughts similar to these, think twice:

• "I've been in this business for 20 years... I know what to do."
  
• "Customers don't know what they want but I do."
• "Customers are dumb."
  

Thinking you know more than customers is a trap more common than one might think.

A case study:

The current Burger King advertising campaign featuring a very hip king (see above) gets attention and some acclaim for creativity. One never knows where the king will show up. From waking up people to promote breakfast at BK (right) to dancing with Sponge Bob Square Pants to promote Kid's Meals (see video below)... the BK King certainly gets around.

Burger King's current problem?

While fast food consumers seek products at lower prices, BK is sticking to the image of the hip king with little in response to customer pricing desires.

While McDonald's has responded to consumer economic concerns with an expanded "Dollar Menu", Burger King has been airing the booty bumping Sponge Bob commercial (and just recently adding a $1 Whopper Jr. TV commercial).

The results? Burger King revenue is down since March 2009 while McDonald's rose 7% in April 2009 alone .

Even in the current economy, Burger King thought their customers should value image over prices. Apparently, BK was wrong.

P.S. Promoting Kid's Meals with a crotch grabbing king and shaking square booties? That's a topic for a future posting.

TV commercials that reflect the times we are in

Timeliness of subject

A direct jab at competitor to stimulate sales

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.

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.