Don Roy, Ph.D.

Cookie Wars: Wal-Mart vs. Girl Scouts

Wal-Mart has developed a reputation for threatening several American treasures: mom and pop retail stores, independent pharmacies, and small town grocery stores. Now, some people believe it is targeting another All-American icon: the Girl Scouts. Wal-Mart has introduced cookie items in its Great Value line with amazing similarity to Girl Scout mainstays Thin Mint and Tagalongs. According to a post on the blog Authentic Organizations , Wal-Mart is hurting the Girl Scouts by selling “fake” Girl Scout cookies. The taste and texture are similar, too similar, to Thin Mint and Tagalongs, says blogger CV Harquail.

Before labeling Wal-Mart as evil (again), consider the situation more closely. Girl Scout cookies are sold for 1-2 months out of the year, leaving a void of 11-12 months. If Wal-Mart’s products are intended to be like Girl Scout cookies, is Wal-Mart perhaps filling an unmet need? Quality is also an issue. If the knock-off versions of the cookies do not pass the taste test with consumers, the products will not be successful. Most importantly, a stark contrast exists between the mission of Wal-Mart and the Girl Scouts. People will continue to buy cookies to support the Girl Scout cause. Cookie sales are a Girl Scout tradition, and no imitation product can match the Girl Scout marketing combination of great taste, worthy cause, and massive sales network.

One could even argue that competition is a good thing; it should keep the minds behind Girl Scout cookies thinking about how to be innovative and make a long running tradition even better!

Ad Age – “Mom Accuses Walmart of Going After Girl Scouts”

Promotion Clunkers Hurt Brands

Word that the government’s Cash for Clunkers program has run out of money contains a lesson for businesses. The program, which provides financial incentives to consumers to trade low gas mileage cars for more fuel efficient models, is well intended to reduce our dependence on oil. The $1 billion available has been snatched up quickly by eager consumers. The desire was to have $4 billion to fund the program, and it is looking like every dollar of that amount would have been used if allocated.

So, what’s the problem here? We often encounter offers that suggest “hurry- quantities are limited- act now!” The problem is that a promotion poorly implemented can disappoint customers and lead to dissatisfaction with the business offering the deal. Remember KFC’s botched grilled chicken giveaway this spring? The idea was brilliant, the execution was weak. The promotion had to be halted after a few days, leading to a great deal of negative publicity in the media and angry customers in stores. On top of that, KFC spent additional money mailing coupons to consumers for a free dinner to make good on the promotion.

The strategy behind sales promotions is relatively easy to understand. If a marketer can determine what incentives will move the target market to take action, it becomes a matter of creating awareness of the promotion. The more challenging part it seems is in the execution of promotions. Has enough money been budgeted to allow all customers that want to participate to do so (the answer is a definite “No” in the Cash for Clunkers program)? If the promotion is executed at retail, do employees understand the program and how to process the promotion for customers? Is additional inventory needed? Additional customer service help?

When a promotion goes very wrong like the KFC grilled chicken fiasco, one wonders if the brains behind the promotion ever spent any time on the front lines serving customers or if they fully understand the challenges faced. Great promotions can positively impact sales and generate excitement among customers, if implementation issues are thoroughly considered. Conversely, a promotion gone awry has the opposite effect of what was intended and efforts must be made to undo the damage to the brand.

When Customers Dress Like Cows… and Like It!

When is asking your customers to dress like a cow not humiliating, but actually rewarding? When you are Chick-fil-A and you are honoring cows with a “Cow Appreciation Day.” That is exactly what is taking place at Chick-fil-A restaurants today. Customers that come dressed cow-like will receive a free meal, while patrons that may not have full cow gear but have a cow accessory (whatever that might be) can still get a free entree. Chick-fil-A even makes it easy for customers to get a cow costume by making available a printable costume kit at http://cowappreciationday.com.

This promotion might seem a bit odd, but it is a winner on several fronts. It is a great tie-in with Chick-fil-A’s “Eat More Chikin” campaign that has run for several years. It is a playful promotion that allows Chick-fil-A and its customers to have a fun experience. The promotion reinforces the humorous brand associations Chick-fil-A has built over the years. On top of these benefits, the promotion is cost effective as much of the communication for it has occurred in-store, via word-of-mouth, and through online channels. Brand publicity is already accruing as media outlets were covering Cow Appreciation Day in advance.

Chick-fil-A is a very unique brand. On one hand, it holds strong organizational values that include a policy of all locations being closed on Sundays. On the other hand, it does not take itself too seriously, delivering a consistent customer experience while having a good time. So, if you have time today celebrate cows by visiting Chick-fil-A… lunch is on them!

Ad Age – “Want to Boost Sales? Tell Consumers to Dress Like Cows”

Reward Your Customers for… Just Being Your Customers

Frequency and loyalty programs are effective for increasing customer loyalty. Rewards in the form of discounted or free products are an incentive for repeat or increased purchases. A side benefit of such programs is if customers are buying from you that means they are probably not buying from your competitors!

Reward-based programs are nice, but let’s face it- they have strings attached. “I’ll give you a free sub sandwich if you buy 10 subs from me” means there will be no free lunch for the customer! Have you ever given customers a reward for their business with absolutely no conditions attached- a gift? Sprint has launched a program in which it is partnering with approximately 500 theaters in the U.S., setting up kiosks that will dispense coupons for concessions upgrades. Sprint customers can enter codes from their phones at the kiosks to get coupons that can be used on the spot at a cinema’s concession stand.

Is an up-sell to a large popcorn or soda enough to keep a customer loyal to Sprint? Probably not. The relationship still likely hinges on quality service, reasonable rate plans, and effective customer support. But, the cinema coupon campaign is a great way to treat customers inexpensively. Also, it allows Sprint to engage customers via their wireless devices, reinforcing the brand relationship.

It may be unlikely that a customer would switch to Sprint because he or she can get coupons for discounted concessions at the theater (customer acquisition is not the goal of this campaign, anyway). But, Sprint customers will enjoy a treat at the movies complements of their wireless company, while non-customers will be exposed to the Sprint-branded kiosks and wonder “how can I get those coupons?”

The New York Times – “Lights, Camera, Action for Concession Coupons”

Marketers’ Priorities: The More Things Change, The More They Stay the Same

It would be natural to assume that the priorities of marketing managers have shifted with the turbulence created by the recession. A closer look at their list of priorities today finds that it looks remarkably similar to priorities we had long before the economy tanked. A survey of Chief Marketing Officers by JupiterResearch and Verse Group reveals that marketing needs have changed very little in recent years. The number one priority: achieving measurable ROI for marketing efforts (50% said that was their priority). The number two priority was developing programs to integrate online and traditional media (43%). Two other priorities that existed pre-recession are translating the brand experience across different touchpoints (32%) and cutting marketing budgets without cutting performance (31%).

What do the study’s results say about the state of marketing? Greater accountability for marketing expenditures has been a theme among executives both within and outside the marketing function for years now. Sophisticated analyatics have helped make strides in moving measuring marketing performance from an art to a science, but the priorities identified by CMOs studied suggest there is still much work to be done in this area. The same can be said for better integration of online and traditional media; it has been a challenge since online media came into existence and continues to be somewhat elusive for many marketers.

I suspect if a similar survey of CMOs is conducted five years from now, the results will not change much. I am unsure what that says about marketing and marketers. Are we too resistant to change for it to occur rapidly? Are the challenges too immense to overcome quickly? Or, is it a matter of the priorities being fundamental to the success of the marketing function, meaning that they are the priorities of the past, present, and future?

eMarketer: “Taking the Measure of Brand Measurement”

Retailers Bank on Back-to-School Success with Slimmer Inventories

A key measuring stick for retailers and the economy as a whole is approaching with the back-to-school selling season (which is difficult to consider as it seems school just ended!). Will consumers who have been holding on to their money in recent months open their wallets to buy clothing, computers, and other items needed to get ready for the new school year? If yes, is it a signal that the economy may be in the early stages of a thaw that could ultimately lead to happier times? If no, does it mean that the recession will continue to inflict misery on consumers and businesses alike?

The answers to the above questions: stay tuned and we will find out. However, if retailers enjoy a spike in sales in the coming weeks they will have to do so with less product assortments for their customers. Unlike last year when most retailers had merchandise in stores when the recession’s effects were felt and were forced to deeply discount to move their inventories, this year’s store stocks reflect a softer economy. Many stores’ shelves are noticeably leaner. It is possible that consumers conditioned to have ample assortments from which to choose may be less satisfied with retailers’ offerings this year. If that happens, the much needed boost to the economy from back to school sales may not materialize.

Retailers appear to be in a no-win situation. Too much inventory is expensive to carry and can further hurt profit margins if extensive markdowns have to be taken. Too little inventory may turn off customers who feel they do not have ample choice and opt to go elsewhere, or worse, not spend at all. Here’s hoping that retailers meet these challenges and a successful back-to-school selling season is enjoyed by all!

The Wall Street Journal – “Stores Anxiously Watch Back-to-School Sales”

Finding Marketing Opportunity Amid Confusion

Beginning a discussion by saying “the government creates marketing opportunity” is a bit unusual. We tend to think of governmental regulations and influence as limiting for businesses. One exception might be the Consumer Assistance to Recycle and Save (CARS) program, better known as “cash for clunkers.” Its aim is to entice owners of fuel guzzling vehicles to trade for more fuel efficient models. The program itself could be a boon to the auto industry as it offers up to $4500 in incentives to consumers. However, if auto companies rely only on the stimulus effect such a program would potentially create they will miss opportunities to reach potential buyers.

An example of proactive marketing in response to the government incentive program is Ford’s “Recycle Your Ride” campaign. Ford has observed (probably correctly) that the conditions and eligibility requirements of the incentive program will be confusing to many people trying to determine if they are eligible. In response, Ford has an interactive calculator on its web site that will enable consumers to input information on their vehicle to determine their eligibility for the government incentive. In addition, Ford has identified approximately 20 models in its product line that meet the criteria of the government program.

By being a resource for consumers to sort through the details of the Cash for Clunkers program, Ford may be better positioned to reap the benefits of this incentive program than its domestic competitors. A quick perusal of GM and Chrylser web site home pages finds no mention of the Cash for Clunkers program or any marketing efforts that respond to the opportunity. The emphasis of the content on those web sites currently is the company, while Ford’s site tries to help the consumer. Which one do you think potential car buyers will favor? Ford’s tactics illustrate that we should always be looking for an opportunity to provide clarity for customers when uncertainty is present.

Marketing Daily – “Ford Eyes Opportunity in Clunker Confusion”

Motives for Going Green: Status and Savings

The green movement, coupled with the current recession, are considered by many observers of consumer behavior to mark a permanent, significant shift in how and why we buy and use products. Have we realigned our values to reflect new priorities that promotes the greater good over our personal well being? Sounds good, but we may not be there yet!

According to a study by Communispace Corporation, consumer motives for green behavior are driven more by status and frugality than altruism. For some people, their efforts to recycle become a badge of honor, something they can talk about in conversations to score points among their friends. For other people, green efforts may be more about saving money (e.g., reusing sandwich bags, drying paper towels and reusing).

Do the results of the Communispace study mean that we should look down on those people who are engaging in green behaviors for non-altruistic reasons? Not at all! These candid insights open possibilities for involving more consumers in the green movement. Just as we buy cars, shoes, and everything else we consume for a variety of reasons, encouraging green consumption should take a multi-pronged approach. It is not all about making a difference; many people find it difficult to believe their efforts alone can make a difference. So what do they do? Nothing. Green marketing campaigns should consider how to appeal to different values consumers hold beyond saving the world. If the bottom line is getting more people to engage in more environmentally responsible consumption, it should not matter that multiple routes are used to get to the destination.

Media Post Marketing Green – “Frugality and Social Status Trump Altruism”

Can Any Smartphone Competitor Upset the Apple Cart?

Apple is enjoying tremendous customer loyalty among users of the iPhone. A Crowd Science report reveals 82% of iPhone customers have indicated loyalty to the brand for their next phone purchase. Moreover, 40% of Blackberry customers, Apple’s chief rival in smartphones, expressed a desire to switch to the iPhone with their next purchase. That figure towers over the 14% of non-Blackberry customers surveyed who indicated a desire to switch to Blackberry. The Crowd Science survey figures, coupled with the astounding sales performance of Apple’s new 3G iPhone (1 million units in the first week on the market), suggest Apple’s momentum in smartphones will be difficult to stop.

Can anything derail Apple at this point? Many consumers have been deterred by the high price of the iPhone. But, with models as low as $99 today, price is less of an obstacle. The exclusive partnership with AT&T is more of a challenge to overcome. Consumers that are either locked in to contracts with other carriers, have concerns about AT&T service quality, or have loyalties to their current carrier remain elusive customers for Apple. How long will the exclusive arrangement with AT&T last? The deal is lucrative for Apple, and strong sales of the iPhone suggest it is not a major impediment to customer acquisition.

In the long run Apple must expand its distribution beyond a single carrier if it intends to become the dominant smartphone brand. For all of the hype and attention the iPhone garners, Apple is third in global smartphone market share behind Nokia and Blackberry. Apple may be a niche player in the personal computer market, but it dominates the portable music category. Now, it may be driving it toward achieving dominance in the smartphone category, too.

Marketing Daily – “Carrier, Pricing Leave iPhone Slightly Vulnerable”