Don Roy, Ph.D.

Swine Flu Creates Marketing Fever, Headaches

Timing is everything in business. Opportunities often have a rather small time window that can be capitalized. But, when the window is open, one must consider what the opportunity holds for a business. In the case of the current H1N1 flu (a.k.a. swine flu), concerns about health have created opportunities for marketers to appeal to consumers’ desires to stay well. Makers of soaps and hand sanitizers are stepping up their marketing efforts, and those efforts are aided by media reports in which health experts tout hand washing and sanitizing as among the most important actions we can take to minimize exposure to the flu. Brands such as Dial (soap) and HandClens (sanitizer) are responding to an increased emphasis by consumers to use their products. Also, they are promoting good hygiene in general, not “use our product so you won’t get swine flu.”

On the other hand, the H1N1 flu has created headaches for pork producers. The name “swine flu” is not good for promoting pork consumption. The National Pork Producers Council has gone on the offensive to make the case that swine flu is not a food-borne illness and that pork products are safe to eat. Sometimes, circumstances or misfortune bring harm to a brand’s reputation. The pork industry currently faces this dilemma; the proactive response to allay concerns about the safety of consuming pork was the right (and really only) thing to do.

Link: Wall Street Journal – “Soap Makers, Others Hitch Ads to Swine Flu”

Cable Companies Compete with Legislation, not Innovation

Cable companies are often criticized for a variety of shortcomings: inconsistent customer service, billing errors, and rising prices. But, it seems the players in the industry bring much of the scrutiny on through their actions. Recently, Time Warner floated the idea of trying a pay-per-usage service rather than a flat fee but dropped the plan after an outcry from consumers and advocacy groups. Now, Time Warner and others in the cable industry are exploring ways to restrict the impact of municipal wi-fi services. A specific case in North Carolina involves the cable industry supporting legislation that would enact stiff regulations on cities that build their own networks.

The defense used by the cable industry is that taxes levied on their services are indirectly being used to build networks that compete against them. In other words, they now have another competitor. Competition should serve as a challenge to become more innovative, whether it be in the content offered or customer support provided. Also, the cable companies have the advantage of brand recognition in the marketplace. Strengthening brand relationships through products, services, and social responsibility initiatives are ways the entrenched cable companies can take advantage of their standing with consumers. Exerting energy to legislate barriers to entry to competition certainly does not benefit consumers, and it seems cable companies would be better served focusing their resources and energy elsewhere.

Link: The Daily Online Examiner – “Cable Companies Try to Cripple Municipal Broadband”

The Semantics of Sales: What Motivates Consumers

I recall a conversation more than 20 years ago I had with a men’s clothing buyer for the department store where I began my marketing career. We were discussing different approaches for promoting sales on men’s suits. What was more effective: 50% off or advertising the specific price point that reflected a 50% savings? If I recall correctly, the buyer opted to use the percentage discount as the method for framing the promotional price.

Fast forward to today, and the same questions are being asked. In this tight economy, what are the magic words that will prompt consumers to loosen their purse strings and buy? A recently released report by Information Resources Inc. suggests consumers are motivated to scour retailers’ sales offerings in the quest for deep discounts. Furthermore, frequent discounting by retailers has left consumers longing for more, more in terms of deeper discounts. Retailers are responding by stretching the upper limits of their price discounts. Claims of “save 50%” are increasingly being replaced with claims of discounts of 70-80%. In other words, the wow factor of a 50% off sale has been diminished by overuse; deeper discounts are needed to create the desired impact.

Going back to the original question: what’s the best way to frame a discount? It appears the answer is promote the percentage savings, but unless it is an eye-popping figure, consumers may sit on the sidelines and wait for a better deal to come along.

Link: The New York Times – “Never Mind What it Costs. Can I Get 70% Off?”

Saturn: The End of a Great Brand Experiment

I was disheartened to hear General Motors plans to phase out the Saturn brand as part of its fight for survival. Saturn, along with Saab and Hummer, will be phased out in 2009. These brands have been on the chopping block since GM’s financial troubles came to a head last year. In addition, the Pontiac brand will be phased out in 2010 as well as major reductions in employee headcount and dealerships.

Of all the announcements made by GM President and CEO Fritz Henderson today, elimination of Saturn is particularly sad from a marketing standpoint. Saturn was launched in the early 1990s with the promise of a new era within GM. Even the ad slogan supported the notion: “A different kind of car, a different kind of company.” Consumer response to Saturn was very strong in the early years. Then, consumer preferences shifted toward larger vehicles and SUVs. Saturn was ill positioned to meet that trend with its focus on economy cars.

Saturn also suffered from a lack of resource support within GM as well as bad managerial decision making. One role for Saturn was supposed to be to serve as an experimental brand. For example, the EV1 electric car that Saturn tested in the mid 1990s would have put GM ahead of competitors in the race to offer alternative fuel vehicles. The EV1 was tested in California, and the company eventually destroyed all of the vehicles once their leases expired rather than move forward with production.

I own two Saturns and have followed the brand closely for more than 10 years while researching it for a case study I prepared and subsequently updated for marketing textbooks. From a brand building standpoint, GM did many things right to get Saturn off the ground. GM’s Henderson made an interesting statement at the press conference announcing the changes saying “brands are good for offense.” The problem is GM is in defensive mode. The company is resizing itself to reflect the reality of a smaller U.S. auto market. Saturn will be missed… at least by this owner.

Pique Your Customers’ Curiosity to Drive Web Traffic

What drives traffic to your web site? Paid search? Search engine optimization? Those tactics are effective and should be a part of the online strategy for most marketers. However, there is a less tech driven way to prompt people to visit your web site: curiosity. Two examples I encountered recently came from Southwest Airlines and the National Water Council. Southwest is currently running a campaign that offers 50% fare discounts, with a different city featured each day over the course of the four-day promotion. The catch: consumers need to go to Southwest.com to find out what the “mystery city” is each day of the promotion.

I received a postcard recently offering a free bottle of my favorite laundry detergent. All I needed to do was go to www.freedetergent.com. Once I arrived there, name, e-mail address, and favorite laundry detergent brand info was requested. The promotion is an effort by the National Water Council to get participants for its National Water Quality Awareness Program. The promotion expands the group’s database of persons it can reach with its message. The intrigue of the offer and the straightforward URL made it too tempting to pass on visiting the web site.

These examples remind us that if we want to web surfers to visit our site, we must go beyond considering the architecture of web site design and analytics of keywords. Create some excitement through a mystery promotion, one that is too compelling to ignore!

Is a Ratings System for TV Commercials Needed?

The Federal Communications Commission is considering a content ratings system for television commercials. Such a system, coupled with the right technology, would allow viewers to block reception of commercials they deem inappropriate or offensive. Opposition to a ratings system is coming from the Association of National Advertisers. The ANA maintains that viewers are already able to block undesired programming using V-Chip technology, and the fact that technology exists to make blocking possible does not mean it should necessarily be legislated.

The most interesting point made by the ANA’s Executive Vice President of Government Relations Dan Jaffe was “If you independently rate advertising, it will dry up the income stream because advertisers won’t advertise where people aren’t watching the ads.” Here’s an idea Mr. Jaffe: challenge ad agencies and your ANA membership to create ads people want to watch! The prospect of a content ratings system exists because the industry seems incapable of taking care of it through self-regulation. Personally, I don’t care to have my 9-year-old son exposed to a Cialis commercial while we are watching a sporting event or a commercial for a Hardee’s hamburger that is filled with sexual innuendo.

The relevance of TV as an ad medium is being challenged in part by devolving quality of work by advertisers and the agencies they hire. If advertisers do not want government regulation of TV commercial content, they should take steps own their own to insure the quality of commercials is acceptable to their audiences. I am not talking about political correctness, I am talking about using common sense.

Link: – Media Planner Daily – “ANA to FCC: Rating Commercials is Dangerous, Unconstitutional”

Packaging Design as Brand Differentiator

A negative aspect associated with product packaging is environmental impact. Landfills receive tons of paper, cardboard, plastic, styrofoam, and other materials discarded after products are opened or used. Consumers are called on to be more environmentally conscious; product makers bear the same responsibility.

Pepsico’s Frito-Lay brand hopefully is an example of a future trend in packaging. Frito-Lay’s SunChips brand will soon roll out a compostable package. The package will be 100% bio-degradeable. Frito-Lay’s choice of SunChips as the brand to debut an environmentally friendly package is appropriate. SunChips is positioned as a healthier alternative to potato chips. Using “healthier” packaging for SunChips is a great fit.

I bought a piece of furniture recently and cringed as I filled my garbage can with sryrofoam and bubble wrap. Kudos to Frito-Lay for taking the initiative to develop packaging that has less of a negative impact on our environment. It is the right thing to do, and environmentally responsible packaging can be leveraged as a point of difference to set you apart from competitors.

Link: Marketing Daily – “Sun Chips Rolling Out Compostable Packaging”

BK’s Latest Efforts to Lose Friends and Alienate People

Burger King has benefited from the influence of edgy ad agency Crispin, Porter + Bogusky. Icons such as the Subservient Chicken and the King have put BK back on the radar screens of many fast food consumers. Pushing the envelope to get attention sometimes leads to getting paper cuts, as BK has found out. A recent Facebook promotion that offered users a free Whopper for “de-friending” 10 people was stopped because of concerns it violated Facebook’s privacy policies.

Now, BK has caught flack for two ads. One is a print ad running in Europe for a new “Texican Whopper” that features a short, squatty Mexican draped in the Mexican flag standing next to a tall American cowboy. The Mexican government has objected to the use of its flag in the ad. BK has agreed to stop running it.

A second ad is a TV commercial targets children. BK is promoting kids’ meals through an association with Spongebob Squarepants. The link with Spongebob is not objectionable (after all, who could find fault with someone with a work ethic like his?). The issue is the execution of the message. The King character is doing a re-mix of Sir Mix-a-Lot’s “Baby Got Back.” The use of this song and the images of dancing girls with big square butts has drawn complaints from child advocacy groups.

Does the decision to create edgy ad messages necessitate that one accept the likelihood that an ad could be offensive to someone? The answer appears to be “yes.” It seems that BK and its ad agency could have realized these ads would offend some people. Killing these ads before they bowed would have created less controversy for the brand… or is that what BK wants? Some people are offended by the ads and have complained, while some people probably like them and have shared with others. In both cases, people are talking about BK, and that could be the overarching goal.