Archive for the ‘Brand management’ Category

infographic-babies-born

It should be taken for granted that 9 of 10 phones sold are high-end devices. There is a growing number of smartphones in today’s fast-moving world. Each passing day more people are accessing the web through a mobile device than through computer and more Android mobiles are activated than babies born. So mobile search queries has grown five times more in the past two years. According to statistics, almost quarter of all searches comes from mobile devices (20% of all telecom, 30% of all restaurant, 25% of all movie searches).

in-the-toilet

A recent survey of global TV habits has indicated that nearly one in five people uses a smartphone to watch television in the toilet. The researchers also has revealed that consumers are increasingly watching programmes ‘on the go’ : 16% use smartphones in the bathroom and 10% watch shows on a tablet in the toilet.

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Whether it’s when buying clothes, food or cosmetics, shoppers are learning a cool new buzzword, says Jasmine Gardner…

Surely, you are conscious if you are reading this. However, here we are talking about buying “conscious”, eating “conscious”, dressing “conscious”. In the worlds of fashion, food and cosmetics, conscious means far more than just aware and responsive. More specifically, it means that you are ethically and environmentally aware. It is the new way for brands to show they have a social and environmental conscience.

For example, H&M launched its 2012 Conscious Clothing collection – an eco-friendly fashion line made using organic cotton and recycled polyester, with styles that have already been worn by celebrities including actresses Michelle Williams, Kristin Davis and Amanda Seyfried. The famous brand has decided that “Conscious” will be the name it gives to all of its work on creating a future of sustainable fashion.

“Sustainability is very much about being provident with the Earth’s resources and recognising how people and the environment are affected by our operations. Hence the name ‘Conscious’ is a natural choice,” says an H&M spokesperson. Of course, just recognising is not enough to be truly “conscious” in that you need to know about the impact of your actions and accordingly buy the good stuff.

“We offer our customers a permanent range of various ‘conscious products’ with added sustainability value,” says H&M. “Clearly labelled, we make better choice accessible and affordable to all our customers.”

H&M is not the only one at it. The icecream maker, Ben & Jerry’s prides itself on its environmentally and financially sustainable values. Moreover, a few months ago it launched a competition to find new organisations in the UK, Ireland, Denmark, Sweden and the Netherlands that are creating new models for sustainable business. At the same time, in the US it is taking part in a project called the Campus Consciousness Tour – a circuit around American universities encouraging students to take action for the environment.

In the cosmetics industry, Kiehl’s, which produces luxury skincare products in recycled and recyclable packaging views itself as a conscious company at the core. “The Mission of Kiehl’s is a tribute to our belief in giving back, in supporting both the local communities in which we serve and the global community in which we live and thrive,” says its UK general manager, Victoria Campbell. As a result, it supports charitable organisations in Aids research, environmental conservation and supports children and communities.

“The words ‘ethical’ and ‘eco’ have gone out of fashion”

But if what all these companies mean is that they are ethical, environmentally friendly or sustainable, why do they choose “conscious” instead of just saying so?

“There are a couple of factors at play,” says Camilla Grey at branding consultancy Moving Brands. “First, we’ve moved into a new phase where being ethical and eco is integrated into our lives – it is embedded into our psyche. As a result, people now see themselves ‘conscious’. Secondly, [the words] ‘ethical’ and ‘eco’ have gone out of fashion. They imply a certain aesthetic – ‘knitted muesli’ as Mary Portas used to describe it. No matter how hard brands tried, they never could shake off that image. ‘Conscious’ gives them a bit more room to break free from all the white, green and hessian weave.”

Have you ever made a mix tape for your loved one? MixPixie is trying to bring the romance back to the digital world and keep memories alive by allowing music lovers to do the same thing on CD.

Newly established, London-based business is the world’s first personalised CD service. It allows customers to create bespoke albums by choosing artwork from over 500 designs and picking favorite songs from its library of over 8 million tracks. In addition to designing, buyers can include text and personal photos. A ten-track album costs about £15.

Adam Goodyer, James Perkins and Buffie du Pon launched the company a few months ago after spending a year negotiating music catalogue licences. The trio target the gift market and aim to sell 75,000 albums in their first year. They have signed deals with artists including Westlife, Justin Bieber, Jason Donovan and Lionel Ritchie. Former Universal marketing boss Miss du Pon got the idea after a misdirected parcel came through her letterbox containing a homemade CD and a message to a valentine. She said: ‘It brought home how music provides a soundtrack to life.’ As Pon put into the words, CD sales still make up 70% of all the music bought.

‘The problem with compilation albums is they can have scores of tracks but you may only like a handful of what’s an offer.’ Added Pon.

Mr Perkins, who set up the award-winning Concert Live business with Mr. Goodyer, said: ‘We are supporting CD sales and hope to show that downloads aren’t the only profitable revenue stream in the music industry.’

Software giant Microsoft triggers the compettion by challenging Apple with sleek gadgets.

Microsoft has unveiled its own line of tablet computers which it expects will be an “iPad killer”. Hoping its Surface tablets will take on both Apple and Google in the market; Steven Sinofsky, Microsoft Windows division president, called the new device a “tablet that’s great PC – a PC that’s a great tablet”.

Speaking at a press launch, Microsoft boss Steve Ballmer said the two new tablet PCs were part of a “whole new family of devices” the company is developing. They will run versions of Microsoft’s new Windows 8 software because the company wants to “give Windows 8 its own companion hardware innovations”. Although the company has not given any pricing information, Mr Ballmer said that they will be “comparable” to current tablet prices when they go on sale later this year.

Microsoft traditionally relied on others to make computers and phones that run its software. However, the company now offers both gadgets and software and hopes to take on Apple. “We believe that any intersection between human and machine can be made better when all aspects, hardware and software, are working together.” added Mr Ballmer.

The Surface is 9.3mm thick, with a magnesium case and a 10.6-inch HD widescreen display. It also has an integrated kickstand, and weighs less than a kilo (1.5lb). A slightly thicker version – still less than 14mm thick and under 2lb – will work on Microsoft’s Windows 8 Pro operating system. Both devices comes with a detachable keyboard and trackpad that attach magnetically to the tablet.

However, according to experts the company faced a tough battle. IDC analyst Al Hilwa said: “It raises the bar on how Microsoft executes on this, because now Microsoft’s name is on it. They’ve got to get it right – they’ve got to really hit it out of the ballpark.”

Just imagine you go into the market because you have a headache and need a painkiller. On the shelves there are many boxes of painkillers. On the top shelf, you see the aspirin and below there are some other cheaper brands you have never heard about or used. Which one do you choose? Most probably, many people would prefer to buy aspirin. The same is true of most fast-food restaurants, many national hotel chains and many, if not most, shops on the high street.

Many common medicines like painkillers and fast-food restaurants are only one aspect of broader phenomenon: the role of brand names, names owned by particular companies that differentiate their products from those of other firms in the minds of consumers. In many cases, a company’s brand name is one of the most important assets it has. Clearly, Mc Donald’s is worth far more than the sum of the french fries and hamburgers the company produces.

As a matter of fact, companies often defend their brand names, suing anyone else who uses them without permission. You may talk about googling a subject for your learning, but unless the service in question comes from Google, you should describe it as searching on the internet.

As in the case of advertising, the social usefulness of brand names creates a dispute. Does the preference of consumers for known brands reflects irrationality even though other brands are cheaper with the same functionality? Or do brand names convey real information by serving a real purpose rather than creating unjustified market power? Most probably, the answer is some of both. Consumers often pay more for brand-name goods in the supermarket even though consumer experts claim that the cheaper store brands are equally good.

On the other hand, for many products the brand name does convey information. A tired and hungry traveller arriving in an unfamiliar area can be sure of what awaits in Holiday Inn and in Mc Donald’s. Although sometimes traveller may prefer to try another hotel or fast food restaurant that might be better or worse.

Furthermore, sometimes brand names offer some assurance that the seller has a deep interaction with its customers and a reputation to protect. If a traveller eats a bad meal at a restaurant in a tourist trap and vows never to eat there again, most probably the restaurant owner may not care, because it is a small chance that the traveller will be in the same place again in the near future. But if that traveller eats a bad meal at Mc Donald’s and vows never to eat at a Mc Donald’s again, that matters to the company. So this gives Mc Donald’s an incentive to provide consistent quality while providing travellers for some assurance that the quality control are in place.

Have you ever thought why wheat farmers don’t advertise their products on TV as the mobile phone network operators such as Vodafone and Orange or car dealers do? The fact is that because advertising is useful only in industries in which companies have at least some market power (as it is in monopoly, oligopoly and monopolistic competititon in economic terms). Market power can be defined as the ability of a producer to raise prices.

Certainly, the main aim of advertising is to get people to buy more of a seller’s product at the going price. So only a company that has some market power, and therefore can charge a price that is above marginal cost, can gain from advertising. After this logic, it is not hard to see why many companies spend so much money on it. However, the main question which comes to the mind is why advertising works even though the money spent on advertising is often regarded as a waste of resources by the society. Although many advertising creates a puzzle in the minds, much of it is straightforward by informing potential buyers clearly about what sellers are offering. So companies believe that money spent on such promotions increase their sales and they would be in a bad situation if they stopped advertising when their competitors continue to do it.

But what information is given when an actress or sportsman acclaims the virtues of a car or if David Beckham wears H&M brand of boxers? Surely, nobody believes that the actress or sportsman is an expert on car or David Beckham really buys his boxers from H&M. Why are consumers still influenced by ads that do not accord with the reality and not provide any information about the product? One answer is that consumers are not as rational as economists suppose. Their judgements, or even tastes, can be influenced by many irrelevant things such as which celebrity has been hired by the company to endorse its product.

On the other hand, another answer shows that consumer response to advertising is not entirely irrational since ads can serve as indirect signals about the product and company. For example, if you need furniture removals and turn to the Yellow Pages including a lot of small listings and several large display ads, you most probably rationally call one of the firms with a big display ad. Because the big ad probably connotes that it’s a successful company — otherwise, it wouldn’t spend so much money for the larger ad.

Let’s apply the same principle to the ads with celebrities. You don’t really believe that David Beckham prefers H&M boxers to all other more expensive brands; however the fact that the company is willing and able to pay David Beckham tells you that it is a major company and most likely to stand behind its product. According to this reasoning, an expensive advertisement is a venue for the company to put the quality of its products in the eyes of consumers.

After all, it won’t be truism to say that ads only work by manipulating weak-minded consumers especially if we consider the huge amount of spending on advertising. Seemingly, it is an economically productive activity for many companies.

“Permission marketing turns strangers into friends and friends into loyal customers.” 

Today’s fast-moving world with ever-improving technology has changed marketing dynamics completely and reversed almost all values generally accepted up till today. As the marketplace for advertising gets more and more cluttered, it becomes increasingly difficult for marketers to attract the attention of consumers that becomes an important asset to be valued. From now on, consumers call the shots as they have a great power in their hands: not paying attention.

Philip Kotler, world-renowned marketing guru, in his book “Marketing Moves” (2002) states that the power has shifted from companies to consumers. He says that today the consumer is king and he/she has the power of deciding whether he/she will give permission to receive company information and advertising. Now, the challenge that marketers is facing is to persuade consumers to learn more about a company and its products. So, a new form of marketing based on permission is not only changing the landscape but also affecting the other forms of traditional marketing. Within this respect, Seth Godin declares that we are entering an era that’s going to change the way almost everything is marketed to almost everybody.

The “Permission Marketing” concept stated by Kotler was coined and popularized by internet marketing pioneer Seth Godin in 1999. By recognizing the new power of the consumers to ignore marketing, Godin defines Permission Marketing as the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them. He states that treating consumers with respect is the best way to earn their attention. Since permission marketing talks only to volunteers, it guarantees that consumers pay more attention to the marketing message that arrives in an expected, appreciated way. And over time, marketers create a mutually beneficial learning relationship. As Godin puts into the words, “It serves both customers and marketers in a symbiotic exchange.”

However, there is a fine line between real permission and presumed or legalistis permission. Although permission does not have to be formal, it has to be obvious. Just because a company somehow get your email and you don’t complain does not imply it has permission. Just because it’s in the fine print of the company’s privacy policy doesn’t mean it’s permission either. Real permission works like this: if the company stop showing up, consumers complain and ask where it went (Godin, 1999).

Permission Marketing is mostly used by online marketers, email marketers and search marketers, as well as certain direct marketers. The prospective consumer gives either explicit permission to receive a promotional message (like an email or catalog request) or implicit permission (like querying a search engine). For example, Amazon has overt permission to track which books you buy and which books you browse. They build a permission asset by explicitly getting permission to send you promotional e-mail messages. Moreover, they talk to their customers about specific genres of books by creating special interest communities. This is not only where the profit lies but also where Amazon is best able to leverage their permission asset (Godin, 1999).

The core ideas behind Permission Marketing:

Over the last fourty years, advertisers have dramatically increased their ad spending by benefitting from a glut of ways brought by technology and the marketplace. As new forms of media develop and clutter becomes more intense, they have also increased the noise level of their ads by interrupting the day of consumers and making them much more exposed to these ads. How many marketing messages consumers encounter in a day has become countless from huge screens at the airport to advertisements in urinals to brand names or logos on the daily products. There is no wonder that consumers feel like the fast-moving world around them is getting blurry.

One of the key drivers of Permission Marketing is the scarcity of attention. Consumers physically have a finite amount of attention. The percentage of marketing messages consumers get decreases as the amount of noise increases. So they cannot pay attention to everything that marketers expect them to see, watch and remember. Pay attention is a key phrase here, because Permission Marketers are aware of the fact that consumers pay attention only if they are actually interested in the product. And it is too difficult to get their attention back if they change their mind (Godin, 2008). So Permission Marketers use this scarce resource efficiently by sending offers only to consumers who are interested in the product.

Permission Marketing turns clutter into an advantage by allowing marketers to calmly and succinctly give their message without fear of being interrupted by competitors. Permission Marketers need to get some data from the prospects (prospective customers) in order to make the marketing messages more relevant and personal. So they ask for some data from the prospects by making it clear what they will do with the data they collect and why it is beneficial for the prospects to share this data with them. In this personalized, anticipated, frequent and relevant communication marketers speak to potential consumers as friends, not strangers. They try to turn strangers into friends who choose to “opt-in” to a series of communication.

Godin says that permission is like dating. Permission Marketers don’t start asking for sale at first impression. Because they know that the first date is an opportunity to sell the consumer on a second date. So they earn the right, over time, bit by bit. Instead of cheap impressions, they care about deep relationships. As the potential consumers voluntarily pay attention, it becomes much easier to teach them about a product. Instead of trying to capture the attention of the prospect by filling each message with entertainment and eye-catching design, Permission Marketers talk about product benefits by focusing on the ways this product will help that prospect and offer a curriculum over time. As a result, it creates more impact than a random message displayed in a random place at a random moment. For example, if a trusted friend recommend a restaurant to you, you are likely to try it while ignoring a recommendation from an unsolicited mail (Godin, 1999).

Today, the concept of Permission Marketing is redefined by technologies like Facebook Connect and OAuth. According to a recent survey data, the new generation comfortable using social media like Facebook and other mobile apps are quite eagerly sharing personal information with brands and companies in exchange for value provided. Especially, Seth Godin’s favorite phrase “turning strangers into friends and friends into customers” seems compatible with today’s “Liking” and “Following”. These social platforms allow brands to establish an active permission-based relationship with their consumers and users on their own websites. Being upfront with people during the registration process about how their data will be kept and used, and how it will provide mutual benefit; these websites show their transparency (Yovanno, 2011).
Interruption Marketing vs. Permission Marketing 

For decades, marketers almost exclusively have relied on “Interruption Marketing” which is the traditional approach to getting consumer attention. It is often positioned on the opposite side of Permission Marketing. Unlike Permission Marketers that spend as little time and money on talking to strangers as they can, Interruption Marketers spend all of their time on interrupting to capture attention and increase popularity. The word “interruption” reflects the fact that the key to each and every ad is to interrupt what the consumers are doing in order to get them to think about something else. For example, a 30-second spot interrupts a film you watch, a telemarketing call interrupts your dinner.

“The interruption model is extremely effective when there’s not an overflow of interruptions,” Godin says. However, today there is too much going on in our lives to pay attention to the interruptions. Interruption Marketing not only interrupts what we are doing at any given moment but also waste our time. So we naturally ignore them (Taylor, 2007). As a result, mass-market advertising that fights for consumers’ attention by interrupting them does not work as well as it used to and most of the time it fails to give the relevant message. Despite the fact that the effectiveness of Interruption Marketing is diminishing in today’s clutter, the marketers ironically deal with this problem by interrupting us more.

Unlike Interruption Marketing, Permission Marketing is described as marketing without interruptions; but getting people’s attention in the first place still costs lots of money and time (Taylor, 2007). Permission Marketer must offer the prospective consumer an incentive for volunteering. This incentive must be not only interesting enough to make the prospective consumer go out on a first date but also overt, obvious and clearly delivered. Since the incentive offered by the marketer wears out over time, Permission Marketer needs to reinforce the incentive in order to maintain the attention. This is a two-way dialogue between the marketer and the consumer, so the marketer must adjust the incentives and fine tune them for each consumer. Along with reinforcing the incentive, the marketer also aims to increase the level of permission. By gathering more data about the consumer’s personal life, hobbies and interests the marketer uses the permission to change consumer behavior over time. That is how the marketer leverages the permission into a profitable situation (Godin, 1999).

Seth Godin uses an analogy of getting married to contrast the
Interruption Marketer with the Permission Marketer. The Interruption Marketer walks into the singles bar and proposes marriage to the nearest person. If turned down, the marketer repeats this process on every person in the bar. After coming up empty-handed at the end, the Interruption Marketer tries again at a different single bar. On the other hand, the Permission Marketer goes on a date before proposing marriage, which is more rational and successful way of getting married. If it goes well, the two of them go on another date. And consecutive dates. After both sides communicate with each other about their needs and desires, finally the Permission Marketer proposes marriage.In Permission Marketing the cost of interrupting the consumer spread out, over not one message but dozens of messages. This creates significant competitive advantages and profit. While Interruption Marketers are getting mediocre results by interrupting strangers, Permission Marketers are turning strangers into friends and friends into loyal consumers (Godin, 1999).One of the advantages is that Permission Marketing provides meaningful data about the return on investment (ROI). By measuring the depth of permission a company has with each consumer, it can begin to track ROI in Permission Marketing. It can also begin to recognize the value of permission asset by focusing on how deep its permission is with its existing consumers (Godin, 1999).

Permission Marketing takes advantage of new technology better than other forms of marketing. Compared to Interruption Marketing that has rushed in internet by spending billion of dollars to apply their interruption techniques, Permission Marketing effectively uses the internet. The low cost of frequent interaction makes Permission Marketing a powerful trend in marketing (Godin, 1999).

Permission Marketing is a measurable process unlike Interruption Marketing. Since it evolves over time, it becomes an increasingly valuable asset in the long-term. If a company commits to Permission Marketing campaign more, they work better over time by taking advantage of leveragable processes in today’s cluttered market. However, Permission Marketing requires patience before it has success. It is not as easy as running an ad a few more times or creating a website that consumer can find by searching. Because Permission Marketing campaigns grow over-time. While a bad Interruption Marketing campaign gets some results righ away, a Permission Marketing campaign requires infrastructure and a belief in the durability of permission concept (Godin, 1999).

After all, the most obvious conclusion is that today consumers have the power of whether granting a company permission to communicate or not. So it is much more difficult for marketers to get the consumers to raise their hands in the face of cluttered marketplace. However, Permission Marketing seems to be one of the most relevant communication channels that create consumer loyalty.