MARKETING GOES BEYOND

The best of products and marketing campaigns may fall fl at when it comes to the customer. And this may be despite the best of market research backing them. But a marketer who understands the customer’s mind can utilise the 4Ps strategy in a more optimal manner; leading to stupendous results

It’s turning out to be a year of new launches, making the market place more interesting and competitive. Palm launched its glitzy mobile phone “Pre” making Apple really shaky and nervous, with Apple wanting to sue it for copying the iPhone touchscreen. Microsoft has launched, rather relaunched its internet search engine with a new name Bing – planning to take Google headlong in the battle of the “searches”. Yes, this time – innovation seems to be the key to survival. But will plain innovation be enough to make a product survive?

THREE STORIES TO ILLUSTRATE

1ST STORY

100 students at MIT’s Sloan School of Management were shown an advertisement of the magazine – The Economist. It was a subscription ad, urging readers to pick the type of subscription they wanted to buy or renew. Three offers were on display:- 1st Offer: Internet subscription for $59 2nd Offer: Print subscription for $125 3rd Offer: Print and Internet subscription for $125

Out of the 100 students, 16 students opted for the first offer, zero students for the second, and 84 students went for the third offer. Now no one in their right minds would even remotely think of going for the second offer when at the same price, you got a bigger and better bargain when you selected the third offer.

So the researcher Dan Ariely decided to do away with the 2nd offer (after all no one went for it in the first round); this time again, 100 students were asked to fill up the subscription form. The results spoke a different story; 68 students chose the first offer of $59 for Internet only, while only 32 chose the $125 subscription, which offered the combination of print and Internet. While it appeared to be the most lucrative option the first time, what was it that made it look so lackluster the second time?

2ND STORY

It was a basement-run operation when it started. Today it’s grown into a huge business with branches spread all over the world. The company is Amway Corporation. The company has used a technique whose power is indisputable. It calls this BUG. Before you draw up any conclusions, the BUG in nothing but a collection of Amway products – the furniture polish, detergent, shampoo, deodorizers etc. all put together in a specially designed tray. Each salesman is trained and instructed that he has to necessarily leave this BUG in the prospects house for 24-72 hours, without charging her anything or putting her under any obligation to buy. She was just expected to try the product. When the salesperson returned to collect the free samples (BUGs), most of the customers bought at least one product. The BUG, true to its name, was working like magic. What was it that suddenly made the same products so good, that all sales shot up so fast?

3RD STORY

An owner of a jewellery store found that she was unable to sell a collection of turquoise jewellery. She tried as hard as she could, but nothing worked. As a last resort, during the peak tourist season, she asked her saleswoman to put a note on the turquoise jewellery section announcing “Everything at ½ (half) price”. As expected, everything was sold within a few days. However, the shocking part was that the saleswoman had not heard her correctly and instead of putting everything at “½” she had put them at “2x” i.e. double the price. Why did it all sell?

MIND GAMES

In the first story of “The Economist” subscription, the 2nd option of $125 for print subscription was included (even though it sounded totally illogical at first glance) to send 84 out of 100 people to reach out for the 3rd option. The 3rd option seemed like a “steal” when compared to the second. The 2nd option acted as a decoy – for when the decoy was removed the choices changed completely. As humans we always compare especially when we are not sure of what we want (and most of the times, with so many choices around adding to the confusion, we are not sure, not clear which is the best). This superbly intelligent advertisement of The Economist gently pressured us to go for the more expensive option by making it look most lucrative in comparison to the other option!

In the 2nd story of Amway’s sudden increase in sales the success had nothing to do with improved quality of the product, or price change, but rather the use of a “trick” to which mankind has succumbed to since time immemorial. It’s the magnetic power of the word “FREE”. Yes, “free anything” is always welcome. Amway combined “free” with “reciprocity”. The “reciprocity rule” says Robert Cialdini, binds us into doing something in return for a gift received by another. Amway’s “free trial” put many customers under obligation to buy – at least on product.

In the 3rd story, the unintentionally high pricing worked wonders on the minds of the buyers. High priced jewellery is always associated with high quality. So just when the owner of the jewellery shop thought that a reduction in price would rid her of these products which refused to sell, it was the obnoxiously high price that did the trick.

DID ANYONE MENTION PRODUCT?

A whole lot of new and interesting products are being launched this time. In 2005, more than 1,56,000 new products were launched, which boils down to a new product being released every 3 to 4 minutes. Yet, when it comes to remembering brand names, we remember only some and use even fewer ones. The rest all disappear sooner or later. Almost 80% of all products launched fail. Many a times they are not necessarily bad – it’s just that something fails to click in the minds of the consumers. Gone are the days when just offering a product of great quality was sufficient to ensure its success. It is the “image” that conjures up in the minds of the consumers which is most important today. We call this image – a “Brand”.

Back in 1996, British Airways went though an expensive re-branding exercise. In a bid to get a new look, the company changed the tail-fin design of its planes. Instead of sporting the colours of its National Flag, the Company started using different images – to make the airlines look more international. The British hated it. They wanted Britain’s flagship airline to look more British. Richard Branson didn’t miss the opportunity. He sensed the dissatisfaction of the people and immediately painted Union Jacks on its aircraft with the slogan – “Fly the Flag”. BA was forced to return to its old design – if it wanted to stay in business.

A supermarket operator one day realized that his cheese was not selling well. He put out the cheese and invited customers to cut off slivers – as free samples. He sold one thousand pounds of cheese in a few hours.

In today’s world, marketing is “perception building”. You need to understand why people reach out for a product. Those who have used a Nokia phone would rarely switch to a Sony Ericsson. Not because the latter is bad but because they are so used to the way Nokia phones function.

As a marketer, today your primary job is not to look at what your product has to offer but rather what is it that will motivate your target audience to buy your product.

HOW DO I KNOW WHAT WILL WORK?

Yes that’s the million dollar question. The answer to it is not easy; sometimes the quickest answer people give to this question is – do market research.

Ford Motor Company once asked Americans what features they wanted the most in their cars. Keeping all the points in mind, the company came up with the “American car”. It flopped.

In the 1970’s, Pepsi introduced the “Pepsi challenge” where consumers were blind-folded and asked to taste the two colas and give their preference. Most of the participants preferred Pepsi. Pepsi used these research findings and announced to the world that the “Pepsi generation” had arrived and Pepsi was the choice of the young and happening. A totally shaken up Coke decided to change hurriedly to keep up with the times and worked on a new flavour. The test-marketing brought a positive response from the market and in 1985, the New Coke was launched. What seemed like a flawless move turned out to be the worst blunder in the history of Coca Cola. Sometimes, consumer research fails to reveal the true emotions and passions of the people. Coca Cola was the “Real thing” and no one wanted a “New” flavour. They loved the “Old” and Coca Cola had to bring back its original flavour. The moral of the story is – marketing is a battle of perceptions, not products. So “listen” carefully. Sometimes a product may succeed even though research reveals no demand for it. Steve Jobs never, ever does any market research; yet the man and his inventions have changed the world. No amount of market research could have revealed the need for a home-computer when Steve Jobs started creating it. The consumers had no idea that a mobile phone could be made to look like an iPhone. No amount of market research would have let Akio Morita predict the thundering success of the “Walkman”. Yet all these inventions created history, or rather changed history!

A clever marketer is one who knows when to rely on his gut feel. A clever marketer is one who has his hand on the pulse of the consumer. He understands and believes that a brand is defined as “a bundle of audience perceptions about a product or service”. Gone are the days when just making a good quality product would ensure sales, gone are the days when you could beat competitors on the basis of just an ad, correct price and good distribution. Today you need to have the ability to understand the consumer’s mind and plan your 4Ps - price, product, place, promotion accordingly.
After all, marketing today goes beyond the understanding of the 4Ps.

IT’S TIME WE STARTED ADVERTISING RESPONSIBLY

Tobacco companies have successfully used basic and simple marketing tactics for years; even if it meant irreversible damage to society. It’s high time we beat them at their own game.

It’s interesting that rotting teeth, lungs infected with cancer and a slew of other horrendous and horrifying images will adorn cigarette packets in India from this month (June onwards). Another interesting development occurred in Washington a few days back. A federal appeals court upheld a landmark 2006 ruling on 22nd May that cigarette makers for decades have been lying about the dangers of smoking “In a 93-page opinion, a three- judge panel cleared the way for new restrictions on how cigarette companies market and sell their products,” stated the Washington Post. What is it that makes marketing and selling of cigarettes so different that it required a 93-page letter to help reduce their effect, if not stop it totally? What is that that these companies have been doing that’s so harmful to our society. What weapons do they use & what’s their game plan?

POWER OF PERSUASION
Advertising and marketing are nothing but means of persuading consumers to buy the desired brand or product and it’s the tobacco industry that seems to have mastered the art over the years. For, according to some surveys, about two thousand teenagers begin to smoke each day, inspite of the fact that smoking is the number one killer in preventable deaths in a nation. Yet it’s persuasive marketing & advertising that ensures that thousands bite the bait and buy these harmful products. This happens is because cigarette companies thrive on “Image Culture” and use it to the hilt to sell their wares.

IMAGES MARKETING – THE FIRST WEAPON
The television was invented in the 1930’s and for many years, no one thought it had any use. They had the radio for their entertainment and if it tired them out, they all went to the movies. Who needed television – no one! What needed television – the economy. It needed the television to tell to the world, about life in a consumer society. It needed to show “Images” of success, progress, happiness. It’s the cigarette companies who learnt this lesson the best and used these images to camouflage the potent danger of their products. It chose its target audience cautiously and bombarded them with judiciously selected images. The target that was the best, the easiest and the fastest to convince was the “gullible teenagers”. A study revealed that what each teenager feared most was being labeled “uncool” and hence started the “marketing of cool”. This strategy proved to be most successful, for, according to 1981 internal document of Philip Morris (largest Cigarette Company in the world), “Today’s teenager is tomorrow’s potential regular customer, and the overwhelming majority of smokers first begin to smoke while still in their teens. The smoking patterns of teenagers are particularly important to Philip Morris.” With the mission & vision statement clear, cigarette companies started targeting the vulnerable minds of teenagers through marketing schemes & campaigns. They bombarded them with images of “cool”. Tobacco companies used themes that appealed to the young minds; images of fun, action, excitement. Now you could look macho if you had a Marlboro in your hands. Strand Cigarette claimed “you’re never alone with a Strand”. “I’d walk a mile for Camel,” vowed many cigarette addicts. A women was successful if she held a Virginia Slims between her beautiful fingers for “You’ve come a long way” (read achieved success) if you smoked Virginia Slims. Sex appeal; cartoon characters, movie star status – every conceivable tool was used for years by tobacco companies to convince people that if you smoked, you had a life. Every claim of happiness was backed by a stunningly beautiful picture – that made every onlooker want a life like that. Worse still, it made smoking look like a fun activity – not a product that could kill.

REPETITION – THE SECOND WEAPON
The power of advertising lies in the power of repetition and the advertising industry has used this weapon to hijack the minds of young & old alike for years. Advertisers spend billions of dollars planting slogans in our minds. No wonder when it comes to safety, the fi rst car one thinks of is “Volvo”. “Just do it” said in any context always brings to mind “Nike”. Advertising man and author Kenneth Goode wrote, “The greatest of all advertising tricks is that of persistently pounding away at the same suggestion while still keeping the appearance of freshness of idea.” So while the message remained the same, the tobacco companies used a variety of carefully picked images to drive home the point – that it was “cool” to smoke.

According to recent estimates, tobacco companies were spending close to 34 million dollars everyday on advertising. Talk of repetition – they were using every conceivable form of media to reach out to their target audience and repeatedly convince them into believing the “cool” quotient of their product. A survey conducted in 2002 revealed that 86% of childhood smokers favour Camel, Marlboro and Newport cigarettes – the most heavily advertised brands. The mantra was simple - double your advertising revenue if you want to double your sales. In the nineties, Joe Camel Company increased their ad campaign from $27 million to $43 million, capturing shares of over 50% of youth smokers. Interestingly though, their share in the adult market remained practically unchanged. It’s the children who fall prey to these tactics – they are the softest target. According to Naomi Klein’s famous book No Logo, “…poor neighborhoods have a disproportionately high number of billboards selling tobacco and hard liquor products… the ads always feature models sailing, skiing, playing golf, making these addictive products particularly glamorous to kids stuck in the ghetto longing for escape.”

THE LURE OF FREE – THE THIRD WEAPON
In 1998, when several laws were passed in America curbing the vast reach of these companies, they changed their game plan. Being restricted from showing their ads in various places - tobacco companies had to cut down their ad spending drastically. The money they saved thus was used in giving free cigarettes and price discounts to retailers – making the problem even more serious. Not only were the cigarettes displayed prominently in stores, but now they were more affordable. That glamorous life you saw in the ads could be yours – at a lesser cost. The list of freebies kept increasing. So now tobacco companies included T-shirts, CD player & bags as promotional items. So even if you did not buy the product, you still used the “brand” and were aware of it. Even though one saw less of advertisements, one never failed to see the “brand names”.

BEATING THEM IN THEIR OWN GAME
Joe Camel uses the cartoon image of Camel to make its products look harmless and sometimes even look like it’s suitable for children. A research done by American Federal Trade Commission found that 86% of kids aged 10 to 17 recognized the character Joe Camel. Shocking! With so much spending power and such strong image marketing, is there any way one can beat these tobacco companies?

Absolutely. If “images” is what they were playing with all these years, then it was these images, which were used by some to several the true meaning behind these glamorous ads. So “Adbusters”, the Canadian magazine, altered the images and slogans of popular advertisements to show the correct pictures. Absolut Vodka and its series of advertisements changed to Absolut Death. “Ultra Cool” became “Utter Fool”. It did make you laugh & smile, but it drove home the point too.

With most of the products being more – or – less similar, today it’s “images” that make or change people’s perceptions. GM filed for bankruptcy a few days back, which changed people’s perception about the company & its products. On Wednesday (3rd June), the company was ready with its ads; educating people about its future plans. The 60-second spot promised viewers leaner, greener, faster cars. After all, it claimed, “This it not about going out of business; this is about getting down to business.” If it really wanted to survive, it certainly needed a positive image.

In this game of images, putting those horrendous scary pictures on cigarette packets might work. Some may shout themselves hoarse that this was too much intrusion by the government, but it’s time we did something about it. May be the adult smokers might not get affected much, but the young could be deterred from getting addicted.

Advertisers & marketers hold tremendous power in their hands and we made sure that power was in the right hands. It’s time we took to task people who misuse this power. It’s time we started advertising responsibly.

Don’t Forget the Boys!

They are certainly not an endangered species, but definitely quite a peculiar one! The young boys and men of today cannot be reached efficiently via the 30-second commercial anymore, instead they need to be engaged via the gaming route

“Highly unrestrained use of expletives, dark, and very funny” that was how one could describe the new animated satire “South Park” that debuted on VH1 in May. It’s totally different from what TV audiences in India have been used to.

Let’s take a look at some of the popular shows on TV. It used to be the “saas-bahu” ones, which have now given way to the sob-sagas of little girls and their sad tales. Kyunki Saas Bhi Kabhi Bahu Thi ensured that most women were stuck to their TV sets during the time it was aired. Most of them are still there, this time teary-eyed for the girl in “Balika Vadhu” and other serials like it. The point is, look around on TV and mostly those are women who are being targeted and marketed to.

However, there is a segment that, for a long time, has been the most elusive to catch and market to. It’s the young boys & men. Where do we look for them? If statistics are to be believed, then this segment is the most elusive and hence the most desired. Young men are tuning out broadcast TV as they turn to games and the internet. About 22% of them watch TV, while more and more of them are spending their time on the internet. For years, NBC’s “The Tonight Show” was the biggest money maker on television – considering it had a huge fan following. Today, the ratings of the show have declined, albeit slightly – among the younger viewers – since lesser young men are watching it.

With lifestyles changing, people staying up late, TV channels are realizing that there is a market that has gone untapped for a long time and a lot of them are creating programs to suit this group – the young males. However, these are few and far in between. Today, almost every sitcom is female oriented. Male oriented programming is almost squeezed out of prime-time, save a few like the recently premiered “South Park”. Traditionally, big mass-advertisers have targeted women, because the sales of most are driven by women - who still do most of the household buying. However, the 18-34 year old male is today making his choices, forming brand loyalties, and cannot therefore be overlooked.

Life beyond 30
Many would vouch for the fact that life begins at 30. It’s time marketers took a cue from this one. You need to look beyond the 30-second-long TV commercials if you really want to reach out. TV used to be the coveted media, but the remote control changed it all. Then came the internet & fragmented the audience. Today, TV no longer caters to the mass audience and some companies have sensed it. Back in 2003, Coca Cola cut its TV ad spending by 10 percent and pumped the money into a totally new and unexpected new media – the video game! Advertising has followed consumers; so when the young viewers switched from TV to games like The Matrix Reloaded and Enter the Matrix – so did Coca Cola. Soon P&G and GM, the biggest advertisers of US, shifted too. They had found a way to catch the target audience – a way different from the 30-second TV commercial way!

It reached the white house boy
The elusive 18-34 year old male is touted as the “most intensely targeted subset of humans today”. He’s unique – doesn’t read much, doesn’t watch much TV either – but spends hours (15 hours every week) on playing games. Today, all brands big & small are rushing to showcase their goodies on video games, just to catch the attention of this elusive species! As per Microsoft, its Xbox live – a subscription service that allows consumers to download games, and a whole lot of other stuff – reaches more men aged 18-34 than The New York Times, ESPN. com or Men’s Health. Try to beat that!

Electronics Art (EA) recalls a time years ago when it used to pay companies to reproduce their logos on its games. Today big brands like Honda and McDonald’s are paying EA; not just that, hoards of them are on the wait list – to be included in the new games being developed and launched. Recently, Microsoft has entered into a deal with EA to provide live-in game advertising within games developed by EA that can be played with an Xbox 360 or a PC. One of the first to spot the trend, Microsoft didn’t waste time, and a few years back, it acquired Massive Incorporated for $200 or $300 million. It could smell a lot of advertising money coming its way. Google, for the first time, got left behind, but it woke up & soon made plans to acquire another upcoming gaming company – Adscape Media Ltd.

A gamer, on an average, is about 18 years old. This is the age when he influences a family’s purchases, is young, has lots of interests, is a bachelor bread winner with lots of disposable incomeand the thought of him makes marketers salivate in anticipation. Not surprisingly, even Barack Obama couldn’t resist reaching this category. He created history by becoming the first presidential candidate to run campaign ads in online video games. So what if they didn’t watch TV or read, they played & he played too – not one or two but 18 games. Banners proclaiming “Early voting has began” appeared in 18 games via Microsoft Xbox live Service. The games included Guitar Hero 3, The Incredible Hulk, NBA 08 & many more.

In 2005, US $56 million got invested on in-game advertising, a figure that is expected to rise up to US $1.8 billion by 2010. In-game advertising (IGA) is today one of the fastest growing forms of advertising media. According to PricewaterhouseCoopers, the CAGR of games sales is expected to hit 11% annually by 2010, which is double the growth rate for movies and television.

It’s the new Phenomena
Today, not only are brands being placed in video games, but are being woven into story lines too. Lacoste featured in a game “Law & Order: Justice is served”– the murder victim here was about to sign a contract with Lacoste. Big luxury brands like TAG Heuer and Bang & Olufsen, too, are seen touting their products in games. Games once considered the sole territory of awkward teenagers have today become the playgrounds of the “Twentysomethings” male – a demographic with a lot of buying power.

What’s interesting to note is that brands are not just being placed within games, but are becoming an integral part of the game – and the viewers are loving it. They normally resent an ad when it comes in-between their favorite TV serials, but research has shown that viewers like product placements, because they make the games increasingly realistic. Not just this, according to NeoEdge Networks, in-game advertising is found to be more effective than TV marketing, delivering an unbelievable 500% increase in consumer brand awareness. 30% of in-game adverts were recalled in the short term and 15% recalled after five months – something unheard of in advertising.

Video games, as compared to any other media, are highly immersive, interactive and visually dynamic. The viewer is more involved here than in any other media. There was a kid who had a mirror on top of his computer screen, so he could watch TV without turning around. Talk of multitasking! When it comes to video games – that’s not possible – so involvement is higher and if the product is placed intelligently, then recall is higher too.

Advergaming way to go
Advertising in video games – or advergaming is the future. And you need to see who all are here. Brands big and small, exclusive or mundane, cheap or luxurious, are out there. Brands now have special games developed to promote themselves. When you play the Red Bull Flugtag Baltimore games, as you launch your airplane down the runway you cannot miss the Red Bull banners flapping all around. When all advertisement failed, it was the videogame “America’s Army” that turned out to be the most effective marketingtool and helped it recruit thousands of young men. It’s been downloaded more than 16 million times, and gives the authentic military experience – just the way potential recruits want. United Nations World Food Programme uses video games to educate the world about its mission to combat hunger. Dunkin’ Donuts used the classic story of tortoise & rabbit as the backdrop for its video game to promote its new Turb- Ice coffee drink. It used a TV campaign to promote the game. The campaign may have long ended, but the game is still on! Johnson & Johnson has a game where you are supposed to bathe as many toddlers as you can using all J&J products online. The winner gets a discount coupon, which he can use to buy a J&J product. How cool is that!

Today there is hardly any movie launch in Hollywood or Bollywood without a game too. From Chandni Chowk to China, which has three levels – chopping vegetables, training, and fighting the bad guy, to Ghajini, where you can look like Aamir, follow clues & solve the mystery, to Lord of the Rings, Da Vinci Code & zillions more. Video games are actually increasing the life span of a movie, apart from earning precious revenues.

Banks around the world may be crumbling, but “Entropia Universe” is an online video game, where players can exchange real money for Entropia Dollars, which, if you want, can once again be converted into real currency (the exchange rate is fixed at 10 to 1 to the US dollar). Its publisher Mind Ark now even has a license from the Swedish government to operate as a real bank! Last year, the economic activity in “Entropia Universe” was worth $420 million – about the same as the economic activity of the Kiribati island in the Pacific!! This is one bank, at least, which is “virtually” safe.

Games are doing it all
Thanks to technology today, video games have came a long way. They are interactive, interesting & rewarding. They are becoming an important tool in every marketer’s kitty. Games are being given as incentives and games are increasing brand recall like never before. Scotland is using games to educate youngsters on traffic rules. People are even being educated about the swine flu and its infectious nature with the help of a game “Stop Swine Flu”. They are even helping the British Intelligence Agency to recruit their spies! Games have made advertising more dynamic. Think about it – A TV commercial is forgotten in 30 seconds, while a game engages the viewer minimum for a few minutes and if you are good, then for hours; so which is more effective – you decide.

The next time you draw up your marketing plans – play around too. All work and no play make an incomplete marketing plan. Remember, it works and not just that, it takes you straight to that elusive target audience of 18-34 year olds. When you are planning to increase your market share – don’t forget the boys.