Posts filed under ‘marketing’

Growing in a slow-growth marketplace

J Walker Smith writes:

It’s dangerous to take the news of late at face value.  While a Greek deal appears to be in place and the Council of Economic Advisors, headed by Alan Krueger, is opining that the US recovery is stronger and faster than expected, there is some way to go.

To put it bluntly, the developed West is in for a long slog. Slow growth is the new normal for Western developed economies.

The implications of this slow-growth West for brand marketers and business strategists are explored in our latest Future Perspective, Quickening the Pace.  For most business leaders, it’s a new situation. They came of age during the ‘Great Moderation’, a period of relative stability, greater predictability and virtually uninterrupted growth.  What marketers and strategists learned as they began their careers offers little guidance for the marketplace they face today.

The Great Recession has left the marketplace smaller and more polarized than ever.  Consumer confidence has reset at a lower baseline and frustration and anger have boiled over into the street.  Every corner of the world is on edge about the trade implications of weak, stagnant demand in the developed West.

There are still growth opportunities for smart companies. But only the smart companies will grow, for there is no longer a rising tide to lift all boats.  Quickening the Pace reviews seven ways in which brands can revive their value propositions for economically challenged consumers.  Three are worth special mention.

First, consumer reference points have changed from high to low.  Aspiration now seems risky, even out of reach. Worse, the prospect of losing it all seems closer than ever. As a result, consumers no longer compare themselves to those with more; instead, they worry about winding up like those with less.

Surrounded by so many who have hit the bottom, consumers are worried that they might wind up there themselves.  So rather than being attracted by those with more, consumers now live in fear over those with less.  While this is different for brands, it is not impossible for brands able to take the risk out of buying.

Second, debt has become a more important marker of financial well-being than income.  It is a better targeting criterion.  It is a more predictive of spending.  It is more strongly correlated with confidence.  The overhang of debt is keeping consumer spending in check, so contrary to conventional wisdom, growth opportunities are to be found by analyzing what people owe, not what they earn.

Finally, lifestage assumptions are being turned on their head.  The traditional focus of marketers on young people and their lifestage transitions has been undercut.  A suffocating job market has kept younger consumers from even getting started.

But the same economy that has made young people less attractive to marketers has made older consumers more attractive.  Battered by economic losses, many older consumers have changed their retirement plans and are planning now to work longer, which will extend their peak consumption years.  Marketers will have to change, too.

The brands which lrearn these new rules – and adapt to them – could have breakout success.  Not every ship is grounded by an ebbing tide. Some brands will find the enduring pockets of dynamic spending potential.  There is less spending to go around, and not all brands will succeed. The battle for share will go to the savviest, those best able to take advantage of the principles for success in a slow-growth West discussed in Quickening the Pace.

The image at the top of the post is from 123RF.com, and is used with thanks. Quickening the pace, and another economics report, The future of the eurozone, also published this week, can be downloaded from our website.

23 February 2012 at 3:09 pm 1 comment

The future of social media #4

#4: Pivot Points – pervasiveness, utility, and worldview

Alex Steer writes: Yesterday I wrote about how different consumer decisions about scale, privacy and specificity create very different outcomes for social networking. Today I’m going to explore the other three Pivot Points.

Pervasiveness – Turn On or Tune Out?

Social networking has been driven by people’s enthusiasm for connectivity – yet many increasingly find themselves at risk of information overload. So will we want to be permanently connected to our networks, or to dip in and out as it suits us?

In a Turn On future, consumers will want to be “always on” in their networks, receiving updates and information in real time – a possibility made easier by the global mobile and smartphone boom. Buzzwords are real-time, context-specific and multiplatform, and marketers will be expected to feed the desire for constant novelty with content and deals designed to be acted on fast.

Tune Out futures, though, see consumers looking for ways to step back and manage the flow of information and complexity – good news for networks like Flickr or YouTube that function more like a library than an updates service. At this end of the axis, marketing activity needs to be opt-in, durable, asynchronous and polite – designed to be enjoyed wherever, but also whenever.

Utility – Plug or Play?

As we have said, social interactions online can range from the serious to the frivolous. But will consumers see social networks more as a useful resource or more as a form of entertainment?

In Plug futures, consumers look for networks that let them access information, opinion and tools without demanding too much attention. Application, utility and embedded socialization are our buzzwords, and brands which provide lean, useful branded tools will thrive.

In Play futures, though, entertainment is the name of the game. Consumers see networks as places to spend time accessing interesting and immersive content. Think interaction and fun – content creators seek to reward time, attention and sharing with sheer entertainment value, and don’t just push marketing messages.

Worldview – Confirm or Challenge?

Are social recommendation features and personalization a way to access the most relevant and interesting experiences – or are they trapping us inside a self-reinforcing ‘filter bubble’? Will we want social networks to confirm or challenge our worldview?

In Confirm futures, consumers want news, opinion and content filtered and curated by their social connections. Here, marketers make it easy and rewarding for consumers to share content, and target offers based on online habits and relationships.

In contrast, in Challenge futures, marketers provide exposure to new experiences and divergent points of view. Buzzwords are novelty, debate and surprise, and brands will thrive by standing out from the crowd, challenging, stimulating and offering genuine novelty and serendipity.

Using the Pivot Points today

These six Pivot Points are signposts, not predictions – by knowing the directions of people’s behaviour and preferences, we can quickly identify, and prepare for, different possible outcomes. They also offer present opportunities. They can be used to make better business and marketing decisions by tracking target consumers’ attitudes and values, and making sense of changing habits online. The Futures Company is already working with clients to show how to understand, measure and seize those opportunities. We hope that the Pivot Points provide a way to navigate an unstable landscape, and take control of an uncertain future.

This is the last of four posts on the future of social networking by Alex Steer. To read the earlier posts, click here. The image at the top of this post is from the New Medici website, and is used with thanks.

4 August 2011 at 8:04 am 1 comment

Why context matters more than ever

http://www.warc.com/fulltext/admap/images/92114f01.jpg

J Walker Smith and David Bersoff write:

We’ve just had a piece published in Admap where we argue that the challenge of context is the biggest challenge facing marketing – and until it’s addressed, everything else is a waste of time.  Research at Columbia University  illustrates why. In a web-based experiment respondents were asked to listen to and rate unknown songs by unknown bands, then given the opportunity to download as many as they liked. One group of respondents made download choices independently. The other group of respondents made download choices after first being told, in different ways, choices made by previous respondents. The influence of others turned out to be far more important than the individual’s own opinions.

The implications? As the Columbia team noted in their summary, most studies “view the individual as the relevant unit of analysis”. But “when individual decisions are subject to social influence, markets do not simply aggregate pre-existing individual preferences”. In other words, when context is missing, the research results are wrong. Both marketing, and marketing research, will have to change to keep up.

Fragmenting technologies, and fragmented markets, have disaggregated the audience for marketing, and the mass market has splintered. But we’re still using models that were developed when mass media was dominant. Now that people are ever more deeply embedded in narrowly drawn networks of information and influences, contextual reference points play a bigger role in moulding choices. People are surrounding themselves with input they have chosen. The result: people get more of exactly what they want, but are closed off to other ideas.

What this changes for marketers is that they must actively manage both ads and the context for ads, and managing context becomes a primary consideration, not a secondary one. In turn, this calls for an attribution-based marketing model, not to displace persuasion, but to nest it in the bigger picture, like Russian dolls inside one another. Attribution works by shifting how people think of themselves, rather than how people think of brands.

Attribution-based marketing aims to make people attend to alternative aspects of themselves. When people see themselves in new ways, they adopt new reference points for calibrating their opinions, and then behave in ways consistent with their new sense of self. Persuasion must still get the brand message right; attribution sets the context within which a brand message can succeed. The implication for research is that it needs to understand its users’ reference points as well as their opinions. It doesn’t do this well at the moment. It’s a big challenge, and also a huge opportunity.

21 July 2010 at 1:33 pm Leave a comment

The limits to ethical business

Eloise Keightley writes:

Consumers may claim they want ethical brands – but what do they really mean? American evidence suggests that a desire to be ethical does not necessarily correlate with a propensity to buy ethical: Brandweek has reported a survey that found that even among consumers who called themselves “environmentally conscious”, more than half could not name a single green brand. A study at the University of Minnesota’s Carlson School of Management found that while people were likely to buy energy efficient light bulbs from the shops, they tended to opt for less efficient traditional bulbs when shopping online – and this attitude extends to white goods, electronics and domestic cleaning products. There is a classic disconnect here between stated attitudes and actual knowledge or behaviour.

This is partly because of the nebulous way in which “ethicalness” is measured, from the consumer’s point of view. For instance, whilst a vague sense of altruism may drive consumers to make choices they deem ethical, it’s unlikely that the majority fully understand what ethical trademarks denote. There is a recognition that Fair Trade, for example, equates with some sort of ethical standard but consumers often cannot define what that standard is. Consumers also find it hard to distinguish between ethical trademarks and can confuse their policies.

In any case, ethical innovation has historically proven to have a limited shelf life – due as much to legislative progress as shifting consumer values. Only a few years ago, cosmetic brands in particular were falling over themselves to tell consumers that their products were developed without the need for animal testing. These days, few brands bother. Lack of animal testing has become a hygiene factor (mainly due to changes in legislation) and consumers have established new, less standardised and more subjective ethical benchmarks for brands to respond to.

It’s unfortunate that the value of ethical trademarks deflate the more ubiquitous they become. If McDonalds can win awards for its free range eggs, consumers may well wonder about the rigour of free range certification and imagine that ‘free range’ is a tiered or varied notion. Bad press also dilutes the currency of ethical initiatives: the BBC has accused Live Aid of misappropriating the money it raised and there has been a rise in well-publicised literature that calls into question the very nature of humanitarian aid. We have no commonly understood, credible metric for ethics.

Some pioneers of ethical retail have argued that it is not enough to use ethical standards as a USP.  American Apparel CEO Dov Charney, whose business is synonymous with the anti-sweatshop movement, has remarked: “If you want to sell something, ethical or otherwise, appeal to people’s self-interest.” In other words, brands need to marry sound ethical values with products that are inherently desirable if they are to last.

The picture at the top of the post is from Green Mountain Coffee, and is used with thanks.

12 May 2010 at 6:41 pm 1 comment

What you don’t want for Christmas

Oliver Wright writes:

One of my seasonal ‘jokes’ goes that you can tell when Christmas is approaching by the adverts on TV. Thus, like many others I suppose, I am thrust from my usual lethargy into a mild panic, making hurried calls to my siblings and parents, enquiring what they might want for Christmas, with the implicit fear that the shops might somehow run out of appropriate gifts.

In spite of our recessionary times, the high street in London has done surprisingly well for itself compared to 2008 when the onset of the recession dampened the Christmas (spending) spirit. November sales are up only 1.8% on last year nationally, but in the capital sales are up 13.3%.

Even if we are short of cash, we certainly shouldn’t be short of ideas: most of the major newspaper websites have a glut of buying guides, telling us what we could buy, and for whom. But for every article about ideal presents, one often finds a dissenting contributor in the comments sections, outlining the merits of a presentless Christmas. Capitalising on these frugal sentiments, The Green Thing has created a cunning spoof of the Amazon.co.uk website, delightfully titled Amazero.com, encouraging us to buy their single product – nothing (it’s priceless, of course). With a slightly more traditional approach, Adbusters sponsored ‘Buy Nothing Day‘ on the 26th of November this year.

Both of the above campaigns make the claim that Christmas – or more simply, buying lots of stuff – is bad for the environment, and detracts from the true spirit of the season. However, if you’re more inclined to think that Christmas is a waste of money altogether, then Joel Waldfogel’s book ‘Scroogenomics: Why you Shouldn’t Buy Presents for The Holidays’ may contain some more compelling arguments. Based on US surveys, he suggests that people would generally be willing to spend 20% less on the gifts that they received were they to buy them for themselves. This difference – in economic jargon, the deadweight loss – is worth $13bn a year in the US. He continues:

There’s every reason to believe the deadweight loss is as big elsewhere. That would get you to $25 billion a year around the world in value destroyed through gift giving.

Waldfogel isn’t against gift giving – just bad gift giving. Tim Harford has some useful recommendations based on Waldfogel’s arguments: spend modest amounts (hence reducing the likelihood of a large deadweight loss), or increase the sentimental value of your gift – invest time or creativity into making something personal. In other words, give it value to which you can’t attach a price.

In a neat twist, Waldfogel’s book is out for Christmas. But before you buy it, make sure the recipient wants to read it first.

The Image above is taken from the Amazero.com website, and is used with thanks.

18 December 2009 at 10:45 am Leave a comment

Boosterism

Bassets Soft and Chewy

Sophie Stringer writes:

Stepping through Waterloo Station on my way to work the other day a sprightly looking girl in luminous green leggings and a white t-shirt passed me a sample for Bassetts ‘Soft and Chewy’ – as seen in the picture.

These energisers, the packaging tells me, are ‘delicious citrus flavour pastilles with B vitamins and CoQ10’.  The packaging looks pretty feminine (and the sample pack  – as someone pointed out – bears an unfortunate resemblance to a packet of condoms), and the pastilles themselves are in a blister pack, Strepsils-style.  The instructions are to pop one a day, or up to three if you’re in need of an extra boost. There’s theory as well as method: the associated leaflet advises that ‘avoiding the slump’ is ‘not about a quick fix, it’s all about maintenance’.

Bassetts already makes a range of chewy vitamins for different ages, and for ‘all the family’. But this is the first time I’ve seen a specific product for adults, and also the first time I’ve seen fortification for energy promoted with a vitamin product.  The inclusion of Coenzyme Q10 is also a novelty.

So why launch this now?  The product certainly responds to our burgeoning desire for peak performance, along with concerns about the health effects of pick-me-ups like cola or coffee. It also speaks to the resurgence of time-pressured consumers in the wake of the financial crisis. It’s not enough any longer for supplements just to be good for us; they need to work hard and be focused about the needs they are addressing, it seems. But at the same time, there’s some pleasure to be had in the eating, unlike the yeasty smelling vitamin C tablets of yesteryear.

They are probably better for you than mopping up the spare biscuits as you leave a meeting, but I’m a bit suspicious about the proposition: things which sound quite similar to confectionery promising an energy boost might be treading close to a sugar rush, and Bassetts’ efforts to dissuade us of this – with box and blister pack – make them feel oddly medical.  And Bassetts can’t help but evoke Trebor Bassett, and as it happens the Bassetts’ parent company, like Trebor Bassett, is part of the Cadbury group.

Will it take off? The trends are on its side, but it may take time to persuade consumers of the value of this particular solution. The jury’s still out.

15 October 2009 at 11:03 am Leave a comment

Hiding out in the coffee wars

imgzoom-Crushed-Coffee-cup-Rob-Brandt-refrob02

Alex Steer writes:

Starbucks hasn’t had it easy, at least for the past decade. But whether being attacked by Naomi Klein for alleged anti-competitiveness in No Logo in 2001, or more literally attacked by demonstrators during a rally in London in January, Starbucks has always toughed it out. Until the recession, that is.

In late 2008, McDonald’s set up a giant billboard outside Starbucks HQ in its home town of Seattle. Proclaiming that ‘Four Bucks Is Dumb’, it advertised McDonald’s new line of (less expensive) espresso coffees. It was a well-timed campaign, and to judge from its share price, Starbucks spent three months in shock.

Its new strategy, announced last week, suggests that the coffee giant still has the caffeine jitters. It has opened three new outlets in Seattle – without any Starbucks branding. 15th Ave. Coffee and Tea and its sisters look and feel like independents. The muted press release from Starbucks says that the unbranded stores offer ‘new opportunities for discovery, a high level of interaction and a deep connection to the local community’.

But these things – experience, interaction, community – are central to Starbucks’s brand. Hiding the brand suggests a company with an identity crisis. Perhaps Starbucks has been told that, in a recession, consumers retrench to the familiar and local. This may be true, but research from the US and elsewhere suggests that reports of a ‘bonfire of the brands’ are somewhat exaggerated.

The fuller story is that, for American consumers, price matters more. It’s no longer the poor relation to quality and convenience. But price isn’t everything. The brands that thrive in the downturn will be those that offer quality and experience at a fair price and give consumers what they want – for example, acting on the recessionary trend towards going out for breakfast, not dinner (good news for coffee houses).

So four bucks may not be bad – if they come with a little bit more of a bang. Starbucks needs to show its consumers that it understands this. But to build this trust, it needs to keep on being Starbucks.

The picture at the top is of Rob Brandt’s ‘Crushed Coffee Cup’ design, and is used with thanks.

28 July 2009 at 10:01 am 1 comment

Older Posts


The Futures Company blog

The Futures Company was created through the merger of Henley Centre HeadlightVision and Yankelovich in 2008. This is the blog of the new company - but the former posts from the former Henley Centre Headlightvision blog still can be found here.


WPP? Leaders in Advertising,Branding,Marketing