Sir Martin , This time you got it wrong .

I sincerely hope Sir Martin Sorrell ( CEO, WPP plc) was misquoted in the interview he gave during his recent visit to India . He said – “We know that consumers spend 20 per cent of their time online. We know that advertising on Internet and search is 7-9 per cent of worldwide advertising budgets. So, there is a disconnect here since, naturally, it should gravitate towards 20 per cent”.This argument just doesn’t stack up .

Experience =WIN. Performance =DRAW.

Couple of days back, I wrote about the Sandisk Sansa express MP3 player and it being a potential threat to Ipod Shuffle, as it had several additional features. Apple can relax .

Truly Inspired – Smouldering Books .

Iconic

Iconic books in Iconic Designs . Sharp thinking capitalising on a topical event. Love it! Dont think this will be a mass-success but a clever initiative by a small publishing unit.

 

Wii is SONY down

Fresh from CNBC Asia , “Sony is no longer one of the Top 10 Japanese companies by market cap” . Meanwhile , Nintendo has unveiled bumper profits . There is more to Nintendo’s success than the much talked about Wii gaming console.

Cult brand , Good design, Add 40% price premium.

I bought an MP3 player on Sunday.  Its from SANDISK . It has the same capacity as IPOD shuffle ( 1GB) , costs 40% less, has a built in voice recorder and also has a LED display to show the song title .  Should Apple be worrying about the Shuffle ?

The

Do you live an Inter-continental life ?

Yesterday during my flight from London to Beijing, I  came across advertising for the Inter-continental hotel chain. This campaign has been running for over an year now (started in Nov’2005) . I have tried ignoring it, but this time I couldn’t .

  The campaign’s selling /strap line is “Do you live an Inter-continental life”. I am wondering – What is the Insight? Is it relevant to the category and the target consumer? Does it reflect a good understanding of where the brand is currently in the consumer mind space? Does it meet the RDA (relevant, differentiated and appealing) test?  

Inter-continental is the world’s no 1 hotel chain today in terms of number of rooms. However in terms of brand salience arguably it has some distance to cover before it matches Four Seasons, Marriott , Hilton , Hyatt and Sheraton, to name a few . This campaign is a weak attempt at positioning and occupying top of mind. It is clear they want to adopt an emotional platform for the brand to differentiate it from other chains which talk of more functional benefits.

Here is what the company says : “InterContinental’s new advertising campaign is the result of positioning work that has been ongoing since late 2004. The brand’s new tagline challenges its audience to answer the question, “Do you live an InterContinental Life?. At a time when other hotel brands are working to keep people in a ‘bubble’, InterContinental wants to provide our guests with memorable and unique experiences that will enrich their lives and broaden their outlook,” said Jenifer Zeigler, senior vice president, global brand management, InterContinental Hotels & Resorts. The aim is to revitalize a legacy brand for the new generation of travelers. In addition to the advertising, an enhanced concierge training program is in the works

There are 2 issues here :

1. Is this the strongest insight to tap for a brand like Inter-continental (IC) :  I can understand brands like Mandarin Oriental, Fours seasons not talking about functional aspects because most people know what these brands stand for and take high quality service and product for granted. They  have to reinforce their brand (not establish and position /re-position it). I don’t think the same is true for IC.  They need to first give me a tangible reason to think/reconsider  them. A good example of this from the same category in recent times is the WESTIN “Heavenly Bed”  campaign which started in 1999 . A very relevant benefit (a comfortable good night sleep), well branded, impact fully communicated and credibly delivered through the line ( you could even order the Westin heavenly bed for your home) which delivered great business results. They followed up this success with another great product led marketing initiative -”Heavenly Baths”. They have got the 2 most important things in a hotel room covered. 

2. Is the product /service benefit addressing the Insight : Lets assume for the time being that the Insight is good. However , the communication doesnt say anything about how IC hotels help the consumer discover “unique and memeorable experiences that enrich their life and broaden their outlook” . In short, the campaign doesn’t  connect the consumer Insight ( of consumers not wanting to stay in the bubble ie hotel room)  with what the brand offers . If they had  backed up the campaign with a strong in-hotel product which promises to create /organize outstanding  and exclusive experiences for the guests (outside the hotel) , say for example “The Master Concierge” program then we have a good insight and a product/service offer addressing it . Last I checked there is no specific program at IC hotels which links to the insight . They mention enhanced concierge training but frankly thats not good enough if you want people to sit up and take notice (like the Heavenly Bed campaign which stood out ) .

The campaign is doing more harm than good. They should pull it off air till there is actual delivery of the promise.

Enough of criticism. I will move to a more ‘laudatory” mode in my next post .  

Mineral water – No longer “Green”.

Bottled water has been one of the bellwether categories of the “well being” trend which hit the mainstream perhaps 7-8 years back. The “well being” trend was largely seen to be supportive of and in harmony with the “green” trends ( eg organic food- perceived healthier for the individual and more environmental friendly ) .Who would have thought that the “green” wave will soon lash at the shores of “well being ” .

Isn’t it ironic that a product so linked with purity, nature and healthy living is being targeted by the environmental lobbyists. Still bottled water has been one of the fastest growing consumer goods categories over the past 7-8 years , aided by the “well-being” trend , suspicion of tap water quality , strong branding and mass distribution driven by entry of big players like Coke and Pepsi . According to the green party , bottled water now outsells Coke in London . Is this tidal wave in danger of being engulfed by a Tsunami ?

Sample some recent headlines:

“San Francisco bans purchase of bottled water by city and county governments “, “Green Party launched a campaign asking Londoners to request tap water in restaurants and pubs” .

The first signs of activism started in Netherlands in 2005 in the form of a brand called NEAU ( translates as NO WATER ) which offered consumers NEAU branded bottles which were empty and could be filled with tap water . Read more about it here .

Meanwhile , water marketers are steaming ahead with new offerings within the bottled water category (fruit flavored water, vitamin enhanced water, mineral water for men , super-premium spring water ) and I can see them continuing to take share of throat from other beverages ( most notably colas and other sugary drinks) .

It is perhaps worthwhile to look at the issues at stake here . Read the SF mayor’s side of the story here and the Bottled water association response here.

I am still mulling which side of the fence I am on .The key issue at stake here is perhaps the Environmental impact /cost of  bottled water i.e the incremental energy expended in bottle production , transportation , distribution and recycling ( Note that 93% of bottled water is sold  in recyclable plastic , according to an industry website and thus the issue is not of recyclability ) , when one can get almost the same quality ( increasingly in most developed countries) from tap water.

What are your thoughts ? . Is this green terrorism ? Are govt officials playing to the gallery ? Is the industry being unfairly singled out ? Or Is it time the bottled water marketeers stepped back to reconsider and re-orient?

Private equity needs a brand re-positioning ?

“Greed is Good” , said Gordon Gekko in the 1987 classic “Wall Street” . Chances are that this line is still top of mind when the man on the street thinks of private equity . Private equity is very “public” now . Its time the industry does something to reposition itself .

Private equity has been hogging the headlines of late , whether it is the on-going deal frenzy or the “paying less income tax than your cleaner” controversy in the UK . One of the biggest private equity groups Blackstone has even gone public (how ironic , raise money publicly to take more companies private ) . If private equity was a brand , a bit of consumer research would reveal that the associations this brand evokes are ‘greed “, “barbarians at the gate ” , “asset strippers” , “fat cats” etc etc . Arguably Joe public is not the target audience for this brand , but even the sound bytes from the financial press are not entirely complimentary . Policy makers have started talking about the need to reign in the deal mania ( how and when is still not clear).

The arguments often touted in favor of private equity are :
1. More efficient capital allocation
2. No short-term window dressing for quarterly results, instead a focus on long term results
3. Managers are free to focus on business , free from activist investors ,”box -ticking” corporate governance , public scrutiny

If the private equity industry truly believes that what it is doing is actually good for the general public (due to greater corporate productivity and shareholder wealth creation) , then it ought to think about how its brand is perceived and positioned. If however deep down they know that the associations are true and they are in fact corporate vultures looking to “flip” assets to make a quick buck , then the brand has no long term future in any case (hopefully). Either way the “brand” owners need to take stock of the situation.

Finance director falls in love with Marketers .

Some more thoughts on pricing following on from the earlier post ” Strong brands , Timid pricing”.

Smart pricing is very much “Inspired ” marketing . Its the one “P” amongst the 4Ps which can have potentially the biggest impact on the real P ( profits) . A much overlooked element of the marketing mix , it rarely gets the attention of Brand managers , Marketing managers and definitely not of the communication partners . But it gets a lots of attention from retail owners ( and they are the new media moguls -more on that in another post) and of course from the in-house bean counter .

The need for getting pricing right has never been stronger with upward pressure on , (a) production costs due to commodity price boom and manufacturing complexity , (b) media costs due to fragmentation , (c) Trade margins due to retailer power and (d) R&D costs due to increased need for innovation .

Here is what the BIG MAC of consulting found :

Consulting and research giant McKinsey’s study of 2,400 US companies found pricing was a more important factor in profitability than almost any other strategy. The research found a 1% price hike could boost profitability by 11%, whereas a 1% reduction in fixed costs only improved profitability by 2.3%, and a 1% increase in volume only added 3.3% to the bottom line.

In today’s data rich retail environment getting pricing right is not very difficult . There are enough statistical models , marketing analytic experts available and with a bit of robust in-market testing consumer goods owners can hit the pricing sweet spot , which makes both retailers and brand owners happy .

Think of it as a potential source of funding for investment in the other Ps. Your finance director will love you – More investment for long term growth without any short-term bottomline impact .

Its not “sexy” or Inspired marketing one might say . But smart pricing might give you and your communication partners the organizational leeway for what you think is really “Inspired Marketing”.

2 companies come top of my mind when I think of smart ( or shall I say Inspired ) pricing – Apple and ZARA . Priced at just the level you think ” Its worth it “.

The intention here is to get you thinking about it and not to be a treatise on the various theories and models available on pricing .

Read more on pricing here

10 ideas waiting for an owner.

Most of these ideas perhaps exist in a niche form currently and have been tried by small companies . The challenge is for big brands/companies to embrace some of them and take them mass.

· Masala Coke/Pepsi – Its surprising that this has not been launched yet . You can have this concoction at thousands of stalls all over India . Surely Coke or Pepsi flavorists can find a way to develop and bottle a winning mix.. Suits Pepsi’s challenger brand image more. I can see Coke being a bit precious with the brand . Can be easily launched as “Coke /Pepsi Spice” in the western markets.

· Expanding beer consumer base to females ( espl in mature / developed markets) via flavoured beers (if it is working in Germany, a beer purist country, it should work in other European markets also). Fruity , spicy , Lemony ..bring them on !!

· A Light beer in a blue bottle – Why are all beers in either transparent or green bottles. Imagine shelf standout and support for a proposition like “ Fresh Light taste” with a blue bottle .

· P&G or Unilever takeover of green/ecological cleaning products company ECOVER – This brand is slowly creeping into all big retail chains and is steadily growing its sales and product range. Is available in most of Europe, Japan, US and Israel. The “green” trend is here to stay and grow. With premium pricing I am sure margins are very healthy.

· Gillette shaving aids – Think shaving oil (pre shaving regimen) , facial hair trimmer ( post shaving regimen ; who wants to shave high up on the cheek to remove a few tiny scattered hair ) . These products already exist eg Shaving oil by King of shaves and Clarins for Men . Facial hair trimmer is offered by Panasonic. Gillette can take these products mainstream and grow the category many times over.

· Minute- maid fair-trade Orange Juice – We have 100% Juice (Tropicana etc ) , we have 100% Organic juice ( not yet mainstream though) . Can 100% Juice from Fair-trade Oranges be the edge for Minute Maid vs Tropicana? Its only offered by minor players till now ( eg Calypso) .

· Kelloggs special K mini bytes – Special K cereal is a hit and so are the cereal bars . How about making them byte size and snackier . Just right for the 3pm hunger pang !!!

· SONY /BURBERRY co-branded handbag worthy laptops – ASUS has a laptop with a leather cover /front panel which looks like a handbag. They also have a pink one . I am sure women are not enthralled by the “macho” black IBM THIKPAD or a Silver Toshiba/Dell ..and apple is not yet mainstream. If cars designers can wake up to the female segment opportunity so can laptop designers. We need a Toshiba, Sony or Dell to do this to make it big. ASUS hasn’t got the equity in the category.

· LEVIS instant jeans tattoo – Get some cachet back into this tiring brand. Printable fabric transfer tattoos which you can add on to your jeans in-store or later at home.

· Using blogs for talent spotting – Need I explain this ?