Archive for the ‘Mktg – Consumer Behavior’ Category

Want to sell more to men? Just follow these 5 steps

January 30, 2014

No secret, men are shopping more than ever.

Around one-third of primary shoppers for groceries reportedly are now men.

Yet 40% of men feel unwelcome in retail stores …

Man shopping in grocery store

 

As men shop more and more,retailers need to make them feel comfortable in their stores,  Here’s how …

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Will boomers make the economy go bust?

December 11, 2012

Conventional wisdom: increasing proportion of old folks will be a drag on the consumer economy.

People in their 50s spend more than younger – or older folks … by a lot.

The economic implications are monumental.

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Here’s the logic from Bill Gross at PIMCO:

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NetTrax: If you think that you’re being followed around on the net … you’re right.

October 2, 2012

And the company doing it is probably Acxiom … recently profiled in the NY Times.

I had some weird happenings recently.

A friend who works internet marketing for a “plus sized” women’s clothes company used my computer to show me her site’s cool redesign.

For the next couple of weeks I was getting pop-up ads for big women’s clothes … even when I was on common sites like ESPN or WSJ.

Huh?

Another time, I checked the spelling of a Spanish word via Google.

Next couple of times that I went to You Tube, the lead in ads were in Spanish.

Double huh?

I was wondering how the web “knew” … now I know, courtesy of the NY Times.

Here are some highlights …

Acxiom

IT knows who you are. It knows where you live. It knows what you do.

It peers deeper into American life than the F.B.I. or the I.R.S., or those prying digital eyes at Facebook and Google.

If you are an American adult, the odds are that it knows things like your age, race, sex, weight, height, marital status, education level, politics, buying habits, household health worries, vacation dreams — and on and on.

Right now, more than 23,000 computer servers are collecting, collating and analyzing consumer data for a company …  called the Acxiom Corporation, the quiet giant of a multibillion-dollar industry known as database marketing.

Acxiom has amassed the world’s largest commercial database on consumers —  Its servers process more than 50 trillion data “transactions” a year.

Acxiom maintains its own database on about 190 million individuals and 126 million households in the United States

Its database contains information about 500 million active consumers worldwide, with about 1,500 data points per person.

Acxiom’s Consumer Data Products Catalog offers hundreds of details — called “elements” — that corporate clients can buy about individuals or households, to augment their own marketing databases. Companies can buy data to pinpoint households that are concerned, say, about allergies, diabetes or “senior needs.”

In a fast-changing digital economy, Acxiom is developing the most advanced techniques to mine and refine data.

Digital marketers already customize pitches to users, based on their past activities … think “cookies”.

Acxiom  is pursuing far more comprehensive techniques in an effort to influence consumer decisions.

It is integrating what it knows about our offline, online and even mobile selves, creating in-depth behavior portraits in pixilated detail …  Its  a “360-degree view” on consumers.

 

How it works

Scott Hughes, an up-and-coming small-business owner and Facebook denizen, is Acxiom’s ideal consumer.

In fact,  Acxiom created him.  Mr. Hughes is a fictional character who appeared in an Acxiom investor presentation in 2010.

A frequent shopper, he was designed to show the power of Acxiom’s multichannel approach.

In the presentation, he logs on to Facebook and sees that his friend Ella has just become a fan of Bryce Computers, an imaginary electronics retailer and Acxiom client.

Ella’s update prompts Mr. Hughes to check out Bryce’s fan page and do some digital window-shopping for a fast inkjet printer.

Such browsing seems innocuous — hardly data mining. But it cues an Acxiom system designed to recognize consumers, remember their actions, classify their behaviors and influence them with tailored marketing.

When Mr. Hughes follows a link to Bryce’s retail site, for example, the system recognizes him from his Facebook activity and shows him a printer to match his interest.

He registers on the site, but doesn’t buy the printer right away, so the system tracks him online.

Lo and behold, the next morning, while he scans baseball news on ESPN.com, an ad for the printer pops up again.

That evening, he returns to the Bryce site where, the presentation says, “he is instantly recognized” as having registered.

It then offers a sweeter deal: a $10 rebate and free shipping.

It’s not a random offer.

Acxiom has its own classification system, PersonicX, which assigns consumers to one of 70 detailed socioeconomic clusters and markets to them accordingly.

In this situation, it pegs Mr. Hughes as a “savvy single” — meaning he’s in a cluster of mobile, upper-middle-class people who do their banking online, attend pro sports events, are sensitive to prices — and respond to free-shipping offers.

Correctly typecast, Mr. Hughes buys the printer.

But the multichannel system of Acxiom and its online partners is just revving up.

Later, it sends him coupons for ink and paper, to be redeemed via his cellphone, and a personalized snail-mail postcard suggesting that he donate his old printer to a nearby school.

 

Waste”

There is a fine line between customization and stalking.

While many people welcome the convenience of personalized offers, others may see the surveillance engines behind them as intrusive or even manipulative.

Privacy advocates say they are more troubled by data brokers’ ranking systems, which classify some people as high-value prospects, to be offered marketing deals and discounts regularly, while dismissing others as low-value — known in industry slang as “waste.”

Exclusion from a vacation offer may not matter much …  but if marketing algorithms judge certain people as not worthy of receiving promotions for higher education or health services, they could have a serious impact.

“Over time, that can really turn into a mountain of pathways not offered, not seen and not known about.”

A bit creepy, right?

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Look for Mitt ads on the ‘Price is Right’ … and Dems on Springer.

September 18, 2012

The Washington Times did an analysis of Dem and GOP TV ad placements to reverse engineer their respective targets and strategies.

Here are some of the findings:

  • Republicans are at an extreme disadvantage when it comes to television advertising because Democrats watch more TV.
  • Every single genre of TV programming has a Democratic-leaning audience, with sports coming the closest to a partisan balance.
  • Sports and documentaries, have audiences that are far more inclined to vote.
  • Shark Tank,” a reality program about entrepreneurship, has only 18 percent Democratic ads, and the law-and-order favorite “Cops” is heavily Republican.
  • Venerable game shows, while barely registering as blips in modern pop culture, remain among the top destinations for political ads because of their largely older base of viewers who are likely to go to the polls.

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  • The Price Is Right” is second among all TV shows for Romney ads and third for spots for Obama.
  • Democrats are advertising during daytime shows watched by high numbers of unemployed people, including those who rely on welfare and other social services.
  • More generally, the unemployed watch whatever’s on at 3 a.m., or Jerry Springer’ or Maury Povich.
  • All “Jerry Springer” ads have been for Democrats. PAC Priorities USA has made 10 separate buys on Springer.
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  • Nearly every political ad during the adult cartoon series “Family Guy” is for a Democrat.
  • More than 80 percent of political spots during “The Young and the Restless,” the long-running soap opera, tout liberal candidates and causes.
  • Relatively inexpensive ads during daytime soap operas watched by stay-at-home moms are abundant, and are used primarily by Democrats.
  • Reality-dating programs have a skewed Democratic audience that’s below average in likelihood to vote.
  • Obama has advertised heavily on courtroom reality shows such as “Judge Judy”  whose viewers include large numbers of black voters.

The implicit Democratic strategy according to the Washington Times:

The more lowbrow the show, the better.

“People who are low in political information can be more persuadable,”

“If you get someone that’s watching ‘[Keeping Up With] the Kardashians,’ and they’re a swing voter, and see one or two ads,” that could make the difference because that ad may be the only political information they digest.

Sometimes I wonder if “1-man, 1-vote” is overrated …

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You probably paid too much … especially if you’re bad at math.

August 14, 2012

Ac couple of weeks ago we reported a study that consumers almost invariably pick 33% more stuff than a 33% price discount.

Ouch.

Consumers are notoriously bad at spotting real values. Why?

According to the Atlantic ….

  • First: Consumers don’t know what the heck anything should cost, so we rely on parts of our brains that aren’t strictly quantitative.
  • Second: Although humans spend in numbered dollars, we make decisions based on clues and half-thinking that amount to innumeracy.

More specifically, here are some more ways consumers end up paying too much …

  1. Anchoring Effect: People are heavily influenced by the first price we see … it’s called “anchoring” …  that’s why the appliance salesman shows you the most-featured, highest-priced appliance first … it makes every other appliance seem like deal.
  2. Aversion to Extremes: People are  terrified of extremes … they don’t like buying the cheapest item … or the most costly …  they shy away from prices that appear too high or too low.For example, in one famous study, people were offered 2 kinds of beer: premium beer for $2.50 and bargain beer for $1.80.

    Around 80% chose the more expensive beer.

    When a third beer was introduced, a super bargain beer for $1.60, 80% bought the $1.80 beer and the rest $2.50 beer. Nobody bought the cheapest option.

    Then researchers removed the $1.60 beer and replaced with a super premium $3.40 beer.

    Most people chose the $2.50 beer, a small number $1.80 beer and around 10% opted for the most expensive $3.40 beer.

  3. Shining Light Effect: Savvy restaurants, for example, design their menus to draw our eyes to the most profitable items by things as simple as pictures and boxes.Good rule of thumb: If you see a course on the menu that’s highlighted, boxed, illustrated, or paired with a really expensive item, it’s probably a high-margin product that the restaurant hopes you’ll see and consider.
  4. Dulled senses: Alcohol narrows the range of complicating factors people can hold in their heads at once.  People are easily made dumber by alcohol, time, decisions.When we’re drunk, stressed, tired, and otherwise inattentive, we’re more likely to ask and answer simple questions about buying things.

    Cheap candy bars and gum are situated near the check-out at grocery stores because that’s where exhausted shoppers are most likely to indulge cravings without paying attention to price.

  5. Concealed habits: To save some $$$, cancel recurring payments like gym memberships and subscriptions to papers and services you don’t use.Cancelling is a hassle, right?

    So what?

    Cancel that subscription.

  6. Peace of mind… allows some companies to make more money on extended warranties and service contracts than they do on their productsExcept for PCs (high prices, risk of crashes), extended warranties don’t pay-off … otherwise, why would retailers push them so aggressively?

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From the pollsters’ lips to the teleprompter’s ears (and candidate’s lips) … but, what about the forest?

August 8, 2012

My students know that, at heart,  I’m a quant guy and encourage market research over gut feel.

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So, I should salivate over the Obama campaigns reliance on market research, data mining, and precision messaging.

Excerpted from WSJ

The Obama campaign has elevated poll-testing and focus-grouping to near-clinical heights.

The results from his vaunted focus groups  drive the president’s every action: his policies, his campaign venues, his targeted demographics, his messaging.

More specifically, spotted an interesting analysis in The Hill:

Recent campaign spending records of the Obama campaign, disclosed that they’ve spent $15 million on polling since the first of the year.

Based on typical polling rate card, $15 million for polls translate to about 6 million minutes of polling time.

Assuming interview lengths of 10 minutes, that’s like 600,000 interviews.

Of course, “polling” doesn’t necessarily mean one-on-one interviewing.

Perhaps as much as a third of the $15 million may have been spent on focus groups and ad testing with dials.

Again, using normal rate cards,  upwards of 4,000 Americans may have been asked to participate in these test sessions.

Yep, from the pollsters lips to the teleprompter’s ears … to the candidate’s lips … to the voters ears.

So, what’s my beef?

First, lack of “authenticity” … a willingness to say anything to anybody if it polls well … even if it’s not true (e.g. the multiple Pinocchios that the Wash Post gave to the Bain outsourcing riff and the incredible “I spend less than any President since Harry Truman)

Second, a willingness to “tailor” the message to different groups or individuals … i.e. to pander shamelessly.

And, the larger point: losing the forest in the trees …  whipsawing based on minutiae and missing the big picture,

After all, it’s the economy, stupid.

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Quick, pick one: a 33% discount or 33% more for free …

July 17, 2012

According to a study at the University of Minnesota’s Carlson School of Management, report in The Economist

When offered two deals on loose coffee beans: 33% extra free or 33% off the price, most shoppers considered them equivalent though he discount is by far the better proposition … it would take a 50% increase in quantity to be equivalent.

More generally, the researchers found, that shoppers prefer getting something extra for free to getting something cheaper.

For example, the researchers sold 73% more hand lotion when it was offered in a bonus pack than when it carried an equivalent discount (even after all other effects, such as a desire to stockpile, were controlled for).

The main reason is  “consumer innumeracy” … e.g. people can’t do fractions or simple math in their head.

* * * * *
How can retailers compensate for (or exploit) consumers’ math blind spots?

One way is to befuddle them with double discounting.

People are more likely to think that a product that has been reduced by 20%, and then by an additional 25%, is a better deal than one which has been subject to an equivalent, one-off, 40% reduction.

Similarly, when evaluating a car’s fuel efficiency, consumers understand the number of extra miles per gallon it gets, more so than the equivalent percentage fall in fuel consumption.

We’re not talking calculus, we’re talking fractions … ouch.

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Tech wars: Retailers tuning to shoppers’ frequencies …

June 26, 2012

Punch Line: Start-ups are pitching software to retailers that, with the use of in-store Wi-fi, will be able to track shoppers’ path and movements through the store.  Retailers would also get information about which websites consumers are visiting while at different places in store – which would help explain which products consumers may be testing in-store, but buying online.  Manufacturers will also be interested for the ability to directly target consumers with digital coupons or ads as they walk through the store.  Shopper privacy is the one area that hasn’t been “thought through” yet. 

* * * * *

Excerpted from WSJ, “New Wi-fi Pitch: Tracker”

Companies that develop Wi-Fi networks have a new pitch for retailers and marketers: Use the technology to keep tabs on customers, just as Amazon.com Inc. tracks online shoppers … Venues like stores, malls and airports are installing Wi-Fi networks to please smartphone-toting shoppers, who use them to get faster Internet access and avoid cellular-data charges.  Wi-Fi lets the network operator keep tabs on what users are doing—from where they’re standing to what websites they’re viewing. That lets retailers learn in what aisle shoppers are most likely to point their iPhone’s Web browser to Amazon.com. Mall owners have a new way to judge which storefronts attract the most foot traffic. And owners of Wi-Fi networks can turn their antennas into virtual billboards, charging a premium for ads sent to users’ phones in prime locations.

WIFI

Other companies are developing technology known as “heat mapping,” which allows organizations with big Wi-Fi networks to identify customer locations and traffic patterns. It works by triangulating phone signals received by different Wi-Fi bases.

A start-up … goes even further. It offers software that will let retailers track which websites a shopper visits when using a store’s Wi-Fi network and then overlay that information with data showing where the shopper is in the store. The resulting “heat maps” could show which products are most vulnerable to being tried out in the store but ultimately bought for less online.

Retailers that find shoppers are navigating to a particular e-commerce website could buy additional advertising on that website. Meanwhile, a department store that learns many of its customers log on to Amazon.com while in the electronics department could move an additional store employee to that area.  “We’re trying to understand not only physically where they’re going within the store but also where they’re going virtually within that shopping experience.”

Edit by BJP

Thanks to GEA for feeding the lead

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Target the targeter becomes the target … very predictable.

February 27, 2012

This is going to be hard for Target to shake.

The NYT revelations that Target has been mining its data bases to early-identify pregnant women and “change their buying behaviors when they’re vulnerable to marketing initiatives” has gone viral.

Now, Target has become a target …

Here’s a funny piece from the Colbert Report:

click to view
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Thanks to RG for feeding the lead

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Target bellies up to moms-to-be … by mining their shopping patterns.

February 22, 2012

In a previous post, we excepted from a NY Times article How Companies Learn Your Secrets that

  1. Much of what people do is based on habits, not conscious reasoning.
  2. Consumers’ shopping habits and brand loyalties are often more habitual than thoughtful.
  3. But, there are certain “events” — e.g. new baby, new home, recent divorce — that seem to make consumers more open to switching stores and brands.
  4. Savvy marketers are learning to identify these critical events — before they happen — and try to get consumers to switch  their behavior.

Target is one of the retailers identifying customers who are “vulnerable to intervention by marketers” … and pouncing on them.

Who?  Moms-to-be.

How?

According to the NY Times article, Target identified about 25 products that, when analyzed together, allowed them to assign each shopper a “pregnancy prediction” score.

For example, sometime in the first 20 weeks, pregnant women tend to load up on body lotions and supplements like calcium, magnesium and zinc.

With that information in their computer systems, Target can identify likely pregnant women and, more important,  estimate their due dates, so that  Target can send coupons timed to very specific stages of her pregnancy.

It’s a bit unbelievable … and a lot creepy.

And, oh yeah, it works.

But, gotta wonder why Target let this cat out of the bag …  if this story goes viral,  the privacy concerns are likely to offset the added sales to moms-to-be.

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Hitting consumers when they’re “vulnerable to intervention by marketers”…

February 21, 2012

Punch line: Many of consumers’  buying behaviors are habitual — deeply ingrained and difficult of to change.  Marketers have to identify times when consumers are open to change and get them. to break  their habits. 

The good news: the are times when consumers are, in fact, ripe for change …

In the 1980s, a team of researchers led by a U.C.L.A. professor named Alan Andreasen (now at MSB) undertook a study of peoples’ most mundane purchases, like soap, toothpaste, trash bags and toilet paper.

They learned that most shoppers paid almost no attention to how they bought these products, that the purchases occurred habitually, without any complex decision-making.

Which meant it was hard for marketers, despite their displays and coupons and product promotions, to persuade shoppers to change.

But when some customers were going through a major life event, like graduating from college or getting a new job or moving to a new town, their shopping habits became flexible in ways that were both predictable and potential gold mines for retailers.

The study found that:

  • When someone marries, he or she is more likely to start buying a new type of coffee.
  • When a couple move into a new house, they’re more apt to purchase a different kind of cereal.
  • When they divorce, there’s an increased chance they’ll start buying different brands of beer.

At those unique moments, Andreasen wrote, customers are “vulnerable to intervention by marketers.”

In other words, a precisely timed advertisement, sent to a recent divorcee or new homebuyer, can change someone’s shopping patterns for years.

Excerpted from NY Times, How Companies Learn Your Secrets, by Charles Duhigg

Note that Prof. Andreasen didn’t just pick off the obvious stuff — e.g. new parents buying baby stuff,  new home owners furnishing their new digs, or divorcees buying new duds.

No, the life-changers seem willing to change many of their buying patterns and brand loyalties.

Next: How Target identifies customers who are “vulnerable to intervention by marketers”  … and pounces on them.

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Bad economy? … Jack up your heels.

December 6, 2011

TakeAway: IBM research shows a relationship between the height of women’s heals and the economy … the weaker the economy, the higher the heels..

* * * * *
Excerpt from AdAge: “At Last a Good Economic Indicator: Heel Heights Poised for Fall”

Historically in economic downturns heels have tended to go up and stay up, according, a consumer-products expert with IBM.

Why? Consumers look to compensate for dismal times with more flamboyant fashions.

Certainly that’s been true during the recent downturn.

Flats and relatively subdued heels of the 1920s gave way to the high heels of the 1930s recession.

Platform heels also soared during the recession fueled by the 1973 oil crisis.

Ominously, the average height of heels mentioned in social media soared from 3 inches in the first half of 2008 to 6 inches in the second half, just as the U.S. financial bubble burst.

Heel buzz most recently peaked in the first half of 2009 at 7 inches, bounced around at 4 to 5 inches through early 2010 and plunged to 2 inches in the most recent IBM analysis from early this year.

IBM’s cross analysis of heel-height buzz and macroeconomic data suggest a strong inverse correlation between heel-height buzz and economic growth.

Edit by ARK

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Ken says: “get to the pocketbook first”

November 29, 2011

Last week I posted my talking points to a Wash Post reporter asking about retailers moving to Thanksgiving evening openings in advance of Black Friday.

I served up some ivory tower stuff about budget effects, shopping days’ effects, etc.

Here’s what made the cut …

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Black Friday 2011: Holiday shoppers hit stores, with a Thanksgiving head start

Last year, Toys R Us became one of the first big-box chains to launch its Black Friday specials at 10 p.m. Thursday. This year, Wal-Mart matched the move.

So Toys R Us opened its doors even earlier, at 9 p.m.

“This is just the beginning,” said Ken Homa, professor of marketing at Georgetown University’s McDonough School of Business. “Next year, we’re likely to see everybody doing this. . . . The guys with the first opportunity to get to somebody’s pocketbook are likely to take share away from their competitors.”

Accurately quoted and, if I must say so myself, captures the essence of my message … and my style.

Probably a bit nostalgic for my former students …

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Black Friday … it’s all psychological.

November 25, 2011

Punch line: According to the Washington Post, “far from being mass synchronized temporary insanity, the Black Friday ritual has distinct psychological underpinnings.”

1) The crowds (and scarcity) make us happy

When crowds create a sense of competition — such as when hundreds of shoppers are rushing to collect marked-down goods — they generate a different feeling … called hedonic shopping value, or a sense of enjoyment from the mere process of buying goods.

Consumers enjoy something that’s harder to get, and it makes them feel playful and excited.”

create a promotional strategy that has a high value for a limited time.”

2) We love the hunt

Black Friday is “hunting for women” … it hinge on long-standing traditions and involve pursuing a goal as a group. Whether the group actually hits its target is secondary to the fun of the chase.

The process is akin to a marathon, in that a long-distance runner is energized by the grueling trek in much the same way a Black Friday shopper thrives on long lines and frenzied grabs at cashmere sweaters.

Shoppers love to swap stories and show off their prizes at the end of the day.

“It’s ‘mission accomplished … You brag about your great deal, or about how you got the last one.”

3) It’s about togetherness

Black Friday shopping combines elements of both traditional shopping and holiday rituals.

Shoppers planned extensively for Black Friday — as they would for a holiday meal — and relish the day in part because it allows them to spend time with close friends and family.

“Sharing the shopping ritual with family members and indoctrinating children helps to ensure that the ritual is continued in the next generation.”

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Deep thoughts: PepsiCo plays on our “neurological preferences” … uh-oh!

November 22, 2011

TakeAway: PepsiCo is learning how consumer psychology influences in-store shopping behavior. With these insights, PepsiCo has adjusted the shopping experience – the shape of end caps, design of advertising circulars – to appeal to the differences between male and female shoppers …

* * * * *
Excerpted from cpgmatters.com, “Understanding Consumer Psychology Helps PepsiCo Improve Marketing and Display Tactics in Stores

So far, PepsiCo’s research has unveiled three key learnings:

  1. The importance of the shopper’s unconscious
  2. Men and women respond differently
  3. Psychology influences behavior across the shopping cycle

PepsiCo’s goal is to understand the unconscious, engage both genders effectively, and develop best practices to ensure that its brands apply what they learn throughout the shopping process …

Take the importance of curvilinear merchandising … PepsiCo’s Frito-Lay brand is using more rounded fixturing in the store, including the configuration aisles and end caps.

“What we’ve found is a neurological preference toward rounded edges,” Michelle Adams, PepsiCo’s VP of customer strategy and shopper insights said. “Innately, humans avoid sharp edges and objects, and hot stoves. It’s a piece of who we are that we never really realized was going on, but is going on subconsciously.”

A design principle that appeals more to the female mind than male is scattering elements in, say a printed circular. “The more you break things up, the more females like it,” Adams said. “Whereas the male brain will gravitate toward the linear, toward block designs, the female brain will go toward angles and curves and different fonts.”

Another key point of differentiation between male and female shoppers is their reaction to “causes” in marketing, merchandising and packaging. Breast cancer and “sustainability” are particularly attractive causes to women.

“It’s not that appealing to sustainability will shut men down,” Adams said. “It just doesn’t get their attention. Men are about assuring that they’ve got the right brands and flavors, that this brand is for him and his family. The other thing is they want assurances around taste.”

Another area where men and women diverge is in the importance of all-natural products to them. However, overall shopper preference for better-for-you snacks has become important enough to Frito-Lay that it has influenced how the brand arranges its shelf space in supermarkets – typically in the front of the aisle and its more conventional products toward the back.

PepsiCo also rallies especially to the concerns of women with back-to-school “solutions” merchandising. “Our angle around back-to-school is to provide easy solutions to the problems that mom has,” Adams said. For instance, Frito-Lay promotes multi-packs of single-serve packages of chips that are handy for school lunches.

“We try to create sections in the store saying to moms: ‘Here’s your lunch solution, your dinner solution and your big-game event solution,’” Adams explained. “And with the brands we have, we can do that. It’s the advantage that PepsiCo has.”

Adams said that PepsiCo brands already have incorporated design changes in circulars based on psychological insights and already have been able to log greater engagement with consumers because of them …

Edit by KJM.

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Target re-gifts … the ‘Christmas Champ’ is baaack!

November 21, 2011

TakeAway: Retailer optimism is lower this year. Yet, Target hopes to spur sales with a two-day Black Friday sales event and the return of Christmas Champ ad campaign.

* * * * *

Excerpted from brandchannel.com, “Target Re-Gifts Its Black Friday ‘Christmas Champ’ Campaign

Enter video caption here

With Black Friday just a week away, a new survey shows that retailer optimism about sales growth is lower this year than in 2010. Heavy discounts are expected to rule the day as many retailers move their Black Friday operations to Thursday in a dismal zero sum game sales spiral …

To pitch its 2011 two-day Black Friday sales event, Target has rolled out a collection of “tips” from its effervescent, slightly off-kilter shopping maven.

Promoted as their @ChristmasChamp on Twitter, the manic Black Friday sales lover (brilliantly portrayed by comedian Maria Bamford) was Target’s secret weapon that drove the store’s 2009 Black Friday sales to its biggest ever levels despite a grim holiday shopping environment. Bamford was so popular that Target brought her back in 2010.

And so here we are again in 2011 and Target is again turning to Bamford. But the ads the retailer is running are the same as last year …

We kid, but Target’s regifting of its popular, two-year-old campaign is nothing to laugh at if it’s working. Indeed, if a brand runs a holiday ad enough years in a row, it can become iconic.

Edit by KJM

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Forget demographics … segment markets based on buying behavior.

November 4, 2011

TakeAway: MasterCard and Visa are entering the business of market research by tracking online purchases and using the info to identify market segments and target them.

* * * * *
Excerpt From WSJ: “Using Credit Cards to Target Web Ads”

Visa  and MasterCard are using what they know about people’s credit-card purchases for targeting them with ads online.

This strategy is a technological feat: tying people’s Internet lives with shopping activities.

Some of the ideas, for instance, a weight-loss ad to a person who just swiped their card at a fast-food chain — then track whether that person bought the advertised products.

Currently, Web ads generally are based on a person’s online behavior but not information tied to his or her identity or activities in the brick-and-mortar world.

“There is a lot of data out there, but there is not a lot of data based on actual purchase transactions. We are taking it a level deeper…it is a much more precise targeting mechanism.”

MasterCard is pursuing a plan to sell marketers an analysis of anonymous, aggregated data sorted into marketing “segments,” such as people with a high propensity to be interested in international travel.

Visa is also currently pitching the ability to use cardholders’ anonymous buying histories, in aggregate, to tailor the ads people see online.

That would let advertisers, for instance, show cat-grooming offers to people in one area, and dog-grooming ads to people somewhere else, based on the group buying behavior in the areas as a whole.

Edit by ARK

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Halloween: Battle of the bite-sized candies …

October 25, 2011

Punch line: Despite a tough economic situation, Americans are likely to spend more this Halloween season.  And, what candy should you buy for the trick-o-treaters? Well, this year consider bite-size M&Ms and Skittles – they scored the highest across all key metrics according to Insight Workbench … 

* * * * *
Excerpted from brandchannel.com, “M&Ms and Skittles Best Bite-Size Halloween Brands

According to the National Retail Federation’s 2011 Halloween Consumer Intentions and Actions Survey, Americans will spend $72.31 on costumes, candy, and decorations, up from last year’s $66.28 and 2009’s $56.31 …

Overall, this Halloween is all about bite-size …

According to Insight Workbench, Candy Corn, the most iconic Halloween candy had the weakest metrics across all categories: lowest share of buzz, a Net Sentiment score of 52 and a Passion Intensity score of 48. Most people eat it solely at Halloween for tradition’s sake …

According to the NPD Group, about 5% of all candy consumed annually is eaten between Halloween and the week after with the most popular choices being chocolate, chewy candies and hard candy.

“It really came down to a battle of the bite-sized candy bits: the good ole reliable, melts-in-your-mouth-not-in-your-hand chocolaty M&Ms vs. the chewy, fruit-impersonating Skittles that let you “taste the rainbow.”

“Halloween was once an inexpensive holiday. Families made treats like candy apples, constructed costumes out of old bed sheets, and made their own spooky decorations. As stores stockpile all of the typical Halloween fare … plan a budget for this trick or treat season,” says Howard Dvorkin, CPA and founder of Consolidated Credit Counseling Services, Inc. …

Edit by KJM.

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Hit the potty, kid … diapers cost money!

October 7, 2011

Punch line: In tough economic times you gotta cut back, right?

Some parents are simply lengthening the time between their kids’ diaper changes.

Gross.

And, it’s penny wise – pound foolish … just raises the home’s decibel level and the ointment bill.

Excerpted from WSJ : Cut Back Diapers

As the economy continues to sputter, recent data show diaper sales are slowing and sales of diaper-rash ointment are rising.

Diapering a child six times a day costs about $1,500 a year, so it isn’t hard to see how it could become a burden on families dealing with chronic unemployment or struggling to cover rising costs.

Meantime, sales of diaper-rash ointment have increased 8% over the past year and pediatricians say the higher sales likely reflect either less frequent changes or a shift to lower quality diapers.

A pediatrician at Northwestern Memorial Physicians Group in Chicago, says she has seen a 5% to 10% spike in diaper-rash cases this year.

“We’re definitely seeing major effects of the economy: Diapers are very expensive, and the longer you sit in a dirty diaper, the more likely the chances of an infection.”

P&G says the new “wetness indicator” on Pampers Swaddlers has saved his family unnecessary diaper changes because “you don’t have to take the diaper off. You can just see the indicator, and you know if the baby is wet.”

P&G says its research shows parents are also potty training children earlier to save cash as economic uncertainty deepens.

Wonder if the wetness indicator was inspired by the pop-up that tells you when the T-Day turkey is ready?

Thanks to DM for feeding the lead.

>> Latest Posts

Wendy’s: new burger or New Coke? … at least they kept the iceberg lettuce.

September 22, 2011

TakeAway: Wendy’s remakes its hamburger, after 42 years, to boost sales and grow share in the fast food wars … New burger or New Coke? … The market will ultimately decide.

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Excerpted from USAToday.com, “Wendy’s remakes its burgers; here’s how it did that

Dave’s Hot ‘N Juicy, named after late Wendy’s founder Dave Thomas, is Wendy’s new burger — with extra cheese, a thicker beef patty, a buttered bun, and no mustard, among other changes …

“Our food was already good. We wanted it to be better. Isn’t that what long-term brands do? They reinvent themselves.”

Wendy’s started Project Gold Hamburger two and a half years ago to boost lackluster sales and fight growing competition from McDonald’s and expanding fast-casual chains, such as Five Guys …

But the biggest issue was that Wendy’s, which hadn’t changed its burger since the chain began in 1969, let its food offerings get stale over the years while its competitors continued to update their menus …

We have a lot of catching up to do in some areas. But after we launch this hamburger there will be folks who need to catch up to us.”

Wendy’s polled more than 10,000 people about their likes and dislikes in hamburgers. It found that people like the food at Wendy’s but thought the brand hadn’t kept up with the times.

So, executives were shipped off to eat at burger joints around the country and measured each sandwich on characteristics like fatty flavor, salty flavor and whether the bun fell apart.

Then, it was time for Wendy’s researchers to consider the chain’s own burger, ingredient by ingredient. Each time they made a change, they asked for feedback, visiting research firms around the country to watch through two-way mirrors as people tried each variation.

Many suggestions sounded good but didn’t ring true with tasters.

  • They tried green-leaf lettuce, but people preferred to keep iceberg for its crunchiness.
  • They thought about making the tomato slices thicker but decided they didn’t want to ask franchisees to buy new slicing equipment.
  • They even tested a round burger, a trial that was practically anathema to a company that’s made its name on square burgers.

Wendy’s ultimately did not go with the round shape, but changed the patty to a “natural square,” with wavy edges, because tasters said the straight edges looked processed.

Tasters said they wanted a thicker burger, so Wendy’s started packing the meat more loosely, trained grill cooks to press down on the patties two times instead of eight, and printed “Handle Like Eggs” on the boxes that the hamburger patties were shipped in so they wouldn’t get smashed.

Wendy’s researchers knew that customers wanted warmer and crunchier buns, so they decided that buttering them and then putting them through a toaster was the way to go.

In the end, Wendy’s researchers changed everything but the ketchup. They switched to whole-fat mayonnaise, nixed the mustard, and cut down on the pickles and onions, all to emphasize the flavor of the beef.

They also started storing the cheese at higher temperatures so it would melt better, … a change that required federal approval.

Wendy’s faces the reality that some customers may not like the new burger  — or its likely price increase of 10 or 20 cents, because of the higher-quality ingredients.

Edit by KJM

Emotional profiling: I like you, but I don’t love you …

September 7, 2011

Punch line: Why do two identical-looking products that get the same score in acceptability tests, perform wildly differently in the marketplace?

“Emotional research ” tries to find out why, and create profiles of prime prospects.

Excerpted from CPGmatters “Kraft Foods Develops ‘Emotional Profiling’

Kraft Foods has been developing a sophisticated new science of “emotional profiling”.

Kraft has been working on emotional profiling for three years as part of its sensory and consumer-testing work.

“The theory behind emotional profiling is uncovering the difference between ‘liking’ something and ‘preferring’ it.”

“The idea is fairly basic.

Even if an individual likes two different products, they may still prefer one over the other.

We’re trying to figure out that difference or gap so that we can make the best possible products that consumers will truly prefer.”

Traditional research tools may not be enough to capture the implications of emotion on food shopping.

“We use emotional research to define unique points of difference and create a new hierarchy of attributes that go beyond ‘liking.’

Qualitative research usually includes in-depth interviews exploring sensory reactions with target customers who represent a variety of positions along the brand-loyalty scale.

So, tell me again why kids love artificial-looking, artificial-tasting Kraft mac & cheese …

>> Latest Posts

“It’s not the consumers’ job to know what they want.”

August 26, 2011

That was what Steve Jobs has has been saying for years.

The statement seems to be rippling through the marketing community now that Jobs has resigned.

NY Times, Without Its Master of Design, Apple Will Face Many Challenges

Mr. Jobs explained that his design decisions were shaped by his understanding of both technology and popular culture.

His own study and intuition, not focus groups, were his guide.

When a reporter asked what market research went into the iPad, Mr. Jobs replied: “None. It’s not the consumers’ job to know what they want.”

What’s the rub?

Jobs’ success flies in the face of marketers who spend  time and energy arguing for and doing extensive consumer research (surveys. focus groups, etc.).

And, it’s hard to argue with his success,

Hmmm.

>> Latest Posts

Stores creating “a sense of privacy, even sanctum” … for men!

July 8, 2011

According to research coming out of Australia, and reported in RetailWire:

Male-only supermarket shopping aisles that focus on gender-specific products rather than merchandise by category could encourage men to browse longer, trial new items and spend more.

“Research has shown that there is a group of male shoppers who have a ‘fear of the feminine’ or fear shopping among women’s health products such as tampons, waxing strips, pink razors and body scrubs,”

“Further, research found that men made more purchases … of health products that were not placed in high traffic areas or next to feminine-inspired products.

Apparently, some men are apprehensive of women’s products and are therefore less likely to spend time perusing their own personal needs.”

The answer: Creating retail ‘man caves’… “Gender specific aisles providie a relief to men, inspiring them to explore and discover new products … and create a sense of privacy, even sanctum.”

I can’t wait to go shopping tomorrow … I need some “privacy, even sanctum.”

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Random Finding: Men also shop differently, valuing efficiency and independence over customer service and tend not ask for help.

Or, as Grandma Homa used to say: “Women shop, men buy.”

>> Current Posts

In-Store Marketing Reaches In…To Your Home

May 6, 2011

TakeAway: As shoppers research their grocery lists online before going to the store, shopper marketing begins at home.   In-store marketing traditionally consisted of flashy product displays, special promotions at the end of the aisle and attention-grabbing packaging on the shelf. 

No longer. 

Given how inundated consumers are with information via multiple media, the right marketing mix is even more challenging.

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Excerpted from WSJ, “In-Store Sales Begin at Home By Ellen Byron, April 25, 2011

Determined to find the best deals, more shoppers are researching their grocery lists online before going to the store. For marketers, that means big changes in how and when they tempt consumers to buy.

It’s well known that consumers research expensive products like electronics online, but coming out of the recession, consumers are more scrupulous about researching their everyday products such as diapers and detergent, too. More than a fifth of them also research food and beverages, nearly a third research pet products and 39% research baby products, even though they ultimately tend to buy those products in stores, according to WSL Strategic Retail, a consulting firm.   That has led retailers and brands to target customers via blogs, social-media sites such as Facebook and Twitter and campaigns on retail sites, in addition to in-store campaigns.

A 2010 campaign for Procter & Gamble Co.’s new CoverGirl "Smoky Eye Look" makeup kit illustrates the more complex route marketers are taking.  To drum up hype for the product launch online, P&G, with Saatchi X, shipped the packs of mascara, eyeliner and eye shadow to makeup bloggers before they were available in stores. The "Makeup Master" kit also included application instructions, blogging tips, product photographs and a CoverGirl-emblazoned director’s chair.  Inside stores, CoverGirl drew attention to its kits with live product demonstrations, its co-branded print ads with Wal-Mart Stores and cardboard trays that carried the kits on the shelf while highlighting the product’s features.  After a purchase, shoppers were encouraged via Facebook and other online campaigns to write a review of the product, thus spreading the word to more customers researching makeup online.

The digital shift is a particular challenge for food and household-product companies, which typically aren’t as advanced online as their electronics and apparel counterparts. They have been deterred by the cost of shipping bulky but low-value items like paper towels, detergent and canned soup, especially given the ubiquity of brick-and-mortar stores selling the products for about the same price.

Wal-Mart is banking on the trend to accelerate. Lately, it has made its online circulars more user-friendly. It is also developing ways to offer more customizable circulars online, based on a shopper’s interests or needs.

To be sure, the shift hasn’t eliminated the need for effective campaigns inside stores. In-store marketing gained appeal and sophistication amid the fragmentation of television and print audiences, and accelerated during the recession, when marketers believed cash-strapped shoppers made even more purchasing decisions when looking at the store shelf.

Edit by AMW 

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Want to sell more to men? Just follow these 5 steps

April 8, 2011

TakeAway: As men shop more and more,retailers need to make them feel comfortable in their stores,  Here’s how …

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Excerpted from AdAge, “How to Connect With the Heart and Mind of the Male Shopper” by Simon Goodall, March 29, 2011

Men are shopping more than ever. In 2002, 64% bought their own clothes; four years later that number was 84%, according to GQ. Around one-third of primary shoppers for groceries reportedly are now men. Yet 40% of men feel unwelcome in retail stores, we have found.

… all of the suggestions below should be seen as statements of how men are, on average, more likely to behave than their female counterparts. It’s important to understand why they shop…

1. Men need to demonstrate their mastery of shopping.

Men like doing things they can do well. And hate doing things they aren’t good at. …they have never had the opportunity to learn how to be a good shopper. …empower him to demonstrate his mastery …and he will come away feeling he has done a good job.

Amazon has enabled millions of men to master buying music. Consumer reviews and lists provide what he needs to feel confident about his choices…

2. Performance is emotional.

Men want to know how products perform. Reasons to believe are truly reasons to buy. Performance provides a kind of “emotional functionality.” It helps men feel that their choice is more efficient, powerful or technologically advanced. Performance is the way to a man’s heart.

3. Men don’t browse, they carry out reconnaissance.

…when men find themselves popping into a computer store or surfing through 3-D-TV reviews online, they are not browsing — they are carrying out important reconnaissance. Perhaps that explains the drift from generalist to specialist stores. They need someone available to assist with their purchases… they seek out expert advisers and technological proof during their research.

…personalization also plays to the fact that men are more willing to pay for products and brands that are customized to their needs….

4. Men want products that reflect their progress in the world.

Sixty-eight percent of millennial men and more than 50% of Gen X men state a preference for brands that “show I have good taste,” … men are more likely to seek out brands that offer exclusivity; have market-leading position; suggest to others that they are successful; and have a “members-only feel,” … proof of quality and their good taste in the details….

5. Men want sanctuaries where they can be men again.

… the majority of men still do not view shopping as a leisure activity, perhaps because it still carries connotations of femininity. Yet the resurgence of traditional barbershops and emergence of male beauty zones suggests a boom in retail experiences that create a sanctuary for maleness…

So what’s key to winning his heart, mind and wallet? Understand the underlying emotional motivations for why men shop.

Edit by HH

 

Don’t Discount the Men!

February 23, 2011

TakeAway: It seems like no matter where you turn today, there’s a fascination with the idea that women are taking over – their receding unemployment rates, increased number of college degrees, etc.

However, the true growth—even in categories that courted female shoppers for years—lies with the guys.

So, while the buying power might be moving toward women in purely fiscal terms, marketers should not lose sight of the fact that it’s increasingly men who are writing up the shopping lists, hitting the stores and doing the actual spending.

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Excerpted from Brandweek, “Women Are Wealthy, but Guys Mean Growth” By Kathy Oneto, December 5, 2010

The “everyday Joe” has been taught that it’s OK to look good, smell nice and dress well. The motivations (while varied) for this new man’s grooming activities are less about vanity than instilling confidence and creating a feeling of success. Then there’s the growth of the full-time dad. Since 2007, 6.3 million American men have lost their jobs, which has among other things served to redefine their household roles.

What’s significant about this from a marketing perspective is that as fathers assume traditional “mom” jobs such as packing lunches and doing laundry, their interest in the brands associated with these activities—from convenience foods to fabric softener—has increased proportionally.

Some brands have been prescient enough to capitalize on this gender-role drift already. Nutrisystem, for example, has defied industry norms in the weight-loss market by directing its messaging toward men. The move not only gave the brand a new base of consumers, but it also furnished Nutrisystem with an alternative to slugging it out with competing weight-loss plans for share of the same female demo.

Similarly—and after years of soft-focus commercials full of soft-skinned women—the Dove soap brand made a play for the masculine market with a new suite of products called Dove Men + Care, which emphasizes deep-cleaning over softness and signed spokesmen like the Yankee’s Joe Girardi to make clear that Dove was no longer your wife’s beauty bar.

A broadened strategic attention is necessary for any company or any brand that hopes to stay competitive and relevant in a marketplace as lean and mutable as this one is. As one target demo (women, in this case) has moved to the economic forefront, the other (men) may have been inversely impacted. But opportunity often arises from disruption. The sooner that the marketing community catches on to men as a market for goods that previously weren’t aimed at them, the sooner they’ll reap the rewards.

Edit by AMW

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Home Depot Gets in Touch with its Feminine Side

February 2, 2011

TakeAway: To balance a decline in sales related to major renovations, Home Depot is pushing products related to redecorating.

Moreover, realizing that Home Depot stores can intimidate women (who just happen to be half of its customers), the chain is trying to simplify shopping through Martha Stewart Living products that carry icons to assist with coordination across categories.

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Excerpted from NYTimes, “Revamping, Home Depot Woos Women” , January 28, 2011

Without a housing recovery to revive sales of big items or major renovation supplies, Home Depot and its competitors are promoting smaller projects this spring, during what is the major selling season for home improvement stores. And that means sprucing up departments to get female customers excited about window treatments or new colors for makeovers of existing spaces.

Lowe’s, which says it has had a female focus since its beginnings, has added a line of décor products like mood lighting and chrome toilet-paper holders to appeal to women. True Value recently opened a corporate-owned store near Chicago that had wider aisles, better lighting and clear signs, part of an effort to attract women.

Home improvement stores “have been viewed as ‘very large hardware stores’ where big, burly men go to purchase their tools and supplies.”

“These big-box stores need to appear less hardware- and more improvement-driven in the image, and reflect more women in their messages.”

This is not the first time that Home Depot has tried to figure out what women want. It has been running Do-It-Herself workshops for female customers since 2003. In the early 1990s, it opened Expo Design Centers, showrooms with fresh flowers and other feminine touches. (It closed those centers in 2009.)

The Martha Stewart products are aimed at getting women who are already visiting the stores to buy more.

They are meant to spur spending across different categories, so a woman can buy paint, rugs and countertops that coordinate, increasing how much she spends for each visit.

Edit by AMW

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Who’s controlling the purse strings? … Why, old Dad, of course.

January 20, 2011

TakeAway: As times change, more and more men are self-identifying themselves as the primary decision makers for the household and they don’t feel companies are doing a good job of targeting them? 

Know your audience and what is important and communicate that message in channels they will see. (NFL games perhaps?)

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Excerpted from AdAge, “Time to Rethink Your Message: Now the Cart Belongs to Daddy,” by Jack Neff, January 17, 2011

Mom is losing ground to Dad in the grocery aisle, with more than half of men now supposedly believing they control the shopping cart. The implications for many marketers may be as disruptive as many of the changes they’re facing in media.

… marketers of packaged goods … take solace in one thing — at least they could count on their core consumers being moms and reach them through often narrowly targeted cable TV, print and digital media.

But a study last year of 2,400 U.S. men ages 18 to 64 finds more than half identify themselves as the primary grocery shoppers in their households. …about six in 10 identifying themselves as their household’s decision maker on packaged goods, health, pet and clothing purchases. …only 22% to 24% of men felt advertising … speaks to them…

Recession has forced millions of men in construction, manufacturing… out of work and … into more domestic duties. At the same time, Gen X and millennial men in particular more likely to take an active role in parenting and household duties.

…any stigma once attached to men as shoppers is fading fast.

Behavioral research of shoppers shows a number more like 35% of grocery and mass-merchandise shoppers are now men…. That number has been growing thanks to the economy and changing gender roles, she said.

… the fact that a third of a brand’s shoppers are male is an awful lot to ignore. As a result, shopper-marketing efforts are increasingly gender-neutral rather than targeted for female shoppers,

Last year’s tear-jerking “Behind Every Olympic Athlete is an Olympic Mom” Winter Olympics ads for P&G created some resentment from dads, who still make up the vast majority of volunteer coaches for youth sports.

Perhaps favorably for marketers… men are more brand-loyal and less focused on promotions than women shoppers, Ms. Weinberg said. In advertising, they do more product research …because they’re often newer to the categories, prefer ads with more information.

There are more ads that speak to men,… But many …still portray [men] as hapless domestically, which doesn’t help marketers. “Men,” he said, “need to be something other than invisible or buffoons in advertising.”

Edit by HH

 

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Full Article
http://adage.com/article?article_id=148252

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Target Gets Fresh with Mommies

January 3, 2011

TakeAway: Target has been aggressively marketing its fresh food offerings this year in a major nationwide campaign, which includes direct mail, billboards, television, radio and vehicle wraps, among other elements.

The ads focus in part on the three daily meals that could be put together with a trip to the store, and the company hopes its efforts will resonate with mothers, who are a prime target of the campaign.

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Excerpted from NYTimes, “Shopping at Target?  Now You Can Pick Up a Dozen Eggs” By Tanzina Vega, December 16, 2010

While Target has carried snack foods like potato chips and soft drinks for years, the company has expanded to include fresh groceries like steak, chicken, eggs and apples. So far, 350 of the 1,752 Target stores nationwide have been reformatted to include the new food layout, and the company expects to add the arrangement to additional stores at the rate of about 400 a year.

While the fresh food offerings will include items similar to what a customer can find in a grocery store, “The concept is built around the notion of fill-in trips and convenience trips. There’s a real need for convenient and affordable grocery options.”

Target stocked fresh food items alongside local products like Turkey Hill ice cream, Ellio’s Pizza and Herr’s potato chips.

To market the concept, the company ran ads in local newspapers, used direct mail and placed door hangers on homes. It also used “guerrilla tactics,” like distributing 10,000 samples of produce on the streets of Philadelphia using branded bicycles and trucks with the Target bull’s-eye logo and “Get Fresh Philadelphia!” messages.

The look of the campaign incorporates Target’s bold red lettering against a white background with fruits and vegetables splashed across the layout.

Edit by AMW

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Full Article:
http://www.nytimes.com/2010/12/17/business/media/17adco.html?_r=2&ref=media

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The Evolution of Focus Groups

December 22, 2010

TakeAway:  Arguing that focus groups were never really all that effective in the first place, agencies and research facilities have introduced a variety of methods aimed at shaking up the traditional focus group approach. 

Young & Laramore, an Indianapolis-based agency, frequently runs what the company president calls “friendship groups.”

That’s when the company will tap one consumer and ask that individual to recruit two or three others from his/her social circle. The assumption is that one is more likely to be comfortable in an experimental setting when with others in one’s social network.

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Excerpted from Forbes, “From Focus Groups to ‘Friend’ Groups” By Elaine Wong, November 19, 2010

In these situations, researchers can tell when participants are sharing “secrets with each other, you can catch them winking their eyes or exchanging signals with each other, and you dig into that and find out what’s up.”

Contrast that with the conventional focus group model, in which the scenario in question usually runs something like this: A packaged goods company, retailer or marketer, let’s say, asks an agency or research partner to recruit a panel of consumers with whom to test new products, packaging or ideas. These groups, which can range anywhere from six to 12 or more in number, then gather in a “sterile” room, as many agency execs describe it. A moderator then runs through a list of questions and records participants’ responses while researchers in the back room watch. Such procedures are routine, boring, not to mention long—one session can last 90 minutes—and yield few, if any, new insights.

One catalyst driving the push is the proliferation of social media mining tools, which allow companies to test and tweak new go-to-market strategies in real time and without the need for an actual focus group.

To avoid the typical, ho-hum answers, one company, The New England Consulting Group, uses a methodology called Super Groups, which involves finding the extreme, “lunatic fringes” of a consumer set. Talking to those who are not your average consumer ensures that you get not-so-average—and in some cases, off the chart—results. Several agency executives also brought up the idea of “conflict groups,” when “you recruit and mix people who love something [with] others who hate it or [bring together] passionate lovers of two different brands,” explains an Arnold executive.

Efficiency aside, the historical focus group also posed other problems. One is the gap between what people think and how they later act. Consumers may rationalize their shopping or buying behaviors, but emotion, rather than reason, is often a big driver of these decisions.

Edit by AMW

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Full Article:

http://blogs.forbes.com/elainewong/2010/11/19/from-focus-groups-to-friend-groups/

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Profile: Just-in-Time Consumer

December 20, 2010

TakeAway:  The recent recession has left in its wake a deeply changed shopper: the just-in-time consumer. Manufacturers and retailers report that people are buying less, more frequently, and are determined to keep cash on hand. Executives peddling wares from canned goods to cashmere say the shift in consumption habits is prompting them to change how they produce, package, price and deliver their goods.

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Excerpted from WSJ, “The Just-in-Time Consumer” By Ellen Byron, November 23, 2010

So far, the impact of just-in-time buying on the corporate bottom line is mixed. Smaller unit sizes, for example, generally mean higher prices—and therefore higher profit margins for manufacturers.  Still, the phenomenon is so new it hasn’t shown up broadly in earnings. A Kimberly-Clark spokeswoman notes that potentially higher profits on smaller packages can be offset by higher manufacturing costs.

And companies are still reeling from lower sales volumes that began in 2008 with what some dub “pantry deloading.” Over the past two years, the number of items kept in American pantries has fallen about 20%, according to a recent survey. Consumers are also cutting back on the range of goods they stock.

The new shopping behavior is having a big effect on club stores, the ultimate pantry-filling destinations, which offer low prices but require bulk purchases. Some, including Costco and BJ’s, have reported increased shopping-trip frequency and decreased transaction sizes. To adjust, some discounters are rethinking their businesses. BJ’s began courting new customers two years ago to expand its membership, including smaller households and empty-nesters. It began shrinking its package sizes, in part to lure shoppers more interested in weekly purchases than monthly stock-ups. Now, the chain sells cartons of 18 eggs, instead of only five-dozen egg packages. It offers two containers of margarine of nearly two pounds each instead of only five-pound buckets.  The margarine change alone resulted in 46% more members who bought margarine.  BJ’s is trying to make its stores more attractive and change promoted items to encourage more frequent visits.

The changes at retail are often prompted by manufacturers. This summer, Del Monte began reducing the number of canned fruits and vegetables in multi-packs sold at club stores—and advising other retailers to reduce the number of cans required to qualify for a discount. The company realized consumers were more worried about overall cost, even if it meant a higher cost per can.

Just-in-time consumption is also disrupting long-established purchase cycles, including the annual back-to-school shopping ritual.  Shoppers of high-end discretionary products are shifting to just-in-time buying as well.

Edit by AMW

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Full Article:

http://online.wsj.com/article/SB10001424052748704865704575610452319977706.html?mod=WSJ_business_LeftSecondHighlights

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A very soft sell from Ikea in China

December 8, 2010

TakeAway: Even though the average Chinese consumer can’t afford most of the furniture in Ikea, the company is encouraging potential customers to spend a lot of time in its stores.

Eventually when individual purchasing power catches up to China’s macroeconomic growth, the company hopes to be top-of-mind for that new bed or sofa.

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Excerpted from Bloomberg Businessweek, “In Ikea’s China Stores, Loitering Is Encouraged,” by Michael Wei, October 28, 2010

Yang Shuqi paces the aisles of an Ikea store in Beijing, looking for a “small bed with toys.” She’s not planning to buy one—her grandson Beibei just needs to take a nap.

Unfortunately on this Saturday afternoon, every bed in the 43,000-square-meter (463,000-square-foot) store is occupied, with some children and adults fast asleep under the covers.

Managers at the Swedish furniture retailer don’t mind. They figure that the more customers choose to relax in its Western-style showrooms or grab a cheap snack at the in-store restaurants, the more likely they’ll be to make a purchase once their incomes catch up with their aspirations. …

Ikea plans to more than double the number of its stores on the mainland by 2015, to 18, on a bet that incomes in China will continue growing at a fast clip. (Per-capita gross domestic product has more than tripled in the past decade alone). …

Market researcher Euromonitor International expects China’s home-furnishings market to surge 17 percent this year, to $28 billion. “Government stimulus spending and favorable policies toward retailing and consumer lending have encouraged overall retail growth in China,” says Alex Liu, a Euromonitor analyst in Shanghai. Ikea, which has been in China since 1998, doesn’t break out sales for the country; Euromonitor figures the Swedish retailer has the biggest share of China’s home-furnishings market, at about 7 percent.

Even after years of record-breaking economic growth, however, China’s per-capita gross national income ranked 120th by purchasing power last year, according to the World Bank. So, for now, there’s a lot more looking than buying for many Ikea visitors. At the Beijing store, Xu Nan, a 22-year-old college student, had one of her friends snap a photo of her lounging on a black Vreta sofa that sells for 7,999 yuan ($1,197)—the equivalent of one-third of China’s annual per-capita GDP. …

Edit by DMG

 

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Full Article
http://www.businessweek.com/magazine/content/10_45/b4202022164114.htm

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Millennials say “red” or “white” … or a Miller Lite

December 7, 2010

TakeAway: 70 million millennials’ (loosely defined as those born between 1980 and 2000) taste for adventure, quirkiness and convenience will drive the market in the coming decade.

They are taking up wine at an earlier age than Gen X-ers and will buy wine just about anywhere – including the corner convenience store.

Moreover, 20 million of them have yet to turn 21, meaning they will become an even more powerful force. 

Experts say millennials, as opposed to other generations, have no fear of asking for wine advice, but a lot of them seek it from Facebook friends and on Twitter – which is leading winemakers to invest in social media.

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Excerpted from AdAge, “Millennials: the Great White Hope for Wine Industry” By E.J. Schultz, December 6, 2010

Wine marketers have only recently started zeroing in on the market, as opposed to other lifestyle brands which have been tracking the generation for many years.  The most recent player is 7-Eleven, which convened a focus group of millennials before launching its latest line of proprietary wines about two weeks ago. The brand, called Cherrywood Cellars, is priced at $7.99 to $8.99 to lure young adult drinkers whom the convenience store chain says might be watching their wallets more closely than Gen X-ers and baby boomers during the economic downturn.

Although beer remains the beverage of choice for millennials, accounting for 42% of their alcoholic drinks, wine captures 20% — up from 13% for Gen Xers when they were a similar age 10 years ago, according to Nielsen. Drinkers tend to shift to spirits and wine as they get older. If that trend holds, wine will account for 26% of all alcoholic drinks consumed by all U.S. generations in 10 years, up from 24% today, while beer will fall from 41% to 38%, according to Nielsen.

The test for marketers is to gain loyalty from young drinkers whose tastes are only now emerging. For some wine companies, that means putting members of the generation in charge of their brands. At Treasury Wine Estates in Napa, for instance, a 26-year-old is a member of a team of 20- and 30-somethings planning the national launch early next year of Sledgehammer, which is targeting the male millennial market.  Marketed as a “no-fuss” wine, the brand “eschews really traditional wine speak” like “this smells of cherries and berries and that type of thing.”  But the wine will also seek to subtly educate the new generation of wine drinkers, possibly using booklets of wine facts presented in a way that’s “funny and sarcastic.”

Some companies have formed special millennial divisions, such as The Wine Group, maker of Franzia, whose Underdog Wine Merchants unit is enjoying big success with Cupcake Vineyards. The brand was the 14th-best-selling wine for the four-week period ending Oct. 31, with sales jumping 250%.

Still, marketers risk overplaying their hand if they reach out too aggressively to the generation, known for its suspicion of overt selling tactics. For instance, some industry executives are noticing a backlash against trendy, edgier wine labels.

Edit by AMW

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Full Article:
http://adage.com/article?article_id=147474

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Market researchers say “let me look into your eyes” …

December 3, 2010

TakeAway: Packaging is an important purchase decision factor when consumers are at the store, ready to buy.

A great product with poor packaging might be passed over for a sleeker packaged alternative.

That’s why several brands are turning to eye tracking research to gauge how consumers’ eyes fixate on products across a shelf category.

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Excerpted from Brandchannel, “The Eyes Have It: Brands Conduct Staring Contest With Consumers,” by Barry Silverstein, November 30, 2010

It sounds like science fiction, but the best way to know whether or not consumers find brand packaging appealing may be to look into their eyes. It turns out that consumer brand companies like Procter & Gamble and Johnson & Johnson are doing just that.

Testing new brand packaging or a new product with consumers has always been a high-risk proposition. Focus groups, surveys, and other traditional consumer research techniques offer some insight, but they are hardly definitive.

Companies with millions of dollars invested in brands want a more accurate assessment of whether or not a product will resonate with a consumer.

Christian Simms, associate director of consumer market knowledge for P&G’s Herbal Essences and Pantene brands, tells Packaging World, “What consumers say and what they react to is a very different thing than what they spontaneously react to. We’re interested in what they can tell us without saying it to us.”

That’s why P&G uses eye tracking research for answers. Eye tracking is not a new science. It has been used for over twenty years in the military and for medical applications. …

In a typical eye tracking experiment, an individual consumer is shown, for example, 6-foot wide store shelves on a screen. The consumer views the shelf categories in this simulated shopping environment. Using a joystick, the consumer moves from one category to another. While she’s doing so, her eye movements are being recorded at 60 readings per second.

The collected data is used to create a heat map of fixation readings; the more intense the color in the heat map, the higher the number of viewing fixations. The data is also analyzed so that the marketer knows the percentage of consumers who “actively fixated” on each product or brand on a shelf.

Edit by DMG

 

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Full Article
http://www.brandchannel.com/home/post/2010/11/30/Eye-Tracking.aspx#continue

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Consumers baffled by zero

November 23, 2010

TakeAway: The human brain has difficulty interpreting the number 0 according to new research.

This difficulty can lead to irrational decisions when it comes to choosing a credit cards with 0% interest rates.

Retailers offering credit cards will be happy to take advantage of this.

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Excerpted from Wall Street Journal, “When 1% is more appealing than 0%,” by Mary Pilon, November 17, 2010

As retailers ramp up their holiday sales pitches, they may be playing off some surprising and counterintuitive ways our brains interpret numbers.

For example: what’s more confusing: A credit card with a 1% interest rate or a card with a 0% interest rate?

Even though 0% is better, we might be lured toward the 1% card … When it comes to advertising “zero,” consumers get baffled. …

… The “principle of diminishing sensitivity” makes the perceived difference between two quantities decrease as both increase by the same amount. He offers up the example that the difference between 10 and 20 is perceived as larger than the difference between 110 and 120, even though in both cases, the numbers are still only 10 apart.

Enter the number zero.

“Zero is a special value that prevents consumers from using relative comparisons when making decisions.” Because zero makes us lose our reference point when we compare it to other values. …

Let’s say you’re offered a credit card with a 25% interest rate. Then, say you’re offered a credit card with a 1% interest rate. You may think, according to the theory, “Wow, that’s 25 times as high of an interest rate!” The gap seems huge.

But then, let’s say you’re offered a credit card with a 25% interest rate and another interest rate of 0%. The zero makes us lose our bearings when it comes to determining the gap between the two, even though we know that the 0% is less than the 1% and even further away from 25%.

According to research cited in the paper, when no reference point was cited, 49% of survey participants chose a card with a 0% interest rate, while 73% chose a card with a 1% interest rate even though that rate is clearly less advantageous in the long run. …

Edit by DMG

 

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Full Article
http://blogs.wsj.com/economics/2010/11/17/when-1-is-more-appealing-than-0/

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My name is Domino’s, and my pizza was bad. Now it’s better.

November 15, 2010

TakeAway: Domino’s admitted its old pizza was lacking (to put it politely) and introduced a new recipe by revealing it to its staunchest critics.

The company continued the transparency theme by encouraging customers to alert Domino’s when the pizzas they ordered were not up to par.

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Excerpted from AdAge, “Domino’s Talks Radical Authenticity” By Abbey Klaassen, October 28, 2010

It was arguably one of the riskiest marketing campaigns of all time — so how, exactly, did Domino’s get its “Oh Yes We Did” campaign, which touted a revamp of pizza by admitting the previous version was terrible?

“We had to do something” because sales were so bad, said Domino’s CMO. 

“New and improved” campaigns typically feel cliché and disingenuous.  So Domino’s looked at what was going on in the news and culture and launched it under a new guise: radical transparency.

So far, the company has seen only positive results; most recently, its third-quarter same-store sales were up 11.7%.

Additionally, the “Show Us Your Pizza” campaign, in which Domino’s asked customers to take their own photographs of the food to be used in ad campaigns, has resulted in 13,000 submissions. Domino’s also responded in ads to customers whose photos showed a pizza that didn’t arrive photo-ready.

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Full Article:
http://adage.com/ideaconference/article?article_id=146782

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What per cent of Americans “always or usually” live from pay check to pay check ?

September 13, 2010

Answer:

Recent polls show that 61%of Americans “always or usually” live from pay check to pay check … up from 49% in 2008.

Source:
http://www.ft.com/cms/s/0/44d4b1c4-b52f-11df-9af8-00144feabdc0.html

You Can’t Just “Shrink It and Pink It”

September 8, 2010

TakeAway: Eight years ago, sportswear maker Under Armour learned that making smaller, pinker versions of its male apparel wouldn’t simply translate to women. 

Women buy because a piece fits well and promises to help keep them cooler or drier. 

Under Armour’s founder believes women’s apparel will one day surpass its men’s apparel, so learning what women wanted was key…the consumer always comes first! 

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Excerpted from New York Times, “Under Armour Wants to Dress Athletic Young Women” By Elizabeth Olson, August 31, 2010

Under Armour is aiming at the “team girl,” which Adrienne Lofton, head of Under Armour’s women’s apparel, defines as a female who is competitive and confident and who plays on high school or college sports teams, or who, after college, continues to work out regularly.  “The team girl is tough, intense and passionate, and she creates her own style.”

In 2003, Under Armour began marketing a line of women’s wear designed by women. Even so, women’s apparel represents only about 25 percent of the company’s nearly $800 million in annual revenue, and it wants more.  It is the only sports apparel sector where sales are forecast to grow, according to Marshal Cohen, an analyst for NPD Group, a market research group.  Part of that is due to the marketing of active wear as street wear.

Under Armour’s newly designed line, with compression shorts, a sports bra, shorts, footwear and other training gear, is being introduced Wednesday with a campaign called “Protect This House I Will,” which builds on the company’s successful we’ll-tough-it-out-together theme that it started for its men’s gear.  

Perhaps surprisingly, the 60-second television and digital spot anchoring the campaign features both male and female athletes — a choice, Mr. Battista said, shaped by focus-group research among high school and college women playing on sports teams.  Women wanted to see themselves on par with men – as athletes, not “female athletes.” 

For the campaign’s digital marketing, Under Armour is placing two- and three-minute segments it filmed of the three female athletes on a new Facebook site for women (which is not yet active) and on each athlete’s Web site.  The digital portion of the campaign will appear on MTV.com, Facebook and other teenage-oriented outlets, video sites like Hulu and CW and the high school sports site MaxPreps.  “We have been shifting more to digital,” the company’s Vice President for Brands said. “It is now 80 or 90 percent digital. Our customers are telling us they like to receive information online and prefer to shop online.”

Edit by AMW

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Full Article:
http://www.nytimes.com/2010/09/01/business/media/01adco.html?ref=media

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Is fiscal responsibility (by individuals, not the gov’t, of course) killing the economy?

September 2, 2010

Punch line: As long as consumers (and companies) continue to deleverage, the economy will continue to sputter.

And, the deleveraging is likely to continue …

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Excerpted from RCP :Why the Recovery Lags, by Robert Samuelson, August 30, 2010

The logic of  Recovery Summer allegedly recognized that over-borrowed Americans would repay loans and replenish depleted savings, creating a temporary drop in consumer spending and economic activity.

But once savings increased and debt declined, consumer buying would strengthen. It would replace the Obama stimulus program. Hiring would improve; the recovery would become self-sustaining.

So, why is the recovery faltering?

There are many explanations: depressed housing; weaker-than-expected exports; cautious (rebellious?) corporations.

But consumers, representing 70 percent of the economy’s $14.5 trillion of spending, are the crux of the matter.

“Consumers are deleveraging (reducing debt) … and rebuilding saving faster than expected.”

In 2007, the personal savings rate (the share of after-tax income devoted to saving) was 2 percent. Now it’s about 6 percent. In the early 1980s, the savings rate averaged 10 percent.

The Federal Reserve reports that debt service — the share of income going to interest and principal payment — has decreased from almost 14 percent in early 2008 to about 12.5 percent, the lowest since 2000.

In the past decade, consumers counted rising stock and home wealth as “saving,” which rationalized high borrowing and spending.

Now, the process may work in reverse.

Since late 2007, lower home and stock values have shaved about $10 trillion from household wealth.

If Americans tried to replace most of this through more annual saving, consumer spending would remain weak for years.

Consumers are adopting a “defensive outlook,” they’re prone to “pare their debt” or increase “reserve” savings.

They aren’t “itching to resume old spending habits.”

Full article:
http://www.realclearpolitics.com/articles/2010/08/30/why_the_recovery_lags_106923.html

How much does a ‘for sale’ home’s list price matter?

August 13, 2010

Answer: a lot … it’s the psychological effect called anchoring.

For example, researchers asked both professional real estate agents and man-off-the-street amateurs to predict the final selling price of a house.

They were all told that the current tax appraisal value of the house was $135,000.

Then, each respondent was told that the house was listed in one of four prices — ranging from $119,900 to $149,900.

The researchers found a clear positive correlation between list prices and predicted sale prices.

The amateur is responded more to the differences in list prices and the professionals — but even the pros and a $15,000 spread that can only be attributed to the differences in the list prices.

Bottom line: if you’re selling a home beach for the sky with your list price; if you’re buying a home try to ignore the list price and focus on more fundamental values like tax assessments and comparable sales

image

Source: Priceless, William Poundstone, Hill and Wang Books, 2010

How much does a ‘for sale’ home’s list price matter?

August 13, 2010

Answer: a lot … it’s the psychological effect called anchoring.

For example, researchers asked both professional real estate agents and man-off-the-street amateurs to predict the final selling price of a house.

They were all told that the current tax appraisal value of the house was $135,000.

Then, each respondent was told that the house was listed in one of four prices — ranging from $119,900 to $149,900.

The researchers found a clear positive correlation between list prices and predicted sale prices.

The amateur is responded more to the differences in list prices and the professionals — but even the pros and a $15,000 spread that can only be attributed to the differences in the list prices.

Bottom line: if you’re selling a home beach for the sky with your list price; if you’re buying a home try to ignore the list price and focus on more fundamental values like tax assessments and comparable sales

image

Source: Priceless, William Poundstone, Hill and Wang Books, 2010

Is the wine fine … or just high priced ?

July 29, 2010

Peer pressure influences us …  If everyone is telling you that something is good, you’re probably going to agree — or at least that’s what your brain will try to think.

And for adults, one of the best measures of what their peers like can be found on price tags.

Researchers tested just how much the luxurious feeling that comes with using a high-priced good determines the enjoyment of that good.

People were asked to sample and rate what they were told were five different wines. In reality, there were only three wines, each with a fake price tag — a $5 wine labeled $45, for example.

The results show that those fake prices carried a lot of weight: The participants thought they tasted five different wines, and the more “expensive” the wine, the more they liked it.

And they weren’t just lying to themselves: The researchers tested parts of the participants’ brains and found that when sipping a purportedly higher-priced wine, there was more activity in the parts that experience pleasure.

Excerpted from US News: The Fine Pleasures of Paying Through the Nose.  February 28, 2008 : 
http://money.usnews.com/money/business-economy/articles/2008/02/28/the-fine-pleasures-of-paying-through-the-nose.html

Hummer: Taking the high road … huh ?

July 23, 2010

Excerpted from Canadian Business: MY HUMMER, RIGHT OR WRONG, 10/13/2009

Hummer buyers don’t hate the planet-they just love their country more

Depending on where you are sitting – or more accurately what you are sitting in – the Hummer super-SUV is either

  • a shining symbol of American consumerism gone mad, or
  • a 21st-century emblem of American frontier heritage and individualism.

It’s easy to understand the first view.

The Hummer is a hulking, slab-sided truck built by the same company that makes the Humvee military vehicles; Hummers need a gallon of gas to rumble 10 miles.

The case for the latter, according to a study in the Journal of Consumer Research, is a little more complex.

Basically, Hummer owners are aware of the criticism aimed at the vehicle but drive them anyway-not despite the critics, but to spite them.

“For Hummer owners, it is possible to claim the moral high ground.”

Hummer attitudes go beyond defending the rights of other Americans to choose, to a form of patriotism.

“They think they are particularly American by consuming this vehicle.”

The “denomination effect” … it’s about spending, not religion.

July 21, 2010

Punch line: If you want to control your spending, leave your credit cards at home and only carry around big bills …

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Excerpted from NYT: A Reluctance to Break the Large Bills, March 29, 2009

A paper  published in The Journal of Consumer Research investigates the so-called denomination effect — the additional tight-fistedness people exhibit when their money is tied up in a few large-denomination bills, as opposed to many small ones.

  • In one study, 63 % of college students who had been given four quarters splurged on candy; 74% of students given a single dollar bill, pocketed it.
  • In another study, 20 percent of Chinese women given a single 100-yuan note ($14.66) chose not to spend the money on an array of shampoo, bedding and other household goods — but the rate of abstention was only 9.3 percent among women given the same amount of money in smaller notes.

“People overvalue these large bills … It’s partly a self-control mechanism — I want to hold onto it, because if I do break that big denomination, I lose track of my spending.”

The findings are especially relevant to “places like China or India that are predominantly a cash-based economy.”

Full article:
http://www.nytimes.com/2009/03/30/business/30drill.html

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Ken’s Note: Never thought of a “single dollar bill” as a particularly big denomination …

Walk clockwise around grocery stores !

July 14, 2010

Why?

Because you’ll save money.

Researchers have discovered that “shoppers open their wallets wider when moving through a store in a counter-clockwise direction.”

On average, they spend $2 more per visit.

Why??

One theory is that most shoppers are right handed … and like most basketball players, they go to their right better…. so, impulse items stocked to their right along “walls of value” are easier to grab and throw in the cart.

If you are right handed, walk clockwise and the “wall of values” will on your left,  and will be less tempting.

Source: Priceless, William Poundstone, Hill & Wang, 2010, p.149

If you’re opposed to the illegal immigration law … then boycott Arizona (Tea) … huh ?

April 30, 2010

The problem: Other than its brand name, Arizona Tea has nothing to do with the state of Arizona … it’s brewed in New York. 

Ready  =>  shoot  => aim …

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Excerpted from NY Daily News: Opponents of immigration law call for boycott of Arizona Iced Tea, April 28th 2010

Arizona’s new state law allows cops to demand citizenship papers from anyone they stop for a violation and think looks illegal.

Opponents of Arizona’s new anti-immigrant law are calling for a boycott of the state’s products – including the popular Arizona Iced Tea.

The problem: Arizona Iced Tea is actually brewed in New York.

Misguided tea fans vowed to switch to Lipton or Snapple:

  • “Dear Arizona: If you don’t change your immigration policy, I will have to stop drinking your enjoyable brand of iced tea” 
  • “It is the drink of fascists”.

Founded in Brooklyn in 1992, the firm was based in Queens before moving into a new $35 million headquarters in Nassau County last year.

Actual Arizona firms facing a boycott: Cold Stone Creamery, U-Haul and Best Western.

Full article:
 http://www.nydailynews.com/news/politics/2010/04/28/2010-04-28_ariz_law_leads_to_misfired_ire.html#ixzz0mTxCBHo1

From soup to nuts: Campbell’s turns to psychology for consumer insights

March 23, 2010

Takeaway: Consumer anxiety commonly runs high when companies discontinue iconic images — last year scores of consumers protested the redesigned Tropicana carton.

In this high-stakes branding game, Campbell’s has sided with science and will soon abandon its widely-recognized red and white labels for a design the company believes will evoke a deeper emotional response from shoppers.

To arrive at this decision, the company employed neuromarketing – an emerging discipline that augments traditional market research with analysis of consumers’ biometric responses to new stimuli.

If successful, Campbell’s approach may provide marketers with powerful new tools for understanding their customers.
 
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Excerpt from FastCompany, “Campbell’s Soup Neuromarketing Redux: There’s Chunks of Real Science in That Recipe” by Jennifer Williams, February 22, 2010.

About a week ago, the Campbell’s publicized a bold redesign of its iconic label with the assistance of neuromarketing. Pundits promptly predicted brand suicide, decrying the company for using pseudo-science.

With help from its parter Interscope Research, Campbell’s spent two years studying microscopic changes in skin moisture, heart rate, and other biometrics to see how consumers react to everything from pictures of bowls of soup to logo design.

By the end of a two-year study, more than 1,500 subjects were interviewed and tested using multiple methodologies–which ranged from traditional consumer feedback to cutting edge neuromarketing techniques.

The team used a combination of proprietary micro facial expression analysis obtained by in-store cameras, in-aisle eye tracking and pupilometry, and intercept interviews.

One brand team member explained that the type of cutting edge technology they employed enhanced traditional methods of market research.

An Innerscope researcher explains, “Companies that rely exclusively on traditional measures, focused only at the conscious level, are missing a critical component of what drives purchase behavior. The vast majority of brain processing (75 to 95%) is done below conscious awareness. Because emotional responses are unconscious, it is virtually impossible for people to fully identify what caused them through conscious measures such as surveys and focus groups.”

Many argue that the new label design could just as easily been arrived at by a savvy designer with good instincts. Perhaps. After all, understanding that a steamy bowl of soup is likely to elicit a positive emotional response isn’t much of a leap.

The end result offered many things that savvy design or consumer feedback alone could not have predicted. This fall, consumers can expect their soup shopping to be easier and more emotionally enjoyable than it is with Campbell’s current label. Flavor and style will be easily distinguished, and the familiar red logo will still be there. However, the logo will be smaller and out of the way in the scan and selection process, and the updated images will tap into emotions that consumers already associate with and want to feel about soup.

Was this a case of a mere marketing fad masquerading as science meant to mesmerize corporate clients more than consumers? Campbell’s synchronizing of careful research done by three agencies–research which triangulated two years of data gathering and statistical analysis–looks a lot like genuine science.

Edit by BHC
 
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Full Article:
http://www.fastcompany.com/article/rebuttal-pseudo-science-in-campbells-soup-not-so-fast

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Hold the burger … and just give me with a glass of water, please.

February 10, 2010

Excerpted from CNNMoney.com: The burger and beverage recession, February 9, 2010

People are holding back on buying burgers, soda and beer. So much for fast food, soft drinks and booze being recession-proof.

Sure, the worst of this downturn may in fact be over, but don’t tell that to Coca-Cola, McDonald’s and Molson Coors.

  • Coke’s fourth-quarter profit that was led by robust sales growth in markets such as India, China and Brazil. But North America revenue fell 4%.
  • McDonald’s said that same-store sales, a key measure of growth at restaurants open at least a year, rose more than 4% in Europe as well as in its Asia/Pacific, Middle East and Africa division.  But,  U.S. same-store sales were down 0.7%. 
  • Molson Coors reported that demand for its beers in international markets in the fourth quarter was frothy, with volume rising 14% thanks to healthy sales in Europe, China and Latin America. Yet, sales fell in the U.S. during the quarter.

It appears that U.S. consumers are serious about keeping an eye on their budgets … even for relatively inexpensive creature comforts such as a Big Mac or six-packs of Coke Zero or Coors Light.

“People aren’t as panicked, but they are still hanging on to their wallets pretty tight. The big question hanging out there is whether this recession has been long enough and deep enough to change consumer spending for an extended period of time.”

Full article:
http://money.cnn.com/2010/02/09/markets/thebuzz/index.htm

Who’s to blame for the lack of integrated marketing mixes these days?

January 14, 2010

TakeAway:  It’s unclear whether CPG manufacturers should blame themselves or the retailers, but the CPGs better blame something for their lack of adhering to a key marketing success pillar – integrate your marketing mix.

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Excerpted from Marketing Daily, “GMA Study: Shopper Marketing Still Siloed,” By Karlene Lukovitz, November 3, 2009

Shopper marketing continues to grow in importance for CPGs and retailers, but its effectiveness is being limited by insufficient integration with out-of-store marketing and media channels …

Overall investment in shopper marketing ( … in-store advertising, promotion and design initiatives intended to extend brand equity and provide the retailer with differentiation) is estimated to be growing at 21% annually …

Study concludes that CPG manufacturers have yet to align shopper marketing initiatives with the advertising and promotions that reach consumers at home and on the go. That results in disconnected marketing messages, wasted spending and missed opportunities to drive purchases …

Integrating and quantifying results from shopper marketing is becoming even more critical. Retailers increasingly seek to tap into CPGs’ budgets beyond trade promotions, pushing manufacturers to shift spending into ads on retailer Web sites and in-store video networks, as well as participate in retailer database marketing programs …

Study found brand preference to be the most important out-of-store factor influencing which products go on a shopping list …

The study also found that nearly half of food and beverage shoppers and nearly 60% of health/beauty and household goods shoppers purchase their preferred brands even when a less expensive alternative is available. And, 48% of food and beverage shoppers, 58% of household product shoppers and 59% of health and beauty shoppers — use coupons or price promotions to “justify buying the brands they want” rather than as the key factor driving their decision making …

Shoppers choose 59% of the brands they buy in the store, and 41% before they enter the store. This points to opportunities, even in the current down economy, to influence their brand choices before they go shopping.

For the 59% of items for which brands are selected in-store, 85% of shoppers perceive in-store factors as more influential than out-of-store marketing. After price, communicating benefits on packaging is most influential, whether for reinforcing existing brand preferences, driving competitive switching, capturing purchase when there is no strong brand preference, or creating impulse sales.

While confirming that most shoppers (81%) do research before shopping … 77% of shoppers do not take detailed shopping lists into the store. Instead, most shoppers have “mental lists” that include “brand consideration sets,” but evolve as they are exposed to more marketing at home, in transit and in the store.

Edit by TJS

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Full Article
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=116719

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Looking for a low-cost marketing research tool? Twitter may be your answer.

January 13, 2010

TakeAway:  In need of real-time consumer feedback?  Well, look no further.  Twitter evolved its search capabilities to allow “searchers” to not only track the volume of tweets, but also to assign a sentiment to those tweets.

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Excerpted from, WSJ, “Follow the Tweets,” By Huaxia Rui, Andrew Whinston, and Elizabeth Winkler, November 30, 2009

There’s a new tool that can help companies predict sales for the coming weeks, or decide whether to increase inventories or put items on sale in certain stores. It’s Twitter.

Social-media sites such as Twitter have made it increasingly easy to find out what consumers think and want without the limitations and bias associated with older market-research tools … With Twitter, users broadcast what they are doing or thinking via “tweets” … People can “tweet” about anything at any time … which allows for word-of-mouth to spread at astonishing speed. Anyone can follow a user’s messages, and tweets are easily searchable using keywords …

Executives can make accurate predictions about sales trends by analyzing tweets that mention their products or services … essentially companies can monitor their “buzz” …

Imagine a company is releasing a new product into the marketplace and has spent a lot of money on advertising to create “buzz” … the company can track the buzz, determine whether the overall opinion is positive or negative and focus on specific areas of the country. The company could track the progression of tweets during and after the product’s launch to determine whether there are shifts in opinion, giving the company a chance to react quickly if there is a problem …

If executives notice a sudden surge of tweets in New York City, signaling that people will go out and buy their product over the weekend, they may want to make sure stores in the area have enough stock. Inversely, if they notice that the buzz about the product is dying out, they may decide to put the product on sale, eliminate inventory and come up with something new.

There are some challenges inherent in collecting and sorting tweets in “real time,” or as they are being sent. Twitter returns only the most recent 1,500 tweets for each keyword-search query, so if there is a sudden surge of tweets containing your keywords, you could miss some messages …

Twitter’s advanced-search feature is capable of identifying tweets as either positive or negative … Twitter determines whether a tweet has a positive or negative attitude based on “emoticons” …

Here are a few ways companies are successfully using Twitter:  1) Take note of complaints that may help improve the next generation of products and offer customer service. Listen to what Twitter users are saying about the competition and the industry in general … 2) Identify influencers … Reaching out to these Twitterers can be a key strategy for companies when launching a new product, building a new campaign or just collecting opinions … 3) Pay attention to shifts in opinion … or emoticons … 4) Follow trending topics. Twitter has recently added a trending topics section to its home page, showing the 10 most discussed topics at the moment …

Edit by TJS

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Full Article
http://online.wsj.com/article/SB10001424052970204731804574391102221959582.html

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