Archive for December/2007

We would like to wish you all the best for 2008.

Thanks for reading, supporting and making this blog a big success. We look forward to have you on board during next year and promise to keep you updated with new trends and interesting initiatives.

Best regards.

Manuel & Ignacio
Coto & Gafo Associated

Desde la Comunidad de Marketing os deseamos lo major para el 2008.

Gracias por leer, respaldar y hacer de este blog un éxito. Esperamos que sigáis con nosotros a lo largo del año que viene. Os prometemos que os tendremos actualizados con nuevas tendencias e iniciativas.

Un abrazo.

Manuel & Ignacio
Coto & Gafo Asociados

We enclose two promotional videos. The first one is from Pepsi Brasil. A good example of how to use a special moment (in this case Christmas) for building your relationship with your customers and reinforcing your brand.

Os adjuntamos dos videos promocionales. El primero es de Pepsi Brasil. Un buen ejemplo de cómo aprovechar momentos especiales para reforzar la relación con nuestros clietnes y potenciar el valor de marca.

And the second one is a classic one that you have probably seen. It is a great example of Consumer Generated Content + Branding + Virality. This one is from Office Max and is circulating through the USA; similar examples have been developed in Europe by J&B.

Y el Segundo un clásico que seguro habéis visto. Es un gran ejemplo de Consumer Generated Content + Branding + Viralidad. Está dando vueltas por USA y es de Office Max; en España tenéis réplicas de J&B.

Office Max para USA, replicado por J&B en Europa

HAPPY NEW YEAR!!! FELIZ ANÑO NUEVO!!!

Llega la Navidad y más de media España juega a la Lotería. Es prácticamente imposible que nos toque, pero no podemos dejar de intentarlo. Ante esto me pregunto, ¿qué es lo que nos mueve a hacerlo?

La teoría más difundida es la de la Ilusión. Como dice el anuncio de la Lotería Nacional “Cada Navidad tus sueños juegan a la Lotería“. Esto es, compramos porque tenemos sueños que pensamos que el dinero de la lotería puede hacer realidad. Teoría que para mí sólo explica a lo sumo el 50% de las compras, y que además es discutible per sé (el dinero ayuda, pero en ningún caso va a dar la felicidad).

En mi opinión, el principal driver de compra no es la Ilusión sino el Miedo. Más en concreto, el miedo a que le toque a la persona que tenemos al lado y a nosotros no, habiendo tenido la oportunidad. Es superior a nosotros. No podemos aceptar que se nos haya ofrecido un décimo que alguien cercano haya cogido y nosotros no. Os doy dos situaciones que seguro habéis sufrido:

- El Décimo de la Empresa. Sí, los décimos que circulan por las Empresas y que se ofrecen por doquier. Pocos son los valientes que se atreven a no cogerlo! Sólo por no pasar por la situación de que le toquen 200.000€ a toda la empresa menos a nosotros, gastamos con total tranquilidad los 20€ de turno.

- El Décimo del Grupo de Amigos. En este caso la situación es diferente. Surge básicamente en una situación en la que a todo el Grupo se le ofrece un décimo (dígase en una comida de Navidad, una noche de copas, etc). Empiezan unos pocos, y al rato todo el Grupo se ha adscrito al décimo de turno.

Que queréis que os diga. En Marketing jugamos con motivadores, y entre los mismos están tanto las Iusiones como los Miedos. Siendo estos últimos algo más relevante de lo queremos admitir.

Feliz 2008 a todos!

Think Different!!!

Ignacio Gafo

For once I will not speak of company marketing but of Climate Change Marketing. For Climatic Change has become one the hottest spot of the year and perhaps of the years to come.

It is difficult that such a primarily scientifically subject, not immediate but affecting the medium to long term, has got so much attention in the media and has driven Al Gore to be awarded the Nobel Peace Price.

The Al Gore film An inconvenient Truth, his world tournee of Conferences and the creation of an Al-Gore´s army of Clima Speakers around the world, has lastly woken up the conscience of the world… that has today access to electricity.

This has been an extraordinary marketing example, the combination of basic evidence- the IPCC technical reports, with a powerful mass campaign –Al Gore film and Conferences, and a continuous, remembering campaign. His Army of Clima Speakers in many countries and languages.

The business community has also jumped to the opportunity. Now, many companies boast how much they are climate friendly. Not before long, the greenhouse gas emission of a product will be included together with other elements such as content or compliance with safety regulations. Climate Change has been seen as a powerful marketing element by many companies.

But insofar, the most promising idea has come from the IT industry. IT industry is, by its own nature, a reduced emitter of greenhouse gases per unit of value and consequently have come out with a fantastic idea: The industry together with the European Commission have launched the “mobGAS” initiative.

This is basically a user friendly software, soon available in all European languages, that could only be discharged in to your mobile phone, and that with the input from your daily behaviour, will tell you how much greenhouse gases you have emitted that day and give you also tips to reduce emissions. Instead of an inconvenient truth you will have a convenient SMS.

For the IT industry three pluses: First it rallies behind clima protection, second they find a niche of potential new uses for the mobile phone, last but no least, you will have to pay for your convenient SMS and so the companies will raise their profits.

Mr. Al Gore you have an SMS.

Think Different!!!

Ignacio Gafo

Nintendo is to stop its TV campaign for the Will in the UK. Big rumors are around that it will also be stopped in other countries like Spain, but it looks that it will only happen in the UK.

The reason for it is an unexpected demand that the Nintendo has been unable to meet. Thus the decision to stop the campaign for, if maintained, it will only generate more and more unmet demand.

Three things can be analyzed from a Marketing point of view:

1. What are consequences of an unmet demand.
2. If the decision is the right one
3. If situations like this can be avoided

The consequences of an unmet demand are not as obvious as they might seem. The first but not lasting one, would be a frustration in the customer that cannot the item in the stores. However, there is a second one that to me is the lasting one, which is an increased perceived value for the item. For scarcity is usually associated with value, and thus the effect.

Another decision would be what the customer will do when being unable to find the item. One logical decision would be to go for a substitutive product or brand, in case there is any! You might for instance replace one brand detergent by another, but you are unlikely to do it with a toll (no way you will take the risk of taking a Bratz instead of a Barbie).Same thing applies to Nintendo´s Wii: It has no obvious replacement, so the risk of losing sales due to a shift to competition is small.

Of course, something different would happen if the Wii is going to be purchased as a present. In this case the customer has to purchase something different and the sale is therefore lost.

Having said this, we can question if the decision is the right one. My opinion is that the positive branding effects mentioned do not compensate the amount to be invested in a TV Campaign, so the decision seems to be correct only if you have strong evidence that you cannot meet the demand.

And finally, we move to the last question, which is how to avoid these situations. I have personally suffered a similar situation and can assure you that it is very hard to. Some suggestions that come to my mind would be:

• Assure an excellent planning. It will minimize risk if properly done.

• Do your best to get a precise demand estimation. Market research + experiences in other countries + the opinion from Salespeople and Retailers are a must.

• Consider the product lifecycle and adapt to it. In case you are launching a new product always work with an reasonable overstock.

• Last but not least, be sure to be very well coordinated with your Factory and Supply departments.

In Marketing, as in life, we can and have to do our best to avoid problems and unexpected situations. However, they will show up and only a combination of creative + commons sense will work.

Comments and thoughts are welcome either in English or Spanish.

Merry Christmas to you all.

Think Different!!!

Ignacio Gafo

Si te lo has perdido, no dejes de ver este video. Un sublime ejemplo de lo que se debe hacer para consegur Publicity y Viralidad Destructivas, ¡en un tiempo record!

Para mí que han pensado:

- Si Pirellli se ha hecho famoso utilizando un calendario con mujeres

- Y todo lo que sean obras sociales nos va a posicionar como un empresa comprometida socialmente

Seguro, que si lo mezclamos y le damos un toque provocador, ¡vamos a estar presentes en todas partes!

Hasta aquí correcto. Pero el estar presente, el que se escriba de uno, no es necesariamente bueno. Sobre todo si abundan por la red y los periódicos críticas por doquier, y encima terminas recibiendo una denuncia de la Facua por discriminación de la mujer.

Think Different!!! (pero no te cargues tu marca )

Ignacio Gafo

The same product costs 41% less in America than in Europe, which is exactly the exchange rate relationship of the Euro with US dollar.

As you can imagine, the price is not published in Euros in USA, so the comparison for the customer would therefore be 399€ vs. 399 US$. Seems to be obvious that Sony has taken advantage of the fluctuation of the exchange rate, but let’s analyze other possible reasons behind this:

1. The first and most likely one is the level of competitiveness in the Videogame Industry, which is much higher in the USA than in Europe. The latter applies both to the suppliers (in USA Microsoft is giving Sony a tough time) and to the retailers (in USA they take lower margins and face much more competition).

2. The second one has to do with the Consumer Profile. As you know the Videogame is a Blade + Razor business where you lose money selling the hardware and get it back through consumables (in this case, the games). So the key is how many videogames you are to sell per customer for it will dictate how much you can lose with the hardware. Again the Americans are behaving differently than Europeans in two respects:

i. Looks that they purchase more games than Europeans.
ii Looks that they get less pirate games than we do in Europe (you can have many games but unless they are original, the manufacturer will not get any money).

3. The third one has to with the product lifecycle. You may question me, but the truth is that the lifecycle is incredibly fast, and that the Playstation 3 was actually launched 7-8 months before in the USA than in Europe. And in that time it could have lost some of its freshness and exclusiveness.

4. And the last one that comes to my mind is related to the way prices are published: In Europe we tend to include the taxes, while in America they exclude them. Thus you have to add to the 399 US$ an approx. 7 % for the taxes (they vary from State to State). Even with them, the difference will be around 34%..

To make matters worse, you do not get exactly the same. You get more in the USA! Take for instance Best Buy, where the 399 US$ Playstation is bundled with a film priced at 30€ (specifically with Spiderman in this store). Smart move by the way, for the cost of the film for Sony (who has the rights of the film) is almost zero.

Isn’t it interesting how small the world has become? I am sure that this has been happening for many years and we didn’t have a chance to know it. God bless Internet!

Thoughts and comments are welcome.

Think Different!!!

Ignacio Gafo

PS: If anyone knows what can I do for getting the PS3 in the USA and shipped to Europe, please let me now… ; )

www.Santiago Iñiguez.com, Dean and Professor of Strategy