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July 19, 2008 What can you do when your competition is beating you no matter what you do? Sue them! This is what Mattel has done with MGA in order to get rid of Barbie-killer Bratz. As I explained in “Barbie gets a new shape” Mattel had to change dramatically the deisgn of the Barbie doll in order to cope with new customer tastes and a new competitor called Bratz.
It has been more than one year since the change in the shape of the Barbie but sales were not recovering. Bratz was overselling Barbie and was close to become the best-selling doll in America! No classic marketing initiative seemed to work. Moreover, the economic recession was pushing down the sales even further. Time for the Judges to be involved then. Mattel alleges that the designer of the Bratz was working for them while designing the Bratz, which meant a violation of copyrights and intelectual work of the Company. Ethical or not (my personal thoughts are more on the unethical side), it has worked well for Mattel and Barbie, that will eventually not have to compete with the Bratz again. This makes me think of including a Fifth P to the Marketing Mix: Prosecution. Let´s see if P. Kotler agrees on this and includes it in the next release of his book... I enclose a full article form the International Herald Tribune. Think Different!!! Continue reading 'Barbie sues the Bratz (and comes up with the Fifth P)' 
July 13, 2008 Lucas Arts recently announced that they will make a worldwide launch of its new videogame, Star Wars: The Force Unleashed, on September 16. The Force Unleashed is the first next-generation game developed internally at Lucas Arts, and will be available on the Xbox , Playstation 3, Playstation Portable and Nintendo Wii. The videogame casts players as Darth Vader's "Secret Apprentice" and promises to unveil new revelations about the Star Wars galaxy. The expansive story, created under direction from George Lucas, is set during the largely unexplored era between Star Wars: Episode III Revenge of the Sith and Star Wars: Episode IV A New Hope. In it, players will assist the iconic villain in his quest to rid the universe of Jedi - and face decisions that could change the course of their destin From a Marketing point of view, this initiative is extremely interesting, for what could have become they 7th film of the Saga, has turned into a new videogame. Why have they done so? As I explained in “The Kingdom of Shrek” (cfr International Marketing for more details), where the studios are really getting money is not from the box office of the movie but from Licensing. The movie in itself is actually an excuse for launching or relaunching a License. So the question would therefore be: Till what extent do you need to develop an expensive movie to relaunch the license or can get the job done with something else? At Lucas Arts they have thought they can get it done through an innovative videogame, that includes a story-telling within it. Let me follow with some figures from the Industry. According to Price Waterhouse Coopers: • The Videogame Industry is expected to reach a market size of 46,5 billion US$ in 2010 with a 11,4% compound annual growth. • The Filmed Enterntainment Industry to go up to 104 billion US$ in 2010 with a compound annua growth of 5,3%.
Moreover, if you compare the Videogame Industry vs the Film one you will conclude that the former: • Has less fragmentation (great products can get a significant market share). • Has less intermediaries (you can work without media moguls such as Warner or Paramount). • Has a much faster time to market (the development of a videogame has nothing to do with the one of a film). So if you are able to come up with an outstanding videogame + combine it with good Licensing Business around it, the return on investment is going to be really good while taking a limited amount of risk. Add to to this an awaited story within the videogame, and you are sure to have a big hit in your hands. So far, a release of the trailer has been done on July 8th. Tons of Star Wars fans (who are also intensive videogames players to a big extent), are already queueing for the game. In the meantime, I presume that Lucas Arts is currently moving many agreements on Licensing. Be sure to that you will get a Star Wars goodie with your Big Mac! Be the Unleashed Force be with you. Think Differnt! Ignacio Gafo
June 30, 2008 Vodafone has recently launched a Worldwide Roaming Campaign based on the Image and Songs of Bob Marley. Looks that they have done a great work with it but, is it really worth? Doesn´t it make more sense to adapt the campaigns locally in order to fit better with the target Group? How far should a Headquarter go in defining ATL campaigns? Let me start with the campaign itself and the circumstances around it, before analyzing whether it really makes sense or not. The campaign has been launched by Vodafone, one of the biggest Mobile Companies in the World, that boast of having the widest International presence (directly and indirectly) in the industry. Thus Roaming seems to be a key proposition for this Company, as long as it reinforces its positioning and is used by intensive and high–end users. In order to meet its customers´expectations., Vodafone launched two years ago a differentiating roaming service called Passport, that gave the customer his local tariff + an additional set up cost while using his phone in a foreign country. This summer Vodafone has introduced some changes in the tariff (basically an extension of the countries where the Passport tariff applies), and had to do something big around it. An outstanding ATL campaign was a must!
The next decision to be taken was how to go ahead with it. Hitherto, the Headquarter decided to cover directly key locations in ATL campaigns (such as Heathrow Airport at London) while leaving up to the local countries what to do. However, on this occasion the Group decided to go with something different and launch the above mentioned worldwide campaign. The campaign had to be innovative + catchy + fresh + coherent with the values conveyed by the brand. Moreover, an additional value for handling the campaign centrally was demanded by the national companies. After checking different proposals they decided to go with a risky one: Revitalize Bob Marley and get him into roaming. Thought and done: They spoke to the son of Bob Marley, got the rights of one of Bob´s best known songs, and ask the former to sing and record it for Vodafone. The outcome is what you can see on tv, other media and Internet across Europe. Do International ATL campaigns make sense in Multinational Companies? I guess it depends. Key thing is how far a message + creativity can go internationally. In this case the results are yet to be seen. So far a lot of buzz + enthusiasm + publicity have been generated. Hope that Passport is to eventually have the same worldwide success as Bob Marley´s song! Think Different!!! Ignacio Gafo
June 23, 2008 What role does Internet have in pricing? Till what extent it can help to boost competition and plummet prices? What kind of services and products are going to be mainly affected? Let me start with two examples: 1. Purchasing a tv You want to get a new tv. You don´t have any idea about tvs. You only have an approximate idea of budget and functionality but nothing else. What would be the purchasing process?
2. Going to the vet to get your pet checked Something is going wrong with your pet. He is behaving in a strange way and sleeps more than usual. As a consequence, you are able to change your mind in the first case but not in the second one. The main explanation for this is that Internet has helped to eliminate (or reduce significantly) the Assymetric Information that you and the salesperson have in the case of the tv, but not in the case of the service. Assymetric Information is to be defined as the difference in information that the purchaser and seller have. The more Assymetryc Information you experience, the more selling power the seller have. And the more selling power he has, the more likely you are of not getting a good deal, not getting the right stuff, and paying a non-fair price for the transaction. Internet helps you in other words to make a criteria about something, by providing transparency of variety, prices, functionality and supply. Which eventually results in a sharp drop in prices. Does it have the same effect on every single service or item? Not necessarily. Assuming a minimum price (you are not to compare for instance the price of tea in two stores), the more homogeneous the products are, the higher the effect will be. This is also true for products and services where the added value granted by the distribution is limited.
The latter also applies to the product and services that are mainly sold through Internet currently and in the future. Thus products like books and trips are and will be more and more sold through Internet; while heterogeneous services or products that require and big amount of support, are likely to be sold through traditional channels. To sum up, Internet is to plummet prices in products easy to compare + where little added value given by distribution is given. Maybe it is good time to think where your products + distribution are. God Bless Internet! Think Different!!! Ignacio Gafo PS: For more detailed examples about Assymetric Information check a book called Freakonomics by S.D.Levitt + S.J Dubner.
May 25, 2008 I will start this posting acknowledging three things: 1. I do admire Steve Jobs as marketer. He is definitively one the best in the World. Apple owes much of its success to his constant creativity, enthusiasm, vision and ability to think in a different way. 2. For sure, the I-phone has revolutionized the mobile handset ant telecom market. As I will explain later, they have not been up to expectations, but they have been able to bring the smartphone industry to its 2.0 version. 3. It is always easy to analyze things after they have happened and bring out lessons. However, it is vital to analyze the facts and try to learn from them
Having said this I would like to share some thoughts about the way the I-Phone has been launched and handled during its first year of existence: • Branding is not everything. It might be for anxious early adopters + brand fanatics, but not for everyone. For sure it is something key that will make the difference and let you charge a premium price. But on top of that there has to be a real layer that supports it. In the case of the I-Phone, the brand was incredibly powerful and was supported by some innovative features + superb design. However, it also had some technical limitations that had impeded it achieving the expected sales worldwide. • The Power of the Brand differs from country to country and so should do the strategy. Seems to be an obvious statement, but it was not for Apple. They took for granted that the attractiveness of the brand was the same in Europe and USA, and evidence showed this was not the case. Europeans are not that fanatic about the brand, and applying the same strategy as in the USA has not worked so well. Lesson: The strategy has to be adapted to brand strength and positioning, in order to maximise results. • Exclusive distribution does not work everywhere. The latter made Apple to start working on a exclusive distribution basis in some European countries like Germany + France + UK. The result? As long as people in these countries were not that Apple enthusiastic, the sales were well behind expectations. This has brought the brand to a change in the strategy and to opening its distribution in other key countries such as Italy.
• Beware of handling properly the expectations. No need to explain to you the huge buzz + expectations that Steve Jobs was able to create when announcing the product at the Mac Convention in San Francisco (which could be something good if properly handled!). In this case, these expectations went too far and made analysts and bidding telecom companies for the exclusivity believe that it would go much further than it has actually gone. • Price planning to be managed with care. Hand in hand with those expectations came a big mistake in planning the right price. As you will remember, shortly after launching the I-Phone, they cut the price by almost 30%. Reasons were not disclosed but it seems that the overstock was the main one. In the end it caused such a big mess that Apple had to refund the price cut to customers claiming for it. • Beware of competition. The announcement of the handset and the excessive time to market taken since the former was done, gave an advantage to competition. The result was that competition accelerated the introduction of cool terminals such as the HTC Touch, that reduced the potential sales to be achieved. Same thing has happened with the 3G version: It has taken too long to be launched and Blackberry and Samsung have already announced some state-of-the art handsets and get part of the momentum reserved for the 3G I-Phone.
• Use PR to justify your movements. Of course it makes sense to make up your mind in a different way, mainly when you have made a planning mistake. So if you make for instance a change in your distribution strategy, silence about it (which is what Apple has done) is not the best thing to do. PR will help you to explain things the way you like!. The 3G I-Phone is likely to be launched within June. Let´s see what happens and what Steve Jobs has in mind to overcome all these points. To be continued. Think Different!!! Ignacio Gafo
May 15, 2008 I would not go that far with the statement, but I would certainly say that it has helped to diminish the decline that the The Coca-Cola Co was having within it soft drinks division, while attaining further differentiation. Structural market trends cannot be changed through launching Star Products and Brands. But the latter can make indeed make a lot of sense from a financial and marketing point of view, even in mature markets.
Coca-Cola has been struggling for years within its soft drinks division, mainly due to the sharp decline of this market in its core market: The USA. Reason for this has been a shift of preference towards healthier drinks such as mineral water, juices and energetic drinks (sure that energetic drinks are not that healthy, but people perceive them as such). Coca-Cola Co was aware of this trend and has been able to enter successfully into this new market, but also had to do something for its soft drinks. The solution has come by launching something new and aligned with what the market is asking for: The Zero sub-brand. Before launching it, Coca-cola had its regular Coke + a light one. The first was perceived as unhealthy, while the second was viewed as having a weird taste by many customers that were looking for something else. Solution for this? Coming out with something that had the best of each one: A new version that had the full flavor of the regular one while not having sugar at all. The launch was carefully thought and turned out to be a big success throughout the world: It helped to revitalize the sales the soft drink division (at least for the first six months), while bringing a unique positioning for Coca-Cola. What to do next? As a boss I had in Canon Europe once told me: “If something is working, keep on doing it and extend it to the rest of the categories”. Thus Fanta and Sprite Zero were launched. Same strategy as with Coca-Cola Zero: Big launch for the new version intended to revitalize the Fanta and Sprite categories and attain again differentiation. Results to be seen in the mid term, but are likely to be very positive for Fanta and Sprite as well. Again, they will not change the core market trend (soft drinks sales are to keep on dropping), but will have positive effects for the brand, its profits and its sales.
My prediction? Zero will be expanded to all brands of The Coca-cola Co. Aquarius Zero is to come soon! Think Different!!! Ignacio Gafo
May 12, 2008 Marvel Comics had to take the risk. It has been years of licensing its superheroes for extremely successful films made by other studios—Spider-man for Sony, or the X-Men franchise for Fox—, without really profiting from them. They are a small 486 million-a-year comic book company, that did not have the know-how and the money, so they went for a $525 million credit line, made distribution arrangement with Paramount that allows it to keep a hefty piece of the profits, and launched their first superhero movie: Iron Man.
Looks good, but will they be able to make a business success out of it? Three things will be critical for achieving it: 1. Product quality Continue reading 'Will IRON MAN dominate the Superhero Planet?'
May 07, 2008 How would you term the children of Baby Boomers born from 1970 onwards? What are their defining characteristics? How would you deal with them? What is the correct marketing approach for them? In an interesting book called GENERATION ME, Jean M. Twenge tries to address these questions. In words of the author: “Why today´s young americans are more confident, asseertive, entitled and more miserable than ever before?”
Although focused in the american socierty and being sometimes too generalistic, the conclusions and points raised in the book can also be applied to young generations from Europe and other continents. For all of us dealing with these generations and who want to analyse them (ourselves) with a critical but relaxed view, here you will find an interesting approach. Continue reading 'GENERATION ME'
May 04, 2008 Todos sabemos que Nintendo está compitiendo sólo en un mercado que él mismo ha inventado. Un mercado resultado de una inteligentísima segmentación, que le ha llevado a atacar tanto a clientes mayores de 30 años como a aquellos poco propensos a los videojuegos de acción. El resultado han sido unas ventas de su Wii y DS muy por encima de las expectativas de los analistas, mientras Microsoft y Sony están embarcados en una lucha brutal. De muestra un botón. Ayer se me ocurrió ir a El Corte Inglés de Castellana. Lo que se podía ver en la sección de videojuegos era abrumador: - El stand de Microsoft con su X-Box rebajada de precio y sin nadie ni siquiera jugando en las consolas de demostración. - El de Sony con la PS2 igualmente rebajada, y muy poca gente echando un vistazo a los juegos (que no a las consolas). - El de Nintendo a rebosar. Gente preguntado por la DS, mucha gente esperando para poder probar la nueva Wii Fit, y por supuesto la Wii completamente agotada. Wii Fit es como decía un accesorio para Nintendo Wii. Un módulo sobre el que te apoyas y que viene equipado con una serie de juegos para ejercitarte en aerobic, yoga y otros juegos de siempre como el hulahop. Un juego que enlaza diversión con otra de las grandes preocupaciones de hoy en día: El mantener la línea. Complemento que logra tres efectos al mismo tiempo: 1. Captar más clientes 2. Desarrollar a los actuales 3. Incrementar todavía más la rentabilidad de la compañía El accesorio ahonda todavía más en la diferenciación que ya tiene Nintendo, al ofrecer algo completamente diferente a lo de la competencia. Esto hace que personas del target potencial se animen a comprarlo, por el beneficio adicional que tiene. Como ha sucedido estos días, en el que se ha convertido en un regalo estrella para nuestras madres. Cosa que igualmente sucede con la gente que ya tiene la consola .Una de las claves de las mismas es poder ofrecer juegos y funcionalidades novedosas, Lo que logran con iniciativas como ésta, que hacen que los clientes adquieran el nuevo accesorio, disfruten todavía más el producto, e incrementen su satisfacción. Resultando por supuesto estas dos en un incremento de rentabilidad, al ser los márgenes de los accesorios y juegos muy superiores a los de la venta de la consola (en los que en muchos casos se llega incluso a perder dinero). Dicen que en breve Sony y Microsoft desarrollarán funcionalidades semejantes a las de la Wii. Veremos si es verdad y cuánto tiempo tardan. Esperemos por su bien que se den prisa, que si no se van a encontrar con un mercado saturado y fidelizado. Think Different!!! Ignacio Gafo
April 08, 2008 For being able to write about the Wedding Business you either have to work in the industry or have gone through the marriage process. I have personally gone through the latter recently, so I cannot stop myself from writing about it... If I would have to summarize the message that the couple (customers) get all the time it would be: Because it is only one time in your life (at least hopefully!). You tend to think so and everybody reinforces the idea, so you eventually get deeply emotionally involved, and jump into an emotional thinking with no space for the normal behaviour and rationality (for sure there are exceptions, but most people fit into it). This emotional thinking makes you accept things that you would never do under normal conditions, specifically in two areas: 1. Pricing Some months ago I saw a brilliant tv Spanish program. Two actors with a hidden camera went to a catering place. They explained that they were planning to get married in short and would like to get a budget for X people with a Y menu. They got a budget of Z € for it. Some days later, another two actors from the same program and a hidden camera went to the same place. They asked for a budget for a business lunch, with the same meu, locations and number of guests as the former couple and guess what???!!! The budget they got was X/2. How is this possible? How can they charge you the double if you say you are to get married? Simple: Because it is only once in your life! Or in other words, you are so immersed into an emotional thinking that you just want things to be perfect. So if you find a place you like, you become completely insensitive to price. Something similar applies to the dress of the bribe. On average you will pay 3.000 € for it in Spain. 3.000€ for a dress you are only going to dress once in your life! If they would ask you if you would do it under normal circumstances, you would certainly say no way. But if you are in a Wedding, the uniqueness of it will make you agree with it. Funny thing is that not only you become insensitive to pricing, but also take for good bundled services that are not necessarily the best. In normal life you have the freedom to choose your suppliers. You select them according to the price and quality of the service that they offer to you. You might take bundled services, but only upon getting additional benefits such as discounts. And again, no way for them in the Weddings! In most places, you take the place and have to contract as well the rest of the services. You might for instance decide to get married in a nice location. A location that you can only take if you also hire the services of The Catering, The Photographer, The Musician, The Buses, The Video Producer and the XXX that they have an agreement with. Therefore, no choice for the couple. The Location comes with a bunch of services and unless you take the whole package, there is no deal! Unfair, but most people decide to take the whole package. I could also be writing about other related things such the Wedding Lists and the Honey Moon, but this posting is becoming too long and something should be left for further discussions. Think Different!!!! Ignacio Gafo
March 30, 2008 The triumph of Sony´s Blu-Ray is a demonstration that an outstanding product is never enough. Because, as it was demonstrated with the Betamax and Blue-Ray Stories, unless you accompany it with a winner Marketing Strategy, you will not make it. Let me make a quick summary of the Betamax and the Blu-Ray stories: In the 80s Sony came up with an outstanding format for the videorecorders called Betamax. It was an state-of-the art technology, far beyond the one they were competing with: VHS. Sony thought that the product quality in itself was enough to win the format battle, and did not put in place a Marketing Strategy to get it fully supported. The result was that the VHS format became the mainstream and the Betamax has to be abandoned. More than 20 years later Sony was facing a similar situation: The standard for the high definition was at stake. They had their own format, the Blu-Ray, which was competing with another one developed by Toshiba called HD-DVD. One month ago, Toshiba announced that it would abandon the production of the latter. The main reasons for this are not to be found in the product quality of Blue-Ray, but on the Marketing Strategy defined and implemented by Sony. Good for them that they have learned of their mistakes. These are some the key points that they put into place: 1. Hardware manufacturers support The first thing to get was the hadware manufacturers support. Both Sony and Toshiba ran to get it, but Sony was smarter. In the case of Sony they made a huge lobby and ran intense negotiations to get the full support of the PC and DVD manufacturers. The result was that Dell, Hitachi, Hewlett-Packard, Panasonic, Pioneer, Philips, Samsung and other IT equipment producers, announced publicly that they were to support this format and produce based in it. The outcome has been that they have been able to put into place in the market an increasing and significant installed base of Blu-Ray performers. The second thing was to get the Content Companies producing according to their format. One of the reasons why Sony decided to enter into the Content Market was to be able to push its own formats against competition. This was clearly shown on this scenario. Good start but not enough. It was also key to get the support of other Content Companies for, not only you need people to get your technology, but also to be able to find the movies and games they want to play exclusively in your format. Thus they managed to get Electronic Arts, Vivendi, Metro-Goldwyn-Mayer and Walt Disney on board from the beginning assuming, as it happened, that other content producers will follow little by little. In parallel, a long-term strategic management of their product portfolio took place. The first step was taken, as explained, by getting into the Movie Business. And the second and most crucial one came with the Playstation 3. They made the decision of incorporating in the PS 3 from the beginning the Blu-Ray, to assure of massive installed base. This was heavily criticized by analysts for the production delays it generated (the PS 3 had a launch delay of approx. 8 months), but have turned out to be absolutely key. Not only for the Blu-Ray in itself, but also for the PS 3 that is now positioned as the console of the future thanks to the former. And last but not least, they have come up with something that we tend to forget: The first to communicate is the first to launch (check this posting in the IE MK Weblog for more details). They have therefore launched an ATL campaign where they clearly state that Blu-Ray has become THE HD-DVD technology and that it is produced by Sony. Smart thing by the way: They get the message across and grant Sony´s Brand with additional premiumship. Congrats for Sony. They have demonstrated that an outstanding technology is never enough. A holistic Marketing Approach is the only recipe for success. Think Different! Ignacio Gafo
March 21, 2008 Estaba claro que algo más tenía que hacer Starbucks. El gigante con pies de barro que han creado con la sobre-expansión se ha tambaleado con la crisis económica. En USA arrancaron esta Navidad con una campaña de tv de dudosos resultados (ver posting "The Word of Mouth is dead, right Starbucks?), y ahora le toca el turno a Europa. Tiene razón Mr Schultz en que Starbucks tiene que frenar su expansión y concentrarse en sus clientes. También le diría que reinventarse, adaptarse al perfil de sus clientes en cada país, y por supuesto volver a ofrecer un producto de calidad superior.
Think Different!!! Ignacio Gafo Continue reading 'LA EUROPEIZACIÓN DE STARBUCKS'
March 18, 2008 Following up with Manuel´s posting on Mobile Marketing, I will write a new Image Search for Mobile Phones called Otello. This new solution, recently launched in Germany, works in the following way: Instead of entering a word or phrase users send pictures via MMS (Multimedia Messaging Service) from their mobile phones.
The picture can be anything from a historical building to a CD cover.Otello then returns information relevant to the picture to the mobile phone, just like a normal search engine. The reason why behind image search is that it's more convenient to take a picture than to enter search terms with a phone that lacks a normal keyboard. A trial is being held with German paper Bild. Readers can find out more about specially-marked articles by photographing them with their mobile phone camera and sending the image to Bild. This gives the reader access to additional multimedia content, such as photos or videos.
The next step for the service remains to be seen. The real life applications + the availability of the service for all carriers will determine how far it will go. My guess is thatt this new solution will get its momentum and will replace other Mobile Marketing Solutions such as Bidimensional Codes. Time to time. Ignacio Gafo
March 04, 2008 As you can deduct from previous postings (take for instance “Getting protected from the EU”) I am a firm defendant of the lobbies. Lobbies are indeed one of the most powerful tools your organization has for affecting and controlling the environment. But, how do we do handle lobbies in Spain? In the article enclosed, Mark Mulligan writes for the Financial Times how they work in Spain, and how do they manage to influence politicians.
I enclose the full article. Think Different!!! Ignacio Gafo Continue reading 'How do Lobbies work in Spain?'
February 24, 2008 Ahora que el tiempo ha pasado y las emociones se han enfriado, creo que es un buen momento para hacer una valoración objetiva de los efectos de patrocinar a Alonso en Fórmula 1. Y nada mejor para hacerlo que una investigación de mercado, en este caso una de Optimedia, cuyos resultados han llegado a mis manos. El estudio se hizo el año pasado en España a una muestra de 1.045 personas.
• Tres de cada cuatro españoles recuerdan al menos una de las marcas que patrocinan a Fernando Alonso. Más en concreto encontramos lo siguiente respecto a Vodafone, Mercedes y el Banco Santander, tres de los principales patrocinadores: • Vodafone es especialmente recordado entre hombres jóvenes, urbanos y de clase media alta y alta.
• En Vodafone: El 27% de los encuestados tiene una percepción mejor o mucho mejor después que antes de la marca, versus un 4% que tiene una peor.
Sigo pensando que el Patrocinio es una actividad con efectos hasta cierto punto no controlables (de muestra, Alonso) pero que, bien manejada y respaldada por otras acciones de comunicación, puede generar efectos muy beneficiosos en notoriedad e imagen de marca. De hecho tanto Vodafone como el Banco Santander y Mercedes han decidido seguir a bordo, aunque también es verdad que tienen mucho que ganar fuera de España. Seguiremos escribiendo sobre el tema. Estoy seguro de que dará mucho de qué hablar. Ignacio Gafo
February 20, 2008 What makes the difference between a cool technology and a killer product? I am sure you know about tons of disruptive technologies that never went mainstream due to the lack of marketing ability of their inventors... This is not the case of Spinvox, a british start-up, with which I have had the pleasure of working very closely with in the launch of their service in Spain. In the video enclosed you can get an insight of their story and some of the keys for their success: It does not seem to be quite a big issue right? But there are some key learnings to consider: No need to do anything big. Just take care of your customer, go step by step, be selective with your market and distributors, and and never stop innovating. SAY IT. SEE IT. LOVE IT. That´s the Spinvox way.
Ignacio Gafo
February 17, 2008 The American primary elections of the candidates of the Democratic + Republican Parties are being one of the most interesting ones in the history of American democracy. And above all, an excellent lesson of how to do political marketing. I guess you know how the primary elections work: Each main party, the Republican + the Democratic, have to choose their candidate for the General Election. Candidates are voted state by state, and the one most voted is the one that represents the party. So far it has been impressive for the strategies and tactics employed, specially by Hillary Clinton and Barack Obama from the Democratic Party. In this posting I will focus on what I think it is making the difference: Segmentation + Positioning. Nobody believed in the beginning in Obama. Everybody thought that Hillary was to be the clear winner and, in case there would be a rival, that would be Mr Edwards. Big mistake as you know. HILLARY CLINTON basically positioned herself as an experienced Executive being able to tackle with Americas core problems and put into practice what was needed to bring back America as the world ruler in the political and economic arena. Her main credentials were therefore EXPERIENCE + EXECUTIVENESS. She definitively thought that those values combined with a well-known brand (CLINTON) would be broadly appealing. In addition to that, and in order to be sure that she maximised the potential votes in every State, she adapted her message and proposals to some minorities that could make a difference in the end of the day: Women + Latinos (no need to address explicitly to blue collar people, they will support her no matter what). 1. It has been able to touch the heart of Americans, to awaken the illusion of those that want something different. 2. It has been able to position himself in a place were no other candidate can be: The only one with no clear political links and able to start something from scratch. 3. It has delivered a mass market message, that goes beyond segments and even political thoughts. Sure it has helped him to position quite well within black people + young voters + white people highly educated, but also to attract independents + centre oriented Americans. Furthermore, it has also being able to attract part of the segments that Hillary was sure to get for they do not feel identified with her too vague message (what is appealing for a Latino of California does not necessarily work for a Texan Latino). Obama is likely to win. He has been able to go with a unique positioning + mass segmentation that is driving the difference. Mrs Clinton is now doing her best to kick back. Her main tools are now disqualification (she is openly criticizing him for his incompetence for ruling) + trying to go with another segmentation (not based in demographic variables, but in concerns such as the economic crisis or the American defence policy). In other words, she is trying to succeed by doing things in a different way + using one of the last resources you have in Marketing: Appealing to Fear. Let´s see how this end up. So far, my vote goes for Mr Obama and his think different political marketing approach. Think Different!!! Ignacio Gafo PS: Whathever it happens, I am curious about what will be done when either Hillary or Obama becomes the Democratic candidate. At that point the reputation of each candidate will have been deeply attacked by the other, and so will be Brand Asset that the Democratic Party has. I will write again about that then.
February 03, 2008 Today, NESTLE, published the following announcement in the front cover of many well-known spanish newspapers (El País among others):
The advertising announces a new web site and invites every single reader to get registered and get some prizes in exchange. To me, these are excellent news for they confirm that a New Marketing is here. A New Marketing where two elements are key: 1. A new customer Approach.
Every single Marketing textbook insists that an organization should be customer based. Whatever we do, whatever we offer, whatever we communicate should always consider what is best for the customer. Long-term successful companies have been those able to understand the customer and adapt to hm. So far things have not changed: The customer should be the king and our organization should be obsessed in satisfying him profitably. However, the new customer has changed dramatically. The new customer is better informed (God bless Internet), knows better what he wants, has many alternatives for satisfying his needs and, what is more important, wants to have say. Therefore the customer approach has to go beyond selling. It has do with building a long-term relationship with your customers, creating a strong emotional link with him and introduce measures to keep him loyal and satisfied. As a result, CRM and Loyalty Programs are a must. Your company will not last long unless you measure systematically your customer satisfaction and let him have a say regarding what he wants or deserves. 2. THE INTRODUCTION AND IMPORTANCE OF NEW MARKETING TOOLS On top of Digital Marketing, you have Mobile Marketing. From my perspective, it is a third tool that goes beyond what are now traditional Marketing Digita Tools. Properly handled, it is one of the strongest communication tools that your company can have. Its straightforwardness + cost per impact + immediacy make it extremely powerful So what is so interesting about www.NESTLE.es and its advertising campaign? That it is a clear evidence that what I have written about are not words but a reality. The campaign puts the focus on Digital Marketing, clearly bets on getting the data of their customers for being able to treat them personally, and gives a hint that they are planning to go ahead with Mobile Marketing (they ask for you mobile phone when being registered). I presume that the campaign will work well for NESTLE. They seem to be combining the right elements to be successful + provide an incentive for the customer to share their data with them (although I would personally have given stronger incentives…:o) ). New times for Marketing are coming. Don’t forget asking yourself where you and your Marketing are. Think Different!!! Ignacio Gafo
January 27, 2008 If you are currently working in a growing company that needs to hire talented people, you will surely agree with me, that TALENT is becoming more and more difficult to find. Finding the right people, with the right talent and brisk of what is called a genious, is becoming a kind of mission impossible. Much is at stake for the future of our company is at risk. Thus the quesion: What can we do about it? The supply side is beyond our scope. Young generations, their values, their culture and their education are something in which the companies do not have a say. I remember speaking to a Top Executive from a well-known japenese multinational company, that complained that most of new japanese graduates were unable to do team-work and think by themselves. However, he admitted, there are exceptions and his company had to whatever it was necessay to get it recruited. Traditionally, the role of hiring new Talent has been allocated within Human Resources, that should come up with attractive salary package + a well defined career path to be sold to new graduates at University. Unfortunately, due to the scarcity explained, this has become more a hygienic factor for getting talent than a determining one. I.e., you can have nice packages and career plans, but unless you make some Marketing you will either fail to get Talent or will have to pay more than others to get it. Within the Marketing to be done, I would say one the most critical variables is Branding. Branding has many benefits for a company, among others the ability of creating an emotional link with your target group (aspirational and a sense of proud among others), and being able to charge a premium price for something which might not the best. (which in the case of hiring people is translated into being able to hire the best without paying the most). American Companies are aware of it and invest a significant amount of money in Branding themselves among their targeted talented people. Take for instance the amount of activities and donations that both Microsoft + Google make in Stanford, or the Ranking that Forbes keeps of “The 100 most desired companies (USA) MBA students want to work for”. Or if you prefer, go through a selection process in one well-known american company, and you will be told that it is within the referred ranking, and the reasons for that. To sum up, excluding top American Companies that are aware of this, there is no systematic effort done by Asian, Latin American or European companies to create Branding for Talented People and measuring it. The cost of opportunity of not doing so is huge and, if we don´t go ahead with it now, our companies will suffer the scarcity either by paying more than we should for talent, or being managed by people that lack it. Maybe it is time to create a ranking of “The 100 most desired companies (European) MBA Students want to go for”. Ignacio Gafo
January 20, 2008 One quick response would be that it depends on the Industry you are in. So if you are in the IT or electronic one, you would say yes for cost reasons; and if you are in the FMCG you would say no for it is not usual to do so and savings are discussable. Whichever the Industry, the reality is that the economic globalization is pushing more and more companies to outsource production for they do not have a real chance. Prices are going so low in some countries like India or China, that there is no point producing in our own countries. So, what shall we do in these cases? Do we have a real chance to survive in the mid and long term? As some smart companies have shown, the answer is yes if you are able to comply with two things: 1. Keep product quality under control. Let me share some some real examples that will bring some light into the discussion: 1. Mattel: We have already written and discussed about it. They outsourced manufacturing in China, but have suffered dramatically for not implementing quality control measures. Both the financials and the brand image suffered due to this flaw. 2. HP: One the smartest companies that I know, I have to admit. They outsource most of the production to OEMs, but have been able to keep in most of the markets where they compete. Reasons for this? They have kept for themselves key sources of competitive advantages such as Design + R&D in new technologies + software. 3. Nokia: Hybrid production. They outsource of low end models where they do not have a chance to be competitive, and reserve for themselves the production, design and R&D for mid and high-end companies. 4. Samung + LG: For many years they have been unknown manufacturers of tvs, video and camcorders for well-known Japanese companies. The latter gave them too much control (including design + R&D), that ended Samsung + LG competing successfully with their old Japanese customers. 5. Verizon (and most of the leading telecom companies). They outsource non strategic processes and services (such as Telesales and systems mantainment), but keep for itself the key ones. You will agree with me that globalization is strongly leading to be specialized in key things and outsourcing the rest of them. However, we have to be careful for we might ask others to do for us something that is making the difference in the end of the day. Think Different!!! Ignacio Gafo PS: Special thanks to my Global MBA Group from Sept 08. They have driven a Product Management discussion very far and have led to this posting. Some of ideas + points are from them. PS2: Video one is telling a real outsourcing done in Springfield. Video 2, what we will be up to if the American Studios outsource their series to India
January 04, 2008 Yes, you are reading it right: If you want to go for an I-Pod Nano in Blue, Black or Green you have to pay 50€ more. To be more precise, the I-Pod Nano of 4 GB (priced at 139 €) is only available in a boring grey; the cool colors are only available for the I-Pod Nano of 8 GB, priced at 189 € in the color mentioned… You want it Red? Then you have to go the Apple Store where they sell it in exclusivity.
Apple again is innovating. I am not sure if the promotion will work or not, but it is fair to admit that these guys from Apple never stop thinking different. In particular there are three things that I regard interesting about the promotion: 1.They are pushing the customer at the Stores to get the pricey option for getting the cool colors. Something likely to happen as long as the target group is looking a cool and outstanding gadget. 2. They disregard potential channel conflict and offer an exclusive product variety at their online store. They can do it for they have such a strong demand for the I-Pod that no store can permit himself not to stock one of the hottest presents for Christmas. 3. They are launching a worldwide promotion at Christmas through all their online stores (I have only checked the ones of Spain, USA and Italy, but it looks that it is the same everywhere). I realized about this the other day when I was going to get one 4GB I-Pod Nano for my Sister at PC City. What was really amazing to me was the Salesperson informed me about the product availability and recommended me to go to the Apple Store if I wanted the red one! What will be next? I guess that they will launch the 16GB with exclusive cool cases, that will cost you 50€ more than the “old-fashioned” 8 GB. Think Different!!! (Think Apple!!!!) Ignacio Gafo
December 31, 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 |
