What Can Abercrombie & Fitch Teach Us About Crisis Communications?

 

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Abercrombie and Fitch is a 100+ year-old purveyor of fine sporting goods and accoutrements for the discerning outdoor enthusiast. It was a venerable old name with a storied past, known and patronized by legends such as Vanderbilt, DuPont, Kennedy, Morgan and Melon. The place once famous for selling waxed-cotton hunting jackets, snake-proof boots and the world’s finest fly fishing rods to the down East, old money set, now sells skinny jeans and Chinese sourced t-shirts to Millennials and Gen-Xer’s who still live in their parents’ basement.

 

Abercrombie & Fitch began in 1892, and despite Fitch retiring in 1928, the company continued to grow and prosper well into the 1960s. In 1977, filed for bankruptcy and would not completely recover until more than ten years later. In 1988, Abercrombie & Fitch was bought by The Limited Group in Columbus, Ohio. The company remained true to its roots for about a year after the acquisition at which time The Limited in its infinite wisdom shifted the focus away from outdoorsy clothes and sporting goods to “casual yet fashionable lifestyle clothing targeted to teens and young adults from upper-middle income families”. (Tanner, n.d.). In my personal opinion, changing the brand was their first mistake. The market for clothing like that sold by the current iteration of A&F is fairly well saturated. However, their old model would have only had to contend with LL Bean to a degree, Orvis and Filson.

 

 

The “new” Abercrombie & Fitch is no stranger to controversy.   The company has a laundry list of faux pas and boo-boos that flirt with the generally accepted line that we who adhere to social mores usually don’t cross. The fun started in 2002 when A&F introduced a t-shirt that was considered by many to be blatant stereotyping and offensive to Asians, creating an outcry of racism from the Asian community. Abercrombie’s ham-fisted response to the furor was that “we probably thought Asians would love these t-shirts. [Insert deadpan straight face from me with cricket sounds in the background]. This PR tour-de-force was followed up in that same year when Abercrombie introduced a line of thong underwear in kids’ sizes. Naturally once word got out, every mother’s group in the country went from zero to DEFCON 1 is 2 seconds flat. Abercrombie’s response? “They were intended to be light-hearted and cute”. (Reiss, n.d.). [ Insert that same dead pan look from me, only now I have one eyebrow raised].

 

The problem.

 

Those minor debacles were only the beginning. Once Mike Jefferies started running his yapper and making incendiary comments that he “only wants young, beautiful and thin people to wear his clothes” , a little chunk of Hell broke loose. And if that weren’t enough, Jeffries went on to put the cherry on top by telling an interviewer that the secret of the company’s success was that “we go after cool kids…a lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.” (Temin, 2013).   At the time, Salon Magazine was fairly new and the resulting outrage was minimal. However, with the Internet being what it is, old stories you wish would die, never do. They always come back to bite you.

 

 

Here is the charming CEO of Abercrombie & Fitch.

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Oh wait, I’m sorry…that’s the wrong picture.  My bad.

 

THIS super-attractive male-model shown below was the actual uber-charming, CEO of Abercrombie & Fitch [he left some time in 2014].

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As luck (or fate) would have it, Robin Lewis the author of “New Rules for Retail” was being interviewed for a 2013 article in Business Insider when she brought up the Mike Jeffries interview.   She stated, “Teen retailer Abercrombie & Fitch doesn’t stock XXL sizes in women’s clothing because they don’t want overweight women wearing their brand…”. That’s all it took for the subject to be revived. The blogospere immediately ignited, Change.org circulated petitions, Facebook was alive with creative memes about pots calling kettles black and similar remarks, press and late night talk show hosts were all over this thing, and it all happed under the assumption that Jefferies had just made the comments a few weeks prior, not 7 years ago. This time Abercrombie had an actual crisis on their hands. People boycotted the stores, stock price fell, as did sales, and something had to be done (Temin, 2013).

In the face of this smoldering problem igniting into full blaze, the company was silent for far too long. When they did eventually speak up, they let the ever so eloquent and media friendly Mike Jeffries take to social media with half an apology.  He released a statement that said, among other things, “I sincerely regret that my choice of words was interpreted in a manner that has caused offense.” (Fairchild, 2013). This, as you may have guessed, was the proverbial gas on the fire.

 

The real problem.

Mike Jeffries went through the motions of apologizing, but people aren’t stupid. It’s very easy to read between those lines. “I regret” does not equal “I’m sorry” there is no real contrition or actual remorse in those words. Similarly, he regrets that “his choice of words was interpreted in a way that has caused offense”. This statement is a clear deflection of blame. In other words he may as well be saying “I didn’t mean what you thought I meant, YOU interpreted it all wrong”. As it turns out, the company, and certainly Mike Jeffries would have been better to stay silent, as the campaign of pure hatred that ensued would be enough to make Satan himself blush.   When the whole internet turns on you, you know you are screwed.

What should they have done?

 The truth is, Abercrombie is a niche marketer and as such does not, and cannot cater to everyone. We know that, and they know that, but everyone doesn’t have to know that. Obviously not saying offensive remarks in the first place will do wonders for keeping the crisis management team from excessive drinking and reinstating their old smoking habits.  However, once the “situation” has presented itself, it behooves the company to face it head on, with great haste and with great honesty. If Mike Jeffries came out and said, “Hey, I messed up. I just don’t know when to keep my mouth shut sometimes. Look at me, I’m no prize. I have undergone untold thousands of dollars worth of plastic surgery and I still look like the banjo boy from Deliverance”. He would have bought some goodwill with that self-effacing and more humble approach, but he had to remain arrogant and that was a big mistake that would ultimately signal his downfall.

An article in Entrepreneur spelled out 8 simple steps that can be taken to have a PR nightmare turn out more like Tylenol and less like BP.

 

  1. Regret, restitution, reform, recovery.       These steps need to be taken in order, and very quickly. Don’t let any grass grow.
  2. Suppress your emotional reactions.  (I’m looking at you Mike Jeffries).
  3. Define the problem.
  4. Create structure and process.
  5. Reveal character first, story second.
  6. Prepare for social media terror.
  7. Make reform convincing and advantageous.
  8. Believe in recovery.

(Reiss, n.d.).

 

Obviously each of these 8 steps has a rather lengthy explanation that would make it so none of you would even glance at this article past opening it. The simpler explanation, and what I would have tried to accomplish for A&F is to acknowledge the problem immediately, take full responsibility for it, express sincere remorse and then attempt to make the solution to the problem beneficial to the constituency and the company. Sitting on the story makes you look guilty, and incomplete or muddled communication only acts to compound the situation. United Airlines could learn a thing or two from this story. It’s just like all of our parents tried to tell us when we were growing up; honesty really is the best policy–and when you tell the truth, you always get in less trouble.

 

 

Your pal,

 

Steve

 

 

References:

 

Fairchild, C., (2013, May 16). Abercrombie and Fitch’s semi-apology didn’t go over too well. Huffington Post. Retrieved from http://www.huffingtonpost.com/2013/05/16/abercrombie-fitch-ceo-controversy_n_3286502.html

 

Reiss, C. (n.d.). The PR crisis playbook. Entrepreneur. Retrieved from http://www.entrepreneur.com/article/217190

 

Tanner, L., (n.d.). Abercrombie history [Weblog post]. Retrieved on October 7, 2014 from http://www.ehow.com/facts_5325703_abercrombie-history.html

 

Temin, D., (2013, May 5). How a ceo can wreck a brand in one interview: Lessons from Abercrombie & Fitch vs. Dove. Forbes. Retrieved from http://www.forbes.com/sites/daviatemin/2013/05/13/abercrombie-and-fitch-v-dove-or-how-a-ceo-can-wreck-a-brand-in-1-interview-7-years-ago/

The Queen Mother Of ALL Web Metrics!

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Oh my gosh! What could he be talking about? Page visits? Probably page visits. I bet it’s page visits. Or maybe visitors. Yeah, that’s got to be it. This is so exciting, I can’t wait!

Well kids, I’m glad you’re so enthusiastic. I want to tell you a little something about a web metric that is in my opinion, and without unnecessary hyperbole, the greatest web metric ever to be conceived by mankind in this, or any other universe. That’s all. No big deal. However, before I get to the big reveal, let me touch on the topic of web metrics in general for just a sec.

What Exactly Do They Mean By “Web Metrics”?

It’s pretty simple actually. A web metric is a quantitative measurement of statistics that describes an event or trend on your website. Clear? No? Basically web metrics are numbers that measure things. Between Google Analytics and several of the other analytics tools available today, you can measure practically any aspect of your website. Some of the metrics will be simple counts that are merely basic units of measure, like number of visits or unique visitors. You are essentially just counting events. Other metrics are derived by calculating as a ratio or a rate, such as page views per visit, or bounce rate. So web metrics ultimately measure website events and seek to illuminate trends so you can know what is going on with regard to traffic sources, how visitors are responding to your content and calls to action –all kinds of stuff! Pretty cool, eh?

The Queen Mother of All Web Metrics.

Before I reveal my favorite web metric of all time, let’s think about it for a minute. If metrics measure things, in this case, web “events”, what could we measure that would make me (or anyone) this excited about it? Could it actually be visits? Visits are great, and visits can tell you the kind of activity volume you are enjoying (or lamenting, depending on your situation), but beyond that, what does it really tell you? Could it be bounce rate? It very well could be. Bounce rate is a pretty informative metric that can tell us where we have problems, where our best traffic comes from, what our best search words are, and best of all, it measures a customer’s behavior! But yeah, it’s not bounce rate. So, do you give up? Not even a guess? Ok, I will tell you then that for my money, CONVERSION is the top-dog metric in all of web analytics-dom. There it is.

Conversion!

Yippee Kai-yay, cowboy! Now we are measuring something good! Of all the things you can measure, conversion rate is one of the most important, if not THE most important. Why? Because conversion rate is the percentage (remember those derived metrics?) of people who achieved one of your goals or performed one of your important actions on your website. Conversion rate is measuring the all coveted holy-grail of web actions–behavioral change. It’s not (always) enough that visitors just show up at your website door, we want them to DO something while they are there. You’ve got people , real people, jumping through your hoops, and you had better be measuring their actions, Buster.

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Everything Can’t Be A Sale Though.

Oh how we wish that weren’t true, but it’s just the way it is. Naturally if you’ve got an ecommerce site, your ultimate focus is on converting potential customers into buying customers. That’s all well and good, and frankly something you should be concerned about, but it may surprise you to know that there are other kinds of conversions you can experience and then still be super-happy. While conversion to a sale is undoubtedly the big kahuna here (or macro conversion, as the eggheads call it), there are many other customer actions worth looking at. These somewhat smaller kahunas are known as, you guessed it, micro conversions. Micro conversions can take place on commerce sites, and non-commerce sites alike. They are simply measurements that indicate customers are reaching certain of your predetermined goals. But in this case, those goals aren’t necessarily sales, or even the creation of sales leads. Instead, micro-conversions are going to be goals that help build relationships with your site visitors, and can very well (but not always) contribute to macro-conversion, or the big kahuna, somewhere down the line.

Micro-conversions could also be something completely unrelated to sales such a when a job-seeker visits your “careers” tab to look for an open position. If they complete an online application while they are there, that’s a micro-conversion! That means your site is working like it should be and is changing behavior. Similarly, visitors who create an account, sign up for a mailing list, download content, or leave product feedback have all completed micro-conversions and you should be happy as heck about it because YOU brought that action about. Yay you!

Micro-conversions. So?

It has been said by many practitioners of the analytical arts that nobody just shows up at a website and immediately converts to a sale. Yeah sure it happens occasionally, but the rule more often than not is that potential customers convert in several smaller ways, before they ever convert in the big kahuna way. You will really only discover the path to your website’s success (macro-conversion) if you measure the process that users engage in and use it to understand what it takes to lead them through the funnel It pays to learn how customers react and interact with your site. At the end of the day you end up with a better picture of your type of customer and a more solid understanding of their behavior, and potential behavior—both of which contribute to a potentially more successful customer acquisition scheme. It never hurts to know as much as you can about your customers, both current and potential.

Micro-conversions can give you clear insights into what you are doing right, and what people are interested in. If you produce a ground-breaking masterpiece of an informative white paper, and 8 out of every 10 visitors download that content, you are doing something right my friend. Now go do more of it! You’re engaging people with your sparkling content and you should keep that up. Also, if you are segmenting like you should be, you can understand which referring sites are providing you with top converters and which are sending you the duds. Just knowing those simple facts can save you untold marketing dollars! Same thing goes for keywords, social media campaigns and other content.

Conversion: The Super Metric!

The key to online happiness is found when you have honed your site’s efficiency to a razor’s edge, and monitoring both macro and micro-conversions can act as the whetstone you need in order to get there. In both cases (micro and macro) you have created a customer who is engaged in your content, and who has changed their behavior by responding to your marketing genius. You should be proud of yourself! I know I am.

Your pal,

—Steve

If you liked this article, I cordially invite you to check out my other blog.

The Mad Marketeer

Follow me on Twitter @SteveGeibel

RUSH: Living In The Social Media Limelight.

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Beyond the Gilded Cage.

In 2016, it doesn’t take much looking around to find companies who are absolutely killing it on social media in general, and Facebook in particular. Brands like Red Bull, Warby-Parker and Target are redefining how content marketing can be done. However, social media savvy and content genius aren’t the sole property of Fortune 500 companies and brands with everyday names. In fact, they can be found being executed by organizations one might least expect. One such example can be seen in the case of the Canadian progressive rock band RUSH as they prepared for their 2015 35 date, 40th anniversary tour aptly named, R40.

Mounting a 35 city tour of that magnitude in 30 thousand-plus seat arenas and with ticket prices ranging anywhere from a mere $40, up to $10 thousand a pop is no small feat. When combined with merchandise, signature instrument sales, music box sets, and DVD box sets, a tour of that stature can net more than the GDP of some small countries. It then becomes incredibly important to get the word out and create as much buzz as possible as quickly as possible, because the majority of that revenue activity takes place between the months of May and September. RUSH’s social media team has been deftly doing that very thing for a long time.

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RUSH maintains a Facebook page with over 2.8 million loyal fan “likes” and a Twitter page that has a somewhat less impressive, albeit still hefty 200,000 followers. Their social media strategy is fairly brilliant in its simplicity. They provide eager fans and followers with up to the minute news and content that they are very interested in with at least one major post per day, if not more. However, the frequency of their posts are not what brings people to the Facebook page, and subsequently the RUSH main website and with any luck, Ticketmaster– it’s the excitement of the content. RUSH never blatantly states “hey, come to a show”. Instead they post glowing reviews from past shows, both professional and amateur photos of the band in action, behind the scenes videos about the tour and about some of the unsung people working outside of the limelight. RUSH is essentially telling a story, day by day, about what it takes to put on a show of this magnitude, and how exciting it is to attend one in person. Stories are how people make sense of the world, and these stories allow the uninitiated to get a glimpse beyond the lighted stage and into the unbridled excitement that surrounds a RUSH show. Ultimately, the RUSH Facebook page and other social media outlets are following one of the most important rules in all of Social Media Marketing which is, of course, delivering content that interests their fans.

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Multiple Platinum Platforms.

Though RUSH sees the majority of all social activity on their Facebook page, they also maintain a Twitter presence, a YouTube channel, a minor presence on Instagram and heavy exposure on Qello. The social team cleverly integrates all applicable social media platforms with their main website via the use of individual hash-tag campaigns for each show venue. Fans can make comments and post pictures on their social media pages with their corresponding venue hashtag, and the comment or picture will appear on RUSH’s main website for the whole world to see. Rush’s platform integration is a catalyst for the resulting groundswell, in that band created content and fan content are combining together to create a larger experience for the user, and also enabling those who may not follow RUSH to be exposed to the band on their feeds.

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Bonus Tracks.

Not only does the band make heavy use of Facebook and other social media platforms, while cross pollenating them with each other and then integrating them with their own website, but they encourage, and in some cases outright ask for user created content.

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In the case of the example shown above, RUSH asked for fans to send pictures of themselves enjoying moments with the band over the past 40 years. The submitted photos ended up being used in a photo montage shown on three giant screens during one of the 27 songs played at R40. Crowdsourcing ideas and content is one sure way to drive customer engagement, and help build the relationship between the customer/fan and the brand.

Falling Down the Charts.

RUSH is comprised of three incredibly talented, retirement aged men who have been rocking like maniacs since the 1970’s, but some of their success must be attributed to the people they surround themselves with. They have an award winning Art Director, a world class Lighting Designer, a state of the art Tech Team and a top notch social media team. However despite all the intellectual horsepower they have on tap, they have still managed to miss the boat in one area in particular. Their content is spot on, and they are prodigious posters, but they have completely neglected to engage with the fans. Part of the point of creating a community is to get people to engage with the brand, and hopefully create a dialog. RUSH fans are loyal to the core and champing at the bit to engage, but are denied at every turn by a social media team that seems to be only interested in a one-way communication. Generally, if customers are consistently ignored they will ditch the brand (band) in search of an alternative that makes them feel more a part of the community . It would no doubt be preferable, and certainly thrilling to some fans, if the RUSH social media pages would directly address even a few of the many, many fan posts.

Battle of The Bands.

If one were a rabid enough fan of the Holy Triumvirate known as RUSH, a fairly cogent argument could be made that they have no competition to speak of. However, for this exercise it may be better to view the term competition in its most academic sense, i.e. other “brands” vying for finite concert-going dollars. Two other bands who also toured during the Summer/Fall and had a significant presence on Facebook were Van Halen and U2. The Van Halen page has 5.6 million “likes” but similar numbers of individual post shares and “likes” as RUSH who only boast half that number. The Van Halen page has no real brand created content other than hard sell pitches for tickets and blatant commercials for the tour and available CD box sets which as we all know is a complete turn off, and unspoken industry no-no. The VH team does not engage with fans either.

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Liner Notes.

So what can we learn about becoming social media juggernauts from a trio of sexagenarian Canadian rockers? Quite a bit as it so happens. Without putting too fine a point on the semantic argument here, suffice it to say that if you are doing social media marketing, you are also doing content marketing. Content is everything and everywhere. And the number one rule of content marketing is to provide the user with the kind of information they want. That can be anything from technical information, buyers guides, safety tips, recipes, all the way to behind the scenes photos and interviews from your favorite band. If the content is on point, your users will consume it voraciously. The second tip is to encourage your users/target audience to do the talking. NOTHING engages an audience like an invitation to provide user generated content. In fact, casual users are 60% more likely to engage and re-engage in subsequent visits when they are a part of the content. And finally, engage with your audience. Social media is ultimately a customer relationship-building tool that fosters trust and affinity. In order for any of that to work, there really needs to be a dialog. Don’t just post and run. If you monitor your responses and engage with users, before you know it you will have built an interactive “community”! You can thank me for that later.

Your pal,

—-Steve

If you liked this one, you might want to check out my other Blog.

The Mad Marketeer. http://themadmarketeer.blogspot.com

If Your Company Creates Content, They Will Come…

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In 2016, the astute marketer understands that traditional marketing is becoming less and less effective with each passing day. Jingles and catchy slogans are being replaced by timely and relevant content that provides value to the potential customer. Of course content marketing itself is a strategic approach focused on creating that relevant and timely content in order to attract and retain a clearly defined audience, and ultimately to drive customer action—i.e. sales. And that is an important distinction to note too –there is content, and then there is content that is relevant and timely. Strive for the latter, as the former does nothing but take up space. The key to any kind of content marketing/blogging/inbound scheme is to provide something that customers, or potential customers find useful, humorous, or if you’re lucky, both.

As marketing focus shifts to all things inbound, content marketing has become the watchword of the day. As this relatively new marketing tactic develops, it is becoming increasingly clear that the company blog can be the centerpiece of a comprehensive content marketing strategy. IMC practitioners love to use the phrase “breaking through the clutter” when speaking adoringly about any tactic that catches the consumer’s attention for more than a millisecond, but blogging doesn’t exactly fit that description in this case. What blogging does is rise above the clutter by providing useful, relevant and interesting content that the customer not only wants to consume, but in some cases looks forward to consuming. Of course it doesn’t hurt that the vastly interesting and useful content they clamor for is tied directly to your brand either.

While the [blog] content itself may be brilliantly written, impeccably timed, and a textbook example of the use of both stunning visuals and thoughtful SEO, it isn’t going to do anyone any good if no one reads it. That’s where blog promotion comes in. It became clear to me early on that blog promotion is a very necessary, and seemingly never ending task. It is imperative to create and implement a comprehensive promotion strategy that uses every resource at the blogger’s disposal.

The Marketing Benefits of a Business Blog

People want content and they are consuming it at an alarming rate. There are over 150 million blogs on the internet and a new one is born every half second (Stats, 2013). So who is reading all of these blogs? More people than you might expect. In fact, 20% of the population reads more than one blog on a daily basis, and that number is growing. You’re reading one right now! Many of those people have admitted to discovering new products or services through blogs, and basing their ultimate buying decisions on what they have read (Stats, 2013). Crazy , huh? Crazy like a fox.

– Blogs Drive Traffic!

One huge benefit of having a business blog is that every time a brand creates a new post, they are creating a new indexed page for their site. Search engines in general, and Google in particular are starting to place more emphasis on meaning, significance and content, than they are on mere keywords when ranking sites. So that extra page of content is amping up their SEO, and giving them one more chance for their website to be found. If the company blog links to the company website, it’s even better! Each additional link to a specific page on the site can improve search engine rankings of both the blog and the website. But that’s a whole other SEO discussion that I’ll save for another day.

– Blogs Can Lead to Conversion

Once a blog is established and is attracting an audience, it is time to move in to phase two by converting those readers into either leads, or customers. Once a potential customer has shown enough interest to come to your website, you have their attention for just a few moments and now is your chance to give them a call to action. If the company is looking to generate leads, they should give a call to action that exchanges something of perceived value for customer information –stuff like a free trial (samples etc.), free white papers, branded SWAG or whatever. The company just needs to ensure that they get the customer’s information so that the uber-valuable personal relationship can be started as soon as possible. On the other hand, if a brand has a solid offer, they could certainly go for the conversion at the outset. As soon as the customer is on the company website, it might not be a bad idea to make them an offer they can’t refuse. An eye-opening statistic says that 57% of blogging companies have reported that they have acquired new customers through their blog (Browning, 2013). That is nothing to sneeze at.

– Blogging Makes a Brand The Expert.

How does it feel to be the go-to guy in your field, Mr. Bigshot? Having a business blog can actually make a company the de facto expert on their subject matter, and a future go-to source for more information about their entire category. Their expertise not only brings people to their site, but it allows them to build all-important trust, and once the customer trusts a company, conversion is just a hop skip and a jump away. A blog ultimately increases credibility and allows new customers to feel more comfortable buying from the brand—particularly if it is a lesser-known brand.

-Blogging Puts A Face On The Organization.

Well maybe not a face, but certainly a personality. Blogging humanizes a brand, and allows it to tell its specific and personal brand story. And as has been well established, stories resonate with readers more than almost anything else marketers can put in front of them. The blog can give an insight into company Social Responsibility initiatives, highlight the company mission and philosophy, and give customers a real reason why you are in business, and more importantly what it means to them.

– Get Social.

Linking a company blog to their social media platforms cannot only help gain readers, but it can establish an interactive community that will provide an open dialog and plenty of user generated content. That UGC can in some ways be as valuable, if not more so than corporate content. In fact, strike that. User Generated Content is in many ways more valuable that corporate content because readers, even cynical Millennials that marketers slobber all over themselves to attract, find UGC to me much more believable and genuine.

– Blogging Enables Introduction and Promotion of Products.

Along with press releases, blogs are a great venue to introduce new products into the market. The blog format allows a company to expound far beyond the 140 characters allowed by Twitter, and avoids the unspoken no-no of doing hard sell on Facebook (More on this in another post). A brand can take as much space as necessary to tell the story of the product or service without appearing pushy. Similarly, a company can use their blog to promote existing products and link directly to the selling page of their website.

Things to Be Aware Of When Starting a Blog.

Promotion is a must! If one wants a blog to be seen, they must take steps to make it known to the audience. Linking with ALL social media platforms is a good first step. It makes sense to create multiple social media updates for each outlet, as use and viewership vary by platform. In other words, don’t just post once, do it several times throughout the day or days.
Images Help. They grab attention and help break up large blocks of text, making a blog easier to consume. They can also provide enhanced promotional content if they are used in conjunction with relevant text.
Reach Out to Industry People & Other Bloggers. It may take time to build a following, but if other thought leaders can be engaged with, particularly about the blog, it can increase exposure exponentially.
Leverage Groups. Industry groups on LinkedIn are great places to promote blog content.
Respond to Comments. It is your best way of starting a valuable dialog, and if you don’t think that is important you are kidding yourself. In 2016, it’s all about the dialog. Customers want to feel they are a part of the company and the process and creating that two-way street is a great start. I would give the same advice to any Social Media Manager whose job it is to oversee a company’s social media platforms. ANSWER QUESTIONS and make comments. Trust me on this one.

Standouts.

20% of all people read one or more blogs per day, and many base entire buying decisions on what they read (Stats, 2013).
57% of companies that blog see increased customers because of it (Stats, 2013).
A blog requires constant attention, and must be promoted at every turn. In the beginning, every view is a battle.
Results can take time, but they are well worth the effort.

All in all, blogging provides the marketer with the perfect platform for storytelling, a place to tell the brand’s side in intimate detail, a place that is supremely compatible with the use of imagery, the perfect venue for introducing products, and a channel that is marked by an unusually long freshness date. What’s not to like? If your company isn’t blogging by now, what are you waiting for? Go get ’em!

 

Your pal,

—Steve

References:

Browning, B. (2013, January 11). 10 reasons your business needs a blog. Discover Your Customers. [Weblog post]. Retrieved from http://discover-your-customers.com/blah-blah-blog-10-reasons-you-dont-need-to-blog/

Lee, K. (2014, march 31). The ideal length of everything online, backed by research. BufferSocial. [Weblog post]. Retrieved from https://blog.bufferapp.com/the-ideal-length-of-everything-online-according-to-science

Putnam, J. (n.d.). How to apply buzz marketing principles for effective internet marketing. KissMetrics. [Weblog post]. Retrieved on July 19, 2015 from https://blog.kissmetrics.com/online-buzz-marketing/

Stats. (2013, November 20). Interesting facts about blogs. WP Virtuoso. [Infographic]. Retrieved from http://www.wpvirtuoso.com/how-many-blogs-are-on-the-internet/

Lessons From Colgate in Entering Emerging Markets/Countries.

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So your company has expanded to become a global powerhouse? You’ve got product in over 20 countries? Wow, that’s awesome! How are you dealing with the competition? Are your actual sales keeping up with projections? Ever think about emerging markets? Yeah, yeah, I know…it’s a gamble for sure. BUT, what if you do your homework? What if you enter those markets right? Colgate did that very thing, and you can learn from their ups and downs.

 

In the Beginning.

      The huge multi-national company now known as Colgate-Palmolive can trace its roots clear back to 1806 when a young William Colgate started a starch, soap and candle business (not unlike my own Mountain Organix company) on Dutch Street in New York City. In 1865, Colgate introduced an abrasive dentifrice to the United States and then later in 1873, they introduced a more convenient toothpaste in jars (Colgate World of Care, n.d.).   Though Colgate sold, and continues to sell, many other products, toothpaste and what is now referred to as the “oral care” segment would become the company’s largest economic driver.

In 1908, the company was officially incorporated by William Colgate’s five sons, and big-time corporate expansion began in earnest.   Colgate started its quest to become an MNC (that’s a “multi-national corporation” to you and me) as early as 1920 when they began establishing footholds in Europe, Asia, Latin America and Africa. After merging with soap manufacturer Palmolive-Peet in 1926, all bets were off and the new entity Colgate-Palmolive was a seemingly unstoppable juggernaut. In 1985, Colgate-Palmolive entered the emerging country of all emerging countries, China, with a smooth acquisition of an existing Hong-Kong brand. Today, Colgate-Palmolive focuses on four core business segments that include oral care, personal care, home care, and pet nutrition. Colgate sells its 800 products in over 200 countries and territories worldwide—to the tune of approximately $15 billion in sales per year. (Colgate World of Care, n.d.).   Not bad for a little starch and soap company from Dutch Street.

 

Global Expansion

    Colgate has had a history of fairly aggressive global expansion since about the beginning of the 20th century. In the 1920’s the company made great inroads into developed, industrialized and semi-industrialized countries like Australia, France, UK, Switzerland and Mexico. In 1937, Colgate moved into India and within another decade had a strong foothold in South America. By the mid-twentieth century, Colgate-Palmolive was firmly ensconced as one of the world’s largest multi-national corporations with facilities and distribution on 6 continents (Riani, n.d.).

 

Colgate’s rapid global expansion was fueled by keen competition from the likes of Proctor and Gamble, Lever Brothers (now Unilever) and Crest (now part of P&G) after the American Dental Association announced that toothpaste was indeed a good preventative health measure. Not to lose sight of the fact that Colgate-Palmolive makes a bevy of other products, but after the ADA announcement, toothpaste sales exploded and became C-P’s most lucrative segment. Competition combined with increasingly stringent regulations in the United States meant that Colgate-Palmolive needed to search elsewhere to expand its shrinking business. Increased advertising was only giving the company temporary gains (Riani, n.d.). What Colgate needed was a permanent solution, and that’s when they set their collective eyes on emerging markets. As traditional developed and industrialized markets became hyper competitive, emerging markets showed great promise for offering increased and incremental opportunity for larger multi-national companies (Kotabe & Helsen, 2010. P.3).

 

 

Why Emerging Markets?

      Though the exact meaning of an “emerging market” varies depending upon whom you are asking, but the concept is generally accepted to center around economies that are rapidly growing and industrializing. We need to delve a little deeper into the meaning and implications of “rapidly growing and industrializing” in order to see the full picture and what benefits could be in store for companies who seek out these diamonds in the rough.   The real upshot of an economy that is rapidly growing and industrializing is the fact that the country’s upward economic movement is typically lifting millions of people out of BoP poverty and creating giant middle classes full of potential customers– all clamoring for products and services (Khanna and Palepu, 2010). When you combine those expanding middle classes and their resulting markets with larger populations, you have the recipe for a lot of potential sales —IF, the market is entered correctly and the culture is understood and respected. A multi-national company will have a hard time making a go of it by simply showing up on the doorstep of a large emerging country like China, and trying to rely on its existing products and an existing marketing mix to do the heavy lifting. Colgate-Palmolive entered China, the poster-child for huge emerging economies, in the 1980’s and has become the country’s top oral care product provider through a combination of crafty investments and realigning their marketing mix to suit the target market (Chen & Vishwanath, 2005).

 

 

How Colgate-Palmolive Gained Access to China.

Colgate’s typical entry into a developed country involved outsourcing of manufacturing to the country(ies) in question, and/or Foreign Direct Investments (FDIs) into production and job creation in those countries. Entering China however, would take a slightly different strategy. In 1985, Colgate-Palmolive acquired a Hong Kong based manufacturer called Hawley and Hazed that was known for making China’s then number one toothpaste –Darkie (Riani, n.d.). Though the acquisition helped Colgate-Palmolive gain a foothold in one of the harder markets to crack (at the time), Darkie, as shown in Figure 1. turned out out to be something of a public relations nightmare for them back in the states.

 

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Figure 1.   (Source: NewsOne).

 

 

The blatantly racist imagery, combined with a name that has long been considered a racial slur, made for some uncomfortable times for Colgate-Palmolive. Interestingly enough however, the people of China had no such outrage and considered it perfectly natural to say. In fact, the product was known as Black People’s toothpaste in the local vernacular and despite a (slight) name change and rebrand to Darlie (You’re not fooling ME, Colgate), Chinese people still refer to it the old way even today (Raini, n.d.).

 

China presented the ultimate prize for the emerging market hunter because it wasrapidly industrializing and had a massive population with billions of citizens in relatively compact geography.   MNC’s are typically known to prefer entering an emerging market with 100% ownership, Colgate-Palmolive was no different, opting to enter China with a shiny new wholly owned subsidiary. This strategy allowed CP to assume full control of their product development and marketing, with all profits reverting to Colgate (Kotabe & Helsen, 2010. p. 312).   As the company gained momentum and share in China, it created a regional division in 1992 known as Colgate-Palmolive (China) Co. Ltd (Bloomberg, 2016).

 

Adapting Colgate’s Marketing Mix to Suit The Market.

 

Despite the risks associated with entering an emerging market, Colgate had just invested significant dollars on a key acquisition and considered themselves to be “all-in” as far as the Chinese market was concerned. They made several changes to their marketing mix for Chinese consumption—some of which were subtle, and some were not so subtle.

 

Product

The oral care segment accounts for over 40% of Colgate-Palmolive’s global revenues and was the segment with which they gained entry into China, so it will be the focus of the remainder of this discussion –if for no other reason that to keep this paper from becoming War and Peace.

 

In the West, when we think of oral care, clean teeth and fresh breath, we typically think of flavors like peppermint, wintergreen or spearmint. Asian palates and sensibilities are obviously a little different and therefore call for customized product. Colgate couldn’t go into China, guns a blazin’, and expect to sell western toothpaste to eastern tastes, so they adapted the product by using local flavors and ingredients. Colgate introduced flavors of toothpaste and mouth wash that included tea, ginger, ginseng, berry, herbal and fruit to much acclaim and allowing Colgate to reach over 50% market share in the region (Team, 2013). In fact, Colgate’s market share is by and large a function of its willingness to customize and adapt to local tastes—not just in China but globally as well. For instance, Colgate now sells a mouthwash in India called Plax bamboo Charcoal and a toothpaste called Active Salt with Neem. Both Neem and Charcoal are known for their antibacterial/antimicrobial properties and are prized in the Indian market (Morgan, 2015). They are also both know to taste like total crap to westerners, but that’s neither here nor there.

 

Another way Colgate chose to differentiate its product for the Chinese market was through the use of what would have then been considered innovative packaging materials.

The Chinese culture has had a long held distaste for commercial packaging that uses too much waste material, or seems overly elaborate or frivolous in any way. This attitude is directly attributable to their deep regard for environmental issues. Similarly, price conscious consumers (as the majority of China’s emerging middle class are) don’t really care about packaging materials and are more concerned with the contents therein. When the Colgate brands of toothpaste first hit the market in China, the vast majority of toothpaste manufacturers were using aluminum tubes. Colgate adopted the plastic tube because it is cheaper, more durable, lighter and safer to use—resulting in the immediate (relatively speaking) capture of one third of the Chinese toothpaste market.

 

Price.

 

Even though the country was becoming industrialized and more people were emerging from the depths of poverty, they were still cautious about spending and were fairly value-conscious.   Colgate was keenly aware of the price sensitivity of the emerging Chinese middle class and adjusted accordingly.   The adaptation of the plastic tube, the incorporation of locally sourced ingredients, and a reduction in overall package size all combined to allow Colgate to sell toothpaste with a recognizable brand name on par or in some cases, just slightly above the price of most local brands (Doctoroff, 2012).

Chinese consumers welcome foreign products, but they aren’t willing to pay huge price premiums to get them. Colgate managed their costs down by utilizing local suppliers and ingredients as well as shifting to local manufacturing which all resulted in their 65-gram

 

tube of toothpaste dropping almost 63% in price (roughly 59 cents to 22 cents). Moreover, the price difference between the Colgate brand (seen as premium) and the local brands fell from a whopping 270% differential to around 44% (Chen & Vishwanath, 2005).

 

Place (Distribution).

 

When discussing distribution or “place” in the context of the four P’s, one must note that the concept refers to providing the product at a place that is convenient for consumers to find and become aware of. Products can be distributed the easy way, which would include fewer, large centralized locations, or the right way, which involves knowing the habits and customs of your target shoppers (something I preach ad nauseum). Colgate invested significant time and resources into understanding the ways in which consumers in China obtained everyday household goods.

 

Because Colgate acquired Hawley and Hazed, they had also acquired their distribution network and infrastructure. Colgate invested more into the distribution system to ensure that Colgate toothpaste was available, or potentially available to everyone.   At the time there were no WalMarts or Kmarts or large drugstore chains that everyone instinctively flocked to. The majority of Colgate’s sales came from small neighborhood stores that were often within walking (or biking) distance from consumers’ homes. Colgate mounted an intensive ethnographic research program that sought to not only gain a deep and intimate understanding of how the stores worked and interfaced with customers, but

to work with shop owners to offer an assortment of product relevant to their specific clientele (Colgate, n.d.).

 

In addition to making Colgate products available in small neighborhood stores, Colgate also made smaller sized (and less expensive) packaging available through street vendors and transient merchants who dotted the rural landscape.   That ensured that even those who were not in proximity to a store could still find product (Colgate, n.d.).

 

Promotion.

 

Colgate-Palmolive is the poster child for how to enter an emerging market in the right way. Colgate put in its research time in China and came away with an understanding that China isn’t one large homogeneous block of people who all think and act in the same way. They actually found out that there is “Coastal China” and what they referred to as “A cities”, “B cities” and “C cities” as well as the rural areas. Colgate discovered that the country was very complex and nuanced and that each segment would require a separate approach (Warc, 2010). To that end, Colgate employed an intensive, and widely varied media mix. In the US, most people get their product heads-up from TV or magazines (these were pre-internet days), but a different approach had to be used in China. Of course Colgate did use TV and print, but they also used a significant amount of outdoor advertising—particularly in the more rural areas. In the case, outdoor advertising included everything from traditional billboards to painted buildings to sandwich boards (Riani, n.d.).

 

Another guerilla-style promotional plan Colgate employed in China had been in their bag of tricks since 1911. They provided small tubes of toothpaste and toothbrushes to school children and provided technicians to instruct the students on proper brushing techniques (Raini, n.d.). The idea here is that if the habit starts early enough, it will be carried into adulthood.

 

What Colgate Could Have Done Better?

 

It’s hard to sit in judgment of a trail-blazer like Colgate-Palmolive. They were presented with a set of circumstances that dictated additional markets were quite literally required in order to stem the tide of slumping sales and profits. Then they acted on that information by setting their sights on several emerging countries. They (wisely) chose emerging countries because of the enormous upside potential they promise, and they moved quickly so they could be either the first, or one of the first to crack the new markets. Once there, they practiced due diligence and did the required research so they could have a complete and thorough understanding of the culture they were now entering. They leveraged their newfound cultural understanding to inform the necessary changes in their marketing mix—knowing full well that U.S. models don’t translate everywhere. So, from the market entry perspective, Colgate was on top of their game.

 

The one obvious and glaring mistake from an international perspective, was that Colgate acquired Hawley and Hazed and their questionably named premier product (Darkie) and then simply left it alone for over a year.   Of course no one in China thought

anything about it, nor did they even suspect it was in any way offensive. Back home however, was a different story. Colgate was boycotted, costing them untold revenues until then Chairman Rueben Mark admitted it was a problem and that Colgate would make all necessary arrangements to change it. Unfortunately Colgate wasn’t moving fast enough to suit some people, so with extra pressure from the Congressional Black Caucus, the NAACP, and the US Catholic Conference, the name was finally changed to “Darlie” and the Al Jolsen logo was changed to a somewhat less offensive version of itself.

 

Colgate-Palmolive is a western company, and as such should have been sensitive to the situation surrounding the Darkie brand. In a perfect world, they would have negotiated a name change and logo refresh BEFORE making the deal with Hawley and Hazed. BUT, hindsight is always 20/20.

 

The Bottom Line:

 

     Global expansion into developed markets can only take you so far. Granted there are large MNC’s who are doing very well for themselves by sticking mainly to the top 20 GDPs. However, if you overlook the emerging nations/markets, you are absolutely leaving money on the table. Colgate shows us an example of not only how to expand into such markets, but ultimately how to do it right. Minor faux pas notwithstanding.

 

 

References:

 

Bloomberg. (2016, April 17). Company overview of Colgate-Palmolive (China) Co., Ltd.

Retrieved from http://www.bloomberg.com/research/stocks/private

/snapshot.asp?privcapId=105765089

 

Chen, A. & Vishwanath, V. (2005, March). Expanding in China. Harvard Business

           Review. Retrieved from https://hbr.org/2005/03/expanding-in-china

 

Colgate. (n.d.). Our company: Sustainablity. Colgate.ru. Retrieved on April 18, 2016

from http://www.colgate.ru/app/Colgate/RU/Corp/LivingOur

Values/Sustainability /RespectForPeople/Operating ResponsiblyIn

EmergingMarkets.cvsp

 

Colgate World of Care. (n.d.). Welcome to our history. Colgate.com Retrieved on April

17, 2016 from http://www.colgate.com/app/Colgate/US/Corp/History/1806.cvsp

 

Doctoroff, T. (2012, September 29). Doing business in China: How to win. The

           Huffington Post. Retrieved from http://www.huffingtonpost.com/ tom-

doctoroff/china-business_b_1717510.html

 

Khanna, T. & Palepu, K. (2010, May 27). How to define emerging markets. Forbes.

           Retrieved from http://www.forbes.com/2010/05/27/winning-in-emerging-

markets-opinions-book-excerpts-khanna-palepu.html

 

Kotabe, M., & Helsen, K. (2010). Global marketing management. (5th Ed.). Hoboken, NJ: John Wiley & Sons, Inc.

 

Lab Brand. (n.d.). Brand translation: Packaging design differences. [Weblog post].

Retrieved on April 18, 2016 from http://www.labbrand.com/brand-source/brand-

translation-packaging-design-differences-between-china-and-west

 

Morgan, P. (2015, July 27). Colgate-Palmolive is a leading fast-moving consumer goods

firm. Market Realist. [Weblog post]. Retrieved from http://marketrealist.com/

2015/07/must-know-business-overview-colgate-palmolive/

 

Riani, D. (n.d.). Globalization of Colgate-Palmolive from 1806 to present. Higher Ed

BCS. [PDF]. Retrieved on April 17, 2016 from http://higheredbcs.wiley.com

/legacy/college/sparke/0631231293/Model_Answers/Colgate_Palmolive.pdf

 

Team, T. (2013, January 30). Colgate-Palmolive’s emerging markets growth and oral

care unit in focus. Forbes. http://www.forbes.com/sites/greatspeculations

/2013/01/30/ colgate-palmolives-emerging-markets-growth-and-oral-care-unit-

infocus/#6cc554771ad6

 

Warc. (2010, June 10). Colgate adopts innovative approach in China. Retrieved from

http://www.warc.com/Content/News/N26817_Colgate_adopts

_innovative_approach_in_China.content

Predictive Analytics vs. The Savvy Marketer: Who Wins?

Screen Shot 2016-08-09 at 5.04.18 PM

Introduction

The continued upward movement of traditional direct marketing combined with the explosive growth in online retail sales creates an unprecedented number of transactions for marketers. In fact, online retail sales are expected to reach over $360 billion dollars by the year 2016 (Woo, 2012). This scenario also creates an ever-expanding set of choices for the consumer. Because of those choices, the astute marketer needs to find a way to fully understand their customers so that they may not only fulfill the customer’s current needs and wants, but anticipate their future needs and wants as well. The challenge is for businesses to deliver the right offer, at the right time, at the right price, through the right channel (Parr-Rudd, 2012). Anticipating and predicting future customer behavior almost seems like Voodoo, but is in reality child’s play for a kick-ass predictive analytics software package.

 

For the uninitiated –Predictive Analytics is a statistical or data mining solution that relies on algorithms, machine learning and various techniques to identify the likelihood of future outcomes based on historical data (Halper, 2014). Even though that sounds all fancy-schmancy and super-shiny-new-hi-techy, predictive analytics itself is not a new technology by any means. As a matter of fact, it has been used on structured data for many years—decades even.   It has come into the white-hot spot light more recently though because of the existence of cheaper computing power, an exponential rise in the amount of data available, and the sheer volume of data being collected –also known by the fashionable moniker “big data”— its relative ease of use, and probably most importantly, the increased need for companies to compete more effectively (Halper, 2014).   It is after all, a jungle out there.

 

What Did Marketers Do Before Predictive Analytics?

     In the past, marketers relied almost solely on RFM Analytics (which still works just fine, thank you very much) to determine each customer’s value in time, and to predict how those customers would react to future offers or calls to action based on their historical activity.   RFM is a comparatively simple way for marketers to manipulate their database to determine those customers who should be most responsive to a given marketing effort. The RFM process uses information about the customer’s Recency, or the date of the customer’s last transaction, Frequency, or the number of transactions made by the customer in a given time period, and Monetary value, which includes the aggregate amount the customer has spent with the organization. RFM, get it? Customers are then ranked into 5 quintiles based on their performance in each dimension. The score of “5” goes to the highest performers and “1” goes to the lowest performers in each dimension. Once scoring is complete, the three dimensions are realigned in the database to give each customer a total RFM score. The best customers, and those who are most likely to respond to new offers or calls to action have the highest scores. Of course a score of 555 is optimal, but not every customer will have that score. So it becomes the job of the marketer to decide where the reasonable cutoff may be. RFM scoring and analytics has been a great basis for understanding customer value and predicting future customer activity based on past behavior, but in reality only represents a fraction of the clairvoyance of “Predictive Analytics Software”.

 

So How Does PA Work?

     Predictive Analytics begins with the understanding of a set of predictors, which are really nothing more than single value measurements of each customer (Roebuck, 2012). Predictors are the foundation upon which predictive analytics is built. Examples of predictors include the previously mentioned Recency, Frequency, and Monetary Value, but there are also many, many more. Of course these individual predictors don’t mean much when viewed alone. Predictive

Analytics actually looks at the relationship between predictors much in the same way that the older, simpler RFM analytics did only with an added mega-dose of steroids. When predictors are combined and viewed in a relational context, they create models, which in turn allow for inferences to be drawn through Predictive Analytics –also known as Predictive Modeling (Roebuck 2012).

 

     Predictive analytics “connects data to effective action by drawing reliable conclusions about current conditions and future events” (IBM, 2010). Of course such magic doesn’t just spontaneously occur. PA takes people to make it happen, and it all begins with the definition of a business problem or goal. Marketing and data specialists must collaborate to not only determine if the goal fits current business requirements, but if a relationship can be drawn at all, and if so, will it have any real meaning. Once the marketer has determined the business problem he wants to solve, he then determines the predictors he feels will best give him the information he is looking for. PA uses historical data, broken down into individual predictors in order to more fully understand a company’s customers’ actions and to ensure that future marketing activities can be more accurately targeted (Roebuck, 2012). In order to uncover potential trends and to understand very complex relationships between seemingly disparate variables amongst a sea of data, marketers build models based on two or more individual predictor variables. The model is then loaded into a sophisticated software program that provides the analysis.     The program is able to extract trends and relationships that an analyst could never uncover in terabytes of data. That information then enables a marketer to place customers into segments that are easier market to as homogeneous groups. The marketer also has a higher level of certainty as to the potential outcome when targeting groups with marketing initiatives.

 

As is the case with all direct marketing, there is an element of testing and tweaking so that the marketer can adjust the PA results to their most optimal. We can’t simply take the computer’s word for it and rollout a very expensive campaign without testing, adjusting and retesting first. The testing phase confirms and sharpens what the computer and PA software have told us. Figure 1. illustrates the flow of the process.

 

Screen Shot 2016-08-09 at 5.04.30 PM

What PA Software is Available?

Since the advent of the “big data” age, and companies’ need to look deeper and deeper into their customer base to uncover every potential dollar in sales, Predictive Analytics has become huge business. Where there were once just a few companies producing software to cater to those analytical clients’ needs, the market has been flooded with more and more companies looking to get in on the PA trend. Some of the offerings include SAS Predictive Analytics, SPSS (an IBM Company), SAP, Oracle Data Mining (ODM), Predixion, Statistica, RapidMiner, and Angoss just to name a few. It should be noted however that SAS, SPSS, SAP and RapidMiner are the most highly regarded and utilized industry wide (Predictive Analytics Today, n.d.).

 

Three Examples of PA Awesomeness.

 

SAS

     SAS saw its genesis at North Carolina State University where it was originally undertaken as a project seeking to better analyze agricultural research. As word got out, demand for such powerful analysis software began to grow and the company known as SAS was founded in 1976. SAS stands for “Statistical Analysis System”, and has become one of the leaders in the predictive analytics industry (SAS, 2015). SAS offers enterprise solutions that allow companies to process massive amounts of data in areas that include Advanced Analytics, Business Intelligence, Customer Intelligence, Data Management, Decision Management, Risk Management and Supply Chain Intelligence. These insights are facilitated through a portfolio of SAS products that include, but are not limited to SAS 9.4, SAS/STAT, SAS Analytics Pro, SAS Data Management, SAS Enterprise Miner, SAS Marketing Optimization, SAS University Edition, SAS Visual Analytics, et al. Though the SAS products span a multitude of industries and organization sizes, they will allow marketers of all stripes to gain deeper insights on, and draw inferences from vast amounts of customer data in order to make intelligent marketing decisions moving forward.

SAS interfaces nicely with the open-source framework of Hadoop, and if there were any doubt about SAS’s relationship to the platform, they make Hadoop-specific applications as well. Hadoop was developed by Apache Software as a solution to store and process huge amounts of data and deliver distributed processing power via the cloud for a very low cost. It allows even the smallest companies to analyze billions of lines of data in just seconds (Mariani & Thompson, 2014).

 

SPSS

SPSS is an IBM predictive analytics software that allows the user to predict with confidence what will happen next so they may make smarter decisions, solve problems, and most importantly, improve outcomes (SPSS, 2015). The SPSS website has a bevvy of preconfigured software, all of which are also available via the cloud. The emphasis is on solutions that allow organizations to capture, model, predict, and act with confidence, all utilizing their own valuable customer data.   Software packages available include: IBM Analytical Decision Management, IBM Social Media Analytics, IBM SPSS Data Collection, IBM SPSS Modeler, IBM SPSS Statistics, Predictive Analytics for Big Data, Predictive Customer Intelligence, and Predictive Maintenance. These cutting edge analytics applications allow customers deep insights and operational confidence in the areas of customer acquisition, customer lifetime value, loyalty, profitability and social media analytics. The beauty of these applications is that they can take tons of collected data and uncover trends and hidden insights that allow the marketer to create a more personalized customer relationship (CRM) and produce marketing/communications that are more highly targeted, more effective and thus more profitable.

 

SAP

     SAP is a German company doing business in over 130 countries and with over 282,000 customers around the globe (SAP, 2015). SAP also offers a multitude of software applications for a variety of industries and business types, but does have products that place special emphasis on marketing intelligence. SAP purports to offer real-time contextual marketing that delivers individualized customer engagements at every stage of the buying process. By employing their software, the marketer would be privy to unprecedented customer insight from marketing analytics and could in turn, leverage that insight into creating a more loyal customer and increasing demand.   SAP is another company that makes mention of using predictive analytics to gain insights into customer attitudes via social media analytics, but this author is less impressed with this feature. The fact that customer attitudes can change on a dime, and the fact that anything gleaned from social media isn’t exactly valid decision-making data makes this facet something that may do more to cloud the process than provide any real actionable intelligence.

 

What Are Other Professionals Saying About Predictive Analytics?

      Any time there is a massive movement toward a new paradigm (I hate myself for using that word), there will always be detractors and iconoclasts who try to figure out why the collective wisdom of an industry is wrong. A recent Forbes article discussed how the notion of customer loyalty is too hard to measure, misleading and difficult to correlate with other business metrics. The author instead advocates the use of “customer engagement” (Bingham, 2014). Even when employing predictive analytics software, it is difficult to put a finger on customer loyalty he claims.   The author of this article, yours truly, believes we are experiencing a good old-fashioned semantic argument here. Even the simplest RFM Analytics can easily determine loyalty, because a customer’s loyalty is based on historical behavior that is easily discernable. Duh. Mr. Bingham instead pontificates that “advocacy and involvement” are better predictors of customer loyalty and the resulting impact on revenue. I have espoused the position to anyone who will listen that “you can’t eat engagement”, for many years. Engagement doesn’t necessarily equate to sales, nor does advocacy. Many people advocate the use of Leica cameras and are very engaged with the company via social media, forums, blogs etcetera, but have never made an actual purchase. Engagement is no substitute for loyalty, and loyalty is most certainly an insight that can be determined through judicious use of Predictive Analytics. Moreover, once the loyal customer is identified, his future behavior will be easier to predict and therefore he will be easier to communicate with.

Michael Berry, Analytics Director for TripAdvisor.com takes the stance that “big data” is nothing more than hype (to which I agree), and that predictive analytics doesn’t require as much data as most people think. He feels Predictive Analytics doesn’t require a marketer to figure out how to analyze all the data, but rather how to figure out how much data is needed to see something worth noting (again, agreeing here). Berry states that testing the predictive model requires starting with what the marketer feels is just enough data, and then adding data incrementally so as to understand when enough is enough (Laskowski, n.d.). I am frothing at the mouth in agreement. Predictive Analytics is a tool that allows us to uncover hidden insights and trends, but doesn’t necessarily require every data point we own in order to provide useful information. To expand on that notion, I would say that the vast majority of companies are too wrapped up in the pursuit of “big data” because it is the current fashion of the industry, but in reality they “need” far fewer data points to actually answer their pressing business questions. But I digress.

 

Is The Intuitive Marketer Still Relevant?

      Of course he is. In fact, the marketer may be more relevant than ever. Marketing is a business conducted by people, toward people. Computers and software, though incredibly helpful, can only process and understand the information they are given. It takes a marketer to detect nuance, and to understand how a customer may respond to certain turns of phrase within copy. Copy and copy testing is an integral part of the direct marketing process and one that relies heavily on the ability to communicate effectively. That requires a human touch. Moreover, a savvy, intuitive marketer is required in an organization because despite the massive analytical power companies have in the form of PA software, it takes a degree of experience and human understanding to know what questions to ask, how to interpret their answers and what potential information can be found through analyzing massive amounts of data. Almost anyone can create a predictive model through inputting individual predictors, but only a marketer will know how to apply the results. A marketer will know how to use the right information, at the right time, to solve the right problem. Long live the marketer!

 

Conclusion

     In 2016, consumers are literally bombarded with marketing and marketing messages and as such they are typically only receptive to those that resonate with them on a deeper-than-average level. Meanwhile, companies succumbing to the Siren call of Big Data, are collecting every shred of information about each customer they possibly can, resulting in gargantuan data sets

that would be impossible for a human to analyze with any accuracy. The astute marketer needs to find a way to sift through and analyze the tremendous amount of data he has at his disposal in order to uncover the strategic advantages that will allow him to create that perfectly targeted, resinous communication good customers (and potential customers) will respond to. Of course this is where Predictive Analytics comes in to play.   Software packages from SAS, SPSS, SAP and others can provide the marketer with more accurate information for making key business decisions and predicting the types of offers and calls to action that will yield maximum response with minimum marketing spend. If asked, I would recommend that any company looking to identify trends, better understand their customers, improve business performance, drive strategic decision making and more accurately predict future customer behavior, should look into any of the top four PA software providers to see which one is best for them based on cost, scalability, and usability.  You still need your smart marketing people, but a PA package could make their lives a whole lot easier, and make their predictions a whole lot more accurate.

 

—Steve

 

 

References:

 

 

Bingham, C. (2014, March 28). Customer loyalty is dead. Long live engagement. Forbes. Retreived from http://www.forbes.com/sites/oracle/2014/03/28/customer-loyalty-is-dead-long-live-engagement/

 

Halper, F. (2014, March 4). Four more advances in predictive analytics. TDWI.org Retrieved from http://tdwi.org/articles/2014/03/04/4-predictive-analytics-advances.aspx

 

 

IBM. (2010). Real world predictive analytics: Putting analysis into action for visible results. IBM Corporation. [White paper]. Retrieved on April 2, 2015 from http//www-01.ibm.com

 

 

Laskowski, N. (n.d.). Big data and predictive analytics: When is enough data enough? TechTarget. [Web log post]. Retrieved on April 3, 2015 from http://searchcio.techtarget.com/opinion/Big-data-and-predictive-analytics-When-is-enough-data-enough

Mariani, G., & Thompson, W. (2014). Big Data, Analytics and Hadoop. Retrieved November 10, 2014, from http://www.sas.com/content/dam/SAS/en_us/doc/conclusionpaper1/big-data-analyticshadoop-107049.pdf

Par-Rudd, O. (2012). Drive your business with predictive analytics. SAS. [White paper]. Retrieved on April 2, 2015 from http://www.sas.com/content/dam/SAS/en_ us/doc/whitepaper2/drive-your-business-with-predictive-analytics-105620.pdf

 Predictive Analytics Today. (n.d.). Top 27 predictive analytics software. Predictive Analytics Today. [Web log post]. Retrieved on April 5, 2015 from http://www.predictiveanalyticstoday.com/top-15-predictive-analytics-software/

Roebuck, K. (2011). Predictive analytics: high impact emerging technology –What you need to know. [1st. ed.]. Berlin, Germany: Tebbo Publishing.

SAP. (2015). About SAP SE: Global company information. SAP. Retrieved from http://go.sap.com/about.html

SAS. (2015). Company history. SAS. Retrieved from http://www.sas.com/en_us/company-information.html#history

SPSS. (n.d.). Enabling the predictive enterprise with predictive analytics. SPSS.com Retrieved on April 3, 2015 from http://www.spss.com.hk/predictive_analytics/work.htm (NEED)

Woo, S. (2012, February 27). Online-retail spending at $200 billion and growing. The Wall Street Journal. [Web log post]. Retrieved from http://blogs.wsj.com/digits/2012/02/27/online-retail-spending-at-200-billion-annually-and-growing/

Campbell’s Brand Architecture is M’m M’m Good!

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Brand Architecture.

     What the heck is it anyway? For lack of better terminology, the brand architecture is the master plan an organization uses to understand how all owned brands relate to each other, and how the names should be used at each level of the organization (Kotabe & Helsen, 2010. p. 368). Within the larger framework of brand architecture, lie several distinct branding approaches, three of which are particularly apropos to this discussion. Corporate dominant branding, involves using the corporation’s name to lend credibility to the company’s products. It is particularly useful to a CPG company like Campbell’s when they are seeking to take a product global, and it really helps if they have a recognizable and established name that is capable of making an impact globally. Product dominant branding on the other hand, is a technique that allows individual brands to stand on their own, without emphasizing their relationship to the parent company. This technique is particularly useful for disparate products (such as the case for Unilever’s Ben & Jerry’s ice cream and Wishbone salad dressing), or when established brand names have been acquired by the parent company. Then there is hybrid branding which employs a combination of corporate and product branding (and logos) in an attempt to leverage the brand equity and goodwill of the parent company. Ultimately this relationship sets up the parent brand as the endorser of the sub-brand, which tells consumers that it “must be” ok. This is a perfect strategy for new or unknown brands that can benefit from being associated with a well-known parent brand.

Two excellent examples of hybrid branding can be seen in Figure 1 below.

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Figure 1. (Source: Lisa Merriam Weblog).

 

The two examples differ slightly because there are no “Microsoft products” per se, whereas there is such a thing as a freestanding Marriott Hotel. Microsoft is the parent company of all its sub brands and it makes certain that the parent company name is associated with every one of them. Every sub-brand is a Microsoft brand. Marriott on the other hand was already an established hotelier and had been in business for quite some time. Marriott is using that notoriety and brand equity to endorse other, newer brands that occupy different niches in the hospitality industry and may be competing with other well-known names like Holiday Inn.

 

So, Why Do I Need to Know About Brand Architecture?

      You don’t really need to know about brand architecture—that is unless you are trying to grow your company through acquisition or expansion, or are hoping to enter global markets. Otherwise, go back to whatever you were doing 5 minutes ago and don’t worry about it. We’ll still be friends.   If however, you might be concerned that a new product or division isn’t exactly in line with your original corporate mission or is at odds with your flagship brand, read on. If you are launching similar products that compete with each other and may ultimately be cannibalizing your market share, read on. If your company sells both premium and value-oriented products under the same brand, read on.

 

Where It All Began.

Not unlike many of the multi-national corporate giants of today, Campbell’s began with just a flash of inspiration, the juxtaposition of circumstances, and some luck. Founded in 1869 by fruit merchant Joseph Campbell and icebox manufacturer Abraham Anderson, the fledgling Campbell’s Soup Company opened their first plant in Camden, New Jersey. Initially, the company offered a few varieties of canned, ready to eat soups, but it wasn’t until 1897 when company chemist John Dorrance invented condensed soup that Campbell’s really took off (Campbell’s n.d.).

Throughout the ensuing years, Campbell’s has grown through a combination of innovation and acquisition, picking up already famous brands like Pepperidge Farms and V8 . They have also made entry into foreign markets by acquiring local brands like

Arnott’s Biscuits in Australia, and Erasco Soups in Germany.   Today, Campbell’s has more than $8 billion in global sales with products in 17 different categories (Campbell’s, n.d.).  Campbell’s continues to stay focused on creating a smaller portfolio of very strong, core brands and expanding those brands globally with an emphasis on Asian and Latin American markets (Nunes, 2015).

For the purposes of this exercise, we will discuss three different brands from three separate categories to determine the type of branding used, and the appropriateness of each method used. The three brands are Campbell’s Soups, Arnott’s Biscuits, and V8 Juices, each owned by Campbell’s, each sold on a global scale, and each representing a completely different segment for the company.

 

The Big Kahuna.

The flagship brand at Campbell’s is the venerable Campbell’s Soup brand. The familiar red and white label has become so iconic that it has inspired innumerable pop art

references, including clothing, everyday household items and or course a very famous work of art by the late Andy Worhol.

 

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Source: Worhol Foundation         Source: dromfgt.top                       Source: Worleygigs

 

As a result, the image of the can transcends the idea of its contents and the name “Campbell’s” has almost become synonymous with the word “soup”. Of course all cultures have their own version of soup, and Campbell’s is able to successfully leverage that commonality by becoming a global seller of condensed soup with very little in the way of customization. Naturally, flavors will vary by region and culture, and language does too—where necessary—but for the most part, the ubiquitous red and white can looks the same everywhere it is sold, and has the brand name Campbell’s prominently displayed font and center. Even markets like Russia and Japan have proven to be very lucrative for Campbell’s Soups with over 70% of those who have tried a variety, coming back to buy again (Mulvihill, 2008).

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[Chinese label].           Source: Foodology.

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[North American Label].                     Source: Campbell’s

 

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[English/Japanese labels].                 Source: Getty Images.

 

Campbell’s is practicing a Corporate Dominant strategy for the Campbell’s Soup brand.   The company was founded on soup, it is well know throughout the world for soup, and there is no other name that should appear on their bread and butter brand than the corporate name. They are using the corporate name because it has become so iconic and their red/white can is instantly recognizable regardless of country, or era. This author believes that it is the right strategy to employ for a global brand selling a product that is not particularly culturally grounded. The flavors may vary, but soup is universal and Campbell’s is understood by almost everyone.

 

An Acquired Taste.

In 1865 Arnott’s bakery was just a small, mom and pop operation that supplied baked goods to the locals and to the crews of merchant ships that docked at the port in Newcastle, just north of Sydney Australia. What once was a small town bakery, eventually grew to become synonymous with Australia’s favorite biscuits (Arnott’s, n.d.). So despite the fact that Americans aren’t very familiar with the brand, they managed to stay in business for 150 years and become one of the largest food companies in the Asia/Pacific region (Arnott’s, n.d.). Campbell’s had been acquiring Arnott’s stock since the early 1980’s, but acquired full ownership in 1997 (Campbell’s, n.d.).

Because Campbell’s acquired a 150 year old company that was firmly entrenched in the Australian psyche, it made absolutely no sense to tamper with the name of the product or the branding whatsoever. Though Campbell’s does feature a small logo in an inconspicuous place on the back of the labels, it does not market or advertise any Arnott’s products by trying to leverage the Campbell’s name. Thus, Campbell’s is exercising a product dominant branding approach with this particular brand. The company’s long established name and reputation constitute the main reason to employ this branding type, but a second factor helps to underline their reasoning. The fact that Arnott’s makes cookies and Campbell’s makes soup could make for a strange pairing in consumer’s minds. They keep the Campbell’s name away from this brand for the same basic reason they didn’t market Godiva Chocolate as a Campbell’s product –it didn’t make sense, and it could produce negative connotations in some people’s minds.

 

Today, Campbell’s has leveraged its global infrastructure to distribute Arnott’s biscuits in over 40 countries outside of its immediate Australia/New Zealand/Indonesia markets (Arnott’s). The same branding is used throughout the world with the possible exception of the United States. In The US, Campbell’s has taken one of Arnott’s most popular products of all time, Tim Tams, and rebranded it as a Pepperidge Farm product.

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Source: NYC Food Guy

 

 

The “Americanized” version features the old familiar Pepperidge Farms branding (another Campbell’s subsidiary), along with the tagline “Australia’s Favorite Cookie”.

 

Arnott’s has a long and illustrious past that is very well known in the Asia Pacific region, and is spreading to Europe, India, The Middle East, and parts of Latin America with apparent success. There is no real reason to rebrand Arnott’s most famous product for US consumption unless it is a financial play aimed at giving Pepperidge Farms a boost. The original Arnott’s branding with the possible addition of “Australia’s Favorite Cookie” should have worked just as well for American consumers and would have created an economy of scale that could ultimately save the company money.

 

Everyone Should Have a V8.

      Acquired in 1948, V8 is one of Campbell’s oldest subsidiary brands. Originally called “Vege-min” and then later, “Vege-min 8” the juice received a lukewarm response from would-be juice drinkers. It wasn’t until a grocer in Evanston, Il suggested that the name be shortened to “V8” that the brand started gaining some real traction. Campbell’s acquired it shortly after the name change and have maintained it is V8 ever since. Though the original variety was a juice and not a soup, it still contained 8 vegetables and by virtue of that alone, it could have possibly made sense to have switched to a hybrid branding early on. The fact that they didn’t switch back in the 40’s makes it even harder to do today. V8 Juice and its many variants are sold in 100 countries today, all under the product dominant branding scheme. Though the packaging is slightly altered to meet local tastes, the branding, labeling and messaging (and product) stays the same no matter where it is sold.

 

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Source: Campbell’s US             Source: Campbell’s UK     Source: Campbell’s Australia

 

Because the brand is 83 years old, and has been owned by Campbell’s and continually sold under the name V8 for 68 of those years, it is probably a good idea to maintain the name and branding no matter where the product is sold. To change it now would be confusing to some consumers. V8 is a strong, recognizable and valuable brand asset that helps differentiate the brand from the rest of the portfolio and establish it is a power brand for Campbell’s.

The Surprise Ending

Even though this article has indicated that the three sub-brands of a larger parent company utilize different branding types, the parent company itself, Campbell’s, like so many other big CPGs, is using a hybrid brand strategy and brand architecture. The hybrid strategy combines at least two or more of the several branding approaches suggested by Johannson, and allows the company to address emergent and existing market strategy needs on a brand by brand basis . It is through a hybrid branding strategy that Campbell’s can offer a corporate dominant brand like Campbell’s Soup, but also offer several product dominant brands like V8, Pepperidge Farms, Arnott’s, Prego and Pace, and even a few endorsed brands like Campbell’s SpaghettiOs (formerly a Franco-American brand).

 

 

 

References:

 Arnott’s. (n.d.). Arnott’s history. Retrieved April 11, 2016 fromhttp://www.arnotts.com.au/about-arnotts/

Campbell’s. (n.d.). Our history. Retrieved April 11, 2016 fromhttps://www.campbells.com/about-us/campbell-history/

Kotabe, M., & Helsen, K. (2010). Global marketing management. (5th Ed.). Hoboken, NJ: John Wiley & Sons, Inc.

Mulvihill, G. (2008, January 2). Campbell soup a success in Russia, China. Manufacturing News. Retrieved from http://www.manufacturing.net/news/2008/07/campbell-soup-success-russia-china

 

Nunes, K. (2015, May 26). Campbell Soup still struggling to gain momentum. Food Business News. Retrieved from http://www.foodbusinessnews.net/ articles/news_home/Financial-Performance/2015/05/Campbell_Soup_still_struggling.aspx?ID=%7B4D657B7B-C5C7-4E20-A1B5-3388AF7 6DE50%7D&cck=1

Advertising Appeals to Latinos: La Familia es Todo.

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     Before any serious conversation can be had about advertising and marketing to “Latinos” in America, it makes sense to first establish exactly who the target market really is. We see the words “Hispanic” and “Latino” used almost interchangeably these days, but the truth of the matter is that each word represents a different circle in a larger international Venn diagram.   The term Hispanic refers to those people who are from a Spanish speaking origin, which includes Spain but excludes Brazil. Latino on the other hand, refers to those who hail from so-called “Latin American” countries (Central and South Americas) and includes Brazil, but excludes Spain. Obviously there is quite a bit of overlap in the Venn diagram, but it is a distinction that should nonetheless be noted (Pittman, 2015).

     The real issue that should be addressed by this distinction in terminology is that although some marketers tend to view the Hispanic culture in America as one big homogeneous lump, the truth is that there are several subcultures present that do not necessarily all share the same traditions and social mores.   Though there are several core commonalities among the groups, Cubans in Miami, Mexicans in Phoenix and Columbians in Denver do not necessarily all share everything in common. For instance most Latin American countries celebrate El Dia de los Muertos [aka Day of the Dead] wherein people remember loved ones who have passed and mark the day by decorating their graves and creating altars to their memories, all culminating in parades and celebration of life (Explore Hispanic Culture, n.d.). On the other hand, the popular Cinco de Mayo festivities that have become almost as popular in the US are actually commemorative of the Mexican army’s 1862 victory over the French at the battle of Puebla during the Franco-Mexican War, and as such is a holiday mostly celebrated by those with a Mexican heritage (History.com Staff, 2009).

     Despite the fact that there are multiple different Hispanic and Latino cultures, each with individual nuances and traditions, there also exists a large degree of commonality in attitudes and outlooks. The truth of the matter is that even though we have multiple cultures, languages, traditions and social conventions on a global scale, people will tend to just be people and as such will all have a few things in common. The concepts outlined in Maslow’s Hierarchy of Needs are a set of almost universal human motivations that are understood and shared by everyone. Though the steps are broadly generalized [physiological, safety, social, esteem, self-actualization], and can have slightly different meanings from one culture to the next, their core meaning becomes the basis for a universal commonality (McLeod, 2007).   It is those commonalities that should be explored by the savvy Global Brand Manager seeking to appeal to both Latinos and non-Latino Americans.

     In 2015 the Hispanic target segment in America eclipsed $1.5 trillion in buying power, making them a very lucrative nut to crack for multi-cultural marketers (Llopis, 2013). As many marketers have found out (the hard way), cracking that market in a genuine way is a lot more complicated than simply translating existing marketing campaigns into Spanish. For starters, the two languages don’t have exact parity and not every word translates with identical meaning, which can lead to some awkward situations, if not outright failures when applied haphazardly. A company has to develop a deep understanding of the culture before they can attempt to become a part of it. In fact, cultural intelligence and cultural sensitivity have become critical in developing culturally specific marketing programs that get to the very heart of the target segment’s lifestyle and beliefs. Hispanic consumers in particular, do not want to be ‘sold to” but rather want to connect with brands that have proven to embrace their culture in a meaningful way (Llopis, 2013).

     Wing and Experian’s Latino Influence Project illuminates elements of the Hispanic culture that may not be readily apparent to the untrained eye. And while the study is not meant to be the definitive word on Hispanic culture, it does give the would-be marketer a map for success. Important takeaways from this landmark study include that Hispanics have a fascination with new technology, primarily from the perspective that it is a way to keep them informed, and keep them connected to others. Tablet and smartphone use skews very high among Hispanics, and they have shown a distinct propensity to be open to mobile advertising if it provides value to them and are much more likely to engage with their devices while shopping (Wing and Experian, 2012). Moreover, Hispanics have a positive view of alternative medicines, organic and all-natural foods, and designer clothing labels. They also tend to buy new cars more often than used, care more about the environment than most segments, and are very into sports—particularly soccer (futbol) and boxing. Perhaps one of the two most important takeaways from the study is that Hispanics in general are incredibly family-oriented and love to live and share life with their loved ones. The second most important point to note is that Hispanics exert significant influence on non-Hispanic Americans who live in proximity. So while American culture does influence Hispanic-Americans to a degree, they in turn influence Non-Hispanic Americans, and that should certainly be noted by any marketer who wants to reach both cultures at once (Wing and Experian, 2012).

So How Does a Global Brand manager Design Advertising That Appeals to Both Non-Latinos and Latinos in the US?

     While this is a seemingly complicated question on its face, the answer is probably simpler and more straightforward than one might guess. Hispanics hold family and friends near and dear and have a lot of other interests that actually cater to that relationship. They like their devices so that they may stay in touch. They enjoy sharing food and celebrating so they may spend quality time with those who mean the most to them. Even their love of spectating sporting events is ultimately just another way to spend time with family while doing something fun. Though Americans are more individualistic and therefore less collectivist than Hispanics, they still share a love of family as one of their core values (Reel, 2005). Now we have established a universal theme between two seemingly disparate cultures—family and friends—that everyone values and understands. The smart Global Brand Manager will incorporate the element of family and friends into his cross-cultural advertising aimed at Hispanics.

     If the Brand Manager wishes to exercise standardization in order to save time, money, etcetera, he also needs to remain cognizant of the fact outlined in Experian’s research that shows Latinos have a strong influence on the Non-Latinos they live amongst. While an advertisement designed with a universal theme would probably be suitable to run in the entire country, the Brand Manager’s biggest bang for the buck will come in areas that have a higher density of Hispanics who can in-turn influence the non-Hispanics around them. Figure 1. illustrates the population densities as a percentage of total population on a country by county basis as of the 2006 US Census.

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Figure 1. (Source: Market to Latinos).

     So, if a Global Brand Manager wishes to create advertising that targets both Hispanic/Latino Americans and Non-Latino Americans, he will need to design a campaign that is culturally sensitive and culturally intelligent so that it becomes a genuine experience for the target and not a superficial effort from a company who obviously doesn’t really care. In addition, he will need to include cultural values that span both cultures and resonate with members of both target groups. Once he has a deep cultural understanding and can telegraph that through his advertising efforts, he needs to take the message to where the targets are. Since Experian has shown that Latinos exert significant influence over their non-Latino neighbors, it makes sense to use geographic targeting to have TV spots, radio spots and digital advertising get exposure where the target populations are the densest.

     None of this is meant to be an indication that standardization is the only way to go in a case like this. Many companies have multiple executions of the same approach that can be used for multiple cultures in the same country. Many times those companies even have English and non-English versions of the same advertising to be used depending on medium and audience. It is in those cases however that the transcreation process is more critical than ever so that the advertising becomes more than just a translated version, and actually maintains the original intent.

Toyota: La Auto Compania Mas Grande

 

   The behemoth Japanese automaker Toyota sells cars on a global scale, and as such knows that it takes much more than a one-size-fits-all approach. Even though we have discussed the existence of universal themes that transcend cultural lines, it is also true that within every culture there are certain nuances that contribute to the overall culture. Toyota has become pretty adept at leveraging those nuances to become ensconced as a fixture within the culture itself.   In this case, Toyota has taken a different tack than our Global Brand Manager above, by selling cars in the United States to Latinos and Non-Latinos alike, but by utilizing totally customized and separate advertising.

   Hispanics have a love affair with their cars. In fact, it is a widespread habit for people in the Hispanic culture to give their beloved car a name, or a nickname. Toyota leveraged this cultural nuance into a campaign they called “Mas Que Un Auto”, or “More Than A Car”. Mas Que Un Auto was so effective and well received that it won an ANA Multi-Cultural award. The premise of the campaign is that since Hispanics are already naming their cars, Toyota will help them by sending a FREE chrome name badge in the same font used on their Toyota model. They only thing Toyota asked for in exchange was a story about the owner’s love for their car and how the name came about. Toyota sent out over 100,000 badges in the first six months and received almost an equal number of Tweets and posts that ultimately became branded customer content. Toyota had enlisted the help of Saatchi & Saatchi’s Hispanic Shop to create what would become the highest user-generated campaign in the brand’s history (Wentz, 2015). The campaign was originally conceived to celebrate (and underline) the fact that Toyota was the number one selling car line with Hispanics in the United States for 10 years running, but they didn’t count on the response. In fact, the campaign went over so well, that they decided to try the same thing in Asia and South America.

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Figure 2. (Source: masqueunauto.com)

     In late 2015, Toyota reunited the two main characters of 1989’s popular Back to the Future to promote the new Toyota Mirai to American audiences. In this case, Toyota used the imagery and characters from a beloved and quintessentially American movie to advertise a “future technology”—hydrogen powered cars. The company cleverly leveraged a piece of pop culture as a cultural nuance to speak directly to the American car buying public. Instead of going into great scientific detail as to how the fuel system works, Toyota used the movie and some of its concepts as a sort of living metaphor. The bottom line is that the car runs on garbage, just like the “Mr. Fusion” machine enabled the DeLorean to do once Dr. Brown returned from the future. It’s a perfect slice of Americana served up without a huge amount of explanation. It just makes sense, and inspires a twinge of nostalgia in the process (Monllos, 2015).

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Figure 3. (Source: AdWeek).

   Toyota is a huge company with pockets deep enough to take multi-cultural marketing to the next level.   They have become keenly aware that the US Hispanic market is no longer some little niche market that can be treated as an afterthought. It is a full-blown one sixth of the country’s population with $1.5 trillion in spending power. They deserve respect and deference, and Toyota shows that by delving deep into their culture for a nuance that resonates deeply with them. Similarly, Toyota took a piece of American pop-culture and molded it into a campaign that resonates with its intended audience. To take matters a step further, Toyota maintains a dual website that is available in English, or Spanish.   It may cost Toyota more than a standardized approach, but their customized marketing campaigns and websites make each culture feel as though it was made specifically for them. Toyota’s marketing is the epitome of culturally intelligent and culturally sensitive, and they reap the rewards continually through increased engagement, sales, and brand loyalty.

–Steve

References:

Explore Hispanic Culture. (n.d.). Hispanic traditions. Explore Hispanic Culture.com. Retrieved on March 28, 2016 from http://www.explore-hispanic-culture.com/hispanic-traditions.html

History.com Staff. (2009). Cinco de Mayo. History.com. Retrieved fromhttp://www.history.com/topics/holidays/cinco-de-mayo

Llopis, G. (2013, May 13). Capturing the Hispanic market will require more than a total market strategy.  Forbes. Retrieved from http://www.forbes.com/sites/glennllopis/2013/05/13/capturing-the-hispanic-market-will-require-more-than-a-total-market-strategy/#60f9620b3a95

McLeod, S. (2007). Maslow’s Hierarchy of Needs. Simply Psychology. Retrieved fromhttp://www.simplypsychology.org/maslow.html

Monllos, K. (2015, October 14). Toyota reunites Doc Brown and Marty McFly to promote its newhydrogen fuel cell car. AdWeek. Retrieved from http://www.adweek.com/news/advertising-branding/toyota-reunites-doc-brown-and-marty-mcfly-promote-its-new-hydrogen-fuel-cell-car-167556

Pittman, T. (2015, August 19). A quick breakdown of the difference between Hispanic, Latino and Spanish.Huffington Post. Retrieved from http://www.huffingtonpost.com/entry/difference-between-hispanic-latino-and-spanish_us_55a7ec20e4b0c5f0322c9e44

Reel, G. (2005, April 20). American values. Common Dreams. [Weblog post]. Retrieved from http://www.commondreams.org/views05/0420-20.htm

Wentz, L. (2015, November 9). Toyota, Kleenex, Allstate and J&J win ANA multicultural awards.  Advertising Age. Retrieved from http://adage.com/article/ad-age-annual/toyota-kleenex-allstate-j-j-win-ana-multicultural-awards/301258/

Wing and Experian (2012). Latino influence project report: How Latinos are influencing non-Latinos living among them. Experian.com. Retrieved from: http://www.experian.com/simmons-research/latino-influence-project-report.html

Corporate Social Marketing and The Self: How Doing the Right Thing Can Impact Consumer Behavior.

Screen Shot 2016-03-11 at 2.09.02 AMIntroduction

     Corporate social responsibility, or CSR, has been defined as the continuing commitment by business to contribute to economic development, while improving the quality of life of the work force and their families as well as of the community and society at large (World Business Council for Sustainable Development, n.d.). At their heart, CSR initiatives aim to increase goodwill, money, and recognition of a cause, but have no specific intention of influencing customer behavior, which would seem to be a little at odds with the reason most corporations exist. The solution to this seemingly paradoxical conundrum is where corporate social marketing, or CSM, comes in.

 

Purpose Statement    

     This article will illuminate the importance of the growing trend of Corporate Social Marketing and its impact on branding efforts, improving corporate profits and on the creation of an effective marketing plan– all seen through the prism of the consumer’s idea of self identity.

 

Corporate Social Marketing

Phillip Kotler, a widely acknowledged expert in the field of modern marketing, described the concept of societal (or social) marketing as the organization’s task to “determine the needs, wants and interests of target markets and to deliver desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the society’s well-being” (Vashisht, 2005).   On its face it seems simple, but not every initiative or cause will resonate with every consumer. However, if CSM can be executed successfully, the company

can gain brand recognition, improve profits, add substance to the marketing plan, and create a brand that truly resonates with its audience on multiple levels. The trick of course, is to create a scenario in which the marketer can truly understand the motivations of the consumer. If a company is to strategically integrate a Corporate Social Responsibility element into their marketing, they must start by acknowledging the interests and attitudes of their many stakeholders, both internal as well as external. Those stakeholders can have a significant impact on the bottom line of a company, and if a proper CSM program is implemented to such a degree that it becomes a part of the brand identity, constituent stakeholders will typically begin to exhibit pro-company behavior (Hildebrand, Sen, Bhattacharya, 2011).

 

The Self.

When a consumer compares himself to a social ideal, his self-judgment actually impacts his own self-esteem. Whether that social ideal is income, prestige, social conscience, or whatever, the ideal self is a person’s conception of how he should be, or how he would like to be with regard to that social ideal (Solomon, 2013a). Because the ideal self usually differs from the actual self, consumers strive to affect the characteristics of the ideal self, based on the person they wish to be. Self-image, or self-perception, is very closely associated with the personality in that consumers tend to buy products and services from companies with personalities very similar to their own (Gountas, & Mavado, 2003). Moreover, it is becoming increasingly apparent that consumer self-perception is leaning toward the socially responsible end of the spectrum. In fact, more than 88% of consumers think companies should try to achieve their business goals while improving society and the environment, and 65% of employees (another key stakeholder) would consider leaving their job if their employer hurt the environment (Epstein-Reeves, 2010).

It is also important to note that a close relationship between actual self-image/product image congruity and consumer choice in product preference, purchase intention, product usage, ownership, and consumer loyalty has been supported by numerous studies (Sirgy, 1982). It is because of this fact that it becomes critical to take stakeholder self image into consideration when incorporating CSR into a marketing /branding plan.

Branding

Whether influence comes from a changing zeitgeist, or individual awakening to the idea that corporations need to give back to society, more and more people are aligning their self-image and their ideal self-concept with a mindset of conservation, charity and sustainable production models. As a result, a key factor driving the growth of CSM initiatives is the realization that consumer perceptions of a company as a whole and its role in society can significantly impact a brand’s strength and equity (Hoeffler & Keller, 2002). In fact, branding guru Kevin Lane Keller has stated, “although firms provide the impetus for brand creation through their marketing programs and other activities, ultimately a brand is something that resides in the minds of consumers” (Keller, 2013).   It becomes imperative then for a company to be cognizant of how consumers feel about themselves, and in-turn how their organization can align with those self-perceptions.

 

Brands often have clearly defined images, or “personalities” created by advertising, packaging, branding and other marketing strategies (Solomon, 2013b). CSM initiatives can impact those other activities by serving as a means for improving overall brand recognition. Of course the type and amount of recognition a brand receives from CSM initiatives is largely a

function of the amount and nature of its communication in the company’s branding (Hoeffler & Keller, 2002). For a brand to grow in today’s marketplace, it must become relevant in some way to the consumer. Relevance can be created by incorporating a strong CSM element into the overall marketing plan, but the CSM initiatives must be proactive in responding to actual trends, understanding the consumer’s concerns and self perceptions, as well as demonstrating that the participation by the company will actually meet a societal need.

 

An example of a company that successfully uses CSM to support its brand position is SUBWAY® Sandwich Shops. SUBWAY® is the first fast food restaurant to earn the American Heart Association’s Heart Check for serving heart-healthy meals (Subway, n.d.). With more and more people voicing concern for diet, health and overall wellbeing, SUBWAY® has incorporated CSM initiatives that reach to the very essence and core of their brand. The company has attempted to fill a real societal need that resonates with their stakeholders and is clearly benefitting from their partnership with the American Heart Association. The SUBWAY® brand is now indelibly associated with being a heart-healthy option, even though all of their offerings don’t necessarily fit the criteria. The societal impact is that the brand not only makes healthy alternatives available, but also actually encourages a contingent of the population to take control of their lives by eating healthier meals.

 

Improving Profits.

     Today, amid the lingering remnants of a fierce recession that has ravaged corporate profits and intensified pressure from shareholders, companies are endeavoring to create newer and more comprehensive CSR models than ever before (Knowledge@Wharton, 2012). The more cynical stakeholders may view CSR and CSM as mere gimmicks that pander to the audience and that are

only implemented in order to increase sales and gain attention. Ultimately, the initiatives can improve sales and will gain attention, but only if they are conducted in accordance with the brand’s ethical obligations and are meaningful to society on the macro level, and individual self perceptions on the micro level.

 

A simple example of a company employing a CSM program to build profit is the Best Buy recycling program. The program offers consumers the ability to recycle up to three items per day, and almost everything electronic is included. The initiative is ecologically sound and earth friendly, while giving consumers an incentive to go to a Best Buy location. Consumers are offered discounts and trade options related to their recycling items, and have shown to be likely to replace items while in the store.   While the program is still relatively new, it is profitable, if only barely. Leo Raudys, senior director of environmental sustainability said that Best Buy really has multiple revenue streams from this program.   First, they get a cut of the commodity sales from their recycling partners, and then they also receive revenues from its manufacturing partners who are bound by federal regulation to recycle a certain portion of their product a year. Although Best Buy considers the program a “value added service” for their customers, they do enjoy incremental sales associated with the program (Aston, 2012). Of course it goes without saying that Best Buy is reaping benefits measured in brand equity and recognition.

 

Incorporating CSM Into the Marketing Plan

     As we have seen, a CSM program can be a very effective and beneficial component of a company’s marketing strategy and should be formally written into the plan. Garratt Hasenstab, the Director of Sustainability at the Verdigris Group stated that they have made it not only a marketing policy, but also a corporate policy to become a world leader in CSR. The policy is not

only written into their marketing plans, but permeates the very fiber of the company, and they benefit in a number of ways (Thorpe, 2013).   Most company managers will be amenable to supporting a CSM component because they know it is good business to be perceived as a socially responsible organization, and they would be right.   The problem then is how does the marketing team execute the CSM plan? A good start would be an in-depth research study to determine the thoughts and feelings of the various stakeholder segments to gain a deeper understanding of not only how they perceive the world around them, but also how they perceive themselves and their role therein. It will also be imperative for marketing managers to be proactive in initiating a program rather than creating one as a response to pressure from the competition. In other words, it has to be real. Consumers are savvy and cynical and will see right through a corporate responsibility measure enacted for the wrong reasons.   The cause has to be familiar to, and resonate with, the consumers first, and then its also critical that it supports the company’s overall mission statement, goals, products and/or services.

 

Conclusion

As the practice of including a social responsibility element in marketing plans proliferates across most industries, there are many examples of companies that are doing it well, and reaping the rewards. Incorporating such a strategy doesn’t happen overnight however. It takes significant planning, commitment, thought, and most of all, research. The bottom line is that, much in the same way organizations have to prepare to market their products, companies also need to fully understand their constituencies and what motivates them before they can choose the right CSM program and execution. If for example a company specialized in the manufacture of shotguns for duck hunting purposes, chose a CSM plan that helped to preserve the wetlands so

future generations had a place to hunt ducks, the initiative would probably be fairly well received and successful with all segments of their stakeholders. If on the other hand, they chose to replace the wetlands with a retirement village so that old people could have a nice place to spend their twilight years, it probably would do them more harm than good. Even though the retirement village scenario represents a good cause, it doesn’t mesh with the company’s business and most likely wouldn’t resonate with the stakeholders.

 

If a company is willing to do the required research and investigation so that the potential CSM program they choose fits with their brand and resonates with their consumers, they have a great chance of seeing a marked positive impact on both brand equity and potentially profits as well.

 

 

References:

 

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