the molife of crappy booze

Tom Pirovano, Director Industry Insights, The Nielsen Company

SUMMARY: Purchasing decisions in 2010 will be affected by factors such as brand innovation, retailer assortment, proliferation of store brands, and healthy eating preferences. Walmart’s “Project Impact” strategy and other similar retailer initiatives will test consumer preferences for clean aisles and lower prices vs. broader product selection. In the first few months of 2010, sales of healthier eating alternatives should be a good indicator of consumer confidence. As 2009 brought an increase in coupon activity, CPG manufacturers will look for more efficient and effective ways to reach consumers vs. traditional trade spending. Time will tell if new product innovation will be enough to drive shoppers back to traditional brands.

Throughout the recession, retailers and manufacturers have stepped up efforts to bring about innovation that seize the moment and “drive the recession wave” rather than “ride the recession wave”. Winners in 2010 will continue to innovate in the form of new formats, service offerings and differentiated products—a list of best bets for 2010 is described below.

Winning Brands Will Innovate and Differentiate
Sales of store brands have grown by $12 billion (up 17%) vs. two years ago as shoppers focus on value. As the economy improves, value is still important, but smart marketers are differentiating brands through innovation—with new products, new flavors, new packaging and with marketing/media campaigns with a heavy emphasis on social media to build rapid awareness and product trial. Brands that fail to innovate may also fail to win buyers back from store brands.

Product Assortment is a Point of Differentiation
Some retailers have followed the lead of Walmart’s “Project Impact” with cleaner aisles and limited assortment. Others have an opportunity to set themselves apart with a wider selection of products. Supermarkets that struggle to compete with Walmart’s prices will find an advantage with shoppers looking for variety. The trick is finding which categories require the broadest selection.

Healthy Eating Is a Solid Measure of Consumer Confidence
As the economy improves, consumers will focus on health and wellness priorities. An increase in sales of foods labeled “organic”, “natural” and “high fiber” as well as diet aids and reduced calorie/fat frozen dinners and entrees will be an indicator that consumer confidence is growing. Look for the first signs after the holidays, when consumers tend to start those New Year diets.

Manufacturers Get Stingy with Trade Promotion Spending
A whopping 50 million products each year—43% of supermarket purchases—are sold with a feature ad, display or price reduction funded primarily by manufacturers. An increase in coupon activity and new advertising opportunities such as cell phone apps and in-store TV networks will stretch promotion budgets. Retailers need to demonstrate sales performance to get their fair share of trade funds.

Direct to Consumer Options Thrive
Online price wars and the squeeze on in-store assortment will fuel large and small manufacturers to give consumers options to buy direct from manufacturers or from online services from the likes of Amazon, Drugstore.com and Alice.com.

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What if what you are selling is neither a product or a service? Most marketing advice is distributed based on the assumption that you fit one of these two categories. The unfortunate gap between them is the large category of organizations or businesses that provide an experience – which are often left out. If you were marketing a destination such as a city or country, for example, would that be a product or service? What about a hotel?  Or a conference? Or a sporting event? What these examples share is that might be described as both a product AND a service – or at least a collection of other products and experiences. They are all experiences.

For marketers who are focused on promoting an experience, the traditional product or service model doesn’t work. When it comes to promoting an expeirence instead of a product or services, here are a few tips and examples that may help:

1. Create a comprehensive starting point. One of the toughest things about travel information online is that it is so spread out. To combat that spread, the country of Sweden created a single hub for everything about their country. From tourism to environmental belief to culture to migration. By putting all this information in once place, Sweden makes it easy for someone to learn about their country and culture. They offer a place to start.

2. Find your best ambassadors. When it comes to most destinations, the power of the experience usually comes most from the people who have already been there and talk about it. The benefit of social media is that you can find these people more easily. They are the ones that upload hundreds of great photos, or comment on message boards or write blog posts. If you can use these tools to find them, then you are in a much better place to think about how you might help them share their positive experience with your destination with even more people.

3. Offer an exclusive and talkable experience. El Bulli is the best restaurant in the world according to several food magazines, and has won that honor for multiple years. It is situated off the Costa Brava near Barcelona in Spain, and the cuisine is so unique the restaurant is closed for 6 months out of every year just so the chefs can develop and practice it. You simply cannot go to El Bulli without telling someone else about the experience – and you have to book far in advance to even get a reservation. That is a unique and exclusive experience.

4. Highlight your best stories (even if you didn’t create them). In New Zealand, you can dine in a tree restaurant. You may have seen photos of it – but it is a restaurant that is built entirely in a tree in a New Zealand forest. The interesting thing about this restaurant, though, is that it was created as part of a marketing campaign for Yellow Pages to prove that it was still useful. The end result, however, was a destination that the entire country of New Zealand and the surrounding region could promote as part of their experience.

5. Translate one experience to another. Let’s say you are trying to promote a skiing destination. In the winter time, your marketing is obvious. The problem is, you still have half the year when you need to drive people to come even though you don’t have your best natural asset … snow. What Keystone Lodge in Colorado does, is they change their marketing to use related experiences. For example, you may not be able to ski down their mountains, but why not mountain bike down them instead? By translating one experience to another, they can successfully give their customers another reason to visit, even without snow.

6. Focus on letting people share their experience LIVE. When it comes to travel, most people inherently WANT to share their experience. The main problem is that there is not always a way to share that experience as it is happening, and later they may not remember. What if you let people upload digital photos of themselves online directly from your museum? Or gave people free postcards with a picture of your store and free postage to mail them? The easier you can make it for someone to share the experience they have with you as they are having it, the more likely they will take you up on it.

7. Build engaging itineraries instead of listing of attractions. The normal way to promote destinations is usually from creating a big list of attractions and letting people select what they are interested in. Everything comes a la carte, and the only alternative is typically to take a guided tour. Instead, what if you were to create itineraries for people based on interests? The ultimate day for Clock Enthusiasts in Switzerland, or the Influence of Indian Culture Guide to London. These are itineraries that people could choose based on their interest – and do more than simply listing attractions.

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The connected customer leaves brands in the dust.

As we close out the year, it’s important to look back at what happened in social marketing in order to plan for the future. There were four key trends in 2009 that CMOs should reflect on, starting at the macro level then shifting down to micro real-time updates. They are:

The Recession Spurred Consumers to Adopt Social Technologies. Humans are social creatures and, as a result, they tend to band together in hard times. During financial crises, this same behavior is evident: People connect to one other, share, learn, and communicate. What’s more, with unemployment at record highs, those with internet access have more time–and need–to connect with others. It’s evident through Facebook’s 350 million global users. For brands, it’s interesting to note a study by Razorfish, which indicates that 52% of consumers have blogged about a brand’s product or experience. Don’t expect this to change as the recession lifts, as it is the preferred method of communication for young people.

Some Brands Followed Suit With Social Marketing. Marketing budgets are pinched during tough times. Recent data from eMarketer indicates that companies are slashing print budgets by 37% and TV by 21% as a response to the recession. Yet marketers know that tough times also spur innovation, as they experiment with mediums such as social marketing. Social marketing promises lower costs and bigger returns. In fact, word-of-mouth campaigns encourage consumers to do the marketing on behalf of the brand themselves. Yet despite the opportunity, research conducted by the Altimeter Group (where I’m a partner) and Wetpaint found that while brands like Starbucks, Dell, eBay, and Google interact with their customers, most brands do not. Still, we’re seeing a noticeable increase in social marketing budgets, as brands find ways to innovative marketing.

Social Networks Share Data, Spreading Social Influence. A key trend across the technology vendor space in 2009 is that social networks are connecting with other systems. Much like how Apple’s iPhone developer program enables third parties to build and create new applications, many social networks are doing the same. Take for example, LinkedIn, a business network that recently began allowing third party sites to connect with the LinkedIn platform to share data. Similarly, Facebook Connect allows users to log into third party sites using their Facebook ID. There have been over 80,000 connections since this time last year. So what does this data availability mean? It means that consumers’ social experience will spread from site to site, and that wherever they go online or off, they can access their friends’ opinions, experiences, and recommendations in real time.

Consumers Move Faster By Sharing Real-Time Data. In August, 2009, blogger Heather Armstrong, who boasts over a million followers on Twitter was miffed about a shabby customer experience and tweeted about it. Although the company, Whirlpool, responded within hours, the damage had been done–Armstrong’s real-time feedback about her company experience spread quickly through her network and beyond. This spread of customer experiences in real time is a trend, in fact, status updates are a feature found not just in Twitter but in many social networks like Facebook and LinkedIn. Recently, Twitter signed a deal to allow Microsoft’s Bing and Google access its real-time data, displaying real-time tweets which appear along side traditional search results. So what is the impact of this increase in real-time data? It means that consumers can instantly give feedback about their product experiences and tell their friends. For brands, it means they have to move faster to keep up with consumers who are sharing.

Takeaway: This year, consumers are more connected, and moving faster than brands. It’s essential for senior marketers to use the past to plan for the future, and these four trends indicate that people are connecting and sharing with each other–at an increased pace. Brands need to develop a strategy and a plan to respond–not simply react–to the latest technology. In our next piece, we will discuss the key trends to watch in 2010 to help with strategy planning.

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That’s for today till after Christmas! Have a safe holiday!

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Good news! For those of you who are still feeling lucky and craving for chocolates, you still have time to join the Cadbury Chocettes Small Doses of Happiness Championship contest!

How?

Be the funniest person in town, record &  submit your funniest video, garner the highest votes possible, be among the 20 finalist selected for an on-ground championship in Cineleisure The Curve on 15 Aug, and emerge as the Grand Prize winner!

Dress up, put on some make-up & prepare to redeem your prize! Cold hard cash of RM10,000!

Hurry up!

PS: If you’re not interested, do also visit the site and listen to the opening ‘eerie’ laughters!

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