Whether you are a soccer fan or not, it was hard to miss the world class attention the month-long event unleashed – as well as the marketing lessons that brought the games to South Africa this year.

This was the first World Cup ever to be held on African soil. Complaints about the noise from vuvuzelas aside, fans gave South Africans solid reviews on hosting the event. 

What you may not know is that long before South Africa won the bidding to host the games, it created a marketing council of thought-leaders focused on creating a cohesive and long term vision for the brand of South Africa. You may not think of countries as brands, but the tourism and investment agencies of government certainly do. 

The reason this matters for you? We can learn a lot from how South Africans wooed, won and hosted the FIFA World Cup — lessons that can help inspire your marketing and people.

To help their citizens get ready for the World Cup, the marketing council created a four-step plan that every South African citizen could be a part of. Within the following four simple elements are some key lessons that you can apply to your small business:

1. Football Fridays (Lesson: Create a shared ritual to foster a sense of team) – Every Friday leading up to the start of the event, South Africans would come together to watch and celebrate football to build excitement. What could you do in your small business to offer this type of consistent moment where all your employees could share some type of ritual? Perhaps monthly bowling, or summer Fridays where everyone leaves at noon. Whatever you can do to create a ritual that everyone can be part of, you can start to foster a sense of team and belonging among your group.

2. Fly The Flag For Football (Lesson: Let people publicly declare themselves part of something) – The South African flag is a symbol of the country and the more places it is flying, the more patriotic everyone would feel. So the marketing council focused on asking people to share it. The flag is a symbol of something bigger than any one individual, but it offers a shared identity. How could your customers share an identity with your business? Car dealerships put frame plates around license tags. Home security companies put a stake on your front porch that says, “this home protected by [security company name]” These are daily examples of how businesses achieve this on a smaller scale.

3. The Diski Dance (Lesson: Use a shared exclusive experience to deepen relationships) – This is a unique South African dance around football moves, which the marketing council created around videos on YouTube and asked citizens to watch them and learn the dance. The thinking was that by having this shared language through dance they could give the South Africans a common “insider knowledge” to bond over. The Diski dance is like the secret handshake. Is there anything your customers know that is exclusively for them? Private sales or VIP offers are one promotional example, but this could be so much deeper. Do you offer them something that has inherent value and invite them to be part of it? The more experiences like this you can offer, the more involved your best customers and employees can be with your business.

4. Our National Anthem (Lesson: Encourage people to declare their loyalty to make it real) – The national anthem for South Africa is a symbol of loyalty to the nation as it is for other countries around the world. Having citizens learn it and sing it with pride is important for South Africa to build a strong cultural identity of people connected to the country. Chances are you don’t have an anthem for your employees or your customers, but there are ways to use this idea in your small business as well.  Starbucks managed to do it on a smaller scale by introducing its lingo into the way that you talk about your coffee. Now you’ll order a “grande” instead of a medium. 

Airlines and hotels are also good at fostering this through extended products, so you will get the credit card for double miles or put the special tag on your luggage. Each approach declares loyalty to the brands in not-so-subtle ways.

These principles helped South Africa capture a place in history and on the world stage as Spain took the coveted championship home. Hopefully, some of the principles that worked for the host country of World Cup 2010 can work for you.

By Rohit Bhargava

Source: Open Forum

Raman explains how in an e-mail interview about their new book, The New Science of Retailing: How Analytics Are Transforming the Supply Chain and Improving Performance (Harvard Business Press).

As a practical guide, The New Science of Retailing helps retailers mine their sales data to identify and pursue missing opportunities; improve store-level execution; unite partners’ objectives for creating a flexible supply chain; benchmark performance against other retailers; and evaluate and manage new technologies. Raman and Fisher provide specific, detailed metrics and techniques that can be used by retailers to benchmark their performance. The book also describes how investors can—and do—pay closer attention to retailers’ inventory levels.

“When it comes to implementing science in retailing, the ‘missionary’ is more important than the scientist.”

Raman, who specializes in operations management, is the UPS Foundation Professor of Business Logistics at Harvard Business School, where he teaches courses in supply chain management, service operations, and the investor’s perspective on operations to MBA students and executive education participants. Fisher, the UPS Professor of Operations and Information Management at the Wharton School at the University of Pennsylvania, is codirector of the Fishman-Davidson Center for Service and Operations Management.

An excerpt from their book follows our interview.

Martha Lagace: In a nutshell, what is rocket science retailing?

Ananth Raman: It means that retailers should

• Use the data generated at your stores to understand customers and their needs deeply.
• Develop the ability to respond to this understanding with better-tailored assortments, replenishment of the hits, and timely markdowns on what is left over.
• Execute well, especially at the stores. Attend to data inaccuracy and placement of products within stores.
• Align incentives within your organization and in the supply chain.
• Use technology judiciously and pay attention to emerging new technologies, whose value might still not be apparent.
• Explain the changes you are making to your investors.

Q: In The New Science of Retailing, you and Marshall Fisher write that “well-designed incentives are a necessary condition for rocket science retailing to work.” What are some typical sources of incentive misalignment? How can incentive misalignment be reduced or overcome?

A: We frequently see perverse incentive misalignment within organizations and in the supply chain. In the book, we identify three reasons for perverse incentive misalignment:

1. Incentives exist to induce specific behavior. Managers who design incentives often are not entirely clear on the behavior they would like to induce.
2. Managers who design incentives often do not have a sufficiently deep understanding of operational details.
3. Most operations—both within the firm and in the supply chain—are rife with “hidden” information and action.

To align incentives better, managers should first acknowledge the role of incentives in guiding behavior. Then, they should develop a deep understanding of their operations and the behavior they want to induce. Finally, they should trace the incentive misalignment to hidden action or information and use contract-based, information-based, or reputation-based solutions to reduce incentive misalignment.

Q: What inspiration and guidance do you think retailers could draw from the Toyota Production System (TPS)?

A: TPS highlights include the power of focusing and executing the operational details; the vital role of continuous process improvement; and the need to involve employees and other firms in the supply chain in improving processes.

Retailers can certainly learn from the auto industry’s experience. Like in manufacturing a few decades ago, there is a lot of low-hanging fruit in retail operations today. However, to harvest these fruits retailers will have to

• make problems visible,
• provide their associates with tools for identifying and solving these problems,
• engage their employees and suppliers in their improvement efforts.

Q: Your book notes that typical stores experience staff turnover of 100 percent each year. How do you see successful retailers retain and empower employees?

A: Successful retailers empower their workers to improve processes at the store and also give them the tools and training needed to use the empowerment appropriately. Enlightened retailers also realize the importance of not overloading their store employees with too many tasks. Finally, we do see a number of retailers that are paying careful attention to the hiring, training, and rewarding of store employees.

Our favorite example of a retailer that has used labor successfully is the online retailer Zappos.com. The company pays very careful attention to hiring and training. It reduces turnover by providing employees with a career and seeks to find employees who are looking for one, too. In fact, during the training period, all trainees are offered $2,000 to quit Zappos: Most decline the offer. Zappos’s approach to managing its employees results in very satisfied employees, which has translated into very high customer satisfaction and sales growth.

Q: What typical errors do you see retailers make assessing and investing in new technologies? How can retailers overcome these errors?

A: Retailers make several errors concerning new technologies, but they can be surmounted.

Keep an eye on emerging technologies. Technology has the ability to change retailing substantially: The Internet is the most recent example. Hence, retailers—even though they are not usually technology specialists—should pay attention to technology and technological change.

Before adopting the technology, understand its key details. Adopting a technology without understanding its power and limitations usually ends in disaster.

To leverage a technology optimally, pay careful attention to how the technology integrates with the company’s operations and business model. When adopting technology, retailers—and many organizations—often fail to make changes to their processes and business model that would be needed to use the technology optimally. That is akin to replacing your car with a helicopter but not making any changes to your lifestyle.

Adopt a “call options” approach. Why? It is usually hard to estimate precisely the benefits that will accrue to a retailer from adopting a new technology: This often leads to retailers being reluctant to invest in the new technology. But by structuring your investment as a “call option,” if the technology turns out to meet or exceed expectations, you can make a more substantial investment later. On the other hand, if the technology disappoints, you would have lost only the small investment up front.

Q: What are the main barriers you see for integrating new analytics within retail organizations?

A: In our book we identify many barriers:

• Analytics often require people to change the way they think. This is hard.
• Many non-analytically inclined managers are skeptical of analytical approaches because past claims by some analysts have been exaggerated.
• The retail organization might not have the skills needed to sustain the analytic approach.
• Analytic skills often need organizational change that the retailer is reluctant to make.
• Implementing analytic skills might require collaboration across multiple functions.
• Analytics are simply not “fun” for many people.

Q: How can managers ease the path to adopting the new science of retailing in lieu of making major cultural or structural changes?

A: When it comes to implementing science in retailing, the “missionary” is more important than the scientist. Implementing the science is often a bigger challenge than devising the science itself. Over the years we have seen many successful missionaries implement analytic approaches without the mandate to make large-scale cultural or structural changes.

Here is what some of these missionaries do:

• Recognize that there are multiple users, each of whom has “veto power” on adopting analytics. Involve each of these users and understand and address every one of their concerns.
• Quantify the benefits—and acknowledge the fact that precise quantification is usually impossible! Ideally, “own a benefit” with senior management.
• It’s better to win quickly rather than seek to win big!

Book excerpt from The New Science of Retailing: How Analytics Are Transforming the Supply Chain and Improving Performance

By Marshall Fisher and Ananth Raman

How will rocket science retailing be different in the new normal than it was in the past? Equally important, what are the salient aspects of rocket science retailing that need to be reinforced? In the new normal, managers will have to learn to cope not only with mix uncertaintybut also with aggregate demand uncertainty. In addition, managers will have to redouble their effort to improve product availability and operational execution.

Anticipate and React to Fluctuations in Aggregate Demand

With total revenue likely to fluctuate much more than in the past, managers must be ready to take anticipatory action. Consequently, they should improve their ability to forecast aggregate demand. Supply chains during the last few decades have focused on dealing with mix uncertainty. In fact, many of us—rightly for the time we were focused on—assumed that firms could forecast their aggregate demand well but not their mix, and we worked on improving approaches for mix forecasting. Unfortunately, these tools don’t translate well to situations with aggregate demand uncertainty.

How well do managers forecast total revenue? You can get a sense of that from looking at investment analysts’ forecasts. While it is true that managers have information that analysts lack, analysts’ estimates and management’s guidance on earning (as opposed to sales) show that the two groups are closely aligned in their thinking. Analysts are often in frequent and close contact with management, even though they’re not privy to inside information.

Examining analysts’ sales forecasts in 2008 reveals that analysts—and probably managers too—were slow to update their demand forecasts as the economy deteriorated and the financial crisis intensified. […] In March and April 2008, when [Abercrombie & Fitch] was making operational plans (for example, sourcing raw material and planning production), analysts were expecting its annual sales to be roughly $4.2 billion. As late as August 2008, they were still expecting more than $4 billion, and even in October—that is, after Lehman Brothers declared bankruptcy—they were projecting close to $3.8 billion. In other words, they overestimated by roughly $250 million in October, nine months into the year for which they were forecasting. The evidence that we’ve seen suggests that this performance is typical: analysts and managers have trouble making forecasts in the kind of volatile economy that will probably be part of the new normal.

Pay Attention to Product Availability

Repeated studies in supermarkets and other retailers of fast-moving good have shown that roughly 8 percent to 10 percent of the SKUs in a store are stocked out at any given time. Stockouts are expensive for retailers for two reasons. First, they lead to lost sales. A 2004 study that surveyed over 70,000 consumers in 29 countries found that when they did not find the exact item they wanted, nearly one-third went to another store to buy the product, while less than half bought a substitute.³ Perhaps most significantly, stockouts harm customer goodwill. A study conducted by a multinational consumer-goods maker shows that consumers blame retailers for the stockout a whopping 83 percent of the time, irrespective of who caused it.

Pilot programs at many retailers have shown that stockouts can be reduced with better forecasting, inventory planning, and in-store execution—exactly the techniques described in this book.

Companies often understate sales lost due to stockouts. Our favorite example comes not from retailing but from Hugo Boss Bodywear, a division of Hugo Boss AG. In a test, the bodywear division recently moved 45 of its SKUs from monthly to weekly ordering while leaving the ordering process for 269 SKUs, which served as a control, untouched. The in-stock rate on the 45 weekly SKUs went from 98.24 percent to 99.96 percent. Sales for the 45 SKUs increased by 32 percent, even while sales for the control SKUs fell by 10 percent. Why did sales rise by 32 percent rather than 1.72 percent, the difference between 98.24 percent and 99.96 percent? Though the division had historically achieved high in-stock rates on average, there were periods when in-stock rates on popular styles dropped to roughly 85 percent. Anticipating periods of low availability, retailers often carried an “insurance brand,” which they could order more of during the periods when Boss’s products were in short supply. By taking the in-stock rate close to 100 percent, Boss reassured retailers that certain SKUs would never be out of stock. Many retailers responded by dropping the insurance brand from their assortments, causing Boss’s sales to skyrocket.

Improve Operational Execution

Steve Kaufman, former CEO of Arrow Electronics, a large distributor of electronic components, often says, “A less than perfect strategy with perfect execution will beat a perfect strategy with less with perfect execution every time.” The adage is definitely true in retailing.

Execution can take many forms in retailing. In stores, for example, you must greet customers appropriately, keep inventory accurate, and minimize misplaced product. In any economy, these tasks will remain vital to competitiveness. Improving them requires attending to basics like employee training, appropriate staffing, and store layout. Everyone in retailing knows this, but basics are boring, and it’s easy to lose sight of them.

The U.S. automotive industry offers a cautionary tale of the perils of not tending to the basics. The Big Three—General Motors, Ford, and Chrysler—declined and Toyota rose primarily because Toyota, with its push for continuous improvement, focused on operational excellence and produced more reliable, economical cars. Not surprisingly, Toyota’s market capitalization during the last few years has exceeded by substantial amounts that market capitalizations of Ford, GM, and Chrysler combined—and that was true even before GM filed for bankruptcy and Chrysler was merged with Daimler.

Retailers should learn from the Big Three’s mistakes. Toyota couldn’t have beaten them without innovative human resource practices that engaged and empowered its line workers to identify ways to improve its production processes. Retailers, too, must recognize that to excel at execution, they must empower their people, including in their stores and distribution centers.

A few years ago, we visited a Toyota factory where we asked the plant manager why Toyota allowed other manufacturers (including competitors) to tour its plants. “Wouldn’t they be able to copy the Toyota Production System?” we asked. “Others cannot replicate our performance unless they can replicate what goes on in our people’s heads,” he said. The more we learned about the Toyota Production System, the more we agreed. Other companies could (and did) easily copy physical attributes of the Toyota Production System, such as andon cords and kanbans. But they couldn’t replicate Toyota’s approach to people. The challenge with retail execution is similar. Not only do retailers, like manufacturers, have to focus on operational details, they also need to transform their frontline workers into a “community of scientists.”

As we discussed earlier in the book, the hardest part of deploying analytics is implementation. It can take a long time and must be done in phases. It’s a long journey for most companies. But as the Chinese proverb says, “A journey of a thousand miles begins with a single step.” Are you ready to take a step?

By Martha Lagace

Source: Harvard Business School Working Knowledge

He’s the chief marketing officer for Sprint Prepaid Group, which created and introduced four prepaid brands in the past year.

Market segmentation fueled the conceptualization and launch of Boost Mobile (emphasis on nationwide talk, text and web), Virgin Mobile (emphasis on messaging, email, data and web rather than talk), Common Cents (basic talk with easy-to-understand billing), and Assurance Wireless (free phone and 200 minutes of talk for qualifying customers, supported by the Universal Service Fund). Features vary but include product purchase separate from service agreement; nationwide coverage areas; no-contract, unlimited and per-minute plans.

Identifying market segments, reaching multiple types of customers, serving their unique needs, and leveraging resources to generate greater profits amidst the day-to-day turmoil of running a business isn’t easy. Lindsay shared his approach to brand positioning, messaging, and go-to-market strategies with me. These basic principles can be adapted to your small business.

Market Segmentation at Sprint Prepaid Group

Growth in the prepaid market was the impetus behind market segmentation for Lindsay’s business. Over the past year, new wireless customers have been just as likely to prepay for service as sign a contract.

When prepaid comprised a much smaller share of the market, wireless carriers reasonably made general assumptions about prepaid customers: They were very often credit-challenged, independent youth not able to qualify for contract service. But as the industry grew and more people opted for prepaid plans, the opportunity to slice the market into multiple segments emerged.

Designing multiple, targeted offers — products, service features, pricing plans, etc. — aligned with the needs of customers representing all ages and levels of creditworthiness held the potential to grow sales and profits.

Lindsay’s team members reviewed Nielsen reports, gathered information directly from Sprint customers, conducted market research drawing from the general population, and hosted focus-group sessions. Quantitative data drove analyses of the market based on not only traditional demographics and geography but also psychographic characteristics and behavior. Focus group sessions helped to explain the reasoning of customers.

This research provided insights useful in beginning the process of defining new market segments along with brand messaging and mix of media buys that could resonate with target audiences.

Lindsay gathered his brightest people to review findings and talk about the best ways to think about the market in context of research, their domain knowledge, and instinct. They determined how to delineate market segments and approach each market. They predicted what types of consumers might respond to certain offers.

Finally, he led the design of each brands’ go-to-market strategy, which integrates all customer touchpoints: products, customer care, and more — wherever, however, and whenever customers interact with the brand.

To create diverse, desirable offerings while controlling costs, the group tapped common back-end support, such as customer care and technical infrastructures; and shared financial services to further leverage the business.

Marketing Lessons for Small Businesses

Lindsay provided guidance for smaller businesses:

• Deepen market research when you realize that the market is shifting, growing, and becoming more diverse. Identify possibilities for segmenting your markets or identifying a new niche through ongoing conversations with customers and analyses of industry trends. 
• See the benefits and constraints of segmenting markets solely on traditional demographics (age, income, and ethnicity), which are very often geographically clustered. Recognize that income doesn’t necessarily indicate willingness to spend; instead, personal priorities are just as likely to dictate consumer behaviors and spending habits.
• Let research findings and focus-group results inform, but not dictate, your decisions. Simplify information. Trust your instincts and that of your best people, guided by knowledge.
• Develop and test hypotheses about how customers will react to new offers (inclusive of products plus pricing). Adjust marketing plans using real-world reactions.
• Consider all customer touchpoints when creating, launching, and managing a new brand or new offer. Remember that the product is just one component of the customer experience. Devise and execute a consistent, holistic strategy that covers all elements of the customer’s interactions with your business including pricing, policies, customer service, and billing.
• Understand that your business can create fresh, compelling offers with or without the introduction of a proprietary product (though intellectual property can provide a “sustainable differentiation” that is immensely valuable). Create brands, messaging, and products based on greater market segmentation.
• Make sure that expected volume will support incremental operational costs (staffing, advertising, infrastructure) associated with attracting and serving new markets.

The “sweet spot” for business and market segmentation, Lindsay tells me, is the “intersection of customer needs, technology capabilities, brand credibility, and business model.”

By Julie Rains

Source: Open Forum

While Nike grabbed an early lead with a star-studded ambush commercial, adidas has gained momentum with its domination on the World Cup pitch.

When the World Cup final kicks off this Sunday, futbol fans everywhere will be watching the Netherlands play Spain for soccer supremacy. But in the world of sports marketing, only one competition matters: the battle of stripes versus swoosh.

The Dutch team is one of 10 countries wearing Nike-branded uniforms for the duration of the World Cup, while Spain is on Team adidas, the most successful of the 12 countries that the legendary soccer brand has outfitted. But the championship match that will pit logo against logo is just the final phase of a tournament that has seen the two Goliath sports brands vying for exposure on the world stage with the world’s game.

The score so far? Nike grabbed the early lead with a star-studded, three-minute World Cup ad, created by Mexican film director Alejandro Gonzalez Inarritu, that helped it to steal buzz before the tournament launched. But then it stumbled when several of those stars, such as English superstar Wayne Rooney, disappointed and their teams were knocked out early.

Adidas, meanwhile, which has shelled out huge sums to be the official sponsor of the World Cup among sports apparel companies, has gained momentum as the tournament progressed, dominating the pitch with its billboards and controversial, but stylish, Jabulani ball, which has sold 13 million since the design launched.

“As for the final … I would call it a draw,” said Rob Tuchman, the executive vice-president of marketing firm Premiere Global Sports, adding that each company will be hoping that its side wins this weekend to get the most goal celebration and post-event exposure.”

Adidas and Nike are the Coke and Pepsi of the soccer realm.

Just as Coke has paid dearly to ensure that a Pepsi billboard never appears at the Olympics, adidas has long held a lock on its relationship with FIFA, soccer’s governing body, for sponsorship of the sport’s signature event.

But that doesn’t mean Beaverton, Ore.-based Nike, a relative upstart in the sport compared to its German competitor, hasn’t tried to break through. In addition to the deals it has made to outfit teams, it struck individual agreements with players to wear Nike cleats (footwear is not part of the team outfit arrangement). The company says nearly 50 per cent of the players on the field laced up their shoes.

For this World Cup, it also launched campaigns including a search for undiscovered soccer players to attend a Nike academy and donated a facility in Soweto that offers sports fields, HIV testing and education.

And then there was that epic television ad, which has racked up more than 18 million views on YouTube.

“It created great momentum right out of the gate. It had such a great response,” Nike spokesperson Derek Kent said. Research firm NM Incite noted that the campaign had an ambush marketing effect, taking attention away from adidas – though that was reversed once the tournament began.

Of course, the Nike campaign wasn’t helped by the fact that among the seven superstars featured in the spot, only one scored a goal, and all have now been eliminated from the tournament.

Jeff Cooper, director of marketing communications at adidas Canada, was coy about whether the “Nike curse,” as it has been dubbed, has caused some schadenfreude in the adidas camp. But he said the company was always comfortable relying on the power of its official FIFA partnership.

“They had tremendous success with that creative,” Mr. Cooper said. “But we were counting that when the show starts, it’s adidas. … That story was written because we sponsor, and we invest our dollars, in the World Cup.”

And it has for some time: Adidas has created the last 10 World Cup balls, and has been an official sponsor for more than 40 years. In soccer branding terms, Nike is a relative upstart: Adidas is the heritage brand, going all the way back to a match in Bern, Switzerland, in 1954, when founder Adi Dassler had the idea to give the German National Soccer team screw-in studs on their shoes, helping them keep their footing in inclement weather and win against Hungary.

That heritage also means some well-established business relationships. Industry rumours had it that Nike offered the German team double what adidas was paying to convince it to switch its contract and wear Nike uniforms – to no avail.

“The history there, it would be like buying the propeller logo away from BMW,” said Mark Harrison, president of Toronto-based marketing firm TrojanOne Ltd., which counts Nike and Coca-Cola among its clients.

Nike may have been smart to save the money it would have paid for the FIFA partnership, spending it instead on viral marketing – even if the ad started rumours of a curse, said Mr. Tuchman, the marketing executive.

Any brand that can tie itself to the tournament stands to benefit immensely. With all eyes on the world’s most popular game, every player is a billboard with a global reach.

“You get major marketers taking it to a different level,” Mr. Harrison said. “The World Cup is the greatest sporting event in the world. It’s greater than the Olympics.”

Uniformly visible: Nike and adidas have dressed most of the World Cup teams

Adidas may have its name all over the soccer pitch, thanks to its official partnership with FIFA; but both the soccer giant and its rival, Nike, have spread the money around to outfit 22 of the 32 teams with uniforms – turning every player into a marketing opportunity.

Team Nike

Eliminated Goals scored

The Netherlands* 12

Brazil quarter-final 9

Portugal second round 7

USA second round 5

South Korea second round 6

Australia first round 3

New Zealand first round 2

Serbia first round 2

Slovenia first round 3

England** second round 3

Team Adidas

Spain* 7

Germany semi-final 13

Argentina quarter-final 10

France first round 1

Mexico second round 4

Paraguay quarter-final 3

Slovakia second round 5

Japan second round 4

Greece first round 2

Nigeria first round 3

South Africa first round 3

Denmark first round 3

*The Netherlands and Spain are in the final on Sunday.

**England’s uniform is manufactured by Umbro, which was bought out by Nike in 2007.

By Susan Krashinsky

Source: The Globe and Mail

Reckitt Benckiser’s (RB) plan to charge ad agencies a fee to pitch its business in India, coupled with a Hindustan Unilever (UL) executive’s suggestion that ad agencies ought to work for free, has people in the advertising business fearing that India may kill off the advertising business as we know it.

I’m being facetious, but not by much. India’s ability to do almost everything more cheaply than the West — Tata makes a car priced at $2,500, for instance — has already ground to dust large sections of U.S. marketing. Think telemarketing call centers. Or tech help. The Nielsen Co. outsourced much of its accounts payable functions to the East months ago. There’s no law that says venerable agency brands such as WPP (WPPGY)’s Ogilvy & Mather or Omnicom (OMC)’s BBDO must stay in business forever, in Manhattan, and be paid handsomely for doing so. Which is why developments in Indian advertising should be watched closely in the U.S. That’s where the future is.

Rahul Welde (pictured), Unilever’s vp of media for Asia, Africa, Middle East and Turkey, triggered a wave of rage among admen when he gave a speech in which he said he regarded agencies as little more than interchangeable vendors who should be chiselled on price or asked to take a hike.

The news came in a column by “Uncle” Les Margulis, an American media veteran who worked at BBDO back when it was still only Benton & Bowles:

I expect to be paid for my labor. If those points do not fit into your playbook, then I don’t want you as a client. And for sure I would not pay five lakhs (about $10,700) as a submission fee, as you had suggested, for the privilege of working my team to the bone for two weeks for a Lever pitch.

No, thank you, sir. You are definitely a pass.

This is unusual: agency bosses never criticize clients by name or by company, especially clients as large as Unilever, the global household goods giant that rivals Procter & Gamble (PG) outside the U.S.

If you read the comments section you can get a taste of the distaste that Welde has left. One person suggested Welde’s attitude is a product of India’s caste system; another claims “almost half” the big advertisers in India have the same attitude towards their agencies.

And Reckitt’s pay-me policy was coupled with the fascinating demand that “The winner [of any pitch between competing agency bidders] would also have to rebate to Reckitt volume discounts paid by media owners.” That suggests some agencies in India may not be currently returning volume discount rebates to their clients — a practice which is illegal for any agency owned by a company whose shares are traded in the U.S. The whole thing smacks of bribery, said one commenter:

creativeo: This is one of the most unethical things I’ve heard of. How about giving each one of the clients on the pitch board a brown envelope with $1000 dollars in as well. It’s the same as a bribe. You can’t pretend it’s anything else.

It couldn’t happen here, could it? In fact, it already has. Western agencies have given up considerable ground — and cash — to their clients as advertisers employ procurement professionals to go over contracts and bills, line by line. The U.S. ad business is probably still at the top of the slippery slope. It was back in November, for instance, when media buying shops complained that their clients were asking them to get the price of advertising to go down.

The same thing is happening on the creative side, as more clients use free crowdsourcing to generate marketing ideas. Yes, professional agency staff can produce higher quality product in the long run, but consumers will inevitably produce more ideas, at a lower cost, than any agency could hope to do. Agencies will have to start seeing themselves as the executors of other people’s ideas, rather than the sole font from which ideas spring.

So yes, Welde’s idea that he should be in the business of “screwing all costs down to zero, so if a supplier does not want to work for zero, he will find someone else who will,” is repugnant to those who have made a living selling their labor for a premium. But just because the messenger was undiplomatic does not mean his message should be ignored. If we’re not all Indians now, we may soon be in the future.

By Jim Edwards

Source: bNET

Ads can get consumers into stores but it usually takes some point-of-purchase strategies to get them to buy a product.

Retailers must now compete with the Internet for impulse purchases, putting more pressure on the sales environment in their stores and increasing the need for innovative point-of-purchase (POP) media, materials and techniques.

Paul Pizzini, vice president and director of design at Miller Zell (MZ), said design is all about understanding the consumer and how purchasing decisions are made. Miller Zell is a research and design firm.

Retail is Theater

Pizzini added: “Retail is theater and should deliver an entertaining experience.” That concept introduces new dimensions to in-store marketing.

Here are a few generally held research findings that will likely drive in-store marketing in the near future. They come mostly from studies and surveys conducted last year by MZ, Point-of-Sale Advertising International (POPAI), and Valassis, a retail marketing firm.

• The 2008-09 recession affected female shopping more than male shopping.
• Women are now more price-conscious. Men are more benefits conscious.
• Two-thirds of retail shoppers take a list with them, but six out of ten make brand purchasing decisions after they enter the store.
• Shoppers can identify a brand from five feet in less than five seconds.
• Up to 60% of the MZ survey respondents indicated they were researching products online before going shopping.

Point-of-Purchase Advertising International

As noted in a special report by Point-of-Purchase Advertising International (POPAI), retailers are also realizing that advertising and in-store marketing should be on the same page and focus on the same messages, raising the question: Which comes first: In-store advertising or traditional ads outside the store?

In the report, Author Richard Westllund says the emphasis in point-of-sale marketing today is “on actionable content, easy-to-read signage, attractive displays and an appealing store environment to drive shopping.” However, Westlund adds that finding the “right marketing combination remains a moving target since consumer behavior is constantly changing.”

Retailers Will Use More Digital Signage

John Anderson, chairman of POPAI told Westlund that retailers will use more digital signage in the future because they can “change the message as needed.”

Customers have noticed major store changes in chains like Walmart and Rouse. They’re using bolder signage, widening some isles, rearranging product shelves, and generally giving the stores a cleaner, more organized look. Some of the changes have been so radical that customers are having trouble finding products in their new locations.

End-of-Aisle Signage

A separate MZ survey indicated that end-of-aisle signage “engaged” more shoppers than other in-store media. The percentages:

1. End-of-aisle signage – 70%
2. Merchandising displays – 62%
3. Department signage – 58 %
4. Shelf strips – 55 percent)
5. Shelf blades – 50 %

References:

• Bringing Brands to Life, by Richard Westlund, Ad Week, January 2010
• Behavior Survey Provides Insights into Consumer Buying Behavior, by Miller Zell

The answer is simple. Because no matter how much you try to tell yourself that this is simply a job and you should not take any of their responses personally, it still hurts to be rejected. No matter how many times the door is slammed in your face or a busy person walks quickly by without even looking in your direction, it is a slap in the face whether you are on the job or not.

People often do not realize how hard it can be to market a product and that there is an actual, real, live person inside that company uniform you are wearing. It is easy to associate you with the product that they do not wish to purchase and it does not occur to them that they might be hurting your feelings in the process.

In order to become a successful sales person, you must build up a suit of armor to these kinds of rejection. It is not an easy thing to do, but you must always try to keep in mind that it is your uniform turning them off and not you as an individual.

Consumers can also often be difficult and even if they are interested in what you have to say, they may change their minds a few times or need a long time to be convinced. People can be fickle and they do not think about the fact that you are trying to earn a livelihood.

It is often wondered, why is consumer behaviour the most difficult aspect of marketing, but when you start dealing with customers, you will quickly see why. It is an unfortunate reality that most people are self-centered and more concerned about what will benefit themselves than what will help you and this can create a hard time on the job.

By Abe Loewen

Source: Business TM

Not everyone who knew about Marvin’s actions at the time felt inspired. Some considered his behavior reckless, disruptive, and undiplomatic. For those of us who were inspired by his values, the important question is: What did I do with that inspiration?

Inspiration only begins its useful work when our spirits are moved to thought and action. The self is the weak link between all things inspiring and inspired thought and action. Blaming others for not inspiring us when we are not inspired externalizes the problem. And we cannot inspire others if we are not inspired ourselves.

To become self-inspired, I have found it useful to build three reinforcing processes within me — evolving self, congruent self and courageous self.

Evolving self (a term used by Robert Kegan, an authority on adult development) is the first step in the process of achieving inspiring self. Evolving self occurs when one seeks to push forward to his full potential by willing to shed elements of their old self and induct new (and better) elements into their inner core. Ask people who are in their 50′s or older, and they will tell you how they have changed in some important ways while remaining otherwise the same in the last 30 years. Some people change as a result of their responses to life events; others put in the hard work to evolve to become a better person and/or leader. Yet, many remain stuck well below their potential because the tensions between the comfort of staying with the familiar on the one hand, and the pain of shedding the skin in which we have grown accustomed, are often unbearable. Evolving self is the recognition, desire and action towards continuous learning about yourself.

Congruent self begins with the unwavering drive to be true to oneself. It results in a deep self-awareness and an unbroken flow from being and thinking to feeling and expressing. In other words: I say what I think, what I think is how I feel, and how I feel is who I am. Incongruence dampens the full emotional response to an inspiration and blocks the urge to act on it. It takes inner strength and hard work to resolve the tensions among conflicting desires in favor of truth about one’s self.

Courageous self is the resolve to act consistently with our congruent self, even in situations that harbor significant risk. Consider whistle-blowers reporting corporate wrongdoing: they know that by speaking up they risk being discredited, oppressed, and made unemployable. But their will to abide by their own values in the face of adversity inspires them to act for the greater good.

Inspiring self is integral to the never-ending journey of becoming a better person. Without it, the inspiration we receive from others does us no good.

Tsun-yan Hsieh is Director Emeritus at McKinsey & Company where he has been for 30 years. He sits on the Board of Directors of Sony Corporation and is a member of Cue Ball’s Collective brain trust.

Source: Harvard Business Review

Porsche drivers flash their lights at each other while MINI drivers tend to wave. Volkswagen just wants us to punch each other in the arm.

Stella Artois is doing its best to get us to “behead” our beers while Corona is satisfied to have us plunk a slice of lime in the necks of our bottles.

Rituals matter to us as a species and play an increasingly important role for us as stewards of our brands.

Rituals define our groups and create a sense of community and exclusivity. Those of us who perform this ritual are different from all the others here and this uniqueness is the heart of the group identity. High-performing teams have rituals. They may be subtle, but they very often have cultural nuances and group behaviors that set them apart on purpose. This forges a sense of exclusivity within our peer groups—all important elements in the psychology of group influence.

Rituals spread ideas through source similarity. We see people like us doing something that intrigues us and we copy their behaviors. In a world where we define an ignoramus as someone who doesn’t know what we learned five minutes ago, rituals are powerful compliance techniques. Monkey see, monkey do.

On a personal level, rituals serve as centering touchstones, reminding us of the importance of those behaviors they bring to the fore. We don’t just tap our tennis shoes with our rackets to shake the imaginary dirt from them; we do it to remind ourselves to move our feet on the court. The haka doesn’t just give us a little frolic before a match; it reminds us of our warrior spirit (not to mention the side note that it scares the hell out of our opponents).

In a group setting, rituals create a means to affect culture change by forging symbolic rewards systems. When we create rituals within our teams, we are creating systems within which we are rewarding people for the right behaviors. We do things in a certain way that may appear stylized, but s masks their underlying meaning. Sweeping the proverbial temple steps, in other words, often masks the attention to detail, the meditation––and the upper body strength conditioning—eeded to master the martial arts.

So, have a conversation with me for a moment on this idea.

• Think of a behavior that you need to instill within your team, organization–or just yourself. Make a short list.
• Think of a ritual that you could create–an act that you perform or a process you go through–that would make this behavioral change more visible, easier to remember or more palatable to your group.
• What do you come up with? How can we surface the idea of creating rituals on purpose to affect change and what can this do for us?

By Stephen Denny

Source: Marketing Profs

Business growth today requires new ways of looking at the world, say Sarah Rottenberg and Isabel O’Meara, of design firm Jump Associates in New York. In Rotman Magazine, they offer seven ways to enhance your ability to see new possibilities that do not yet exist:

LOOK AT YOUR OWN LIFE

Long-distance cyclist and rock climber Gary Erickson invented the Clif Bar after he tried an energy bar that had no texture or taste. Scott Cook came up with the idea for Quicken personal finance software after sitting at the table watching his wife struggle to balance their accounts. Microsoft product manager Trish May developed PowerPoint due to frustration with the old ways of creating presentations.

LOOK THROUGH SOMEONE ELSE’S EYES

While founders and employees can represent a segment of a company’s customer base, most businesses grow and succeed by reaching out to people who are different from their staff. Get out into the real world, and meet face-to-face with your customers. GE’s Plastics division was shocked to find its corporate customers less interested in driving the bottom line and more artisanal in sensibility, eager to see what new cool things they could make from plastic fibres.

ZOOM OUT

Take one step back and adopt a wider frame of reference: the rest of the ecosystem connected to your business. In 1999, eBay saw the rising importance of online payments and bought Billpoint, a budding online-payment system.

ZOOM IN

Look at where a sideline in your business might expand into a larger opportunity. Boston entrepreneurs Stacy Madison and Mark Andrus, who sold sandwiches made on pita bread, started baking their leftover bread into pita chips to hand out to people in the long lineups at their food cart. Eventually, they realized the pita chips was the business they could develop more easily, and built a $30-million (U.S.) operation, Stacy’s Pita Chip Co., which Frito-Lay bought in 2005.

LOOK AT WHAT YOU CAN BORROW

Borrowing great ideas from others can help you reimagine your own business. Vernon Hill, who worked with 7-Eleven and McDonald’s franchises, started Commerce Bank in 1973, designed to offer the same convenience and service as a fast-food outlet.

LOOK WITHIN YOUR ORGANIZATION

Companies learn from other divisions within their own organization. When it was owned by pharmaceutical giant Pfizer, Dentyne Gum borrowed blister packaging for its new Dentyne Ice product from the parent company’s over-the-counter medications division. That helped send a message that it wasn’t simply a gum, but also a cure for bad breath.

LOOK FOR BARRIERS

Product offerings must be compelling enough to overcome possible barriers to purchase. Flying in a plane over the rooftops of a city, industrial designer Peter Bressler came up with an idea to integrate solar technology with existing roofing shingles, overcoming the concerns many potential solar users had that a traditional installation would be ugly.

E-MARKETING: Keep landing pages simple

When marketers entice someone to their website the next stage is to turn the prospect into a buyer on the landing page. Tim Ash, an e-marketing specialist, says on Larry Chase’s Web Digest For Marketers, that landing pages should be designed for conversion, not for aesthetics.

Make sure to echo the key words that were in the ad or what the person typed into the search field. If possible, make those the title of the page. Capture the viewer’s eyes with a headline, buttressed by a message about what the page is about. Then display the central image, presumably of your product. Finally, give the call to action. The most important information should be placed in the centre of the page and slightly to the left.

POWER POINTS

Trim your work day

What would happen if you were prohibited from working more than five hours a day, asks business adviser Seth Godin. How would you use those five hours to become indispensable in a different way? Try it for a week, and see how it turns out. Even if you return to a 10-hour day, you’ll have changed the way you compete. Seth’s Blog

Culture shapers

A study by four academics – Amy Cuddy, Susan Crotty, Jihye Chong, and Michael I. Norton – found that culture shapes gender stereotypes, with men being portrayed as the ideal depending on the prevailing culture. In one study, for example, Americans, who generally prize independence over interdependence, rated men as less interdependent than women, while in South Korea, where the opposite sensibility is prominent, men were seen as more interdependent than women. Harvard Business School Working Papers

The teacher boss

When your manager talks to you, do you learn something? Blogger Marilyn Haight says a boss should be teaching every time he or she talks with you. BigBadBossBook.blogspot.com

Can I take a meeting?

Entrepreneur Jim Estill says a success habit he has developed is to decide ahead – making an appointment with himself to do certain things the next day at certain times. Time Leadership blog

Thinking outside the hat

Set aside time in meetings for a thought-provoking or fun question, drawn from a hat or jar of interesting questions. Do a speed round in which everyone gives top of mind responses so it doesn’t take much time. Humor At Work newsletter

Web-based goal tender

A free shareware download, 42 Goals, allows you to set a series of goals and keep a log to track them in a visually pleasing way, displayed in charts to show your progress. You can use it to check your daily productivity, expenses, or even whether you’re cutting down on your coffee consumption. Lifehacker.com

PERSONAL PRODUCTIVITY: Why you’re hooked on e-mail

Can’t live without your e-mail? Eager to break the habit? Blogger Ali Hale looks at why you’re addicted and how to break free on the Dumb Little Man blog:

Reason 1: You open e-mail by habit, without consciously thinking about it. To break the habit, make it harder to open your e-mail by removing the icon from your desktop or taking the bookmark off your browser. Replace the habit with something else, such as planning your day when you first arrive at work rather than looking at e-mail.

Reason 2: When you finish a task and don’t know what to do next, you look at e-mail. Fight this with a to-do list, and batch smaller tasks together so you can move smoothly from one to another.

Reason 3: You’re expecting something urgent. That’s reasonable, but then you often find yourself looking for things that are less urgent. If you can delegate your e-mail, have someone else tell you when the urgent missive comes; otherwise, check out a service such as Away Find, which will alert you if an e-mail from a specified person arrives.

Reason 4: It’s a convenient way to procrastinate. Instead, set a timer and focus on your work without any breaks for a set length of time.

Reason 5: You look for e-mail, and when one arrives it feels like a reward for your efforts (like a lab rat getting a morsel of food for successfully performing a task). “Find other ways to get that feel-good factor,” Ms. Hale suggests. “For instance … print out any particularly glowing e-mails from customers and keep them pinned to the notice board behind your desk.”

By Harvey Schachter

Source: The Globe and Mail