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December 01, 2013

Unique Sales Promotion Ideas (Anniversaries, Inauguration), Levis, KFC

Man biting dog! In the corporate world one has to surprise the customers at all the time. To celebrate 125 years of its existence Levi's did some thing very unique, they gave away one pair of jeans  for any one coming into the store with a personal ID proof of names like Jean, Jane, Joan or John. All names which sound like Jeans. No doubt this was an expenditure but it created good will for the company. 

Similarly KFC (Kentucky Fried Chicken) gave 50% off for customers who came in with a personal identification of any name starting with the letter 'K' on the day of their outlet’s inauguration in Hyderabad. A great idea! This started off a chain reaction and many availed the offer. The offer was so popular that it got featured in the news papers the next day - a dream for all marketers.  To be featured in the news papers, get credibility and free Publicity.   

November 25, 2013

Strategies for Extending Maturity stage (PLC) - 1) Find new uses 2) find new users 3) Induce more usage

What happens when the product reaches maturity and the sales start to slow down or go into a decline? Three strategies can be adopted to extend maturity  and increase sales 1) Find new uses 2) find new users 3) Induce more usage

New uses: The classic example is that of Arm & Hammer baking soda.  As demand for baking soda for food preparation began to decline, the product was extensively researched to find new uses.  Some of the new uses found out for baking soda include
Baking soda can be an odor suppressant for use in refrigerators.
Baking soda can be used as a Clog remover in kitchen sinks
Baking Soda can keep milk from getting spoiled in hot weather (useful in a hot and humid country like India)
Sprinkling a little of baking soda in smelly shoes will deodorize them
Making Baking soda into a paste and scrubbing  the walls will make the walls free of scuffs and crayon marks
Baking soda can be used with a facial cleanser for a gentle, yet effective, exfoliant face
Sprinkling  baking soda on carpets will take away unwanted smells

A variation of the above can be to offer better options for existing users.  Some companies, notably Intel, constantly replace their company and product specific PLCs by introducing higher performance, upgraded versions of their core products.  When the 386 chip was eventually copied by competitors, Intel launched the 486.  Price and volume on the 386 were allowed to fall; marketing emphasis was shifted to the 486.  

When the 486 chip was copied, the Pentium was launched, followed by the Pentium II, the Pentium III, and so on.  In other words, Intel constantly cannibalizes its own products (takes sales away from them and lowers profitability) as a strategy for growing their business.

New users: Products may be initially developed and launched in a single market area, (e.g. the U.S).  As the product becomes established in that market, it may be launched in a second geographic market (perhaps Europe), then a third (maybe Latin America or Asia), and so on.  

Each of the local market areas is likely to conform to the typical PLC.  When the local PLC's are aggregated, they form a combined PLC that is both higher and more extended than the original market's PLC.

Another dramatic example that can be given is that of tooth paste. The sales of toothpaste are dropping in the western markets. One strategy could be to introduce tooth paste for pets – a very interesting concept. One caveat – take care that the branding and the company that is selling the pet tooth paste have to be different from the regular tooth paste maker.  Many of the human customers might find it disconcerting to find out that their own brand and their dog’s brand of tooth paste are the same!

Induce more usage: One of my marketing teacher’s had remarked “the soft squeeze” of the tooth paste packaging being best innovation introduced by the tooth paste makers to induce more usage. Similarly is the tactic of slight increasing of the size of the nozzle so that more tooth paste can be dispensed with each usage (unlike other products once the paste comes out it is not possible to put it back into the tube).

Some more things that have been tried out include, having three colors of tooth paste tubes to indicate three times usage (morning, afternoon and evening). It was tried by an Indian company bit it came out as a naught.

Usually the tack of more usage is through advertising. Initially the tooth paste makers said that one time brushing of teeth was enough. Then they said that it has to be two times one on the morning and once in the evening.  Now it is imperative that one has to brush the teeth every time one has solid or liquid food thus ensuring that we clean our teeth at least 5 to 6 times a day. 5 to 6 times a day is almost a week usage of tooth paste (when a person brushes his teeth once a day). That way they can make us use 4 times more tooth paste and laugh their way to the bank. 

November 21, 2013

Super success story of the Sachin Digigraph campaign by BCCI.

Sachin Tendulkar the great Indian Cricketer has retired. He has left a quarter century of fond memories. His retirement swept India into a wave of sadness and nostalgia.

BCCI (Board of Control of Cricket in India) came out with a very innovative plan to bid  Sachin a fond farewell. It joined hands with and Twitter to launch the “Thank you Sachin Campaign”. It was a very simple campaign (come to think of it, it is always the simplest of things that produce the most dramatic results). Fans of Sachin have to simply send a message saying “ThankYou Sachin” from their Twitter handle and they would instantaneously receive a Digigraph from Sachin Tendulkar. A Digigraph is a Digital Autograph. The Digital  autograph image of Sachin would contain the name of the recipient and would have a personal message from Sachin himself.

This campaign proved to be a super success. The cricket crazy fans of Sachin lapped up the offer. In all 35 digigraphs were on offer and many enthusiasts started collecting all the 35 digigraphs of the master blaster. Yes it is true that the digigraphs are digital have no intrinsic value but might become valuable in let’s say in thirty years’ time!

To ensure that this social media exercise grabs maximum eyeballs, Twitter had send out mails to users informing them of the end of the activity today. “Own a piece of history,” the mail reads. “Tweet to get a personalized photo from Sachin!”

Post Tendulkar’s final match, Rishi Jaitly for Twitter India announced that the campaign had generated a whopping 3 million tweets and counting. The digigraph themselves had been viewed 4 million times. Most importantly, a thank you message came from Tendulkar himself, acknowledging the campaign becoming the most retweeted tweet in India, with the current counter standing at 16,888 RTs and 11,389 favourites.

Great Campaign BCCI, Twitter and Digigraph. Suddenly Twitter is in big news. Many like me were very weary of this very intrusive media. But this campaign forced me on board and I am told many like me opened twitter accounts just to get their “Piece of History”. 

A  lesson to the Indian corporates who have had or still are using Sachin as a brand ambassador. Why is that they did not do similar activities like BCCI? After all BCCI is registered as a nonprofit making organization! It was sad to see that no newspaper (of the ones that I bought) had a special section on Sachin except Eenadu (a telugu dally), the day after Sachin finally retired. It was not that they were caught napping. The match ended at 1130 hours on Saturday and they had a lead time of nearly 12 hours. No wonder the print media is taking a beating from the Electronic media.

The corporates also missed a chance in tieing up with history. Why can’t Boost – the energy Drink, a long time sponsor of Sachin give away autographed bats of Sachin. This would generate enormous amount of good will and would increase the sale too. And why not.  It is payback time. The corporates who made money and increased their market share have to give something back to the fans who finally are responsible for the success of any brand and products. 

Some things to chew upon, Corporate India!


October 28, 2013

Product testing - Interesting examples

Many a times companies would like to know how their products would work out in real life situation. In such cases they would indulge in product testing. Product testing can be done in the field or in a experimental setting or in-house.

Gillette has a very interesting way of testing its products. All the male volunteers of Gillette are required to come to the office or the factory without a shave. Once they come to the factory they are required to go to a special room and take a shave. There are marketers observing the employees from behind the mirrors. The way the employees shave, the time taken, the process of shaving, the application of cream and after shave lotion, the number of strokes in the shaving process, and whether they shave only in one direction or many directions all give very interesting insights in product development. 

Similarly there are lots of youngsters who combine business with pleasure by walking up an down a corridor while listening to music or reading textbooks on their Kindle. What are they testing? They are testing the wear and tear of carpets. Each student has to walk for a specified time and specified distance. This way the durability of carpets can be tested. The luckier lot get to sleep – Literally. They are testing the durability of the mattresses or of the bed itself.

Freebie marketing - where free is not really free.

 Freebie marketing, also known as the razor and blades business model, is a model wherein one item is sold at a low price (or given away for free) in order to increase sales of a complementary good such as supplies (inkjet printers and ink cartridges, mobile phones and service contracts) or game consoles (accessories and software). It is distinct from Loss leader Marketing and Free sample marketing, which do not depend on complementarity of products or services.

The usual story is about Gillette is that he realized that a disposable razor blade would not only be convenient, but also generate a continuous revenue stream. To foster that stream, he sold razors at an artificially low price to create the market for the blades.

But in fact Gillette razors were expensive when they were first introduced, and the price only went down after his patents expired: it was his competitors who invented the razors-and-blades model.

Freebie marketing has been used in business models for many years. The Gillette company still uses this approach, often sending disposable safety razors in the mail to young men near their 18th birthday, packaging them as giveaways at public events that Gillette has sponsored.

Comcast often gives away DVRs to its subscribing customers. However, the cost of giving away each free DVR is offset by a $19.95 installation fee as well as a $13.95 monthly subscription fee to use the machine. Based on an average assumed cost of $250 per DVR box to Comcast, after 18 months the loss would balance out and begin to generate a profit.

Computer printer manufacturers have gone through extensive efforts to make sure that their printers are incompatible with lower cost after-market ink cartridges and refilled cartridges. This is because the printers are often sold at or below cost to generate sales of proprietary cartridges which will generate profits for the company over the life of the equipment.

In fact, in certain cases, the cost of replacing disposable ink or toner may even approach the cost of buying new equipment with included cartridges, although included cartridges are often 'starter' cartridges that are only partially filled. Methods of vendor lock-in include designing the cartridges in a way that makes it possible to patent certain parts or aspects,

Atari had a similar problem in the 1980s with Atari 2600 games. Atari was initially the only developer and publisher of games for the 2600; it sold the 2600 itself at cost and relied on the games for profit. When several programmers left to found Activision and began publishing cheaper games of comparable quality, Atari was left without a source of profit. Atari added measures to ensure games were from licensed producers only for its later-produced 5200 and 7800 consoles.

In recent times, video game consoles have often been sold at a loss while software and accessory sales are highly profitable to the console manufacturer. For this reason, console manufacturers aggressively protect their profit margin against piracy by pursuing legal action against carriers of modchips and jailbreaks.

Many marketers make extensive use of the freebie marketing business model, as many products are promoted as having a "free" trial, that entice consumers to sample the product and pay only for shipping and handling. Advertisers of heavily-promoted products such as weight reducing Products targeting dieters hope the consumer will continue paying for continuous shipments of the product at inflated prices, and this business model has been met with much success.

Websites specializing in sampling and discounts have proven to be very popular with economy-minded consumers, who visit sites which utilize freebies as link bait.

Tying is a variation of freebie marketing that is often illegal when the products are not naturally related (for example, requiring a bookstore to stock up on an unpopular title before allowing them to purchase a bestseller). Tying is also known in some markets as 'Third Line Forcing.

Some kinds of tying, especially by contract have historically been regarded as anti-competitive practices. The basic idea is that consumers are harmed by being forced to buy an undesired good (the tied good) to purchase a good they actually want (the tying good), and so would prefer that the goods be sold separately.

Another common example is how cable and satellite TV providers contract with content producers. The production company pays to produce 25 channels and forces the cable provider to pay for 10 low-audience channels to get a popular channel. Since cable providers lose customers without the popular channel, they are forced to purchase many other channels even if they have a very small viewing audience.