New Marketing - Trends and Insights

Monday, October 18, 2010

Quality is the antidote to high exchange rates

Oh my, the Euro is rising... fast! Bad news for Eurozone companies... or is it really?

Well, it depends.
Back in the days, the German Mark was strong. Very strong. Was that a problem for Germans? Nope. Why? Because they produced with *quality*, making sure that their products would have a stable (or rising) demand, no matter the price.

As for countries with labour-intensive industries, like Portugal, "breaking" (devaluating) their currency would be the only way to maintain the competitiveness of their products. Yes, a very fragile competitiveness indeed.

The end result? German got richer and richer, and Portugal got poorer and poorer.

Lessons learned, marketing-mix designers? Go for quality, very good!
In a cutthroat economy, the only *real* competitiveness in the long run lies on producing high-quality products. Low quality bulk products will always tend to move where the costs of factors are cheaper!

Note to all: "go for quality" does NOT mean "spending money in marketing promotions positioning your production up there while not investing in the physical product quality"!!!

Monday, October 06, 2008

The need for a 3D segmentation

The complexity of the modern world created complex customers.
Many managers still have the focus on marketing management theories which have worked for 50 years, but are in constant challenge by current realities. One of them is the segmentation.
Segmentation is a powerful tool for marketing, for it is the cornerstone of the product development: different customers demand different products. But which segmentation is useful?
Business schools teach that the first types--because they're simple and straightforward--are age and location segmentation. It makes sense. But is it enough? Maybe in the 1960's, definitely not now. People grow "old" for some products much later than it was usual (videogames) , yet faster for others. For some products (think LEGO) some people almost "revert to childhood" later in life. But the issue is: the usage patterns are changing faster than ever, not depending primarily on age or location.

Then you go (up in complexity) to my favourite: the behaviour segmentation, in short, the type of customer in terms of urban/fashion/connectivity, which have become much more cross-age and cross-geographic. The main advantage of this more dynamic segmentation is that it tracks usage so the segments can be smaller but more accurate in delivering the right product for the right... market niche. Managing these niche segments is indeed a demanding task, but it allows, for instance, to keep a highly-customizable product product profitable.

Yet the main issue with the "traditional segmentation" is taking the customer as a sort of independent agent. It's 2D, and it forgets the social network input.
The jump for 3D segmentation is the key for the future. The only "given" is that one of the axis must be the social dimension. The other two should come from the behavioural segmentation.

Is it easy? Not at all. First of all, the visualization. I present you as a sample of my WIP for advertising in the telecom industry.
One solution is splitting the "Cuebe" (got it? it gives "cues") into three 2D graphs. Whatever way you want to do it, remember, it's fundamental and critical for your company's future. Start thinking now!

Wednesday, March 26, 2008

The different speeds of community marketing

For me, it has become obvious how "buzz marketing" (late 90's term) /"community marketing" (late 00's term) is *the* way to sell. And that "traditional media advertising" is so XX century.
May because I became an evangelist for this "New Marketing", fully utilising the new ubiquitous channels, and living in "hi-tec Finland", I got so engaged as to not notice what was happening somewhere else.

Yes, in 1997 I was developing concepts of "InterNETional Marketing", and warned that it wouldn't change per se the nature of advertising, it was "only" a new channel, which permitted more interaction with potential customers,
Yet it had the advantage of being terribly cheap, on a spending/public reached ratio. Because of being that cheap, after 10 years of spam ensued, and everyone got vaccinated. Yet some advertisers continue to "launch their nets", hoping to get someone to buy (into) their products. Just like launching nets on over-fished stocks, the marginal revenue is just too low.
It is relatively cheap to spam. Cheap, i.e., efficient, not effective. But then again, the spammers are mostly con artists praying on human stupid... naiveness.
Search engine ads are a big development, because there is a feeling of connection between the what we are looking for and the actual ads. It's not interrupting, it's helping, hence we potential customer actually thank the advertisers.

The Internet indeed permits interaction with the customer (moreover, on a BIG screen), namely on interactive ads, and there are examples of some immensely funny examples. Who didn't make the chicken dance, or made passes at that waiter? Some of them are visually amazing, but then again, how many went to buy more because of those interactive sites? Or even remember the advertisers?
Aye, there's the rub.

Rewind to what a friend of mine in Portugal wrote me. "TV is still the most respected advertising medium". I dispute this, and explained why on a previous entry. I found it mind boggling that a very good marketer like him cames up with this statement. Then I recall what happened while selling a top-notch, community intelligence system around the world. East Asians were eager, Europeans were sceptical. How come? Aren't the advantages self-explanatory?
The 3 speeds for community marketing in 2008:
1 - South Europe - is this working?
2 - North Europe - let's give it a try, but...
3 - Far East Asia - please give me more!

Recently in Portugal a mobile operator spent 30.000.000 EUR for a rebranding campaing.
They have 2 million customers, in a 10 million country. Costs of the campaign: 3 EUR/total possible customers... how effective was that is yet to be seen, but let me tell you, it won't look good, not even for accounting. So why do it? Maybe because the market is not ready for a much lower-key targeted advertising, that will spread virally, some will say. I dispute it also.
Examples of viral spreading are alive and well (even for the wrong reasons) in Portugal, so try to monetise viral marketing! Transfer energies from "traditonal marketing", impose your views on the agencies, or else ask them a nice explanatory brochure to present on the next shareholder meeting...
That's maybe why in Portugal, TV is still the most respected advertising medium...
nothing is done elsewhere! Change it! How? Ask me! :)

Monday, February 04, 2008

Microsoft octopus prays on Yahoo!

I guess it was 1995 when I opened my first free e-mail account. Of course it was from Hotmail. Back then, yes, it was hot!
Not long after, just in case, since I used the Yahoo! directory services (and basically because it was free), I also opened a proud Yahoo!Mail account.

Fast forward until Microsoft buys Hotmail, transforming what was a lean, fast, and cool e-mail service into a mastodontical, sluggish, spam-ridden, and good-for-nothing-else-than-accessing-MSN thing. MSN 8, AKA "Live Messenger" loads slowly, basically blocks everything else while loading, and for what? To get live feed on some crap articles about Britney Spears which I cannot care less.
As so many other people in th world, I only use MSN because my friends use it also... but since Yahoo!Messenger got integrated into the Yahoo!Mail proper I can chat with my friends and colleagues without needing to access MSN! Nice!

... and by the way, I still use my Yahoo!Mail accounts (plural) and overall Yahoo! services every day, and why? Fast, lean, no spam. Oh that wounderful advantage!
So when I hear they are under scrutiny for being bought by the sluggish thing, I tremble! Over 10 years of faithful service down the drain! PC blockage! Spam! Nooooooooooooo!

Microsoft could go on and buy Google. Evil buys Evil. No problem. Yahoo! would be reduced to providing their excellent service for the anti-evil niche, while the sheep would continue to endure the crap Microsoft service with a smile... until one day they would wake up.

... and I thought Yahoo! was in trouble before!
What are they going to say next? Google is overvalued and Yahoo! is undervalued?

Monday, January 14, 2008

Traditional advertising (in)effectiveness

It's official! Data collected from the Finnish M&M magazine (Marketing&Advertising) shows the recall after 1 (one) week for TV ads, from several weeks, shows these results:

1. the top primary recall (without giving names) is never over 15%
2. the top secondary recall (asking "do you remember brand X") is never over 20%

What does this men?
1. Brands, stop wasting money on TV ads! They don't work!
2. Agencies, stop trying to sell ineffective ads through ineffective channels!

You would make a favour to yourselves, and also to TV viewers... after all, we can get carpal tunnel syndrome from zapping for other channel whenever the "PUB" marking pops up!

Invest in engagement and community marketing, using below-the-line initiatives, engage people to remember brands on a positive way, not just because "well, it's impossible to miss them, the annoying intrusive pricks!"... ask me how, my fees score sky high on effectiveness/price ratio! ;)

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Finnair is good

Don't get me wrong. I like Finnair.
They have direct flights Helsinki-Lisbon, at very sensible prices. Their on-board food has never been better, and also their wines are very good.
As far as I am concerned, they are polite... and always on time!

Last week I travelled to Paris CDG (hiiiiik!), and on the return flight it was on the papers again the "Finnair is getting late too often". Yet another good omen! What called my attention was that the CEO wanted the names of the drunk passengers who caused problems.
Very good!
Many Finns have this annoying habit of boozing themselves before stepping on the plane. And continuing on board. Then it might happen that it forces the plane to come back, losing some 4 hours because of the "joke"--and dissatisfied customers.
For once, I feared that some draconian rule of "no alcohol on board" would pop up. I do hope not. Personally, I come from Southwest Europe, where good food is always accompanied by good wine. And that is what has been happening in my Finnair flights.

So their solution is simple: block the drunken bastards that are a bother to everyone on board, while letting people who enjoy a 18 cl bottle of wine (or two) responsibly to continue enjoying their flight time. Thanks, Finnair, I'll keep on transmitting positive feedback! Until my next flight!

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Optimus subPrime

So now I know.
For days, I was bothered by this huge orange blob while trying to read my online newspapers. I couldn't care less what it was, my only concern was to keep it away from the text. At a certain point, I tried to close it. There i was, franticly pressing the "X CLOSE" but nothing! What an irritating little sh*t!
Today, the revelation: Optimus rebranding. How cute... NOT!
Reading some comments from bloggers, such as this one (in pt-PT), I found it costed 32 million euros!!! Amazing!
Amazingly STUPID!

Naturally the ad agency is happy. Woah, 32 M€ when traditional advertising will crumble is not bad. But I thought people at Optimus were smarter.
I can talk. I tried to sell Optimus a way to potentiate the information they already have, as any other mobile operator has, improving the response to their marketing campaigns--their own customer communication data records!
The biggest advantage is that the improvement on the response to advertising would be made through much cheaper advertising!!! How come? Basically based on social network/communities engagement marketing
(I can tell you folks out there the technicalities for a moderate fee).
Bad news for the ad agencies maybe, but they have to live with the fact that traditional advertising will disappear soon!

How nice, extremely well produced... and intrusive this PR flop was... alienating people!
It's just like the typewriter manufacturers making them full of extras and extra speedy and all, while PCs appeared. Tough break, but the best typewriter cannot... compute! Ad agencies, accept, and embrace the change, or else it is total bye-bye for you. Maybe you will get 30 M€ in 2008, but then your eager-to-pay-so-much client will be out of business next year, because their competitors spent only 3 M€, yet got 2-3 times more clients!

I'm sad, because Optimus was supposed to be innovative. They stormed a market thought to be "already full with 2 operators". Something they did right last year to get a great share of the new clients, but they are starting 2008 on the wrong foot.

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Finnair is late again. But is that their real problem?

When boarding a Finnair plane bound to Lisbon the news all over the tabloid was "Finnair mistreated us". Us, as in two passengers. What a nice omen for the trip.
It happened that they were returning from a "dream trip to Thailand", which ended up over 24 hours later than scheduled. Since we have time, the events unfolded as such: The plane was 10 hours or so late. What does Finnair give the passengers? One burger voucher and water! Yey! Nothing else! (Mind you, in the "old" int'l airport, one goes out, immediately crosses the bridge, and gets to eat plenty of the local delicacies for ridiculous prices).
Eventually the plane leaves. Very late. These two girls were getting the connection to Stockholm after, and as they landed the hostess tells them they might just get into their connection (last plane of the day) after all! Just run!
They ran like there was no tomorrow, arriving at the gate. Where the attendant told them "you cannot board, your seats have been re-sold, because we never thought you'd make it on time."
Amazing answer.
Adding insult to injury, they saw yet another passenger who came from Bangkok with them entering the plane. Why? "Oh, he's in business class."
They got a place on the early flight, arriving one day late and full of fond memories from the trip.
Obviously the tabloid loved it. What is the more surprising (or not, considering those above-mentioned answers from the staff) is the "defense" from Finnair's PR responsible:
1. Somewhere over Europe on the Helsinki-Bangkok route a drunk Finn wrecked havoc. So what else is new? They returned to Copenhagen to leave him (unfortunately it seems there were not enough parachutes available on board), and then retook the route. Arriving late in Bangkok, it left obviously even later back.
Meanwhile the passengers were stranded for hours in the new Bangkok airport, tired and starving. But who cares? It's not Finnair's fault people drink.
2. Just because people arrive in time at the departure gate, it's not automatic they can board! Supposedly, there are checks to be made, blablabla. So what about the gentleman in business class? AH, he doesn't need to be checked, it seems.

Please, someone JUST FIRE THIS IDIOT "Communications Manager"!
There was only one thing to say in this situation:

"We are sorry.
We will try our best so that these things
never happen again."

They could have saved face, at least. By acting arrogant, they will just lose passengers. The two ladies mentioned "we took the Finnair flight because we trusted our home carrier, even if it is much more expensive." Nice reward.
Planes get late. Incidents happen. That's excusable.
What is not excusable is arrogance over customers.

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Thursday, November 01, 2007

Dejá vu? or Web 2.0 ending up like 1.0

Remember Web 1.0? For those of you who do, we used to call it "the Web".
People had to have web sites. Of course! Finally we were able to communicate with the world. And most of us thought our lives and deeds were so important to others that EVERYONE who was potentially ANYONE and had some HTML skills put up some nice "My Home Page" with some photos, what we did for fun, and so on. It was all about self-expression.
But it was hard! Photos had to be scanned, we had to learn HTML techniques (until some angels put up editors, from Aracnophilia to WebEdit, to ease up the process), bandwidth was low low low... but we made it nevertheless, then we waited for the whole world to drop by.
Mostly we found out that our lives were not that exciting to others as we might have thought, because theirs were likewise uninteresting to us... with some exceptions, obviously, like the "Super Pinga's Home Page" which came out in 1997!

And remember Web Directories? They soon evolved into portals, like Yahoo!, becoming one-stop internet destinations.
But all of a sudden, Yahoo! starts losing money, and the word was that sites had to "focus and specialise". Amazon for this, eBay for that, Google for the other, and so on.

Meanwhile, 10 years have gone behind us, and what is the Internet landscape? Now he buzz is "Social Networks", that new, exciting thing. You can put up your site, fill it with picture, list your hobbies, ... yes, like we did in 1997 with great effort. Now digicameras can spit the photos directly into the computer, all layouts are set, it's wonderful.
And there are a lot of integration between different services. Of course! Everything in one place, like in real life. People like it, it´s only natural! So the Social Network Sites, which have already the people content, are also developing as... Portals!

Have these evolutions changed anything from our intentions 10 years ago? NO! Good!

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Tuesday, September 25, 2007

iPhone... or just iHype?

I wanted the iPhone to have it all.
Thus I became really, really disappointed.
Maybe I did not need to wish for the iPhone to have it all to be disappointed. In fact, it would be enough for me to want the iPhone to have:

1. enough memory (even for the contacts only)
2. possibility of expanding the available memory (you know, those small flash cards?)
3. flash for the pictures
4. video recording possibility
5. 3G capability
6. a fully functional software

for me to be absolutely disappointed!
But seriously, folks: I am going to buy an iPhone. Of course! It's beautiful!
I am going to buy it second-hand (they will be quite cheap very soon) and place it on a nice stand in my desk. Everyone will be drooling and envying me! But use it, no way!
Simply, another "geek icon" which has the advantage of being also a "fashion icon".
Not a "usage icon"! Come on, what was Apple thinking?
Oh, since now the buzzword is 'convergence', let´s converge the iPod with a cellphone!". Sorry, the "traditional" cellphone manufacturers have done it brilliantly years ago. Sorry, Apple...

Check the competition: in what is the iPhone netter than, for instance, the Nokia N95?
Because that is the question!

... and what about the distribution strategy? It won´t work in Europe, first of all, because there are more than two operators per country... and not even Vodafone has a centralised strategy!
The biggest operator in Latin America, Vivo, does not believe in it. Neither do I. Really!

Now there are news of a gPhone! Cool! Now phones can be evil too! :D
More on that on a separate entry!

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Thursday, July 12, 2007

Update: Nokia phone with Skype

Funny that this announcement came on the same day I wrote my previous article:
Nokia providing Skype access through WiFi Internet connection on the N800 Internet Tablet.
Actually, while I was Project Manager for the N770 (its predecessor) already in 2005, this was something planned. I say, it's coming one year late! But anyway, it seems Nokia is leading the way in making operators obsolete! Cut the middlemen!

First of all: the N800 is not a mobile phone. It is an Internet Tablet. Well, after having the Skype possibility, it will be a mobile phone, for all that matters! So implementing such features in the "proper" mobile phones will be a necessary step.

This is expected: GPRS connections on mobile phones are reminders of dial-up modem connections... slow, slow, slow.
Still 5 years ago many people had no other choice; now, when DSL is norm, people want fast Internet connection.
Always. In every device!
Not to mention that GPRS access costs a lot!

Actually, this move by Nokia is also a reaction to what I was writing before: when you use Internet to make most of your calls and download multimedia, you use your mobile phone as a videocamera, music player, and agenda. Which means, primarely not as a phone anymore. So the only way to keep people buying a new mobile phone every 18 months (like they want) is to make them able to... access the cheap access! Yes, fast Internet!

Make your bets, gentlemen:
when are the operators going to lose the majority of their business customers?
I say 2008. Because I am cautious.

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Wednesday, July 11, 2007

PC will be the new (mobile) phone

"WHAT? Are you crazy? What a preposterous title?
If anything, the mobile phone will be the new PC!"

This is the reaction I am expecting to hear. Ok, bear with me for a moment:
- An Internet-connected PC is able to make calls through VoIP technology, right?
- At work everyone uses a PC, right?
- Connections are getting broader and cheaper by the minute, right?
- Laptops are getting cheaper and lighter, by the minute, right?
- Most computers have WiFi capability, right?
- Companies in general are cutting costs, right?

So add all these things together, and the bulk of business calls will be done on Skype or similar software. Operators are trembling (well, they have been for some time now), or else they are living in denial. The bulk of their revenue is indeed coming from business customers, which have an ARPU at least twice as higher than private customers. Operators are changing to advertising-based revenue instead of subscription-based revenue for private customers, but it is not feasible to do it for business customers.
So even this gold mine is drying up? Oh yeah, baby!

So you have people getting used to call through their PCs the whole day because it is cheaper--and they know it.
Will they change that when they get home? Unlikely!
For private use, PCs have other benefits too. BIG screens. Let's face it: the mobile phones nowadays are stupendous (I would say they are photo/videocameras capable of making calls), but they are small. And after all, even if in short term they will come with a monthly usage flat rate, you cannot really use it to watch movies. You can see them, but you cannot watch them. You can and use it as an MP3 player. And you can play some online games, but isn't it much better on a 19" screen and a proper keyboard/control gear? Of course it is; just like a movie on a cinema or on a TV screen.

The other advantage is that advertisers can indeed track your profile through your mobile phone usage much better than through your PC usage, no matter the number of cookies and spyware they use. For instance, I keep receiving annoying pop-ups of a cola company when accessing a social network platform, when everyone knows I hate them (the cola... well, the platform is a necessary evil, mind you, I do prefer Yahoo!Messenger).
Thus they have been paying big euros for me to...
spread negative buzz! Brilliant!
In truth, advertisers can indeed send you meaningful SMS with advertising, but cannot do it as easily on the Internet (I did write "meaningful"), unless they have some sort of contract with the page you are visiting--the best example is the search engine--and even that has a factor of "wishful thinking".
All the rest seems like "interruptive marketing", even if it relates to the page you're accessing--because if it does not relate, it is just a big waste of money for the advertiser and nuisance to you (AKA spam which is effectively automatically filtered on Yahoo!Mail).
So if you want to keep a little bit of privacy...
use the Internet (at least, for now).

Of course, a laptop doesn't fit in your pocket--and not everyone is connected on Skype 24 hours a day. That's the advantage of the mobile... multimedia communication device--so you can beep the other person to log in into their account.

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Tuesday, May 29, 2007

(Mobile) Operators - commodities in the development?

What about if someone would pay for your phone bills? And I don't mean your employer.
I mean you would use your phone for free, and the advertisers would take care of the bill.
The "only" thing you would need to do is accept to hear their rant before calling, or read (not only receive) their SMS/MMS.

Actually, it is the opposite of what is happening with TV. People pay a premium to access an ad-free channel--the problem being when you pay for the access and THEN you get ads on top... how do people stand it, it's beyond me!

Sounds interesting, now doesn't it? Someone could build its business model on this premise. How much of a revolutionary concept is this? Virgin Mobiles did it last year, IIRC. Their target group was "young people"--at least in the beginning. The main task here is actually maintaining the people in the network. Here's the trick:
Opportunity 1: Young people are the ones more prone to accept ads on their phones in exchange for free calls.
Opportunity 1: Young people are the most prone to use 3G services, bringing more value to the operator.
Challenge 1: Young people are the most cynical against ads.
Challenge 2: Young people are the most prone to churn.

Enters the scene social network analytics, to tackle this issue. The main goal is to find the best way to deliver the right ad message to the people to whom it will resonate best at the best time.
In this way, the probability that the ad is effective (i.e., that it produces an effect on the receiver--namely BUYING) is much higher; also, the customer receiving only ads that are interesting to his lifestyle/preferences will most likely choose to stay in the network--and get others to join.
The most innovative feature of these solutions is that it provides the operator and the advertisers with a common platform, where the targets' desired characteristics can be adjusted, as to find the right segments to whom launch the ad, thus increasing the effectiveness of a specific ad. In a way, like the slots in an airport.
It is up to the operator to select the which are the most expensive "slots".

Of course, when (not if) the advertising-funded calls concept succeeds, all operators will do the same!!
Why bother with all this? Basically because the future of mobile marketing in terms of value resides in advertising, so if operators want a piece of the future pie, they will have to control a piece of the value chain:
Operators will be the toll on the motorway where the mobile marketing traffic flows.

... or else they will be providing a commodity--traffic flow support.

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Friday, May 25, 2007

Restaurante Riverside - Social Network and Buzz

When choosing a restaurant in Portugal, I usually have some rules of thumb (I do not count fast-fodder places as restaurants, for obvious reasons--the first being they are not restaurants).
One, I avoid shopping malls--franchisings are not the "real thing", are they?
Two, I avoid places with menus in English--usually there is a "tourist premium" attached, not compensated by the increase--or more often decrease!--in quality.

Last week I went for work to Lisbon, and I happen to go to lunch with a long-time friend. He chose the place. The "Riverside", in the "Dolce Vita Monumental" food court.
Given above-mentioned point one, I was suspicious--had he been in Lisbon for too long?
He told me it was very good Italian buffet restaurant, on top of that even cheap. He gave me some examples of what he had been eating. Since this guy is as a gourmet as I am, I thought I should give him a chance.

I arrived first, so I went to check their offers. What to say?
I was like a kid on a candy store (or my mother in a crystal store). The (Brasilian) Chef looked at my face and gladly went on to explain what delicacies he had prepared.
If I recall correctly, on that day there was:
- Duck legs with lemon sauce
- Veal medallion in brie sauce
- Fried grouper with oven vegetables
- Seafood saffron-risotto
- Tagliarini all'amatriciana
- Tagliatelle funghi e panna
- at least two more wounderful stuffed pasta dishes with creamy 4-cheese sauce
- a 5 metre salad table
- if one does not like Italian, there is a 5 metre Brasilian meat (and pineapple) roast also...

After one selects, the plate(s) are weighted (the second dish is plastic). It costs 11,6€/kg 17,6€/kg (my bad, I misread the "7" for "1").
For absolutely delightful, utterly well-prepared delicious food!
By Jove, when back in Helsinki I found sausages costing more than that!
So you know. If you find yourself in Lisbon, around Marquês de Pombal/Saldanha area, ask around where the Monumental is, then go to the down floor, and you'll find Riverside.
You cannot but enjoy!!!

See what happened here? Social networks in practice. The Riverside does little or no advertising, and builds their customer base on satisfied customers (through absolute quality) and personal recommendation. Positive buzz. Smart guys. And I love smart people!

Star Alliance 10 Years

Again I flew Lufthansa. They are great!
Good (warm) food, excellent service, short connections, arriving on time.

The in-flight magazine this onth dealt with the 10th. anniversary of my favourite airline "group": Star Alliance.
It was really nice to read the interview with the CEO.
He starts by saying that their focus is on... guess what! The customer!
One particular phrase struck me: "not cost-cutting, but customer satisfaction".
Cynical as we are, I am hearing already someone shouting "LIP SERVICE"!
The thing is: in Lufthansa or TAP... IT SHOWS! It always did.

I started flying (only) 10 years ago. Hey! It was when Star Alliance started!
Back then, I used Lufthansa just because it was way cheaper than the others. And the food was good (but then again, so it was in the other airlines). In plus, coffee was free of charge in München, which was nice for someone who did not carry Deutsche Marks.
What happened since then?
Petrol costs went up by a gazillion percent. So "normal" airlines had to cut costs.
Low-frills airlines appeared. So "normal" airlines had to cut costs.
After September 11 people stopped (so they say) using planes. So "normal" airlines had to cut costs.
Whatever reason excuse happened. So "normal" airlines had to cut costs.

SAS had an excellent service, and coming from Helsinki it would be a good option. They stopped serving things for free. Oh well... at the same time, Lufthansa (remember, both from Star) cut down prices... maintaining--or as I noticed in-flight, improved--the level of service? Need I say what I did?

Funny thing... on SAS 60th. anniversary, I flew SAS from Bologna to Helsinki through Stockholm. At the gate in Bologna there was a full tray of local delicacies, including champagne. Nice! A party! Then in the plane... a measly small chocolate. Oh well...
In Stockholm it was business as usual. No party. Next flight, the same small chocolate. What the heck is the SAS marketing department thinking?
Are they EVEN thinking??? How costly would it be to offer a full meal to customers once every 10 years? In fact, I do think it would benefit them in terms of customer loyalty. SAS became a not-so-low-cost low-cost ariline.
Lycka till for them for the next 60 years. Just don't count on me.

How come then my "German friends" manage to offer such a good service at such low ticket prices? I know other companies have higher salaries, but their staff is so rude (a French airline). Maybe Lufthansa has the right catering and other partners. Maybe they are just more cost-efficient. Maybe it is both. Whatever they do, I thank them deeply. I am a loyal customer, who recommends them to just about everyone.

Note: Coffee is still free of charge in München.

Wednesday, November 01, 2006

The "country" brand - Part I

Many countries have recently embarked on a journey of revamping their image.
Good idea! Why not?
Traditionally countries have built their brand, either based on tourism (like Italy) or technologic excellence (like Germany), or both (like Switzerland).
Actually, all countries have been doing it for long, even without noticing. Hence some want to change their image.

There is a guy who has been paid bundles to change some countries' image, like in the Ex-Soviet Baltics. One of his premises is that the emphasys on tourism should be abandoned. For him, tourism is based on "something old", and countries have to focus on "something new", like technology. Personally, I think he is a meathead. Hence, no link to his page.

Ignoring a country's natural beauty and historical legacy is just plain dumb. That is, unless your country is destroying the environment and endorsing ethnic cleansing, like Nigeria until 1999.
You don't need to destroy everything and start from scratch (leave that to the Maoists).
But you can and should mix history with modernity, traditions and technology.

Italy is paramount for this: nowhere else in the world can one be immersed as much in a Medieval/Renaissance atmosphere, inside extremely well-preserved cities and towns. And that "respect for the old" has paid off big time, with tourism income flowing constantly into the Italian treasury.
At the same time, the image of Italy as one of the world's most advanced countries is not affected by this. It is part of the G8, everyone loves Italian (sports) cars, and Milan is one of the fashion capitals of the world.

One of the things that hurt me more is that in Portugal old buildings in town centres come down in the name of progress, to give way to total aberrations. Two examples from my home region:
- Santarém wanted to be a UNESCO heritage city, but did not win the bid because of some awful stuff right in the Old Town.
- Cartaxo has rebuilt its Cinema-Theatre "modern style", and has demolished some nice examples of late XIX century traditional architecture (I mean, 3-story high buildings, covered with coloured glazed tiles) and are building "modern" apartments in their place. Once again right, in its Old Town. Then, paradoxally, new 10-story high apartment blocks are being built in the outskirts, with "traditional architecture" finishings! Go figure.

The point is: these two cities are trying to be known through tourism. So this should be a warning to places which are doing the same. Who wants to visit a place promising vibrant History, yet is full of boring modernity?

Friday, October 20, 2006

Give experiences, not ads

I believe people are intelligent and act rationally. So sue me.
Thus I advocate building brands based on value, not on advert pillow talk.

Globalisation permitted lowering production costs to the minimum possible, so every product is tendentially a commodity. Either it is soft drinks or electronics. Actually, even more if we are talking about electronics!

On the other hand, mass media advertising is losing effectiveness, whether we like it or not. People have been bombarded so much they lost sensitiveness to it. It is just a natural reaction. Younger generations are even "ad cynical", and see right through the inflated promises.

How then to motivate these disenfranchised customers?
Simple, give them experiences!

The most obvious example to associate your brand with "their world" is sponsoring music concerts or radical sporting events, which will itself provide the (positive) experience needed. A more refined way is to get those people to interact in a more brand-controlled environment. "Brand theme parks" have spouted, and some became tourist atractions in themselves.
For instance, a football game is excellent to provide experiences to the customer/supporter. Simple things like being selected to shoot penalties with old stars, or winning free tickets to the VIP lounge, can indeed make a big difference. The idea would be to so, even the team loses, "oh well, at least they had a good time"! And it is a very effective way to build a brand, because the costs for the club will be close to nothing.

The idea behind this is working by word of mouth. Research shows 70% of important (read, "very expensive") buying decisions are motivated by a reference from a close person. Of course! Who has time to read all the magazines? Just ask a "tecchie" friend or someone in the industry!
"Buzz marketing" is hot, and I recommend it. Just remember that your brand has to fit the "young, hip, and trendy" market, and that it must look like it is a coincidence the event is happening just there when they were passing by. If youngsters suspect they are just being fed "hidden advertising", you can bet your money they will spread "bad buzz". "Buzz" is wounderful: if it is positive, we spread it in average to 4 people; if it is negative, we will spread it to 8 people!
Don't you just love rational people like I do?

Sunday, October 15, 2006

Brand. What is it good for?

Future looked nice in 1993. I know, "the Internet" was not a household name, SMS had just been launched as a side feature, but the good news were that brands were soon to disappear.
How come? Because we would live in a brave new world of commodities, where the power would be on the hands of big distributors, which would sell "white products" (without any brands), their taste and feel were basically the same, at very low prices.
Well, that idea did not stuck. People were just not used to all-too-descriptive, no pictures packages. Maybe the images of XIX century pre-branding economy were too harsh...
Hence big distribution started to sell products with their own brands. In fact, with labels emulating the category market leader.
So now it would be the same stuff, only cheaper. Oh goody goody!
Let's face it, people would understand that the discount corresponded to the producers' profit margin, which the consumer no longer needed to pay.

Why then in the future (i.e., righ now) we still see brands, or better, why are the brands so strong and alive? Basically because the economic powerhouses refused to yeld that power to distributors. At least not all.
So they had to reorganise their cost structure (do I hear relocation and outsourcing?), and used the savings (just guess) in advertising their brands! Thus the brands became values in themselves, and not because the product would be so much better physically.

To the point that nowadays you should indeed price yourself up, because people still think that more expensive means better quality.
One Finnish example, because it's so obvious it hurts: the coffee market is dominated by a brand which has its products marked-up relatively to competitors. At the same time, blind taste after blind taste gives the 50% market shareholder the worse results. Yes, it is that unbearable!
At the same time, they flood the market with ads, finishing with the ironic "Naturally [brand name]".
Yet people do not realise that coffee tastes BAD if they look at the package (or even if they do, one said "I just put more milk on it"), on the contrary, they say "this really must be better, because it's more expensive". NO, they must keep that price high to pay for all the advertising, you tasteless morons!

So I don't believe in brands? Oh yes I do, but only if I see any aditional benefit on it. There is a soft drink in Portugal called "Sumol". I am a total addict, because not only it tastes GREAT, it has almost 10% of fruit juice. Yes, that much. So much that the world leader has to put 8% of juice in Portugal, while in Finland it puts only 4%. And guess what, the Finnish leader (a local brand) puts only 2%. Read your labels, people!
Thus I don't mind paying that premium; after all, fruit juice costs more than water. So I'm not paying a "pure brand premium", but instead a "objective quality premium".

My point is: brands are good, only if there is substance to support them.

Monday, October 09, 2006

Consumer 3.0 Beta

Value for money.
That is what I want. And I hope I am representative of the "new" consumer.
I am impervious to advertising. Well, not to all advertising, but to about 90% of the ads that come from TV, interrupting the enjoyment of my favourite series, or even worse, movies.
Don't get me wrong, I grew up watching movies "the old style": big theatre, potato chips, and one break. Let's face it, most of the times it was a relief, as it meant a quick visit to the boys' room, eventually a bag of crisps.

So I learned to accept one break. But for a good reason!
Nowadays the studios which offer us the latest Hollywood piece of crap blockbusters do not have breaks. Good! Or is it...? That was not done for people like me. In fact, that was the way to make people store jumbo-sized baskets of "cinema food". Of course! How else could they handle 1,5 hours without breaks?
The "Cinema experience" became a "Munch Croc Munch concert". And people like me stopped going.

With 30+ channels and a "home theatre system", one could enjoy a good movie. But not from most open signal commercial TVs. In Portugal, one channel started the trend of cutting the ending credits (what a lack of respect for the Assistant Key Grip!), but in Finland, one channel fades in the last 2-3 seconds of each part (and any phrase occuring) while cutting to commercial! Nothing is sacred anymore!
And for what? For me to amuse myself zapping to other channels where there are no ads showing. I hate them! And you know what is surreal? That there are commercial breaks in that channel telling people how effective TV ads are if passed there!

I am a person with above average consumption power. But believe me, less than 5% of my purchases is motivated by TV ads. So much for their effectiveness!
When will they learn that "interruptive marketing" is braindead, and stop insisting in maintaining its coma? Be brave, pull the plug!
We, the new consumers thank you heartly!