Table of Contents
Strategies:
The Five Basic Plays of Marketing
Branding: Using Retail to
Rev
Up an Image
B-to-B: The
Marriage of Sales and Marketing
Promotions:
Encouraging Kids to Collect 'Em All
Sampling:
Teaching
Tools
CRM: Making
Dollars out of Change
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This Week's Stories
Strategies: The
Five Basic Plays of Marketing
By Sherry Chiger
"Marketing is first and foremost about strategy," John
Zagula, coauthor of "The Marketing Playbook," told attendees of last
week's DMA World Seattle. "Way too often people put the tactic cart
before the strategy horse."
Before you decide on your marketing tactics, you've got to select
strategy -- or as Zagula, a Microsoft veteran, put it, your play and
your playing field. Given that, according to Zagula, there are only
five
basic plays, homing in on a strategy is less daunting than one might
think.
The five core plays:
1) The drag race. "Beat the other guy across the finish line" is how
Zagula summed up this strategy. It's a matter of focusing on one key
competitor and doing whatever it takes to steal away its market share.
Microsoft Word's battle against WordPerfect in 1990 was a case in
point.
At that time, WordPerfect had 30% market share, making it the
number-one
word processing program; Microsoft Word had 15%, and several other
brands, such as XyWrite, accounted for the rest. Microsoft set its
sights on WordPerfect, promoting Word's strengths over WordPerfect and
offering a discount to WordPerfect users who switched to Word. The
media
also ignored the other brands, focusing on the race for market
dominance
between Word and WordPerfect. As a result, the other players for the
most part faded away; today Microsoft has 85% market share.
With its all-or-nothing approach, the drag race is risky. And bluffing
won't lead to a win. As Zagula said, "You need to have a better car and
enough gas to get through the end of the race."
2) The platform play. You try to build as many alliances, partnerships,
and affiliations as possible. This is best used by companies that are
already market leaders.
3) The stealth play. This is a matter of "finding the opportunities
where the big folk ain't," Zagula said. For instance, Enterprise Car
Rental in the 1970s tried to muscle into airport rental markets, but it
couldn't outspend Hertz and Avis. So it focused on offering replacement
cars for car dealerships, auto shops, and insurers that needed to
provide rentals for customers whose own cars were being repaired -- a
portion of the market all but ignored by Hertz and Avis.
4) The best-of-both play. Budweiser's "tastes great, less filling"
strategy is an example. So is the Lexus strategy, which Zagula said
proved that "Japanese luxury car" was not an oxymoron.
5) The high-low play. If the best-of-both play can be summed up as "why
choose?", the tagline for the high-low play is "why compromise?" In
this
case, you select one attribute -- exceptional quality, for instance, or
fulfillment speed -- on which to focus. According to Zagula, it's "the
most difficult play to manage."
Once you've decided which play is most likely to work for you, it's
time
to choose the playing field: "What is the situation, where do you want
to be, and what do you have to cross to get there," Zagula said. To
ascertain how to bridge the gap between where your company or product
is
and where you want it to be, you need to look at the industry as a
whole; your customers (to best determine your offering); and your
competition (to determine your positioning). Then you can formulate the
tactics that will make up your action plan.
As for the marketing messages themselves, Zagula said that "proof is
more important than benefits, which are more important than features."
And regardless of whether your campaign is built around proving your
product's worth or explaining its benefits or features, you should heed
what he called the Rule of 3: Highlight only three proofs, benefits, or
features, which should ideally be "awesome, awesome, not screwed up."
For example, an auto maker might tout its fabulous handling,
exceptional
pick-up, and low maintenance.
Back to top
Branding:
Using Retail to Rev Up an Image
By Vilma Barr
RETAIL TRAFFIC
Electronics manufacturers are getting into the retail
game, using small, stylish stores to add an extra dimension to their
sales appeals. The operative terms are "connecting" and "experiencing."
The strategy has spawned minis and microminis -- smaller facilities
located in street-front settings as well as in urban and suburban
shopping centers.
Major electronics companies are counting on super-sleek interiors and a
cadre of friendly, "I'm here to answer your questions" helpers as
important components to branding. They fall into two camps: stores
(places that sell merchandise) and "unstores" (those that do not) and
are designed to appeal to both women and men. This recognition of the
buying clout of females, long neglected by the gizmo- and gadget-maker
community, is one of the reasons for the rapid growth in the number of
high-concept electronic product destinations.
"It's all about building the brand," says James Rosenfield, national
director of retail services for Cushman & Wakefield. Showcase stores
being built by Apple, Sony, Nokia, Nextel, and Sprint get people
excited
about the product and how it relates to their particular lifestyle, he
says.
Samsung, for example, has opened a 10,000-sq.-ft,. demo-only
"Experience" store on the third floor of The Shops at Columbus Circle
in
the new Time Warner complex in Manhattan. It's a permanent "unstore"
that allows consumers to test, try, and even borrow the latest
products,
with no pressure to buy.
To read more, visit RETAIL
TRAFFIC.
Back to top
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B-to-B: The
Marriage of Sales and Marketing
By Ray Schultz
DIRECT NEWSLINE
What is a lead?
The only people in b-to-b marketing who know that answer may be
salespeople. At least that's the way it seems to John Coe of the Sales
&
Marketing Institute.
"We focus on sales cycle but don't necessarily understand buying
process
of customer by segment, and we don't align them, which is reason for
low
response rates," he said, speaking at last week's Chicago DM Days &
Expo.
Take the case of the northwestern software company that was facing flat
sales. The firm was producing a high number of leads, offering a book
as
a premium. but 55% of the inquiries received in a single year were
never
touched by the sales force, and the conversion was less than 1%.
Moreover, the cost of customer was $26,900, exceeding the two-year
revenue potential.
There were many reasons for this, but the main one was that the company
had not separated leads from inquiries and sales opportunities from
leads.
The solution: The company redefined what a lead was, then redirected
its
list and hardened its offer. It offered a technical white paper. The
result: Conversion to sales is now over 15%.
To read more, visit DIRECT.
Back to top
Promotions:
Encouraging Kids to Collect 'Em All
By Andrew Grossman
The company that produces "Pokemon" and "Yu-Gi-Oh!" is
betting that kids will be just as eager as teens and young adults to
collect DVD boxed sets of their favorite shows. Target and Best Buy
apparently believe so as well: They have partnered with 4Kids
Entertainment as exclusive retailers of so-called starter boxes for the
third season of "Yu-Gi-Oh," the popular animated series in its fifth
year on U.S. television.
Starter boxes are aimed at encouraging fans to buy a series of DVDs as
collectibles by selling them the first volume of the set, including a
"free" gift, inside an attractive box that will eventually house the
entire season.
4Kids introduced the boxes on April 5 with plans to roll out the
remaining four volumes of the Japanese action cartoon -- each with a
handful of episodes -- by September. Major outlets such as Wal-Mart and
Amazon.com are selling the "Yu-Gi-Oh!" DVDs for the third season but
not
the starter boxes, which at a $19.98 list price sell for about $5 more
than the DVDs alone.
Joe Lyons, director of home entertainment for 4Kids, said he believes
this is the first release of a starter box for a broad-based animated
show aimed at kids. "Most of this stuff was strictly for the older
demo
-- anime fans. We believe this is the first starter box for a
commercial, mass-marketed property," he says.
4Kids was looking for a way to grab some additional shelf space at
Target. Best Buy jumped in when it got wind of the promotion, partly
because it has been substantially ramping up its kidvid DVD inventory.
The retailers were eager to participate largely because of the boom in
the kidvid DVD market.
"Kids like to collect," Lyons says. With the starter boxes, fans do not
have to buy the entire year's worth of episodes in one fell swoop, and
"here you have a great thing on your shelf and it looks really cool."
Back to top
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here.
Sampling: Teaching
Tools
By Tim Parry
PROMO
Who doesn't love those freebies picked up at the
grocery
store or received in the mail? But if marketers don't properly educate
consumers about such samples, those items aren't free -- they're
worthless.
According to Schaumburg, IL-based PromoWorks, spending by marketers on
sampling programs increased more than 20% in 2004. But not all such
programs yield positive ROI for their brands. The key is using samples
to convey the benefits, attributes, and value of the product, says
PromoWorks president Mike Kent.
"Sampling programs are turning more into sales programs," Kent says.
"The handouts, samples, and coupons create a consumer excitement from
the brand standpoint. But retailers and manufacturers are looking at
the
ROI." Kent says the new trend in sampling is to use spokesmodels and
demonstrators as salespeople, not just distributors.
To read more about successful sampling, visit PROMO.
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Award-winning Editorial Director Ray Schultz of Direct Magazine
E-Zine IQ is a bi-weekly email newsletter about email newsletters with
particular focus on corporate communications designed to build customer
relationships. It drills down to all aspects of production, from
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technology you need in house. To subscribe, click
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CRM: Making
Dollars out of Change
By Sherry Chiger
CATALOG AGE
It's human nature to be wary of change. But according
to
Ted Wham, chief privacy officer/general manager of online travel
marketer Expedia.com, "change is your friend as a direct marketer. It
gives you the subtext and context to communicate with your customers."
During his luncheon keynote address at DMA World Seattle on April 6,
Wham outlined a five-step plan for making dollars out of change. To
find
out what they are, visit CATALOG
AGE.
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