Defining "Price" Or "Pricing" In the 9P’s. Is Not As Simple.

In my Nine P’s / 9P’s © 2007, I define “Price/Pricing as “All aspects regarding pricing. The amount of money a consumer is willing to pay to obtain the product. Pricing includes  wholesale/retail/promotional prices, discounts, trade-in allowances, quantity discounts, credit terms, sales and payment periods and credit terms.

Pricing decision making also involves adjusting prices concerning the competitive environment, economic situations and involve buyer perceptions. Want a real-world example?

The WSJ has done a good job of investigating “Price” and “Pricing” at several stores and retailers. Marketing and Financial pros are adopting techniques for their websites to glean information about visitors to their sites, in real time, and then deliver different prices of the same products to different people.

Staples for one has acknowledged that it varies its online and in-store prices by geography because of "a variety of factors" including "costs of doing business."

The WSJ identified several companies, including Staples, Discover Financial Services, Rosetta Stone Inc. and Home Depot Inc., that were consistently adjusting prices and displaying different product offers based on a range of characteristics that could be discovered about the user.

Office Depot, for example, told the Journal that it uses "customers' browsing history and geolocation" from “Place” and/or “People” in the Nine P’s to vary the offers and products it displays to a visitor to its site.

Staples told WSJ that "in-store and online prices do vary by geography due to a variety of factors, including rent, labor, distribution and other costs of doing business."

It is possible that Staples' online-pricing formula uses other factors that the Journal didn't identify. The Journal also tested to see whether price was tied to different characteristics including population, local income, proximity to a Staples store, race and other demographic factors.

Statistically speaking, they reported that the strongest correlation involved the distance to a rival's store from the center of a ZIP Code.

Interesting how the Nine P’s are interrelated along with competitive factors.

How Important is Targeting in Marketing? Very Important. How important is Less Spam Worth to Facebook? About a Buck.

How important is Targeting in Marketing? Very Important.  How important is Less Spam worth to Facebook? About a Buck.
From today's WSJ and Atlantic Wire:

Facebook has their target markets and has garnered one billion monthly active users.

A company cannot serve all customers in a broad market. Companies distinguish major segments, target one or more and develop products and marketing mixes tailored to them.
What is Targeting? In the Marketing classes and in the classroom, I use these definitions:

• Targeting: The market segment or segments toward all marketing activities will be directed. 
• Target Market: A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.

So let’s use an example from today with Facebook:

Facebook has garnered one billion monthly active users. Did you hear that Facebook has begun testing a system for users to send messages to people outside their “network” or immediate circle of social contacts for a payment of $1? Facebook continues to look for ways to generate income and revenue. But what is spam or the lack of it worth to the user experience.

In their statement "imposing a financial cost on the sender may be the most effective way to discourage unwanted messages and facilitate delivery of messages that are relevant and useful."

Facebook does let members send messages to those outside their network of contacts, but routed to "Other" folder. This new feature for $1 would let users send messages directly to a user's main "Inbox.”

To be fair:  Only individuals are allowed to send messages using this feature. Companies can’t send bulk emails to groups of users. But is anyone looking at Facebook and at their Facebook user experience or just revenue.

Execution and Some Background on Creativity in the Marketplace

For major financial, competitive and technological reasons, companies should be concerned with creativity.

Pay attention to Marketing objectives, strategies and tactics, along with the 9P's/Nine P's 2007©, in new ways; escape your mental patterns associated with a topic; keep moving in the thinking to avoid premature judgment and execution, are some of the topics I discuss in the classroom.

A few more: Whenever you ask employees or functional teams to generate ideas, always ask them to purposefully generate at least one outrageous idea along with the other ones. Gives the manager of the department or company the chance to explore.

Peter Drucker once said: Innovation is a core competency that every company needs. Increased distribution is an innovation.

In Marketing, the word “Where” can mean many things and places, especially under the Nine P’s or 9P’s of “Product” and “Place?”

From ClicZ today, “Truvia's Facebook-orchestrated Turning the Town Truvia contest, where the brand asked fans to say where they'd like to see the sugar substitute, has garnered 35,000 leads and increased Facebook fandom 25%. The campaign has also had a practical business-to-business effect as well, convincing Hilton Atlanta, Hilton Boston Logan Airport, Biaggi's in Chicago and the Fireman Hospitality Group, among others, to adopt the brand.”

Food for thought: Now I ask you, "Why are telephone keypads arranged with the digits 1 to 3 on the top row and while calculator keypads have those digits on the bottom row?"

But remember, real success only comes with the implementation of an idea; real success comes with innovation, with detailed, timely execution.

Does This Make Sense to Anyone But the Diet Pepsi P.R. people? How Can You Change the Ingredients, Sweetener and the Flavor Remains the Same?

How can you change the ingredients, sweetener, and the flavor remains the same? Isn’t consistency a product attribute? In the marketplace, boardrooms, grocery stores, restaurants, mass merchandisers, schools, liquor stores, and in the classrooms of Business, Marketing and Advertising classes, it surely is.Let's add 99-cent stores and the dollar stores, too.

From Advertising Age:  "Diet Pepsi wants customers to "Love Every Sip."

They admit they have lost customers, marketing share and awareness of customers, even “loyal” customers at Pepsi. As a marketing expert, are the Diet Pepsi P.R. people  trying too hard? Not believable to me, that changing ingredients and the sweetener do not change the "Product," especially if consistency has been a problem in the marketplace.

Consistency is a product attribute. The Marketing Concept is a philosophy and a practice for me. The practice of Marketing makes the customer, and the satisfaction of his or her needs, the focal point of all business objectives, strategies and tactics.

Diet Pepsi  will be featuring the tagline "Love Every Sip," TV spots starring Sofia Vergara of Modern Family fame and a new sweetener that's intended to give the flavor -- which will be unchanged??? -- more consistency. Really?

“Dine-in” AMC's Movie With Dinner Marketing Concept. Not Drive-in, Dine-in.

Here’s a new marketing "Product" or service concept from AMC Theatres. It’s their “Dine-in” AMC Movie marketing concept. Not Drive-in, Dine-in.

AMC is the nation's second-largest cinema chain and opened its first dine-in theatre in Southern California's Marina del Rey, a couple of weeks ago.  It’s their eleventh theatre of their new concept. Unfortunately we were away and had to wait. But more on that at the end.

Appetizers, entrées, desserts, beer, wine and cocktails are served at your seat, before and during the movie.

We saw “Lincoln.” But this really is more of a review of the service, marketing concept and execution.  I wanted to see and review the “Product” concept, one of the Nine P's in marketing, with the movie “Lincoln.”

If you are a serious movie buff, this is not the concept. Movies target many ages, and specifically 18-24 is not the "Lincoln" demographics. There were noises and sounds not associated with the dialogue and action from the servers, patrons, dishes, etc.  But back to the "product" concept and its execution.  The food is good… lunch, dinner or a snack. We had dinner. Popcorn comes in a ceramic bowl/dish. Interesting.

The experiences combine the cuisine and drinks/cocktails of a restaurant with the fun and excitement of a movie theatre.

How the concept works:
Your options at AMC include:
• “Cinema Suites,” with recliners, a dinner menu and full cocktail bar. Under “People” one of the Nine P’s, guests must be 21 and over.

 

• “Fork & Screen,” a casual in-theatre dining experience with a dinner menu and full cocktail bar. By the way guests must be 18 or over unless accompanied by an adult.

You get to reserve your seats according to your preference and the seating guide.

There’s a “MacGuffins,"  bar and lounge before or after the show. More on that in another Marketing post.
You have a call button at your seat and a server arrives to take your order. Not a problem. There were more servers and waiters than patrons at one point.

The food comes, routed from about three theatres away. The concept is extremely labor insensitive. Service was spectacular but there were no more than ten patrons in the theatre. Three servers: One took the order. One brought the drinks, and one more brought the dinner.  Menu is above average. Seats were like “Barcalounger-type” chairs.  Probably worth experiencing and trying again. I do feel we will do the "concept" again.

Let’s also talk about “Price,” another of the Nine P’s. As with other dine-in theaters, this luxury service comes with a price. The cost of a ticket at AMC Marina 6 will be as much as $17.50 (without food) depending on the day of week. We paid $12.50, and there was a coupon on the web for a free entrée if you bought another one, with two "over-priced" drinks. Another concept at Cinepolis charges up to $19.50 for the ticket at its California Westlake Village location.

One interesting additional point. We were a little slow answering all of the questions of the waiter. It is hard to hear with the previews in the background. We apologized and said we were jet lagged. The steward said: “Where did you fly from?  My wife said “Tanzania.” He looked like a wildebeest in the headlights. Sorry. Still jet lagged, the morning after the movie. Woke up at 3:11AM. That’s when I started to write this.


Note: Go to www.LondreMarketing.com, and specifically http://www.londremarketing.com/documents/Londre-Marketing-Consultants-9Ps-10.11.2012.pdf to review all 9P’s in Marketing.

Hostess Twinkies. Distribution costs are out of whack. And the Union rules, too.

It's all over the news. We all have read and heard a lot about Twinkies and Hostess this month.  Plus Wonder Bread, Devil Dogs and more.

Some interesting points:

• Hostess's production costs were not outrageous but the distributions costs were between $80 million and $130 million annually and this is according to the judge.
• Part of Promotion: There's been a ton of free publicity, but no advertising in a decade, according to the Wall Street Journal.
• Hostess has spent eight of the past 11 years in bankruptcy with some "odd" Union rules. The real story are the unions, AFL-CIO and the Teamsters, and their costs, which hurt the bottom line.
• One of the nine P's, Place: Wonder Bread and Twinkies could not ride on the same truck. More Union rules. 
• Hostess could not enter dollar stores, vending machines and movie theatres; there would have been more sales and revenue with the additional distribution channels and outlets. Unfortunately they needed separate agreements, which were restricted. 
• The Unions imposed work rules, which stopped the drivers from helping load the trucks. How heavy could the Hostess products be? 

Hostess and Twinkies will come back, but should the strange, odd union rules come with them. 

Advertising pricing for Super Bowl XLVII is hot in 2012 and for 2013.

The ads and advertising in the Super Bowl is a hot, interesting topic, especially when I teach or present Marketing and Advertising. Especially right now through February.

I’m asked:

• How much did a 30-second TV commercial or spot cost in Super Bowl XLVI, February 5, 2012?
• What about next February 2013? 

Good news for CBS is that in 2012, a single Super Bowl XLVI spot topped $4 million. This year the majority of Super Bowl spots are sold for the February game in 2013, at a high of $3.9 and averaging $3.8 million, per spot.

With ads ranging between $3.5 million and $4 million, Super Bowl prices were up 13% to 29% in 2012, from a year ago. The big premium is usually for a typical 30-second spot in the first quarter of the game, which averaged around $100K extra. I explain that this premium is due to the larger audience and better chances that consumers will recall the ads early in the game. Let’s say that the viewers are usually in a better state of mind. I have a west coast bias here.

For 2013, with a reported average :30 cost of $3.8 million, CBS could achieve approximately a 9% premium on the previous year’s rate, or as much as $225 million in revenue.

Prices, for this advertising time only, can typically cost millions of dollars; the 30-second spot during the 2012 telecast cost an average of $3.5 million.

FOX in 2011 reported that Super Bowl XLV sold out, fetching between $2.8 million and $3 million per :30. This amount excluded production costs and fees for actors, sets, equipment, advertising agencies, directors, crew and other personnel. Here’s more:

In 2009-2010, the cost of a 30-second spot ranged from $2.5 million to $2.9 million.

During the broadcast advertising time has also grown from 40 minutes, 15 seconds in 2001 — or 82 messages — to 45:10, or 84 messages in 2009. There was a big rise in 2010, to 47:50 and 104 commercials.

Which product is advertised the most on the Super Bowl? Not beers, movies or cars. It’s the network’s own programming promotion. In a typical Super Bowl, 15% to 20% of all commercial time is a plug by the network for its own programming and shows.

Sales and the pace of sales in 2010-2012 were fueled by the heavy competition among car makers. There was a record of eleven different car brands which announced Super Bowl deals, including nine different auto brands. This year we have Mercedes coming back into the fold at the Mercedes-Benz Superdome in New Orleans in 2013.

The Super Bowl is our country’s highest-profile advertising showcase, with households staying glued to their screens and not using TiVo-type products and services during the ads. Marketers get a huge audience, but they also face high expectations especially when the audience can judge and be a critic with the click of a mouse. With the high price tag, it’s a lot to spend if the creative is poor or dumb, lacks strategic marketing direction, or just plain awful. The cost of a Super Bowl spot every year has been an annual contest of brinkmanship for the networks, in setting its price.

Positions in first half sell first. Anheuser-Busch delivered four-and-a-half minutes during Super Bowl XLVI, the company’s 24th consecutive season as the exclusive malt beverage category advertiser.

Super Bowl XXXVIII, broadcasted on 2/1/2004 from Houston, Texas on the CBS network, was noted for a controversial halftime show in which Janet Jackson’s bare breast was exposed by Justin Timberlake in what was referred to as a "wardrobe malfunction". A record $550,000 fine was levied by the FCC, as well as an increase of FCC fines per indecency violation from $27,500 to $325,000.

While the Super Bowl still commands the highest-priced commercial unit — around $3.8 million — other major sports events and the Oscars can pull in total dollars, too.

New insights on recent business activities. Some interesting examples of the Nine P’s in business and in the news.

I have been collecting a few recent business stories in the news, and applying them to the Nine P’s. Here are a few interesting examples of the Nine P’s (Planning, People/Segmentation, Product, Price, Promotion, Place/Distribution, Partner, Presentation, Passion), which break down business problems into possible solutions and into objectives, strategies and tactics to solve your business, marketing issues.

Examples: 

Price: 
Price Less Foods sells groceries at cost. From a recent Supermarket News, markets in Virginia and Tennessee are selling their groceries at cost, and these grocers are adding on a charge of 10% fee per basket. In marketing, “Price” includes all aspects regarding pricing. The amount of money a consumer is willing to pay to obtain the product or service.

People/Segmentation: 
Target market and/or segmentation consists of a set of buyers who share common needs or characteristics that the company decides to serve. Market targeting can be carried out at several different levels. 
With Obama’s win last week it will assist/increase the ratings for Fox News. The re-election of President Barack Obama and the GOP's loss is going to strengthen the network's role as "the voice” of the opposition. With more viewers, the station will generate more revenue. 

Promotion/People: 
Advertising is one component of the Marketing Mix and the Nine P’s. Remember the rock ‘n’ roll, “super,” spectacular outdoor boards on Sunset Blvd. in Los Angeles. 

I read recently that there is a book of photography of these famous boards; it’s called Rock ‘n’ Roll Billboards of the Sunset Strip (Angel City Press). Sometimes the audience was only the artists or band such as The Doors, Elton John, Beatles and Donna Summer, among others.    

Product: 
Doesn’t this seem late, from Yahoo?
It’s reported that Yahoo will relaunch its Yahoo email product. It’s the second time in six years, with last year being the first time in five.  Yahoo is trying to compete with G-mail. Seems too late to me. Most people are happy with Gmail and I know of few who are happy with AOL. 

Promotion/Advertising/Media: 
One more example: Media firms want to be paid for more ad views. It includes “time-shifted” viewing, which could increase measures of program viewership by 30% to 40% during a week.

The networks currently get to monetize some of that time-shifting viewing. What is called “C3 ratings” -- the average commercial ratings plus three day of time-shifted viewing – it’s the way media is measured and the currency through which the TV networks get paid from the advertisers, agencies and media buying services. 

This media metric started in early 2007. There's still other viewing that goes “un-paid” -- in days four, five, six and seven after a program's initial airing. Research has shown live plus seven days accounts for 90% of all viewing. One fix for programmers is inserting "fresher" spots known as “dynamic ad insertion.” 

I developed and own a copyright for the concept, the Nine P’s/9 P's ©2007, which augments the Marketing Mix and 4P’s by the American Marketing Association, Neil Borden and Jerome McCarthy). 

For more on the Nine P’s and other marketing resources, go to http://www.LondreMarketing.com/stimulating_articles.php.

Thinking about the debacle about Lance.

Let’s look at the perspective from years past. It was two years ago when I read in the Miami Herald: “What is LeBron James worth to the Heat?” With the addition of superstar, Miami Heat are seen by many as the team to beat in the NBA. This may be true financially as well, with increased sponsorships, ad sales, season ticket sales, playoff revenue and more. Sports-business media has said, “LeBron is a walking, talking, free-throw-shooting stimulus plan.” How much is Lance worth as Nike et. al. abandon him?

In Marketing you need to come up with the right idea or selling concept.  That must be first. Then decide on the “celebrity” to present, sing or act. In my USC, CSUN and Pepperdine marketing and advertising classes I teach that you must remember what you are going to say in the promotion and advertising is more important than the “who.” Insist on moral clauses and “bigger, longer and fatter contracts,” began more earnestly after the Tiger Woods’ incidents. Using “alleged” instead of “convicted.”

Tiger Woods spectacular tumble prompted the loss of lucrative deals with AT&T, PepsiCo’s Gatorade. Other sponsors have distanced themselves from him, including Gillette and Tag Heuer. Nike and Electronic Arts have stood by him.

Wrigley and the California Milk Processor Board (“Got Milk”) dropped singer/actor Chris Brown as a pitchman after charges that he beat up his girlfriend, pop star Rihanna. Rapper and actor, T.I. enjoyed the spoils of the "thug" life, but it ended costing him $12 Million (his own estimate) in losing the General Motors endorsement deal and other work when he was convicted of a federal weapons charges. (Adweek, 3/8/2010)

Woody Allen says ad lawsuit is getting too personal: Actor-director Woody Allen was complaining about American Apparel, which Allen was suing for $10 million in an infringement case, has crossed a line in its request for personal information. Allen's image was used without permission in an American Apparel billboard that briefly was displayed in Los Angeles. (Los Angeles Times/The Associated Press, 4/15/09)

More Examples:
P&G insures star’s hair for $1M: Pittsburgh Steelers star Troy Polamalu, USC Trojan) is as well-known for his flowing locks as for his crushing tackles. Polamalu is a spokesman for P&G’s Head & Shoulders, and to protect their investment. (Reuters,8/31/10)

In ’99,  Salton International signed George Foreman (Lean Mean Fat Reducing Grilling Machine) to a five-year, $137.5 million deal for the use of the ex-boxer’s name and likeness. George then started another company “George Foreman Steaks.”

What experts say marketers look for? Increasing awareness and SALES, plus a winner, with marketing savvy, plus success on and off the field.

Why do marketers and advertisers use celebrity endorsements?

It's clear we do have a celebrity-crazed culture, but it's both an art and science for marketers. Let's start with Lance Armstrong who is in the news. He has been a multi-brand endorser.

1. Can attract attention
2. Improve company or product's image
3. Boost company or product’s awareness
4. Break through clutter
5. Exploit celebrity's popularity
6. Increase sales
7. Increase company or product's credibility
8. Use celebrity in your marketing and sales meetings. Star can appear in events. 

From today's "WSJ," "Brands are fleeing Lance Armstrong after doping details are released. He's lost Nike, RadioShack and Anheuser-Busch InBev after the U.S. Anti-Doping Agency report detailing Armstrong's use of performance-enhancing drugs. Nike said it would continue to back Livestrong, from which it licenses a clothing line, but it issued a strong statement rebuking Armstrong for misleading the company."

Major questions any brand manager or marketing manager should ask?

1. Is the celebrity appropriate for our product or service?
2. Does celebrity subtract from product or service?
3. Does the celebrity add value? Or generate a good impression?
4. It used to be about "gut feelings." Now brand managers are asking "Show me the evidence that this is the right star or celebrity."
5. Does the celebrity add to the product's image?
6. How much is the fee?
7. How is the contract structured?
8. Do you pay the celebrity their fee, which will decrease media exposure/expenses?
9. What about the history and future of the celebrity exposure? What about "after hour" behavior, any criminal record, FTC issues? Health?
10. Be sure celebrity uses and continues to use the product.
11. Be sure the facts about the product are true and substantiated, before giving script to celebrity.
12. You must disclose if the star or celebrity has considerable interest in the company or product.
13. Q Scores: The company, Marketing Evaluations, produces a Q score (a numerical rating of a celebrity’s popularity).  It’s a calculated business risk. Past blowups have taught brand managers to do a better job of investigating the background and lifestyles. The checks may uncover something which makes you pause. 

It really is both an art and science.

More than a Hundred Twists to Oreos.

Oreo’s doing a terrific job of promoting it’s fun Oreo cookie, with its promotion, advertising, media planning/buying, social media posts and PR, plus 100 days of events ending with the Super Bowl advertising culmination.

Beginning
Oreo is promoting a different cookie each day for 100 days as part of its 100 years’ anniversary.
It’s developed the “Daily Twist” campaign, from an agency team of Draftfcb New York, 360i, Weber Shandwick and MediaVest.

They have invented a cookie to match whatever is trending, rather than sticking to a prescribed schedule.

Super Ending
Mondelez International has asked Oreo’s lead agency Draftfcb and independent Wieden+Kennedy to compete in a pitch for a “cookies vs. cream”-themed Super Bowl spot. The TV spot will cap marketing around Oreo’s 100th anniversary.

What is Promotion? The communication element includes personal and non-personal communication activities.  Activities that communicate the merits of the overall product, which include:

• Personal Selling/Sales Force. In this example, working with the grocery trade.
• Advertising—Mass or nonpersonal selling: TV, radio, magazines, newspaper, outdoor/out-of-home (OOH), online

Advertising is structured and composed of nonpersonal communication of information, usually paid for and usually persuasive in nature, about products (goods, services) and ideas by identified sponsors through various media. (Contemporary Advertising, 13the, Arens, Weingold, Arens, 2011)

Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. (Principles of Marketing, 14e, Kotler and Armstrong, 2012). Ads can be a cost-effective way to disseminate messages, whether to build a brand preference or to educate people.

• Sales Promotion—Trade deals, samples, coupons, premiums, tie-ins, p-o-p, displays, sweepstakes, allowances, trade shows, sales rep contests, events/experiences and more.
• Collateral Materials—Booklets, catalogs, brochures, films, sales kits, promotional products and annual reports.
• Direct Marketing (also referred to as Action or Direct Response Advertising)--online, direct mail, database management, catalogs, telemarketing, and direct-response ads.
• Interactive/Internet/web and social media
• Events and Experiences Mondelez International and their agencies have done a great job of creating events. More than a hundred.
• Public Relations—press releases, publicity. Securing editorial space, as opposed to paid space—usually in print, electronic or Internet media. Promote or “hype” a product, service, idea, place, person or organization, internal communication, lobbying. PR involves a variety of programs designed to promote or protect a company’s image/reputation or individual products.

The Publicity of the New LeBron Shoe at $165 to $300 is Just Dumb Marketing and Promotion for LeBron James, Personally.

It does matter.

The publicity of the new LeBron shoe at $165 to $300 is just dumb, marketing and promotion for LeBron James, just when he was regaining some positive persona.

As NBC News and Bottom Line Blog reported that "for Nike, inaccurate buzz is good news.
Reporters and bloggers eagerly reported that Nike's new LeBron X+ sneakers would cost more than $300 a pair -- only for the company to issue a statement noting that the shoes' actual price was at least $135 less than had been reported. The degree of buzz generated by the initial reports led some to speculate that Nike marketers had deliberately seeded the false reports, perhaps by planting the story with "sneakerhead" bloggers."

The publicity means that Nike may not do any advertising for this shoe. It is doing Promotion and many parts of the Nine P’s (http://www.londremarketing.com/documents/Londre-Marketing-Consultants-9Ps-07.02.2012.pdf).

LeBron’s persona, credibility and street cred suffer again.

Are TV Spots and Commercials Too Loud? Louder Than the Programs? You Need to Know About the New CALM Act.

For years people have complained about the commercials or TV spots which are too loud.

Advertising agencies produced the spots louder. They wanted their clients’ ads to stand out.

Programmers and station management wanted their promos to stand out.

The FCC (Federal Communications Commission) is turning down the volume on TV ads.

By December 2012, the new FCC rules and the Commercial Advertisement Loudness Mitigation (CALM) Act will require advertisers and networks to adopt best practices to ensure their commercials and promos don’t SHOUT at higher, louder volumes than the programming.

It is being argued that promos and ads are making pitches to consumers in a similar fashion. Even though a promo may not involve a direct pay-for-play arrangement, it is argued that the intention is the same.

Under CALM, the burden is on cable operators, satellite operators, telcos and stations to ensure that the content they carry complies with this new legislation.

Now you can turn the volume up or down. Just not both during the same 30 minutes of your favorite show. 

How Many Advertising Agencies Have Worked And Will Work For Burger King? BK Is Looking Again For Agencies? Really, Again?

That is not new or news.

According to AdvAge, BK is looking again. Really.
BK has every agency compete, and by adding more agencies there is more competition. The move means that the new and "old" agencies would have to compete against one another for projects, which has been happening more or less each quarter, for each new campaign.

It’s using McGarryBowen (lead creative agency), Mother, Ogilvy offshoot - David, Pitch, Pereira & O'Dell; and appears to be looking for others. They could be looking to increase "same-agency" sales.

What's more interesting it that there have been sales gains. BK is showing signs of reversing a long decline in same-store sales.

The news of more agencies competing is surely unfortunate for McGarryBowen, which signed on with Burger King as the main agency in ‘11.

McGarryBowen hasn't appeared to have had any work run since the end of the first quarter, after Burger King announced that it was adding Mother, David and Pitch as general-market agencies.

There doesn’t seem to be much "partnership" and more of  "vendor, project based" relationships for BK.

As BK shops for agency "vendors," just watch out that shops may not want more project work, as that works against them for bigger opportunities in the same category.

Good for Nike and Bad, Really Bad, for LeBron

For Nike its $315 shoe has one of the Nine P’s/9P’s  “Promotion” built right into it; for LeBron the shoe has “Stupid” and “Dumb” all over it. For his image, it's just not smart Marketing.

LeBron James' signature shoe or Nike’s high-end version of his shoe is priced at plus $300. That’s what the WSJ has reported. Nike says it has not released its price. Estimated production of 25K to 50K pairs. By the way, his most expensive LeBron IX shoes currently go for $250.

Nike gets to tout its new technology. Every major media outlet has done stories on the LeBron X. That is excellent for Nike. Nike says the top model will cost more "to reflect the Nike+ technology embedded in the shoes."  Well, that overall Promotion, with no advertising, just publicity is excellent for Nike, but not for James.

Now for LeBron. LeBron who was riding high after winning the NBA championship and the Olympics’ Gold medal is in another PR nightmare. Remember the ESPN's Decision crafted by LeBron and his team of high school buddies. Just a plain, dumb, avoidable marketing mess, with legs.

Not sure everyone knew but NBC TV viewers watched LeBron wear the shoes at the London Olympics.

Last week the National Urban League asked parents not to waste their money on an "empty status symbol." Marc Morial of the NUL said "To release such an outrageously overpriced product while the nation is struggling to overcome an unemployment crisis is insensitive at best."

We were at a 1A baseball game in June with the Cleveland Indians’ Captains when they flashed (mere seconds) LeBron’s picture to get more noise. They got huge boos.

Nike is introducing a new LeBron X shoe, just as the public and sports enthusiasts were starting to like him again.

As for “Targeting,” the Nike+ shoe is positioned to elite athletes and consumers who want to track how far they run and how high they jump.

LeBron doesn't really get it (his best, overall public and marketing image) even now. In the court of public opinion he’s going in the wrong way. Again.

1 For the Nine P’s/9P’s© go to http://www.londremarketing.com/documents/Londre-Marketing-Consultants-9Ps-07.02.2012.pdf

2012 Olympic Sponsorships, Ambushing and More

Consumers don't appear to be aware of who has paid to attach their name to the Olympics. Especially the 2012 Olympics.

People often feel and think it’s a major rival or competitor of the official sponsor.
You may know that brands spend hundreds of millions of dollars for their Olympic sponsorships. Estimates that spending on sports-related marketing has reached nearly $100 Billion a year. 

There can be incidental or associative Olympic ambushing, when consumers think or feel that a brand is a sponsor or is associated with an event, such as the Olympics. This kind of ambushing can create marketing and sponsorship headaches for the host organization and for other sponsors because it clutters the competitive environment.

Here are some key questions, concerning the 2012 Olympics for you:

• Is FedEx sponsoring the Olympics?
• Is USPS sponsoring the Olympics and Lance Armstrong?
• Is UPS sponsoring the Olympics?
• Is Nike or Reebok?
• Here’s the easiest one, is it Coke or Pepsi? 

My guess is the average consumer won’t know two or more answers to my five questions. And one of these questions is pretty easy. 

When asked consumers thought that Nike, Pepsi, Burger King, Google and Continental were sponsors and were the “Brands behind the games,” according to AdAge (Toluna), 7/26/2012. 

Sports organizations and official sponsors must come up with new ways to protect the value of their franchises against competitors and ambushes that are growing in number and creativity.

The marketing strategies ambushers use continue to multiply. Ambush Marketing assumes many forms of Promotion (see Promotion under Londre’s 9P’s (Copyright 2007). “Ambush Marketing” use to describe a brand's marketing strategies and tactics to associate itself with a team or event without buying the rights to do so, in order to detract from a rival that paid to be an official sponsorship.

In ’84 Nike bought outdoor (OOH-Out of Home advertising) plus other forms of Promotion. So much that the citizens of Los Angeles thought Nike was the sponsor and not Converse. In ’92 American Express use TV advertising with scenes of Barcelona, Spain, the host city for the Summer Olympics with: "You don't need a visa" to visit Spain. Visa Inc., the official sponsor complained.

Nike once said: "With respect to all our product and campaigns, we respect the intellectual property rights of others (including the IOC and our competitors), and always strive to remain within legal boundaries."

The “true” brands behind the 2012 Olympic Games are: Adidas, Coca-Cola, McDonalds, Visa, P&G Samsung, GE, British Air, UPS, BMW, BP, Cadbury, and others. 

• “In an online survey of 1,034 U.S. consumers taken in mid-July, 37% of respondents identified Nike as an Olympic sponsor, and just 24% said, correctly, that Adidas is one. Coca-Cola was cited by 47% of respondents as an Olympic sponsor, more than any other brand, but 28% incorrectly believed that Pepsi is a sponsor.”

Now for USPS versus FedEx and UPS. UPS is "The Official Provider" of logistics for the 2012 Olympics. 

One more thought: The use of surprise street promotions at or near events seem to have increased. To give you an example: On a major road leading to Paris and the ‘08 French Open tennis tournament, K-Swiss Inc. parked a car that appeared to have been squashed by a giant K-Swiss tennis ball. Across the street, their van distributed sales promotional items and promotional materials with their brand and its involvement with tennis and not the Open.

There will be more examples on better marketing strategies and tactics, plus sponsorships from both official sponsors and others in coming posts.

What Really Is Price?

What really is price? In the 9P’s© 2007, Price/Pricing are all aspects regarding pricing. The amount of money a consumer is willing to pay to obtain the product or service. Pricing includes wholesale/retail/promotional prices, discounts, trade-in allowances, quantity discounts, credit terms, sales and payment periods and credit terms. Pricing decision making also involves adjusting prices concerning the competitive environment, economic situations and involve buyer perceptions.

So it is interesting to note that Southwest and Spirit Airlines are fighting with DOT. From the Washington Post and Bloomberg today: “Airlines fail to overturn DOT rules on all-in fare advertisements: The U.S. Court of Appeals in Washington has rejected a challenge by Spirit Airlines and Southwest Airlines against new rules by the Transportation Department that would require carriers to display the combined cost of airfare and all taxes on fare advertisements. The airlines and industry groups have voiced their disagreement with the decision.”

To marketers and for consumers, “Prices” are a key positioning factor and must be decided in relation to the target market, the product and service assortment mix, and the competition. All retailers would like high turns x earns (high volumes and high gross margins), but the two don’t usually go together. Most retailers fall into the high-markup, lower volume group (fine specialty stores) or the low-markup, higher-volume group (mass merchandisers and discount stores). (Kotler and Keller)

Pricing is the sum of the values that customers exchange for the benefits of having or using the product or service. Deceptive and misleading pricing practices may lead potential buyers and consumers to believe they will get more value and a better price than they will actually receive.

Retail price simply means the price at which goods or services are sold by a retailer to a consumer. This is the purchase price that you pay whenever you buy a product from a retail store. Retail sales are designed for consumption and not for resale of goods or services rendered.

The manufacturer's suggested retail price (MSRP), list price or recommended retail price (RRP) of a product is the price which the manufacturer recommends that the retailers sell the product. The intention was to help to standardize prices among locations. While many or some stores always sell at, or below, the suggested retail price, others do so only when items are on sale or closeout/clearance.

The famous American auto executive once said: “People want economy and they will pay any price to get it.”
To marketers and sales people remember to sell the value before the price. Price is at the bottom of the reasons people offer objections during the sales process. Seven objections begin with:

1. Lack of perceived value in the product or the service
2. No urgency to buy or a lack of perceived urgency in purchasing the offering
3. Perception of an inferiority to a competitive product or service
4. Lack of funds to purchase the offering
5. Personal issue with the decision maker(s)
6. Partner or supply chain issues

“It’s safer to do nothing” perception. Now go sell something, or buy something. The economy desperately needs you.

The Steve Jobs' Book is Spectacular. Adding The 9P's Of Marketing.

STEVE JOBS by Walter Isaacson is a spectacular book about marketing, business strategies, relationships, building a brand and advertising. With 140 interviews, the author packs a lot of information. The book is better than the two recent movies. 

The reading contains perfect business strategies and insights for the classroom, the courtroom and client boardrooms. Here’s an excellent quote, when Apple’s market share was near 4% around 1997: “We’re trying to get back to the basics of great products, great marketing, and great distribution.” 

Plus I like this one, too, which is later during rebuilding the brand: “The mark of an innovative company is not only when it comes up with new ideas first, but also that it knows how to leapfrog when it finds itself behind.”

I’m going to use the concept of the 9P’s in Marketing to highlight Steve Job’s actions, objectives, strategies and tactics. (I own a copyright for this concept, the Nine P’s/9 P’s ©2007, which augments the Marketing Mix and the 4P’s by the American Marketing Association, Neil Borden and Jerome McCarthy):

Planning

• Steve Jobs: His management philosophy, after his first round and return to Apple was “Focus.”
• Steve: “If he’s decided that something should happen, then he’s just going to make it happen.”
• Steve: “No, because customers don’t know what they want until we’ve shown them.” Plus “The journey is the reward.”
• Mike Markkula, a father figure and business strategist to Steve: “Your goal should be making something (starting a company) you believe in and making a company that will last.”
• Mike Markkula: “…lasting companies know how to reinvent themselves.”
• The word, Apple, in naming the company. Signaled friendliness and simplicity. The word “apple” took the edge off the word “computer.” “Plus, it would get us ahead of Atari in the phone book.”
• Steve’s design philosophy: “Simplicity is the ultimate sophistication.”
• From 1998: at San Francisco Macworld: “Think Profit.”

People/Prospects (Target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Market targeting can be carried out at several different levels.)

• Steve Jobs: “A person was either a hero or a bozo; a product was either amazing or s---.”
• President Rutherford Hayes had said when first shown a telephone: “An amazing invention, but who would ever want to use one?”
• The first five store managers of Apple stores went through the Ritz-Carlton training program.
• ”On the day Steve Jobs unveiled the Macintosh, a POPULAR SCIENCE reporter asked Steve, what kind of marketing research he had done. Steve responded: “Did Alexander Graham Bell do any marketing research before he invented the telephone.”
• In 2005, 825 million mobile phones were purchased from grammar schoolers to grandmothers.
• Londre: Remember that your company’s employees are a target market.
• “Sculley believed in keeping people happy and worrying about relationships. Steve didn’t give a s---.”

Product (A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. — Kotler)

• Steve Jobs: “He believed that for a computer to be truly great, its hardware and its software had to be tightly linked.”
• “In many consumer product companies, there’s tension between the designers, who make a product look beautiful, and the engineers who need to make sure it fulfills its functional requirements.”
• Dieter Rams: “Less is better.”
• Steve said “I love it when you can bring really great design and simple capabilities to something that doesn’t cost much.” (Price)

Price

• Steve Jobs: “…later admitted he had overdesigned and overpriced the Cube, just as he had the NeXT computer.”
• Steve Jobs: Set the price they wanted for their wares in the iBooks Stores, and Apples would take 30%.”
• Sculley to Steve Jobs on the Macintosh: “He could have the $1995 price or he could have the marketing budget for a big launch, but not both.”
• ”In 2010 one of the original Apple I computers sold at auction by Christie’s for $213K.

Promotion (The communication element includes personal and non-personal communication activities. Activities that communicate the merits of the overall product, which include: Personal Selling/ Sales Force; Advertising; Sales Promotion; Collateral Materials; Direct Marketing, also referred to as Action or Direct Response Advertising; Events and Experiences; Public Relations.)

• Think Different: They wanted a brand image campaign, not a set of ads featuring products. It was designed to celebrate not what computers could do, but what creative people could do with the computers “It was about creativity.” By the way, different was used as a noun, as in think victory.
• “Why 1984 won’t be like 1984.” Selected by both TV GUIDE and ADVERTISING AGE as the greatest spot of all time.

Place/Distribution

• “Real artists ship.”
• Tim Cook: Reduced the number of Apple’s key suppliers from a hundred to twenty-four.
• Steve Jobs: “Apples stores should have only one entrance.” Plus must be in malls and on Main Streets.

Partners

• On the graphic interface, Xerox accepted. It agreed to show Apple its new technology and in return got to buy 100K shares at about $10. Nolan Bushnell was asked by Steve to put $50K into Apple in 1976 for a minor equity stake. He said no.

Passion

• Steve Jobs: “…how it was exciting it was to connect art with technology.” And “Great art stretches the taste, it doesn’t follow tastes.”
• “There was a hole in him, and he was trying to fill it.”

Presentation

• To Steve Jobs, the Apple voice had “a distinctive set of qualities: Simple, declarative and cleanness.”
• Alex Haley once said that the best way to begin a speech is “Let me tell you a story.”
• Catmull/Pixar’s president: “Steve had this firm belief that the right kind of building can do great things for a (company’s) culture.”
• On Lasseter/Pixar: “As a guide on the Jungle Cruise ride at Disneyland. …Taught him the value of timing and pacing in telling a story; an important but difficult concept to master when creating, frame by frame, animated footage.”
• “One of Steve’s numbers was to stare at the person he was talking to. He would stare into their eyeballs, ask some questions, and would want a response without the other person averting their eyes.”

As Walter writes: “Steve Jobs was abandoned, chosen and special.

 In 2010, Apple had just 7% of all of the revenue in the personal computer market, but grabbed 35% of the operating profit.
How’s that using the Marketing practices of Planning, Product, Promotion, People (Segmentation/Targeting/Target Marketing), Pricing, Place/Distribution, Partners, Passion, and Presentation. You can find Londre’s 9P’s here.

Coke does it again. They are on a hot streak versus Pepsi. They continue to out market and out position Pepsi.

Coca-Cola has created global TV Series for Olympics.

Targeting: Teens in 30 countries. Hosts will speak English, German and Spanish, while other countries will use subtitles.

When: From July 30 through August 10
How: Through a variety of broadcast partnerships.
What: Celebrity and athlete interviews, live musical performances and the Beat Bus, a mobile pop-up studio. Coca-Cola will be trying to capture the social aspect of London during the Olympics.

The show will be ad supported, which means advertisers besides Coca-Cola can buy ads during the episodes.

This “Beat TV” is part of “Move to the Beat” London 2012 Olympic campaign.

What makes a good tagline or slogan for your company, product line or brand?

The best ones are short and powerful that companies use alongside their logos to drive the brand message home to consumers. Think “Just do it,” “Think different” and “We try harder.”

Top Slogans/Taglines

1. “Got milk?” (1993, California Milk Processor Board)
2. “Don’t leave home without it” (1975, American Express)
3. “Just do it” (1988, Nike)
4. “Where’s the beef?” (1984, Wendy’s)
5. “You’re in good hands with Allstate” (1956, Allstate Insurance)
6. “Think different” (1998, Apple Computer)
7. “We try harder” (1962, Avis)
8. “Tastes great, less filling” (1974, Miller Lite)
9. “Melts in your mouth, not in your hands” (1954, M&M Candies)
10. “Takes a licking and keeps on ticking” (1956, Timex)

Top Jingles

1. “My bologna has a first name, it’s O-S-C-A-R.” (1960s, Oscar Mayer)
2. “Plop, plop, fizz, fizz, oh what a relief it is” (1970s, Alka-Seltzer)
3. “Like a good neighbor, State Farm is there” (1971, State Farm Insurance)

Some Key Observations:

1. Does a slogan or tagline need to be clever? A tagline that calls attention to itself unnecessarily, like “Look at me, I’m a clever tagline!” isn’t good. Being clever for clever’s sake will get you into trouble with a tagline.
2. The Internet has made us more aware that we are globally interdependent. It’s a small world, and we’re all in it together. So the popular modern slogans were things like: “Solutions for a small planet” from IBM, “The world’s online marketplace” from eBay and “Share a moment, share a life” from Kodak, now bankrupt.
3. Even a small business needs to extend its brand; make it more relevant and more valuable. A good tagline can do that.
4. A tagline doesn’t have to be just for the company as a whole, it can serve as branding for a division or a product line. You can use a tagline internally, to get employees excited about a new program or product. Anytime a business needs to differentiate itself from its competitors, a tagline can go a long way toward doing that.
5. A good tagline is not just a motto or a proverb or a saying or a long-winded mission statement. It’s got to be fairly succinct – usually seven or fewer words.
6. The slogan should reflect how your company is positioning itself vs. your competitors.
7. How would an entrepreneur go about developing a tagline? Sit down and ask yourself some core questions about your company: Who are you? What are your values? Your vision? Your corporate culture? What nouns and adjectives would you use to convey your brand’s promise and its solution? What words might your customers use to describe your company?

Visit my website for more insights and answers to your Marketing and Advertising questions.