Monday, July 30, 2012

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.

Friday, July 27, 2012

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.

Friday, July 20, 2012

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):

  • 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)
  • 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.
  • “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.
  • 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.
  • 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.”
  • 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.