The U.S. Supreme Court decision that could change marketing forever

The U.S. Supreme court has agreed to hear a case that may reverse the interpretation of the Sherman Antitrust Act that restricts manufacturers from setting retail prices. As perhaps the most powerful "P" of the four marketing p's, pricing control by manufacturers could radically change the marketing strategies of innumerable brands.

Here's a great summary by the International Herald Tribune:
U.S. Supreme Court case tests minimum price rule

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Kids' spend 15% of time on TV and 6.5% on homework

Check out this interesting article by NPD Insights that analyzes how "tweens" (kids 8-12) spend their spare time. SCARY! But, if you don't understand this, how do you expect to sell to them (and their parents)?!

Club cards don't create loyalty?! DUH!

The Seattle Times ran a story titled, "Club cards: Loyalty in the bag? Not really." Anyone in the industry (that's not a retailer) has long known that club cards create no loyalty. And, customers long ago figured out that the "savings" they were getting are the same discounts they got before without a card.

So, why have them?? It's the data stupid. While many retailers still believe that cards enhance loyalty, the primary reason for their continued use if the new form of data provide. The bad news,...most retailers misuse and misunderstand that data too.

OK, I'll turn off the cynicism now. Card data can be powerful and this article is worth the quick read.

Seattle Times Article Link

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P&G, Islam, and Superheroes

Only P&G could pull off a marketing campaign that involves the creation of a conspicuously western-society superhero that sells soap to an Islamic consumer base with little history of personal hygiene (no offense intended...let's face it...most of the world doesn't see a need for soap).

Gotta love P&G...no [recognized] need...CREATE ONE! Man I miss the good ol' days of outrageously ambitious marketing ideas. God bless you P&G (whichever One your consumers choose).

Watch the very interesting report from Martin Lindstrom of Advertising Age.

See it here.

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Alternate Uses for Corporate Laptops

For all of us that have had to suffer with the "latest" technology from Corporate...here are excellent examples of alternate applications. [Disclaimer: I do NOT recommend any of the activities demonstrated unless for entertainment purposes only.]

NEVER GET LOST AGAIN: Without GPS

You probably didn't know it, but you can get FREE interactive maps from Google on most cell phones. You can even get real-time traffic and find local businesses. If your phone has a web browser (which most current phones do) it's a snap. NEVER GET LOST AGAIN and find sushi whenever you need it.

Learn more about Google Maps for Mobile here...

Get those BIG FILES through

Don’t you hate it when you have to send a customer a 12 megabyte file? You know it’s going to get bounced by their email system that’s still living in the 80’s. So, you have to go back in time and figure out how to burn a CD that you have to snail mail to them. There is a simple (and FREE) answer!

Try one of the many online services that plays middleman for your file transfer. You upload the file of your choice (as much as 2 GIGS!) and enter the email of the recipient. The recipient gets an email with a link that allows them to download the file with a normal web browser.

My favorite is YouSendIt. [http://www.yousendit.com/] There is no software to download on either end. Everything happens through a browser. The free version includes ads, but who cares? Your stuff gets through.

You can also try one of these or just google, "share large files." There are many out there!
http://dropload.com/
http://www.sendthisfile.com/

Tips from the MBA Rose Bowl

I recently served as a judge at the Rose Bowl of MBA case competitions; the Pac-10/Big-10 MBA Business Case Competition. Each university sends their best team of MBA students to challenge the teams of the competing universities in a business case analysis and presentation. I had a fantastic time, but also recognized three important lessons for students and “seasoned” business people.

1. The obvious problem is rarely the real problem.

In the business case, the company was obviously burdened by massive debt as a result of numerous acquisitions. Every team spent at least 90% of their time articulating strategies to reduce the debt load.

Unfortunately, in the real world, there was nothing that could be done about it. The acquisitions were recent and to try to sell them would certainly require a fire sale and inevitably lead to the parent company’s stock tanking (not to mention the warrants that would likely be violated). More amazing was that most teams then recommended that the funds from divesting certain businesses be used to acquire “better” takeover targets. Huh!? We blew it the first time, so let’s do it again!?!

I am not trying to bash the MBA students here, but rather demonstrate a problem I see all the time (even among seasoned leaders). In a frantic attempt to address the obvious problem, no one recognized the REAL problem: Management of the company in the case had become dependent on buying growth through acquisitions and had lost their ability to grow their core business! This is an all too familiar recipe, particularly in the Supermarket industry. Sales are slow….the solution…build more stores!! Obviously, this is sometimes the correct decision, for example when new suburbs emerge, or when a store is simply out of date. But, all too often, retailers build stores to mask their own inability to grow sales at the locations they already have. Acquisitions are even trickier. If you can’t grow a business you already own, how in the world do you expect to fix the business someone else is trying to get rid of?
[Are you listening GM? Don’t buy Chrysler!]

The lesson: If a problem seems obvious, you’re probably not looking at the real problem. Take the time to understand why the obvious problem emerged in the first place and focus on resolving that challenge.

2. Product positioning matters!

More than half of the teams presented a plan that included increasing pricing on a value brand to increase revenue (only one team calculated the inevitable decline in volume that would result). Unfortunately, none of the teams recognized that this would create THREE premium brands in the category.

I’ve got nothing against premium products, but what makes anyone think they can simply change consumer perceptions of a value brand by raising the price. Even if the product is EXACTLY the same, that doesn’t mean it will be perceived that way. Just look at generic drugs; they are chemically identical, but all of that advertising Tylenol does still convinces consumers that it is somehow better. Quality is perceived, and a brand that invests in shaping that perception will always have an advantage.

And what’s wrong with being a value brand? Great products that cost a bit less than the premium offering (i.e. value brands) are always appealing, if they in fact offer a value. What do you think has driven private label for the past twenty years. It wasn’t those snappy white boxes they started in. The key to success is to clearly position your brand where there is a real need for consumers, and in a manner in which you can deliver with excellence.

The lesson: Any clear product positioning can work. The more your product strategy sounds like someone else’s, the less likely it will succeed.

3. Always take the high-road, but bring binoculars so you can see the facts.

I firmly believe that integrity is everything, and that one should stand firm in defending high ethical standards. During the judges’ deliberations, several of us noticed that one team had used material (from the Internet) that was outside the timeframe of the case. This was prohibited, and I felt it was unethical. I immediately insisted that we must disqualify the team if our assessment was accurate. Unfortunately, the team in question was the clear winner and it was unclear that the prohibited information materially impacted our evaluation. To me, this was irrelevant. The team had broken the rules and, no matter how difficult it may be for the judges, we must agree on an alternate winner. I made my case emphatically and the other judges agreed.

BUT, fortunately for me, experience has taught me to always check the facts, especially in cases of ethics. I requested a copy of the EXACT documents and instructions that each team had received to verify what they had been told. To everyone’s surprise, the instructions the teams had received were different than those given to the judges. Their rules did NOT exclude material after the case dates. So, the accused team had NOT broken any rules and the judges unanimously voted them the winners.

What I had learned was that fighting for high ethical standards rarely makes one popular. I had been surprised by the willingness of some to “excuse away” behavior because of superior performance. But, I was also surprised by how those same people supported my position after I shared my rationale. Ethics may be grounded in values, but it also requires rational interpretation. Just because someone doesn’t evaluate an ethical issue in the same way as you initially, doesn’t mean they don’t share your high ethical standards. Repositioning the issue often casts it in a different light.

The experience also revalidated the importance of getting all of the facts. The competition was delayed by an hour (a very tense hour), but the effort to make a fully informed decision ensured the appropriate judgment. As importantly, the issue was handled discretely and no one’s integrity was called into question inappropriately.

The lesson: Stand strong and fight for high ethical standards. You will be challenged (particularly if the offender is a top performer), but help others understand the basis of your concern. And ALWAYS check the facts. Assumptions are often wrong.

By the way, USC won this Rose Bowl too.

Loyalty can be bought for less than you think

I was feeling guilty the other day about all of the people that have done nice things for me, whom I have forgotten to thank. So, after my meeting, I walked into a Hallmark store. I’ve never expected to have a life-changing loyalty event.

At first, I was unimpressed. While the place was stocked to the ceiling with cards, it was also predictably overrun with Valentine’s Day merchandise. But, this story isn’t about variety vs. duplication, so I digress. After picking out a stack of cards, I proceeded to checkout expecting my pile of appreciation to cost at least $10. The owner asked if I had a “gold sucker card” or something like that. Realizing this was yet another scam to get me to “pay to save” or a grab for my personal data, I quickly told her that I had no interest in her club. I mentally accepted that my $10 of cards were now likely to cost $12. It cost $35. A bit in shock, I stammered, “Well, I guess I have a lot to be thankful for!”

But this is where the real story begins. The shopkeeper looked up, smiled brightly, and said, since you purchased more than $30 today, you can have one of those lovely Valentine’s day coffee cups behind you for free. Incredulous, I turned around and did indeed see a display of lovely “love mugs" with a prominent sign describing the promotion. And then, my natural cynicism was vindicated; I noted the bold starburst on the sign that read, “a special gift for our gold sucker members” (or something like that anyway). Alas, it was clear…this was another attempt to get me to join Hallmark’s evil cult of chronic card givers. I resolved myself to resist the allure of the free love mug and maintain my independence. I told the smiling gray haired lady behind the counter, “but I told you I don’t have a Gold Sucker card.”

And that’s when the loyalty happened…

She said, “Oh sir, I insist. I appreciate your business and think you deserve it. I also gave you the club discount. Please take the mug with my compliments.” My jaw dropped. And suddenly, what had previously had been a chintzy chotchke, became an objet d'art. I leapt for the mug and said, “Thank you. Thank you. I’ll buy all of my cards here.” And I meant it.

Now look, the last thing I need is another novelty coffee cup. But at that moment, I felt like I had won the lottery. I was a valued customer! I had a gaudy novelty mug to prove it! And take note Walgreen’s, Kroger, Safeway, and Wal-Mart…I will be buying all of my cards there from now on. Is that a big threat to these behemoths’ business? Of course not. But, imagine how much loyalty any retailer could develop is they applied the same philosophy?

A fine Category Manager I know, once said, “Why don’t we give our customers a pie once in a while? We’re probably going to throw half of them away anyway, and at least then we could make a few shoppers feel special.” [I’m paraphrasing of course. Category Managers are always more eloquent that this.]

HE WAS RIGHT! Why don’t retailers do that? Do I want a pie? No! But I didn’t want a novelty mug either! I want what most shoppers want…I want to be appreciated! And there is no better way to show someone you value them than with a smile, a thank you, and the occasional token of your sincerity.

So, retailers,…use your cards, analyze the data, send coupons, and do all the other wonderful things you do with your loyalty programs. But, don’t forget your shoppers are people, and a piece of pie might get you a lot more loyalty than that piece of plastic you call a loyalty card.