Current Issues in Marketing Strategy: June 2008

Saturday, June 28, 2008

Status Pheres

This is written by CJ, a very interesting thought on emerging trends:

In today's world, there is an abundance of goods, products and services. What does unbridled consumption do to our sense of status? If the latest gear is available to more people, what do we do to get recognition and make us feel special?

The trendwatching site says it's morphing into so-called "status spheres". It's not that buying more and better stuff than fellow consumers is dead. Far from it. But we are redefining what constitutes status in a consumer society where millions have access to the same premium goods, to the same premium brands.

Trendwatching says that many people with money, instead of collecting luxury goods to gain recognition, are now gravitating to these "status spheres". These are the:

Transient sphere: where people free themselves from the hassles of permanent ownership and possessions and get as much experience from as many different sources as possible. Travel and jobs would be two obvious areas. The status comes from stories and experiences.

Online sphere: which can be anything from the status gained from the number of views for your photos on Flickr, to the number of friends you have on Facebook, to the number of hits for the video you put together for YouTube. Avatars and the latest gadgets would also big in this sphere.

Eco sphere: where you gain recognition for being as green as possible.

Giving sphere: this is about philanthropy and displays of generosity

Participative sphere: very much built around DIY and building new skills.

This has interesting implications for businesses seeking to target new markets. And of course consumers. Which sphere suits you? Any others you see emerging?

Thursday, June 26, 2008

Love & Business, Love your customers

I found this clip on Servant of Chaos and I think it sums up marketing in 2008

Josh's Opinion
I love this clip, it sums up business in 2008, love your customers. Offer them exceptional value, make every business a service for your clients and you will be rewarded.

Sam's Opinion
Sure, but make it cost effective

Wednesday, June 25, 2008

Nike self - customize shoes: what's new?

The role of branding use to be a point of differentiation, how we want to be seen. Things are changing and expression of attitude for Gen X & Y now comes down to customization, or, the ability to be an individual. Shoes are the forefront of this mass move, Adidas, Puma and now Nike allow their customers to design their own pattern and have their diggs custom made. What I question, have Nike offered a real customization mechanism?

Nike fans simply take a photo of something they like the look of, send it via MMS to the NikeID website who send back an image of what they shoes will look like. That image can be used as a mobile wallpaper, sent to a friend or purchase the sneakers and have them sent to you.

Weakness:
The program grabs the two most prominent colours and adds them to the diggs (as seen in the picture)

Adidas

Adidas run an in-store customization software located in on Paris' tony Champs-Elysées. An exclusive location aimed at positioning it's product as exclusive and top end. From all reports they run a good product, but you can only use it in-store, so people are limited in their access.

Puma
Puma run a web based design program called Mongolian BBQ, it is very very cool and I love the concept behind it, but is riddled with inadequacies. I found a report by jungle-life and I couldn't think of a better way to express it, so here it is:

"The complete selection of fabrics and colors is not available to view at once and the shoe is broken down into components - the only way to see what component you're customizing is to activate a seperate overlay outlining all the components then click back. The only way to see the color or fabric you've chosen applied to the shoe is to click "preview". Clicking preview launches a smaller overlay showing the fabric applied. First you have to choose a component, then you have to choose a fabric, then you have to apply the fabric to the component and you cant change components during the process."

Josh's Opinion

I really like the customization that Puma allows, if you love your sneakers like Julian Cole of ad-space pioneers, then you will love their tools. Adidas as well if you happen to find yourself in France. But have Nike hit the nail on the head?

I would have to say NO. there is very little customization, so what are they offering and why would you bother for only two colours. I think Nike need to go back, invest some more time, effort and capital into creating a better systom that really shows 'attitude' and independence.

Sam Berringer's opinion

Customization is definately the way of the future for pinikity Gen Y and this is a good first attempt. The interest levels from all my sneaker freak friends was very high, but they demand more. If Nike wants to go down this path, they have to do it right!

Cheers to Hill & Knowlton for their article on this topic

Sunday, June 22, 2008

Mobile marketing - a study of ineffectiveness

Generally speaking, text message marketing is a very intrusive and ineffective medium. A very prevalent current example is the array of annoying night club text messages that get sent out every week. I have no idea on God's green Earth why clubs bother sending those out, does anyone ever go somewhere based on the suggestions of an unsolicited text message? I would be willing to guess they are closer to 'de-marketing' than adding to the clubs bottom line.

Punch Kick Interactive posted some interesting stats on the topic:

Approximately 1.8 billion people are actively texting today
Globally, twice as many people use SMS than have email
While 65% of e-mail is spam, less than 10% of SMS is spam
19% of users text professional colleagues
62% text message to communicate with friends or partners

Why is only 10% of SMS SPAM?
Why text message marketing is ineffective comes down to basic consumer behaviour. Casual communication implies a level of control. A mobile phone is very personal, it represents who we are, it is our voice to use and as such is very personal. Marketers that send unsolicited marketing information to our phones fail to grasp this distinction. Much like the night club example, I don't want to be told where to go before I am seeking a destination. A mobile phone facilitates me asking the question when it is relevant.

Positive application of mobile marketing
Several years ago I was fortunate enough to get to know Peter Wagstaff, one of the best lecturers I have ever met. What made Peter stand out, was that he questioned how University professors communicated with their students and put in place a number of interactive channels to better that. Most relevant was his use of mobile technology. He would put his mobile number on the screen and ask students to text him any questions they were not prepared to put their hands up to ask. Either in the class or in his own time, he would craft a response to help them better understand.

Another example occurred as I was writing this blog. I logged onto Commonwealth bank to transfer some money to my hockey club. Before the bank would release the funds, they sent a text to my phone. A code inside the text is required before the transaction is completed. For me, that is value added service. It is not attracting more business, but it is keeping mine. As a contrast to this story, a friend of mine called Brent had his account key logged and all his money stolen...simple technology, good application.

Josh's opinion
Unsolicited material should at the very least have a national 'opt out' register. To send unsolicited advertising to someones mobile phone is not just annoying, it is invasive.

Mobile's are however a way of life, a communication medium that we use day in day out to deal with most every problem. Above is a funny little clip about mobile dating, which is filled with little truths about ourselves and the world we live in. Hope you enjoy.

Sam's Opinion
Mobile marketing is going to blossom with the addittion of more aqdvanced technology and internet connectivity. Tickyes blog points out the new Loopt system that allows Apple I-phone users to locate other users near them through it's advanced GPS system. Social media like this allows you to see how far away your friends are, post blogs, blog pictures and a range of more advanced web 2.0 applications. The future sure does look interesting for mobile marketing.

I wonder if marketers will work out mobile advertising?

Coke Relaunch Mother - Coke announcement

Following up on a recent Mother article, here is the latest announcement

COCA-COLA is becoming increasingly desperate to crack the booming energy drinks market, with the company announcing the relaunch of its energy drink Mother after a spectacular flop last year. Next month, a multimillion-dollar marketing campaign will signal the return of Mother and the company's fifth attempt to establish a beachhead in a market dominated by V and Red Bull.

Early last year, a $15 million marketing campaign saw ads featuring a cast of wide-eyed animals proclaiming Mother's energy-boosting properties, underscored with the line "100 per cent Natural", positioned the drink, which contained a potent Amazonian berry, acai, as an all-natural alternative to the caffeine- and taurine-loaded rivals.

The campaign by one of its agencies, Publicis Mojo, failed because the core target market of 18- to 24-year-old males was not looking for a "natural high" but a "chemical one", according to sources. Those who tried it didn't come back largely because of the taste. "It [the drink] lacked the efficacy of potency and that's exactly what the market wants in these drinks," one source close to Coke said.

Yesterday, Coke put out a short statement admitting it had got it wrong - unusual for a company that rarely, if ever, acknowledges defeat. "It will taste nothing like the old one and will deliver double the energy kick, making it the most potent energy drink in Australia," it said. Even the top of the can will be emblazoned with: "Tastes nothing like the old one."

The sources said Coke will not step away from a market that has grown by 62 per cent in the three years to 2007, of which Red Bull and V have about 90% share. Beverage analyst for IBIS World, Audrey Riddell, said: 'energy drinks are an innovative product, as such, first mover advantage has raised the barriers of entry, making it hard to rival the market leaders.

Coke is not alone. Foster's Torque bombed and its successor, Battery, is making little headway.

Josh's Opinion
I think there is room in the market for more competitors, but will this product be the one? I think hanging on to that previous brand is going to damage image and make it harder to attract early adopters. Energy drinks are very image dependent, I'm not sure how the mother brand is viewed right now, but my opinion of it does not see it even appraoching the 'cool hurdle' let alone bounding over it.

Sam's Opinion
Tried it, hated it, I'm sticking with Red Bull. Enough said?

View another article on Mother here

Thursday, June 19, 2008

Is social media a fad or a marketers friend?

Online marketing is abuzz with social media, platforms like Facebook open the door for marketers to target consumers, effectivly communicate and better deliver value to their constantly changing needs... doesn't it?

I was reading through some old articles written by The Big Switch and a question they posed got me thinking, "if someone should host a network focused on college students, will we see a migration from facebook of its original members?". In the broader sense, how fickle are todays online users. Hats off to Pigs don't fly who found this beauty on the Inter-web, a beautiful social commentary on the short term lifestyle of online fads like MySpace, Friendster and Second Life.

Josh's Opinion
If social media follows a standard industry life-cycle, competitors are likely to flood into the market, barriers to entry are small and there is very little functionality that can not be copied or even bettered. The question is, will consumers make the move and more importantly, will they influence marketability?

Sam's Opinion
Are people that are locked into Facebook likely to move? I have to argue that the barriers to exit are too high. The more time they have invested in their online profile the more important it is to maintain that relationship.

Note: Marketers need to be ware that active accounts is the only true measure of a target audience.

Tuesday, June 17, 2008

Tiger Woods nails Buick candid TV ad

Tiger Woods has teamed up with Buick to create the latest in 'imagination capturing' TV ads. There is no doubt that Tiger as a brand is impressive, but it is the campaign itself that sells the car, Tiger is only the hook. 'Tiger Trap' is grass roots, it is simple, intuitive and connects with the average person. Today's lesson in advertising: KEEP IT SIMPLE!

What works about the ad?
Tiger is not the key to the ads success. I'm not about to say that the ad run with the professional from Rosebud mini putt would have been as successful, but what is important is the concept behind the ad. Connecting with real humans, in a real life situation. Everyone wants to associate with a product, brand or even ad, which is why (and I hate saying this) that Big Brother is so successful, we see ourselves inside the characters and we back them to win.

So why pay a bundle for Tiger?
Tiger is an international brand, recognisable and loved world wide (even Osama has a soft spot for him). Tiger transitions the Buick brand across a wide range of consumers across many countries. The Tiger brand I refer to is powerful in itself, i mean, how many times have you been asked; "have you seen the new Tiger Woods ad?". They ask me like Tiger ads are in vogue, on the same page as this months must have handbag. I guess in a lot of ways Tiger Woods embodies everything that is in vogue and that is why he gets the big bucks.

Does the ad have a weakness?
George Bush has proved that nothing is without faults (American presidents who would have thunk it?) Tiger Trap is no different, the usability appears to be a very small window concentrated mainly around the US open, not to mention that it is 5 minutes long and the cut down version loses much of its mystique. You have to believe that the ROI is going to suffer in the short term, but then again, Tiger Woods ads make up 20% of the viral ads in my e-mail, so long term is still looking good.

Josh's Opinion
One thing that celebrity endorsement often falls short of, is providing reciprocal branding for both product and celebrity. Michael Jordon was the master of building his brand, every ad worked in his favor, associating him with greatness and basketball. As a contrast to this, Mark Taylor received little more than ribbing from the third man for his Fujitsu commercials. Tiger Woods has consistently hit the mark and these ads will not only be successful TVCs, but also as a viral ad into millions of e-mails across the world.

Sam's Opinion
I hate the word celebrity to describe someone like Paris Hilton or the idiots off Big Brother, just getting your cans out on national TV does not make you a star, they are not people to be looked up to. For that very reason Tiger Woods as a brand ambassador is a very good choice and to back it up, a simple, grass roots advertising campaign...very effective.

Also, to add to my Tiger is control of his branding check out this Tiger ad here

Chis Diclerico's blog maybe short, but he's right, Tiger Trap is just good advertising

Monday, June 16, 2008

Kmart's 'Super Sale' Strategy: Poor at best

I was excited to hear that Sputnik (a company I hold in high regard) was working with Kmart to integrate their yearly super toy sales promotion with a new online offering. The Newshound from Marketing Magazine reported the story and in due credit to them, questioned how the site would make any difference to the companies bottom line.

I must admit, I was initially very interested in the online offering that was reported. Games online for kids to play, get involved with the products, increase Kmart brand awareness, pester the 'gatekeeper' (usually mum) to take them there. More simply stated, it targets the children (end user) to create a demand for the purchaser (gate keeper). A sound strategy that even Storm'in Norman would have been proud of.

However, in a previous article I wrote about the values of doing things right the first time, Kmart's lame attempt at child entertainment is weak at best. They have created two games: Super Balloon, and Mighty Robot Explorer, possibly 3 minutes entertainment between them. In fact, I have seen sock draws that have held my attention for longer than those two pathetic excuses for games. Best yet, the prize for completing this life wasting challenge...the right to register for an electronic 'sneak peak' at the Kmart sales catalog.

Josh's Opinion
Kmart are not game designers, I get that and the graphics on the robot game were somewhat clever, but there was no challenge, nothing to get childred excited and certainly nothing to hold their attention for more than a few seconds. I would like to have seen them integrate some of the toys that they sell into the game, create pre-demand by giving children access to them online, not merely thrusting more SPAM into parents already bulging inbox.

Sam's Opinion:
Back to the drawing board...no wait, better throw out the drawing board as well!

Sunday, June 15, 2008

Clearasil ads a big winner

Clearasil have launched a clever new advertising campaign called 'Clearasil may cause over confidence', that I believe hits the mark in several places. Humor as a communication medium is dangerous, you have to get it just right or risk confusing a segment of your target audience.

In this first video we see a scene many university students can relate with, I only wish I had been quick enough to pull this sort of stunt while I was at uni! What is clever and well planned, is that it is targeted, students can relate to the characters and as such pay more attention to the ad and its message.

Don't think that the guys get all the fun, in this next one we see a 'teenage nightmare' defused by a confident girl claiming what is hers. I love the tag line 'may cause confidence', it just fits so neatly.

Targets the reason for getting rid of pimples (confidence)
Associates with the target demographic
Attention getting through hilarity
Strong brand message and product shot at the end

Josh's opinion
It will be interesting to see where they take it from here. Much like the man who builds his house on rock, the foundation is good, will he turn that bungalow into a three story mansion? Clearasil have the capital, will they exploit it. More interestingly, do they need to?

Sam's opinion
It does remind me of busting in to Julian Cole's tutorials, rather than telling him to picture me naked (as in the ad), I was wearing a purple furry monster suit. If you want pictures feel free to mail me.

Note: Hats off to Duncan's TV adland

Saturday, June 14, 2008

Channel 10 advertising from within

Mainstream marketers will tell you that advancements in connectivity have made advertising more targeted, more efficient and a better return on investment. It's a nice theory, but modern day examples sees many companies trying to bridge all the gaps, tackling either the wrong mediums or all of them at once.
Contrary to my mainstream colleges, I offer this thought... You know what the advantage of putting all your eggs in one basket is? It is very easy to carry your basket. The more baskets you are holding, the more likely that one will escape your grasp exploding on the ground, possibly dislodging one or more of the other baskets as well.

Once upon a time there was only newspaper, then television, outdoor advertising, mail blitz, Internet, spam, the list goes on. Managing a marketing campaign and keeping all the baskets in the same hand is very difficult going in todays environment. Which is why it is impressive when companies focus on doing a few things very well, instead of many very badly.

I was searching Network 10's website trying to find when the Hawks were being aired on TV and was amazed to find they have smartened up their website to support their move into High Definition. While I was surfing, an option for a 'program beginning warning' to be sent to my e-mail or SMSed to my mobile. Zac Martin from Pig's Don't Fly also reported that Ten have started video pod casting shows such as Good News Week & Thank God You're Here. This small investment in technology has made them more engaging, involving their audience and providing consumers with an interactive spectacle that captures their imagination.

Josh's Opinion
Engaging your audience is essential, by supporting their product offering with advanced Internet capabilities, channel 10 has offered extra value to their customers, not allowing them to forget their favorite show. Their bottom line can only benefit from this as they offer advertisers a more stable customer base with which to target.

Sam's opinion:
Channel 10 are focusing on keeping it simple, they are not wasting money on expensive branding exercises, instead they are branding from within, focusing on their peripheral services and supporting their core business functions. They are only carrying a couple baskets, but they are holding them firmly.

In 2006 Ella Morton of Tech and the City wrote that Channel 10's Internet offering needed a lot of work. I have sent off an e-mail and hopefully will post again soon to let you know here new thoughts.

Sam Berringer of Monash University is filling in for kelv while he is on the bench (Sam Newman style)

Josh's opinion on Sam's Opinion
Needs more jokes, kelv's always had jokes. Better luck next time

Friday, June 13, 2008

Face book overtakes Myspace popularity

It has been on the cards since 2005, but Tech Crunch reports that Facebook over took MySpace in unique visitors last month, attracting an enormous 115 million to their site.

The interesting statistic that has developed (interesting in the same way that your Gran's stories are interesting, that is to say, it's better to read this than take the trash out) is Facebook's growth has been driven by the international markets.

Of the new 75 million monthly visitors Facebook attracted last month, only 17.33% were from within the US (birth place of Facebook). Myspace added only 5 million, so if this remains linear, we should see the US scores equal each other within a 4 year period.

So where does this leave MySpace?
MySpace really only has one course of action, they have to differentiate from Facebook. Reports out the MySpace camp claim they are planning to rollout a major new look on June 18th. The company has announced that its homepage, navigation, profiles, search, and MySpace TV player will all get a new look.

Will this be enough?
Seems to me that a lot like Kodak lost their market when film became outdated, MySpace and it's lack of R&D has caused it to become outdated. In what is a huge irony, they need to do what they do best - facilitate 2-way communication with their users and work out what the market wants and try to out position their rival!

Josh's Opinion
There are further reaching marketing implications, if you were planning to set up a social media campaign, which site would you use? The one that had lost its' number 1 billing, or the one that has grown phenomenally and taken that title.

In the short term marketers will look for the highest density of people to where they are trying to market. But MySpace should be shivering in their jocks right now, if they can't come back strong, they are going to lose a lot of equity in their product!

Kelv's Opinion:
I like what I read on one of the blogs:

By 2010, another networking site will have clawed its way out of the pack to surpass Facebook http://csmccann.wordpress.com/

Two way communication is well explained in this link

Thursday, June 12, 2008

Technorati

Technorati Profile

2008 - The year 'Two-Way' got important

Consumers are demanding higher level connection with their brand and demand to have their voice hear. Marketing in 2008 now requires not only an understanding of the consumers demographics and basic needs, but an open dialog that facilitates a brand responding to consumer feedback. The following two videos are a funny satirical view on the consumer / brand / advertiser relationship.

Note: Watch them in order and look out for some cracking lines.

Part 1

The break up

Part 2

Inspiration, anyone?

Key developments in 2008
"Understand your consumer" has been a catch cry of the teaching fraternity for decades, as I understand it, usually delivered through the medium of a crusty old lecturer with the personality of a crab-apple. I always thought that was an irony, being taught a fairly 'sexy' subject by someone who is clearly and never was of that ilk and I guess that is why many marketers have been slow on the web 2.0 uptake, they are stiff and rigid, scared to leave the safe sanctity that one way advertising affords (tell consumers what to think ideology).

Here's the rub
In the same way people laugh at you when your shirt is tucked into your underwear, people will always be discussing your brand behind your back. Sticking with this metaphor, you know they are pointing and giggling about you, there are two ways you can react;

1. Act like you know everything and you are cool with whatever they think (one way branding)

2. Facilitate communication to find out what all the fuss is about (two way branding)

Josh's Final Point - So here we are, Ike, Mike and Mustard
Now I won't let this final part be like a much predictable movie like Red October (gee I wonder if that seemingly pointless shot of the ships chef will come back later in the film?) and make some extravagant claim that all brands need to be web 2.0 savvy to truly connect with their customers. The truth of the matter is that it's not appropriate for all product segments at all, in many cases it could just be a costly and unproductive waste of resources.

What marketers of 2008 need to be wary of is appropriate use of technology or business structure to facilitate two-way communication with consumers. Less than 10% of complaints are ever lodged, based on this statistic most companies are taking option 1 and think their fecal matter doesn't smell. It may be hard to measure, but there are few marketing strategies that will pay higher dividend (ROI) than investing in highly specific customer communication.

Kelv's Opinion
Luxury hotels are a great example of two-way communication seeking brands. The Hyatt goes out of its' way to facilitate customer feedback and then rectify whatever they can in order to deliver exceptional service and maintain their clients satisfaction.

Open your eyes, ears and most importantly minds and your brand will thank you for it!

Recommended viewing:
Make sure you check out the Get Inspired Website - "It's more fun that a ferret down your trousers" (circa 1995 Samboys TV ad)

Wednesday, June 11, 2008

The 'Mother' of all relaunches

Coke are having another crack at it, 'Mother' is back! If we count this as another energy product, this will be Coke's 6th attempt at cracking the Australian energy drink market. It reminds me of a cover-band I once saw, no matter how loud the crowd booed, they just kept saying thank you and then launched into another song!

What is new?

Taste - As I mentioned in a previous blog, the previous taste was horrible, hopefully they have rectified this problem for good. I mean even protein shakes attempt to flavour their product in a mildly acceptable taste.

Size - They have trumped Red Bull's new 355ml cans and gone the whole hog, all the way up to 500ml. This is very interesting given that Red Bull offer the small cans at a special 2 for $5 (and V follow a little cheaper) price that has seen turnover increase dramatically. I can't believe that anyone is going to buy 1 litre of energy drink.

Note: I do love that the poster boasts a "double hit of energy" when compared to a can half its size. Must have spent some coin getting the mathematicians from NASA to figure that one out.

Marketing Campaign: Despite the boast that $3M is a large campaign, rummours are that their previous launch cost $15M and that was a flop that would have sent Hugh Hefner racing for the little blue pills.

Will the new relaunch be Coke's little blue pill?
The domestic energy drink market is worth around $1 Billion per annum with annual growth figures of about 25%. With this in mind, the market is still in a major growth stage (see: product life cycle graph), indicating that now is the time for competitors to flood into the market.

Coke have some strengths - As I mentioned previously, they have the distribution chain, they have brand awareness, huge amounts of capital, now all they have to do is get consumers to try it again and gain a foothold in the market.

Josh's Opinion
Despite me rubbishing their previous attempts, I think this is a worthwhile venture for the worlds largest soft drink provider. Red Bull are going through distribution changes with Schweppes, V are not doing anything original and all the other brands are kidding themselves. I think they just might pull one off.

Note: I wouldn't want to be one of the fringe energy drinks right now!

Kelv's Opinion:
Give me $3M and at least I'll spend it wisely on blackjack and hookers, I think at the end of the day we'll see a similar result.

View the official media release here

If you are interested in this article, make sure to read Room for Home Brand Energy Drinks?

Tuesday, June 10, 2008

Room for Home Brand Energy Drinks?

A friend of mine from Red Bull made me aware that Coles supermarket have launched their own energy drink 'ZU energy' which they (Red Bull) consider to be their most imminent threat to market share (even more so than the well financed Coke brand 'mother').

Now don't jump the gun, I can see you're poised to type a reply "what about V?". I haven't forgotten about them, but they are marketing followers choosing to copy every promotion that Red Bull runs and having very few effective new ideas of their own. It would take the hand of god to significantly boost their market share...and as best I know Diego Maradona is currently predisposed.

So can these home brands slice out a chunk of market share? Supermarket brands in Austria and Germany own around about half of the market. So can it happen in Australia?
I do find it hard to believe that Coke have had 5 goes at the energy market and each effort has been as successful as a one legged man in an arse kicking contest, yet a supermarket with a no-frills brand can pull it off.

In my previous blog I wrote that it was a great idea to send in generic brands and see what sinks and what swims, does it still hold firm when it comes to image driven / impulse purchases? Or is there more to the energy market than just that?

On face value, I give it the same chance as Monash Uni soccer team winning the FA cup.

There are a few pitfalls that a new energy drink can fall into:

Rubbish taste:
Mother was the closest drink to breaking through the energy drink 'iron curtain'. I should stress that it was still an enormous disaster, the fact that they were closer than their rivals doesn't really say all that much. They had advertising running 24/7 all the different media were utalised, I shudder to think what the costs would have been like. Every single Coke distribution point was persuaded into taking on a case of trial stock making it very accessible. But they stuffed up the taste...herbal? I don't think so

Rubbish Brand:
Energy drinks are cool! It is as simple as that. Red Bull spend enough money on sponsoring cool events to finance Nigeria's foreign debt, we're talking about enough money to make the Sultan of Brunei blush, their brand is cool, people want to be seen drinking it. Why? Because their idols are seen drinking it. Track their advertising spend, it's an art form.

Rubbish Distribution:
Zu energy is only available through Coles supermarket only. I can understand that as the energy market matures consumers will look to low cost alternatives, but the most obvious market is 'on the go'. I can't help but feel like they don't understand the buyer decision process behind an energy drink. Nobody plans to get tired, but as sure as death and taxes, they do and they need a quick pick me up where ever they are. Zu energy are missing the primary market, their flavour could be identical to red bull, but if you can't buy it at the local servo, why would you?

Josh's Opinion
So lets look at these three pitfalls and how they apply to 'Zu energy'

Distribution: The distribution network is free (no sales staff) and the worst case scenario is that they throw it away if it fails, so to some extent I stand by my original post that the short term cost of trialling a home brand energy drink is insignificant compared to the potential benefits.

Taste: Zu energy could taste alright (that is subjective), in fact I am told that it is made to taste like Red Bull, but it's not a Red Bull that's the fact. Is there an Australian market that demands a Red Bull substitute slightly cheaper, if they are that price sensitive would they not buy more coffee?

Brand Image: This is where the real difference is, Matt Bailey CEO of Photon Group said "What kid is going to think it's cool to be seen holding a 'You'll Love Coles' energy drink as opposed to a Red Bull?" That is exactly the point, if you are going to enter any new product into the market you need to understand buyer behaviour in order to fullfill their needs.

So what need are they filling?
Well there is a strong argument to be made for the product as a coffee substitute. I mean nobody cares if they drink instant or freshly ground beans when the purpose is solely for a caffeine hit or a cliche method of procuring sex after a date.

So if we accept that consumers dig the taste, the distribution system is efficient and hence over heads are low (and as a flow on from that so is the product price), is there a profitable market niche for a 'keep at home' soft drink caffeine hit?

I'm sorry, I just can't see it.

Kelv's opinion
Hint: There will be some bargains to be had when Zu energy nears its expiry date

If you are interested in this article try reading The 'Mother' of all relaunches or No Frills Brands are making up ground

No Frills Brands are making up ground

Traditionally the whipping boy of the grocery market, the 'No frills' generic brand sales are reported by Supermarket giants Woolworths and Coles to have grown around 20% over the past year.

There are several factors that have influenced this meteoric rise to fame

Food & Petrol prices are increasing
Proliferation of generic brands across new product categories
Increase in quality of many generic products
Better in-store promotion

Food & Petrol
The most obvious of which is rising food and petrol prices (and the interrelations therein) forcing consumers to spend their hard earned 'folding stuff' more wisely. This is only going to get worse as petrol is tipped to cross the $2 per litre mark early next year.

Proliferation of generic brands
Woolworths is spreading its' wings wide having released 1154 new products under its I-select brand since May 2005 (Financial Review, 2008). In some instances maybe too wide, like the octopus testicle example above. Much like a soldier firing blindly into the dark, by sheer weight of numbers you would expect some products to be successfully.

Increase in quality
Brand perception has alway hindered the growth of the generic sector, but much like womans rights, there has been a huge amount of progress in a very short period of time. Aldi has shown many retailers the light, proving that quality generics translates into sales at the register.

In-store Promotion
Next time you walk through your local supermarket keep an eye out for attention seeking 'sale' stickers or 'coles bargains'. The big boys have been working hard on gaining more attention and with good reason, they make around 2% extra on their 'home brand' products. Uncle Eddie even argues that advertising spend on name brand advertising has been slashed, opening the door for the home brands to claw a larger foothold.

Josh's Opinion Overall
The David and Goliath 'battle-royal' between generics and the major brands is beginning to go the way of the underdog, despite being bashed over the head with a chair and repeatedly chastised in front of the locals, the slingshot wielding underdog has regrouped, invested in a higher quality weapons stash (probably from his grandfather's arsenal in the USA) and come out all guns blazing. US retail mega-giant or Goliath on Barry Bonds style steroids (if you liked that previous analogy) has seen the light and invested heavily in its own 'home brand' innovation team to maintain their in house products attractiveness, suggesting that home-brand is here to stay.

There is no better time to introduce 'no-frills' products into previously untouchable segments. I agree wholeheartedly that there is nothing to lose from coming out all guns blazing and taking a sink or swim mentality into each separate battle. What is the worst thing that could happen?

--------------You miss 100% of the shots you don't take!----------------

Kelv's Opinion
So what we are really seeing is vertical integration, is it just a matter of time until Coles buy the whole farm? Maybe if they do, they could offer formula one boss Max Mosely a new job, recent video footage suggest he is very handy with a hoe.

If you are interested in this article try reading Room for Home Brand Energy Drinks?

Are you blogging for the sake of it?

Technology is zooming along at an astronomical pace, advancements in communication are linking society faster than ever before and social media is driving enormous change in the business world.

Julian Cole, a well know Australian blogger, has been a good friend of mine through University days and has always been on the forefront of technology in marketing, for years he has been telling me about the potential benefits and alternatively liabilities that user generated content can cause.

Benefits and Damages?
Buying a new xbox360 game is a high involvement purchase for me, I have only scarce resources to stretch and must minimize the opportunity cost, so to avoid buyers remorse. Before I buy, I research value for money e.g will I like this for a long period of time?

To achieve this I look to google, my fav reviewers and of course the blogs and let me tell you the common trend between all the information I take on board; it is all from actual gamers, their opinions & experiences.

The traditional buyer decision process involves a 'research' phase where consumers actively seek the opinion of experts and peers. If we accept that bloggers can act as experts in many fields just like game reviews, then it is essential for every company to be aware of the online domain and potential impacts.

The obvious question:
Does a blogger's negative or positive feedback about a product, service or company have an actual effect on a large companies bottom line?

Would Nike have seen any larger effect on their sales if blogging had been prolific when they were in the midst of their 'cheap labour' PR crisis?

Josh's Conclusion:
There is no answer that is incumbent of every company, but if we look at Nike as the direct case study, the over arching brand of the shoes will weigh out the small amount of 'noise' created by bloggers when it comes to specific quality issues, but when it becomes a larger issue like 'cheap labour' blogging facilitates yet another communication channel with which to inform the public.

It is the multiplier effect that stems from the use of this communication channel that has the real impact on a company's bottom line. The actual blog may only reach 100 people, but if they mention that to 3 people each, then it is passed on again, the posts have been very effective.

In my opinion, we are only seeing the very beginning of an information revolution, the impact of the Internet has not yet been captured or understood to an nth of its potential. The future implication for consumers and company's alike is a more transparent corporate world, information will become freely available about products, services and everything within the parent organization. It is developing into a real PR issue and will be devastating if not handles correctly.

Kelv's opinion
I don't think this blog has had any effect on any company's bottom line...try harder next time

If you are interested in this article check out 2008 - The year 'Two-Way' got important

Current Issues in Marketing Strategy