Current Issues in Marketing Strategy

The new Snickers Ad featuring Mr T shooting chocolate bars at a power-walker and calling him "a disgrace to the male race" has been banned. The Ad features the tag line "Get Some Nuts", a continuation from the previous ad where drives a tank onto a soccer field and confronts a player faining injury. So was the TV commercial deliberately confronting? Is it a segmentation strategy & what are the ramification?



Advertising Strategy
Firstly, lets look at the TVC. The actual campaign is quite well conceived, "Get Some Nuts" is both a clever pun and plays up the physical attributes of the product. An attempt (be it vain) to create imagery in the consumers head and differentiate the product from competitors like Mars.

Snickers has jumped on branding bandwagon and specifically targeted the male market. I say bandwagon because it seems like an unusually high number of FMCG product have been doing so this year. The 'Man Cans' ad for Solo just one of many examples. What does this allow them to do?

Segmentation of any kind narrows the focus of any advertising campaign, the marketing message is more clearly voiced to the target audience and theoretically the ROI in that consumer segment is higher at the end of the day. Simple explanation for a simple theory. Does it work in this case? I would have thought that Snickers is a very male product, they have their sales data & market research, so I'll back them in.

Was it deliberately controversial?
I hear a reporter on the radio talking about 'shock & awe tactics', how advertising agencies are trying harder and harder to take the mickey out of minorities as a way to form better relationship with mainstream Aussies. What a load of Bull dust!

They were not trying to be controversial, their are 1000 other things that are not 'manly' that would have brought a similar number of complaints; drinking soft drink at the pub, drinking light beer, wearing Lycra bike pants, the list goes on. Sure, a little bit of forethought probably could have rejigged it to be more acceptable, but they were not trying to rock the boat. The image fits the tag line...it is a good campaign.

Joshua Strawczynski's Opinion
Great Ad campaign, due to a good tagline, huge media attention & a celebrity that speaks to their target audience (even if in a piss-take sort of way). The Ad is not deliberately confronting or rude and to be honest, the people that complained are not in the target audience anyway. The only effect this will have on the bottom line is the cost of the ad being flushed down the toilet. Shame really.

Sam Berringer's Opinion
censorship has gone mad. It reminds me of a the Taco-Bell Ads that used a dog with a Mexican accent, Mexicans complained that the dog represented their culture and
damaged their image & credibility. The funny contrast to this is that not one American complained about the Budweiser Frogs. It took 3 frogs to say one word, making Americans look slow & uneducated (if we apply the same logic)...yet it was taken for what it was, a frog saying Budweiser....shock horror. All I can say is: Get over yourselves people...lighten up!

Advertising has been on a slippery slope for some time, each year we push the boundaries of acceptability a little further. Sure we get complaints and many ads get pulled, but those that stay up set the new benchmark for what's acceptable. Heineken have pushed those boundaries way too far in their latest 'suicide' TV commercials. Any 1st year marketing student will tell you that this could have a negative effect on brand equity, the question is; What is the real outcome on their bottom line?


Explaining The AdvertisementAdvertising is an attention game, shock & comedy are two common weapons in any advertisers arsenal, but they can go to far. Clearly the Ad is meant to be a joke, so please don't write to me saying it's based on truth. The Ad is based on truth the same way that fishing deserves to be an Olympic sport. It does however get your attention, which is of course the intention. The message they're trying to send is "Life is worth living for Heineken", which it actually portrays very very well. The follow up ad is not as effective, but it is still a valiant attempt at differentiating Heineken from other premium beers.

Part 1Heineken

Part 2Grolsh

The Strategy behind it
Don't think for a second that the people behind the ad didn't know it would create social unrest, in fact far from it. I would have guessed that is exactly what they were going for, getting as much free media coverage as possible. It does raise the question though, would it scare any loyal customers away from the brand?

Josh Strawczynski's Opinion
You will always run the risk of scaring people away from your product when you do something controversial. For instance if someone dear to you has committed suicide or you work for an anti suicide organization, you could very well be disgusted by the flippant view portrayed by the ad, that choosing death or beer is almost to close call.

The other side of the equation is the enormous amount of free media & brand awareness therein that the 'stunt' produced. Heineken are in the enviable position that they have built up an 'equity bank' that is difficult to undermine in one short run ad. Regardless of their advertising, the have huge brand awareness and those consumers know what the brand stands for. In this instance, more good is likely to come than bad...this time anyway.

Sam Berringer's Opinion
I don't think they did themselves any favors, although Josh is probably right about the 'equity bank', I doubt new customers will be falling over themselves to try Heineken. Even the most liberal of minds may find it hard to see the comedic link between Heineken and suicide. The problem with the ad was not that they pushed the acceptability boundary, but they played on a major problem in society. The same would happen with gambling, smoking or drugs...just don't do it. So in summery, the company will survive, but they won't be adding to their bottom line.

Grocery giants Coles & Woolworths are making a second bid to foster a profitable online / home delivery grocery market. Coles has doubled its online range to more than 17,000 product lines, in response Woolworths CIO Dan Beecham is talking up the value the internet presented. It's great that they are proactive, but experts warn that the retailers will struggle to win over shoppers, pointing to purchasing habits, pricing and logistics as barriers to success.
So the question is, if there is no demand right now, why are they doing it?

Why demand is slow
Steve Ogden-Barnes, program director at the Australian Centre for Retail Studies said shopping habits had swung from one weekly shopping trip towards to a more 'convenience store' approach, making several trips per week. This change in habit make it harder for consumers to plan a weeks food, instead they buy more on impulse.

Personal select of fruit, vegetables and cuts of meat was also a big factor, customers are not willing to trust a big company to value quality over profits. Therefore, limiting the potential use of internet shopping to canned and packaged foods.

Making it Expensive
Many companies that go online benefit from centralized distribution and increased delivery efficiencies. Supermarkets do not share this luxury, due to the nature of perishables. In this instance, many food vendors find store based deliveries more manageable.

The rising cost of petrol is another distribution nightmare adding costs to the equation. Coles have signaled their intention to run everything from a central distribution point, meaning that they will have large overheads, making the exercise an expensive one in the short term

The Strategy - Why Go Online?
In the short to medium term, setting up the online distribution center is going to cost a fortune. On top of this, there is no guarantee that customers will move to the online medium for their weekly shop. So why are Australia's giant food providers moving into the online space?

The simple answer is that it is more cost effective to set it up and run it at a loss than for a competitor to get the first movers advantage and steal a huge about of market share. With Aldi, Ritchies,IGA and Foodworks already making a dent into the respective market shares. This is a formally a preventative tactic, although I don't discount the idea that it can be profitable in the future.

The other side of the arguement questions whether consumers have enough 'convenience cash' to purchase the service. The amounts Coles and Woolworths charge for delivery vary according to date, time and location. The Woolies charge is capped at $17.50 and Coles says its charge averages $12.50

Josh Strawczynski's Opinion
Moving online is a great move, it guards against competitors gaining first mover advantage and puts them in the driver seat as consumer tastes for the internet improve. It is worth the move given British figures from Verdict Research shows that within five years groceries will overtake electrical goods as the top sector in online retailing.

Sam Berringer's Opinion
We are talking about a massive risk, I hope that they have available cash flow, because they are going to need it! think about the enormous set up and running costs until they turn a profit. Yikes! Overall however, I would be doing the same thing, maybe in collaboration.

Iconic Australian Pie makers Four'N Twenty have come out with a new advertising and promotional campaign. 'The Salad Plate' campaign targets men directly, running A TVC and instore promotional pull strategy. History has proved that targeting men in their advertising has been successful, the question is, is the new campaign going to be enough?

The Advertising Strategy
As seen in the commercial (below), Four'N Twenty are clearly targeting men, once again with the use of tradesmen eating at their work site. What I like is that it is keeping in line with previous ads, maintaining the iconic 'tradey food' image. Building on previous ads a great way to develop momentum, much like the Cadbury 'what if world was cadbury' ads continue to do.



Promotional Strategy
Supporting the TVC is the promotional product, the 'salad plate' which is going to be sold at convenience stores to everyone who buys a Four.N Twenty pie. This 'pull strategy' creates extra value in purchasing a pie, like any additional offer (see Cadbury + Gold Class promo). In this instance there are a few unusual characteristics;

1. The plate must be purchased - Increases switching costs (compared to usual food purchase)
2. Consumer awareness is very high - More likely for people to want it
3. There are only 50,000 nation wide, making is a collectors item...kinda

Overall Strategy
Trying to leverage the TVC is a good idea, I like that their is a promotional product, 'gimicy' as it is, it does tie in well with the iconic Australian tradey, so in many ways it works. Will it actually get people to try the pies? I would think that this will have a word of mouth effect, showing off the salad plate at work would be a very blokey thing to do. I can imagine that it will be a 'must have' item for a lot of tradey's. Will it actual deliver long term return? I wouldn't have thought so. It will be gone as fast as it came.

Josh Strawczynski's Opinion
When this strategy was presented to head office, they came very close to canning it. In my opinion, they could have used the Ad spend a lot more effectivley, however, they have made a valiant effort to target their male tradey market, so the thought process was good.

Sam Berringer's Opinion
I would like to have seen a more interactive website, some social media application would also encourage a wider range of people to interact with the brand. Nice try guys, but might be time for a reload. Better luck next time.

What does H&R Block mean to you? To me it means tax ads around July. Their use of TV and Radio campaigns in Australia has been the the corner block (pardon the pun) of success for them over the last 5 years. In recent times however they have invested in updating their advertising to target the growing social media craze. Through the use of character Truman Green, H&R Block’s “Biggest Fan”, the block is reaching wider and wider demographics. So what have they done and is this diversion of advertising dollars going to work when it comes to the bottom line?

Traditional Marketing
I have to hand it to them, traditional TV campaigns have been very effective. Austaralians remember the ads and the brand message, I couldn't find the one I wanted, but below is a successful version that ran at the Superbowl in the US. Conversely however, in terms of strategy, they were prominently aired throughout July and early August and sure enough, their brand recall was huge, but the argument is that they didn't trigger young people to act.



The New Strategy
H&R block implemented a very thorough, well constructed and most relevant... cool social media campaign. Their marketing team looked at what people want to watch, how they interact and then worked the H&R Block brand and message into it.

Social media marketing is a buzz word, when implemented effectively, it communicates directly with the youth of today, but despite being new and exciting, it comes from traditional marketing blood lines (The traditionalists are nodding approvingly and stroking their long white beards). The long and short of this social media campaign is that it creates a positive relationship / association with the viewers. That's it, nothing fancy. If you watch the content of Truman Green acting like a dill and enjoy it, you will probably recall the brand and possibly use it.

I love to hammer on about campaign support & integration and this is no differnt. The support of the Truman Green character is excellent, Facebook, MySpace, Twitter and YouTube allow users to connect with him in a range of ways. They can interact by attaching add-ons to their personal page, comment on the latest video and share the content with their friends (making it viral). All in all, the online strategy has really added to their marketing mix.




The argument against
Many modern marketers will tell you that positive branding is a thing of the past. I mean sure, I know the brand 'H&R Block' because their ads struck a chord with me, but would a real consumers just blindly go with them, or does the buyer decision process suggest that most of them will jump on the I-net and seek out the best deal for their money? If this is correct, then brand recall only attracts a fraction of the customers it should...

Josh Strawczynski's Opinion
Actually, as much as I like brand recall, the modern marketer is right, you are going to lose a lot of customers in the buyer decision phase. There are a plethora of options out there and many consumers will choose to exercise those options. However, to start with you had those people thinking of you in the first place, so tick box number one.

Secondly, the actual strategy of H&R block has been excellent, offering website tax advise and creating a more humanistic feel through characters like Truman green, increases trial rate, which in turn with a quality institution and service should retain many of them for the following year.

Sam Berringer's opinion
Social media is just so important to the support of todays modern business. Getting in on the ground floor like this is not only a short term win, but organizational knowledge that will help them build on this into the future.

For more on social media marketing go to the expert Julian Cole @ AdSpace pioneers

Sports Girl has dipped it's feet into the e-commerce world, offering clients of its Peter Alexander Brand the ability to purchase online. The brand which is already generating about $11 million of their $50 million annual sales from online retailing has seen excellent growth from the Inter-web development and is going to role it out across all brands soon. What is the key to their success?

Firstly the results
AFTER 10 months, Sportsgirl's chief executive, Elle Roseby, says sales from its online store are rising 30 per cent month on month, topping 3 million page views a month and had plans for its e-commerce store to deliver up to 10 per cent of overall revenues within five years.

The Strategy
Unlike many online stores, their operating costs have actually increased because Sportsgirl made a conscious decision to keep the online store separate from its existing retail network. It operates out of the central distribution center and has a separate management team, including marketing, procurement and information technology staff. Was this a smart thing to do?

I have to say their marketing forethought was excellent. Targeting the youth market requires retailers to tactfully target social networks like MySpace & Facebook. As one example, Sports Girl tried to replicate the dressing-room experience, encouraging shoppers to post a fashion item or accessory on their Facebook profile and ask their friends if it is hot or not. I love this as it stimulates conversation about the brand and their products. It is viral without meaning to be viral (See an article by Zac Martin for more on Viral).

Josh Strawczynski's Opinon
The separation of store and e-commerce is the key to their success. Instead of supplementing their current offering and potentially 'short changing their clients', Sports Girl have planned and implemented a stand-alone SBU (separate business unit).

Even though the costs have gone up, the very nature of 'sink or swim' planning forced them to thoroughly plan the strategy, attracting and retaining customers. They went above and beyond a simple website, they integrated an online marketing plan and are now reaping the benefits.

Sam Berringer's Opinion
I like what Kasey Lobaugh from Deloitte professional services firm said: "By 2012, almost half of all retail purchases will in some way involve the internet but many retailers are failing to integrate the web into their operations."

The key to this is that retailers are competing with one another, not on having the most flashy site, but integrated marketing...that's the key.

The task of taking over from Tattersalls was always going to be a difficult task, but Intralot have gone about it in a very impressive way. They have focused on a differentiation strategy, upgrading the way that people 'convenience gamble' and spreading their advertising budget wide to increase customer awareness of the new products. So far the stats are impressive. So what have they done well?


The upgrade in the gambling process
The product that consumers are buying is now very different. It is better (subjective comment), it is newer, tech savvy and much more convenient. Intralot have placed automated machines (seen below) to check tickets, relieving store owners from the arduous task and making it easier for customers to dash in and out.

The importance of this is differentiation, but more than anything it is adapting to 2008 consumer demands, a better product should increase repeat purchase rate.

Advertising Mix
Their advertising mix has focused on consumer awareness, getting their name out there and position themselves as 'The luckies game around' or more simply put, 'The best chance to win'.
They have communicated this through a range of vehicles, (in some cases vehicles quite literally), Television campaigns have run in peak time with quirky notions of creating luck, they sponsored trams around the city, posters and print advertising has been all aligned.

Aligning the advertising is marketing 101, I especially like the use of the bright orange logo's everywhere, even on the checking machine itself. Consumer awareness has become very high in a very short period of time, a big win for a new company and the sales stats so far are impressive

The results
Instant scratch ticket sales are up on the same period a year earlier. Numbers dipped when they ran out of stock last weekend (good problem to have). The replacement of Tattersalls instant scratch ticket product with Intralot product has not hurt at all. The Intralot online games, Keno, Lucky Lines and Bingo are pulling good interest too. Their advertising is driving good traffic.

Josh Strawczynski's Opinion
Intralot are trying to target the 'convenience gambler', they are changing the way we are able to access the game, making it quicker and more autonomous (the way gamblers like it...impersonal and largely anonymous).

Their advertising and branding has been excellent so far, it will be interesting to see how their sales figures increase as the bugs are worked out of the system.

Sam Berringer's Opinion
It will be interesting to see if they continue to innovate and target 'convenience gambler', for example, Intralot Peru has announced that it has become the first firm in Latin America to let players to take part in online lotteries utilizing a SMS.

For more on SMS lottery click here

Mainstream marketing logic implies that you should respect your customer, communicate with them & give them plenty of options. This can be one of the biggest mistakes you can make. The old tried and tested rules of 'know your product & your customer' is the key. So strategically, offering too many options doesn't necessarily increase value to your customers and in the long run, can reduces your profits and string out the buyer decision process.

McDonalds is a great example of a company that has its' product down pat. There are only a certain amount of options, very little catagory overlap and yet people never complain about options, because there are always short term specials that give the illusion of change. Contrast to this the example of Outdoor Furniture. When I was at University I worked for an outdoor furniture company, my knowledge was excellent, but it took time to know my customer, so I fell into a pit.

Offering too many options was usually the difference between an immediate sale and them going home to think about it (which gives a competitor a chance to snaffle them). I would ask them what they wanted it made out of, the size, how many seats, which seats, color, padding etc. It was simply outside their consideration set.

Some may argue that these customers were in the wrong part of the buyer decision process, but I can tell you first hand, less options is better. As a further example, I currently work in PPC (Pay Per Click) advertising. The key is to give the customer control, but always lead their hand. A friend of mine who works in FMCG calls it the suggestive sell, but it is more than that, to quote Cori Hodge "People are Idiots", so treat them like they know everything, but assume they know nothing.

Josh Strawczynski's Opinion
The message I am sending is not to act condescending to your customers or tell them what to buy, that would be stupid. What I am suggesting is that too many options increases your carrying cost and supply chain efficiency, it strings out the buyer decision process and eventually these things influence your bottom line.

Sam Berringer's Opinion
Offer your customers a range, but today we live in a world of specialization, so specialize in what you do, sell people on the benefits of what you have to offer.

Red Bull Australia has dumped strategic distribution partner Cadbury Schweppes. This major change leaves both companies in a sticky situation, Red Bull needing to take on hundreds of new employees and Schweppes losing their number 1 & 2 selling product, worth about 20% of their total sales. The big question is how are Red Bull going to adjust? Will Schweppes take on a new energy drink?

On July 31st 2008 Connex will add the Peter Mac cancer research Institute to it's list of community and social sponsorships. The event is much like McHappy Day, but instead of $1 being passed on for purchase of a delicious grease burger, it is a train or tram ticket. What I question is why? I can't believe there is any strategic value in the move other than a warm fuzzy feeling at night and lets be honest, at the end of the day companies are in it to make money!



I'm surprised Connex have money to 'give away' after they were forced to pay the state government $25 Million for failing to meet performance standards throughout 2007. The question still remains, why advertise?

The Strategy

Increase trial to increase repeat rate
Puplic transport is a fairly inelastic product (I say this even though I have just started catching the train to work because of petrol prices), there are not many factors that will increase demand. McHappy day sees me and many other storm down to Maccy D's for a discressionary $3 purchase of a big Mac. I feel happy that I have made a difference, supported a worthwhile charity and all while getting lunch. Connex's Peter Mac day, does not have this effect.

Branding
Is it a branding exercise? Maybe buy supporting the local community Connex endears themselves to the government and increases their chance of being contracted for another term (keep in mind they have to win the contract to stay on). This one is a possibility, they also sponsor; VIS, SEDA, Modern Art museum, moving Gallery, Richmond Football Club. So this is not a one off promotion of community spirit, there must be a deeper reason.

Individual Stakeholders
Never underestimate the power of individuals. I have seen on more than one occasion, an influential individual swing a board room decision based purely on emotion. It is not beyond belief that someone on the Connex board has been affected by Cancer and convinced the company to make a stand against it.

Josh Strawczynski's Opinion

Public transport promotions do not offer any extra luxury, perhaps if they reinvested some of their ad spend into hiring '5 minute angels' (short massage specialists) onto the trains it would persuade people to trial a train for a day.

I can sense some readers unhappy with the thought that you need to give to get, but I ask you, how many chairty functions have you been to for $100 a ticket? Would you have donated even half of that if someone had shook a can outside your car window on the way to work? Of course not, because when it comes down to it, we are no different to Connex, we earn our money for us, not someone else (No offense to any thin skinned readers).


Sam Berringer's Opinion
I applaud Connex for their community involvement. We all know someone affected by cancer and the Peter Mac foundation does amazing work. The strategy I have to guess is however for political gain. I personally think they could benefit a lot more from upgrading facilities, but that's just me.

This year more than ever the AFL has been forced to police their brand image. The balancing act between keeping the game 'man-ly' and encouraging mothers to allow their children to play has been going on for some time, but what is the right balance?

History
Already this season we have seen Barry Hall deliver 'that punch' where he king hit Brent Staker off the ball and was suspended for 7 weeks. Just when we thought the worst was behind us, Dean Solomon elbowed Cameron Ling and broke his jaw, this indiscretion saw him suspended for 8 weeks and effectively ending his season.

The reaction
The AFL has taken a hard line, suspending players for long periods of time, fining them heavily and refusing to let them play until mentally capable.

Why
Mothers are the 'gatekeepers' deciding which sports their children should be allowed to play. In this country soccer is gaining a lot of market share because of its no contact status and increased domestic awareness. With so many options available to them, the AFL can not afford to give mothers another option. If participation rate at school goes down, the next generation of footballers and fans is reduced.

Conversely
The other side of the equation is the AFL traditionalists. Diluting the game of its rough and tumble nature can have as damaging effect as going in the other direction. Keeping in mind that the original AFL game was one for the workers, in recent times, AFL has become more for the middle class.

Josh Strawczynski's Opinion
Soccer is gaining huge momentum in Australia, it is important that the AFL makes exemplary role models out of it's players and tames its game down to something comparable to other professional sports. If they fail to do so, their plans to expand can say goodnight.

Sam Berringer's Opinion
Legitamite contact in a game is great, NFL, NHL even soccer, they have a level of contact that is acceptable because it is within the rules of the game. It is the other stuff off the ball that should not be tolerated. King Hits, Drugs, Lude behaviour, it effects the AFL brand and that is damage that can not be undone with any level of fines or apologies.

Is Apple the next Microsoft?

There are comparisons to be made, nerdy figure heads aside, but what does their similar company strategy do to their brand and staunch loyalty of their fans?

The new Apple iPhone has been released in Australia and despite the glitz and glamor of this wonderful product extension (or hybrid if you will), the reviews are coming back that it is falling short in many basic areas. If you have the time read Gizmodo's iPhone review, their stuff is excellent.

For those that can't spare a couple minutes to peruse another blog, the summary is that the iPhone lacks basic functions:

• MMS
  
• Video recording
  
• Custom ringtones
  
• Mass storage
  
• Fully functioning Bluetooth with stereo audio streaming
  
• Voice dialing when you're using a car kit
  
• Sending contact info to other people
  
• Instant friggin' messenging
  
• Sending an SMS to more than one recipient at a time

So is the key learning that the iPhone is a dud?
Nope. Strategy. Sure they spent plenty of time and money on R&D, but can you honestly believe they could simply forget to put in such basic features? This is a classic 'Microsoft-esk' product composition strategy.

Why would anyone make a perfect product? Sales growth comes from replacement, time and time again. Replacement comes from either:

• Organic damage
• In-built defectives
• Product becomes superseded

Josh Strawczynski's Opinion
Apple are going to release program updates to deal with the major customer complaints. It is essential to offer a great version 1 of your product. They will not however fix all the bugs and feature holes. Instead it is in their best interest to release a new phone every 12 - 24 months with slightly increase functionality and software packages.

There are readers out there who just love Apple and would never question their motives. Let me tell you something for free, every company is looking to make money at the end of the day. They won't sell you a lemon, but they will ensure that you repurchase...soon.

Sam Berringer's Opinion
I love my iPhone, but that lack of functionality is killing me. I now carry two phones around to do the job of my previous one. GRRRRRRRRR

Apple: Please release version 2 so I can rush out and buy that!

In my previous post I outlined the pricing for the iPhone launch in Australia, this will form the corner stone for this article. If you need a copy of it, click here. Now down to business, let's look at the various pricing strategies.

Optus
It appears clear that Optus are following through with their plans to buy back market share. Over the last 12 months, Optus has lost 1% subscribership and 2% of their annual revenue. For a company that a few years back looked to rival market leader Telstra and gain the lion share of the $12Billion mobile market, these are bleak times.

The deal they are offering is about 6 times better than their nearest rival. I can't help but think that they are on the right path, encouraging people to not only buy the phone for aspirational reasons, but to actually use its functionality and gain profits therein.

Agree or not, the consumer sentiment at Gizmodo was very negative towards the proposed plan!

Telstra
Testra continue to trade off of their staunch customer loyalty, for some that would be a compliment, in this case it definitely is not! Their offer is price skimming, they are trying to take all the cream and make this iPhone investment return its value in mach 3 time.

Where teh Telestra plan falls down (assuming people stick with them) is that it punishes consumers for using the 3G features. Based on the pricing structure, you can only use your iPhone very lightly if you don't want to incur enormous premiums...what a joke!

It has been a long time since I have seen Telstra offer true value to consumers. It reminds me of La Porchetta, they set their standards extremely low and yet continually fail to meet them.

Vodaphone
Well arguably Vodaphone is at the mercy of Telstra, ironically they do offer a better contract, but can't rival that of Optus. All this said, if they stick to their guns and target Telstra's fringe users, they may be able to wrestle a substantial amount of market sahre and harness the iPhone to its full potential

Josh's Opinion
Optus appear to have the best strategy, but it is not because it is cheap. It is good because it encourages users to use new features and functionality which in the long run is Optus's bread and butter. The others are not really leveraging the full potential of the iPhone.

Sam Berringer's Opinion
I love the iPhone, but I am shocked at the lack of advertising from any party. I know there are some viral campagins and plenty of word of mouth, but if I was them I would be trying to get my existing user base to early upgrade and start using their mobile more. Start the ball rolling and their friends will jump on board as well.

Australia's major telecommunication companies have released their iPhone pricing plans and their respective strategies, ranging the full spectrum from Price Skimming to market penetration. Only one thing is consistent, the lack of planning and leverage that all providers have attached to 2008's biggest release. So today we are going to look quickly at what has been launched.

Optus
$79 a month
$Free 8GB iPhone
700MB of mobile data -- a generous but not massive amount.

$89 a month
$Free 8GB iPhone
850MB of mobile data

$149 a month
$Free 8GB iPhone
1GB of mobile data

Telstra
$89 a month gets them bugger-all.
107MB of data for God's sake, that will allow them to look at a few web pages every day, providing they don't get much email.
Each additional MB will cost them $1.

Note: For $70, the people who queued at Optus get more than six times that data allowance.

Cheers to Bleeding Edge

Vodaphone
AU$69 costs AU$189 for the 8GB model or AU$309 for the 16GB model.
AU$310 worth of phone calls
250MB of data per month.

AU$99, costs AU$99 for the 8GB model or AU$219 for the 16GB model.
with 500MB of data and a sizable increase

Cheers to Life Hacker

Josh Strawczynski's Opinion

I will go into the relevant strategies and short falls in my next post, however for now the key learning to take out of these plans is that nobody really thought about the potential of the iPhone. The strategies have been weak at best, there has been stuff all ad spend and the contrats do not lend themselves to maximizing user spend and 3G capabilities.

Sam Berringer's Opinion
Next post will be very interesting, I really like the Optus offer, but I think they need to up ad spend to promote the glowing deficiencies in their competitors plans.

Streets Ice cream and Village Roadshow have teamed up to create one of the best hybrid campaigns I have seen for a while. Anyone who bought a Magnum ice cream can redeem the wrapper (via the interweb) for a free movie seat upgrade into Gold Class cinemas (availability permitting).

The promotion is a highly successful 'pull strategy' encouraging consumers to trial both products for the first time or get previous users to recapture the experiential benefits once again. What they have done successfully, is offer extra value without effecting their bottom line.

To clarify this point, Streets only needed to print a little logo on their packets and Village still charged customers for a movie seat, it just sold more ice-creams and filled what would have otherwise been a vacant cinema, potentially creating more space in the standard cinema and additional revenue on tickets, food and drink.


The real and potential problems
Administration can be difficult to implement successfully (from Gold Class point of view). When I was there, the system would not let me upgrade on a Tuesday because ticket prices were discounted and it wouldn't let me pay full price. On another occasion I saw people trying to get the upgrade with the Magnum packet (having not printed out the coupon from the i-net). The idea is to offer exceptional service, in these cases, the manager must be well trained and responsive, it is far more beneficial to bend over for your customer than to belittle them and ruin their product experience.

Length and frequency of promotion is important, so as not to create a 'Myer' style sales period buying habit. If the promotion is too regular, customers will use their entertainment dollars elsewhere and wait for the promotion to come out again before they use the Gold Class service.

Josh Strawczynski's Opinion
This is a great promotion aligning two premium products and leveraging their individual strengths to promote the other. Magnum is a low involvement, high distribution / turnover premium snack. Gold Class is a luxury service that is aspirational to many.

Consumers choosing ice-cream now have a reason to pay the extra and trial a Magnum, and Village have a host of new users trialling Gold Class and making up their own mind if it is worth another $20 per visit to the movies.

Oh and did I mention it was cheap to run? Overall full marks!

Sam Berringer's Opinion
I think there will be pressure from Streets to keep the campaign going as long as possible because of the immediate and measurable effect on sales. Village on the other hand needs to be more responsible, they have profits to be lost if the customers stop paying for the offer. I would like to be a fly on the wall in those meetings!

The Trading Post is undergoing radical change to keep up to date with modern consumers and will be treading into the online auction space currently owned by EBAY. Under the watchful eye of Telstra's Sensis division, the trading post will be updating their way of doing business tackle the $150M online auction market.

The hooks dangles infront of consumers are: ~ No listing fees for sellers + a range of different payment options (unlike EBAY who are moving towards PayPal only settlements).

What are their big guns?
The trading post is a 40 year old Australia institution, they are not selling out (as many have accused), rather they are updating to stay in touch with future generations. Already US$1000 per second is bought and sold on EBAY, and signs only point towards this number expanding in time to come.

Trading Post has a brand image that they can trade off of. Huge brand awareness, reliability and respected, not to mention now being owned by Sensis ($636M in 2004) who have the capital, expertise and strategic vision to develop TP well past its' current form.

Can you beat EBAY at their own game?
You can't beat EBAY, just in the same way that you can't beat Coke, Nike, Microsoft or James Hird, but you can steal market share, differentiate and offer a a product that caters to the needs of a different niche of users.

Every market has competitors, the followers and those that simply thought it was a good way to launder some cash. There can be only one market leader, but they are all capable of servicing segments of that market. As seen in even the most basic industry life cycle, competitors will enter the market when there is profits to be challenged for and I am very glad to see people challenge EBAY.

Josh's Opinion
EBAY is not a unique and beautiful creature (Fight Club, circa 2000), it is not beyond competition... far from it. In actual fact, the more competition there is, the more it forces EBAY to give customers the service they want. For example, I can't believe they are moving to PayPal only payments, that is just ridiculous, give me and option to vote with my feet and I will.

Sam's opinion
I have to applaud the move into the online zone, I know they were already running an online cataloge, but this move to tackle EBAY head on is very strong. They have a brand name to trade off, they offer exceptional value to customers and they already have fiercely loyal customers. This can only be a recipe for success.

Coca-cola has signaled its intent to continue pursuing the lucrative 'energy drink' beverage market, by releasing a new chocolate flavoured energy drink 'full throttle'. The brand which has made some headway in the states (USA) is now looking at a product line diversification to increase attractiveness and product facings.


The strategy behind the move poses challenges to market leader Red Bull, who stick staunchly to their core product range. Should they react, should they diversify their range or should they sit back and watch?

My thoughts are that this new range by Coke is not directly competing with Red Bull. In actual fact, it seems to be targeting flavoured milk more than anything...Big M look out. However Coke is one of the worlds biggest brands for a reason and if their highly paid marketers think there is a gap in the market then so be it. How much you get paid has a linear relationship with being correct doesn't it?

If we forget about the $15M they threw away on launching Mother energy drink in Australia last year, the four other attempts they tried prior to that or any of the countless other failures they have launched (remember Coke with lime?), then yes, a complete linear relationship would suggest that this is a great strategic move. If we decline to forgo this information, then it is safe to say, Coke have an interesting 12 months ahead of them!

Just in case my point had not been made sufficiently enough, below is marketing speal from Rafael Acevedo, Senior Brand Manager of Coca-Cola energy drinks in North America. Regarding the potential to appeal to men, in particular: “Guys are increasingly looking for great-tasting beverage options that will give them the extra ‘kick’ they need to conquer their day,” he said. “Full Throttle Coffee combines the smooth, rich taste of coffee with the intensity that you can only get from a Full Throttle Energy Drink.”

Josh's Opinion
Keep trying Rafael, the energy drink market is a consumer thought process and branding exercise much more than the combined goodness of the ingredience. Didn't we see this flop with the original Mother? Keep trying guys, maybe next year

Sam's word
The product comes in mocha, vanilla and caramel flavours and reportedly combines 100 per cent premium Colombian Arabica coffee with Full Throttle’s energy and vitamin blend.

Hats off to Ausfood news for the tip on this

The highly successful Top Gear television series has branched out and started a print magazine in Australia. In a deal brokered by the BBC, ACP magazines in Australia (one of the countries largest) will assume control of the Australia addition. Danny Lavell a highly respected sports media manager will be overseeing the project which has already been successfully launched in 22 other countries. But why is the strategy interesting I hear you ask...

To be honest, the print extension seems the logical next step but what is really interesting is the target audience that it appeases. Top gear has a highly segmentable (fractured) audience, some watch the program for the car news, some think it's funny, others are captured by the deep celebrity interviews...ok ok, nobody is interested in the interviews, but there are many other 'catches' to the show.

What is interesting about the strategy is that it is less about selling a new product and more about leveraging an existing brand. What I mean by this is that the magazine is not going to be a print version of the television show. Sure, it may have a few articles by the hosts or print a couple of production shots, but more or less, it will be another mag aimed at car nuts, rev heads and socket monkeys.

I love the strategy behind it. Franchise the name, set it up so that it is produced locally and represents the demands of the readers, but constrain it to stick within suitable guidelines that will maintain the integrity of the television show.

Josh's Opinion
I often speak about doing things slowly and correctly and in this case the BBC have done it well. They have ironed out the kinks and slowly but surely expanded the model across the world. I might also add that they have looked high and low for the correct business partners, I say this because the in-store promotion I have seen around is just excellent. I expect breadth distribution to be high right from the get go.

Sam's Opinion
I love the show, but I wonder if there is room for a VOD cast or something a little less old school. Then again, rev heads do love ruining the environment, so short of printing it on animal hides, I think they are sticking to their guns.

I found out about this little beauty on this blog

Nintendo has cracked into a new, very lucrative market in Japan. Finally being trialed as an educational devise, the Joshi Gakuen school in Tokyo is innovating and trying to move away from the rigidity of wrote learning.



Theoretically, students are engaging in more modern day technology which keeps their attention longer and stronger. This is why theory is just that, theory, I'm sure this is the same as when I was allowed to use a laptop for the first time, educationally exciting for one week and an expensive procrastination tool for the next 5 years.

Still the importance to Nintendo is very relevant. In the one hand you have a new channel for potential sales growth. In the other you have a cool brand image that may be tarnished by the educational push.

Josh's Opinion
I think it is a winning move from Nintendo, the potential effect on bottom line is enormous and as for the brand image, I believe kids are more likely to use it for games just like I did with my laptop at school.

Sam's Opinion
I don't think it is going to take off, Japan is miles away from large scale educational reform, but i like the principle.

Whole article available here

Nike have released a new soccer Ad that ties in with Euro 2008. With a host of famous faces, it's an interesting take on soccer skills, but I can't help but feel like their ad spend could have been better.



The ad uses the phrase "take it to the next level" inferring that using Nike equipment helps improve your performance. I like that they are appealing to the consumer, taking them into the performance arena, but there are limitations.

I feel like the brand association gets lost a little in the visually exciting ad, much like an AFL footballer misses the oncoming tram ona visually exciting road (100m from my house by the way).

Apart from that, the star power is incredible, the camera angles keep you captivated and I highly recommend you listen to it with the volume on max, it feels like you are there. It will certainly captivate the avid soccer fan and grab their attention.

Will the ROI justify the expenditure?

Josh's Opinion
You have to believe that the greater branding for Nike is worth every dollar of investment, but it is interesting to think what the opportunity cost is.

Sam's Opinion
I think the AFL gag was a little too soon.