Current Issues in Marketing Strategy

Berocca has broadened its business strategy , developing a new ‘convenience’ based product “The Performance Twist N Go Original 250mL” which for the first time will see them positioned in refrigerators Australia wide. The former vitamin tablet provider now provides a 250ml bottle of water in a ‘ready to go’ format. The value proposition is providing instant gratification with effects that neither Red Bull or Vitamin Water can achieve (perceptually). So is this a good marketing strategy?

Yahoo Search Marketing (their Pay Per Click Wing) has split their search network into two sections; The premium network comprising of Yahoo!7, Bing & MSN & Standard network (3rd tier providers) such as myshopping.com. The idea behind it is that the standard network provides advertisers with a lower quality consumers, lower returns and theory holds that they should not have to pay a premium for it. This strategy and the assumptions therein work out to be a zero sum gain for the advertiser and a value offer created from nothing and costing nothing for Yahoo. Lets explain the Yahoo marketing strategy.

Firstly lets address the idea that the 3rd tier providers convert at a lower percentage. For this to be true, someone clicking on your ad would need to be 50% less likely to make a purchase then someone using Bing. This is an assumption which would struggle to stand up in court, let alone the marketing fraternity. When someone stumbled into your bricks and mortar store, are they any less likely to purchase if they have used Google maps as opposed to yellow pages to find you? Remember, it is your website that sells, so how they got there is irrelevant.

The second part to the Yahoo strategy is genius, discounting the standard network click costs by 50%, making it cheaper to attract the same number of clicks. What they are hoping is that this will build the reputability of Bing and Yahoo!7 and encourage people to reinvest directly through them. This of course goes to the very heart of the Yahoo philosophy, they believe you grow with the number of advertisers, not users. The overall effect is to spend the same budget you were using, but to give you slightly more traffic but with a much higher 'value offer' and hence better public relations.

Josh Strawczynski's Opinion:
Yahoo! will not improve unless they tear down their slow, difficult to use software and start again (referring to Panama ppc that is). Compared to Google, they are too hard to use, optimize and control. There is no doubt that the new Bing agreement will come with new software and better systems and not before time! The current network split does nothing other than bandage a gapping wound.