What is Marketing … Really?

Thrilled that Gardner Business Media published our thoughts on what is marketing … really.

Happy Thanksgiving.

Mitch

Advertisements
Posted in Marketing | Tagged , | Leave a comment

Slipping?

Back in 2013 I posted about Quinn Emanuel’s ad and their focus on providing what their customers want to buy … a win. In 2013 their “see it our way” number was 90%. In their most recent ad it is now 88.4%. Not a big drop, but still moving in the wrong direction.

What happened? Are their new partners not as successful as their longer standing partners? Did they hire several ‘losers,’ who are bringing down the average?

I really don’t know and I still like the campaign; and I may be one of the few people who remembers the number used to be higher.

Mitch

Posted in Advertising | Tagged , , | Leave a comment

The Pyschology of Price

I am continually fascinated by how the mind works, especially when it comes to price. Bundles are often a great way to get people to buy more (up-sell or cross-sell). Making it easy to order often times gets people to buy more. Consider combo meals at fast food restaurants as a simple example.

Of course, we also see the converse where unbundling is used to extract higher prices and/or more money, though this often occurs due to much of the bundle being perceived as “free.” Airline services unbundling is an example here.

I had the good fortune of attending the 6th game of the World Series this year at Dodger Stadium. I am pretty sure I have not been there in a few decades. When I went to order my Dodger Dog (Nathan’s my be the official hot dog of Major League Baseball but it is not even for sale at Dodger Stadium), I noticed the sign in the picture above. Not being much of a beer drinker, I didn’t order the bundle, but my brother-in-law did (though he insists that was his order despite the sign).

I suspect that sign gets a lot of bundle orders given its prominence. I also assume most people believe they are saving money, as my brother-in-law did. They aren’t. Turns out the bundle price is exactly the same as the price if you bought each item individually. The psychology of the sign causes most people to believe they will save on the bundle. They don’t, but sales increase.

As I said in an earlier post, if people were rational, prices would be too.

Mitch

Posted in Pricing | Tagged , , , , , | Leave a comment

If My Marketing ROI Is Going Up, Why Are Sales Going Down?

That is the basic title of an article in Advertising Age yesterday. The title, of course, got my attention. I was pretty sure I knew the answer, but decided to see what the author had to say. Sure enough, while she was more elegant, the bottom line is simple:

  1. Marketers are measuring the wrong things.
  2. Marketers are misleading themselves and their management to believe ROI is improving.

The only way ROI can actually go up if sales (the metric that matters) go down is if Marketing was spending a lot less to get good results. If that were actually true (which it isn’t), then it would be sensible to invest even more in Marketing (assuming there were more good things to do, or one could do more of the things that were working), so that sales would go up instead of down.

The article suggests it’s a paradox. It isn’t. It’s bad math or bad measurement … or both. We have several articles on our website about the ability for mid-market companies to use much more sophisticated data and measurements today so that you are not mislead, or made to look foolish.

Mitch

 

Posted in marketing performance management | Tagged , | Leave a comment

A Downside to Big Data and Data Mining for Marketers

By now anyone who is a marketing professional knows that analytics, big data, data mining etc. are key tools that must be mastered. Unfortunately for too many it has become a crutch or excuse to stop thinking. Another downside is that too many marketers spend even less time than they did before “observing the native in its natural habitat.” They are relying almost exclusively on “data” to drive their decisions. I am a fan of data driven marketing, just not exclusively.

Another “downside” to this reliance on data is unintended consequences. Facebook has been selling ads for a while. One of the things businesses like about advertising on Facebook is the ability to target specific audiences. Facebook really does have way more information about their users than most users want to realize. That information is provided to advertisers to target. So far, so good.

However, this reliance on data by the people at Facebook caused a hugely embarrassing situation for them: turns out you could target people who hate Jews specifically. Turns out one of the targeting options was field of study. Over 2,000 people had listed their field of study as “Jew hater.” In addition the algorithms that Facebook used to help their advertisers target the right people included “why Jews rule the world” and “burn Jews” as fields of study that could be correlated to Jew haters.

Did Facebook offer this service on purpose? Of course not. In fact they have removed field of study as a targeting choice. Previously, their data had allowed people to exclude certain ethnic groups from their ads. They stopped that eventually as well.

How did this happen? Reliance on big data and suspension of critical thinking in my opinion. Data is good. Data without critical thinking and first hand observation as a supplement, can be misleading.

Mitch

Posted in marketing performance management | Tagged , , , , , | Leave a comment

Another Example of the Power of Focus

Over the years I have written several posts on the power of focus. (Heck there is a category for it on the blog page). Today’s example is Chili’s which is reducing its menu by 40 items from 125 to 75 because “Over the years, like many bar and grill chains, Chili’s chased consumer trends, expanded the menu and tried to be all things to all guests, therefore compromising execution and resulting in a fuzzy food reputation,” Chili’s said in a statement.

Focus brings power. As our former team member, David Palmer was wont to say, “There is no business that can’t improve its performance by narrowing its focus.” In n Out Burger with its original menu outperforms McDonald’s with its over-bloated menu (which it is reducing).

Reread some of my earlier posts on this topic and then ask yourself, where should you be focused.

Mitch

Posted in Focus, retail | Tagged , , | Leave a comment

Focus and Say Cheese

10798951 – pizza.

As I have started almost all the posts in this series on focus, … focus matters. Pursuing top line growth to impress Wall Street usually  fails as the top line grows (if it does), while the bottom shrinks, or at least profit margins do. The power of focus is irrefutable.

And here yet is another example: Leprino Foods. What is their focus: mozzarella cheese for large pizza chains. They are in fact the world’s largest producer of pizza cheese. A billion pounds a year of mozzarella. They have 85% market share and profit margins that are much better than most dairy industry companies. All thru relentless focus.

The company has four key values: quality (they have never had a recall which only a handful of dairy companies can say); service; price (40% of the cost of a pizza is in the cheese); ethics. Their absolute focus on mozzarella for pizza allows them to innovate (they have over 50 patents) and know how to help their customers so selling is “easy.”

They make more money than others, have billions in revenue and a laser focus. Meanwhile “smarter’ companies keep looking to diversify, and meanwhile don’t make money.

Mitch

Posted in Focus, Uncategorized | Tagged , , , , | Leave a comment