Thursday, January 31, 2008

99 bottles of beer? At a Discount too!

In one of our Core Classes [Marketing I think] our team came up with an analysis of the Wine industry-competition, should the winery sell to the big guys? Should they not? And so forth. It was quite fun, and it certainly helped that one of us was earlier in the wine industry [hoy@Emmanuel]. Now here is something along the same lines on the beer industry—Costco is looking to invest in private-label beers, using local Gordon Biersch as its brewer. See related article here

I love that a retailer chain like Costco is thinking about its own beer. Granted, am not a Costco member [I would probably save on kitchen rolls at best, and my place is too small to stash 50 rolls of everything]. But they have a ridiculously loyal customer base—who are obliged to enter Costco for every need [that yearly fee? Yep. That’s the catch]. And its not a bad deal at all, if you are buying enough things of value. Add beer to that mix [well, maybe a refrigerator too..i doubt they sell anything less than a 12 pack]. It’s a fairly popular drink, its usually bought in bulk, and bringing in the brand of Gordon Biersch only convinces the hesitant buyer into plonking it into their oversized carts already. And they are not, at this point, really competing with other retailers manufacturing their own beer brands either.

And for anyone who has been just reader on this blog, how about responding with a yes/no to the following question--- ‘Are you a Costco Member? Would you buy their brand of beer’?.

Tuesday, January 29, 2008

How Green is Your Valley?

The FTC is updating its Green Marketing guidelines, focusing on unsubstantiated environmentally friendly claims, or what it calls ‘Greenwashing’. High time, I would think. I am not exactly a grass-green citizen, but yeah, I do my part of cloth bag carrying [ok, I do like the Trader Joe’s raffles as well] and hop into the ever-adventurous SF buses on a regular basis. But I have to admit, when I see the ‘Green’ message pop up from the time I use Webex [the claim is they reduce air-travel by making folks collaborate via Webex instead] to my latest ‘Green’ Febreeze, I want to stop and think about what is the real definition of Green here. Not to mention the guilt-industry that spawns off—case in point, British Airways [after you book your flight of course] pops up a message asking you to offset this transcontinental flight carbon footprint by planting Olive trees somewhere. Do I know where? Nope.

I might be one of the few hit by ‘Green’ Exhaustion, but yes, define what Green is before making claims. I wouldn’t think its an easy job for the FTC though---what Green is for a company like Zipcar is very different from what Green is for Trader Joe’s or Merry Maids. I would think it should be a culture within the company that consciously calls itself ‘Green’, to prevent dreaded backlash from the pro-Green consumers. It cannot be just ‘Green’ness in how they create the product. What does ‘Green’ mean to you? How important is that label to what you purchase?

The 22 Immutable Laws of Marketing

The following rules were taken from The 22 Immutable Laws of Marketing, by Jack Trout and Al Ries. The book provides time-proven marketing advice and is a must read for any marketing executive.

What are your thoughts? (ie, is it really better to be first, than it is to be better?)

1. It is better to be first than it is to be better.
2. If you can't be first in a category, set up a new category you can be first in.
3. It is better to be first in the mind than to be first in the marketplace.
4. Marketing is not a battle of products, it's a battle of perceptions.
5. The most powerful concept in marketing is owning a word in the prospect's mind.
6. Two companies cannot own the same word in the prospect's mind.
7. The strategy to use depends on which rung you occupy on the ladder.
8. In the long run, every market becomes a two horse race.
9. If you are shooting for second place, your strategy is determined by the leader.
10. Over time, a category will divide and become two or more categories.
11. Marketing effects take place over an extended period of time.
12. There is an irresistible pressure to extend the equity of the brand.
13. You have to give up something to get something.
14. For every attribute, there is an opposite, effective attribute.
15. When you admit a negative, the prospect will give you a positive.
16. In each situation, only one move will produce substantial results.
17. Unless you write your competitor's plans, you can't predict the future.
18. Success often leads to arrogance, and arrogance to failure.
19. Failure is to be expected and accepted.
20. The situation is often the opposite of the way it appears in the press.
21. Successful programs are not built on fads, they're built on trends.
22. Without adequate funding, an idea won't get off the ground.

Monday, January 28, 2008

New UC Davis Bay Area Marketing Association Blog!

Welcome to the brand new Bay Area Marketing Association Blog! We anticipate this blog being an active, fluid site that we can use to exchange information/ideas, ask questions, give advice and get all the current information on Marketing Association Events and announcements.

Direct-to-DVD, no Longer an Ugly StepBrother?

NYTimes reports that 'direct-to-dvd' is no longer the loser tactic here. I remember movie-discussions that went 'whatever happened to that flick with xyz in the main lead?' 'Oh it went direct-to-dvd' [scoff]. No longer, NYTimes reports.

Interestingly, the direct-to-dvd strategy depends on the potential for a multiplex draw of a potential sequel. Can be a successful sequel? Make it. If not, push it out to DVD. But DVD sales are noteworthy in recent times--and the window for DVD releases is going down all the time, pegged at 2 weeks last i checked. Movie-theatre erosion? Most certainly. Not many people are going to the movie-theatres--with 45 or 60 inch screens adorning walls of homes, its an almost theatre-like experience, i am told [sorry, I still like the movie-theatre experience. Call me old-fashioned :-p]. And DVD release channels are increasing widely--from direct purchases, to viewership via PPV or movie rentals like Netflix, consumers are offered a plethora of choices to view their desired movies in the most cost-effective way possible.

And those exclusives! commentary, extra-clips, add on the goodies for the DVD-friendly audience to sweeten the deal. Movie directors like Quentin Tarantino spend months just working on their movie DVDs, understanding the cult-like potential for some of his movies. His recent 'Grindhouse' movie effort split up the DVD revenue by making it two separate DVDs--each for a segment of the two-sided movie. What's your movie-watching preference? Are you frequenting those mom-and-pop DVD stores still? Are you a netflix user? Do you pay 10$ in theatres every single time? Why?

[Eyeing the Oscar line-up]

Loyal to your Morning Fix?

MediaPost recently reported that McDonalds is entering the 'Coffee-wars', slated for a big stand-off in 2008. An excerpt here [MediaPost is a fantastic marketing and advertising resource online, free subscription btw]
"MCDONALD'S, WHICH TOOK SOME COFFEE ground from Starbucks and Dunkin' Donuts last year, has announced that it will install coffee bars with Starbucks-like baristas in 14,000 U.S. locations. Along with drip coffee, McDonald's will be serving lattes, cappuccinos, and frappes."

Starbucks made great headway in building loyalty for its brand--I know the second floor Peet's coffee compels some of the employees in my office to regularly take the elevator up to the third floor Starbucks-coffee machine, and less frequently, the opposite happens. However, loyalty erosion seems swift--Starbucks lost ground in loyalty according to the loyalty brand index just in the last year. They are starting to build their $1 coffee test [for the 'i am not paying 4$ for just coffee' people] and Dunkin Donuts is on the offensive, trying to reestablish its Americanness and its price-friendly coffee lineup.

McDonalds' jump into the fray, however, fails to impress me. They tried to jump into the 'salad' bandwagon and the 'fat-free dessert' bandwagon as well, with their USP falling back firmly on their $1 meal and burgers. However, its interesting that the likes of Starbucks is fraying its loyalty a bit. I would think building loyalty is now a lot more than just building cute cozy cafes, its a number of additional aspects to service. Has Starbucks deviated too much into the land of 'mocha-strawberry-blueberry-cinnamon' zone, losing out on the core coffee customers? Are elements like free wi-fi becoming more critical than Starbucks expects? I would think both--especially on service points like free-wifi. Starbucks has been busy building partnerships with T-Mobile for paid wifi for customers, and Apple for free itunes downloads--great! But what percentage of customers are T-Mobile and Apple users? If the mom-and-pop shop down the street offers free wi-fi with 2$ coffee and scone, is that a better alternative? I would think so.

What do you think?