High-Value Retail Brands and Fashion Hops

Wal-mart is revisiting fashion wear once again. Remember how Target suddenly got all excited about Isaac Mirzahi? [designer dude. Designed clothes for Target. Big deal] Well, Wal-mart has a tougher sell—designer clothes are typically more expensive than the usual t-shirts and low-priced garments they sell currently. But get this, according to WSJ, higher fashion apparel and bedding have higher profit margins than other merchandise—almost 32 percent [10 percent above any other category].
I like Target [Wal-mart not so much, but that’s also coz I know the Target store map better. Go figure!]. I go there to buy my home supplies typically…sometimes cereal and such. Clothes? Not quite so much unless am looking for a basic black tee and the likes. Would I do an afternoon’s worth of fashion shopping there? Most likely not. Does the ‘designer’ label convince me? Maybe it will. The trick is, with places like Target that have a lot of value-shoppers anyway, there is no real differentiation between the apparels and the ‘designer’ apparel sections. Somehow I think that’s key—I don’t want my slightly pricier designer apparel bundled up near the discount section, where is the exclusivity of purchasing something that costs more?
I think with most of these stores, in-store design is never given a second thought. And it should be given its due credit—if you jump into fashion lines, mark out the space in your store that will reflect that attitude and make it desirable. Isn’t perception supposed to be everything?

Pharma Companies and Marketing

Pharma companies and Marketing

Pharma companies and marketing are a tricky combination. I came across a discussion on this in two separate instances last week. One at a work-related event and the other in discussion in class with Prof.Naik. Some interesting observations:
-Pharma companies seem notoriously out of touch with consumer perceptions. You only need to look at their ads on TV to realize that ‘differentiation’ is a tough sea for them to navigate [some ED ads notwithstandingJ].
-Pharma companies need to analyze the chain of events from the time a doctor prescribes a medication to the actual purchase of the medication—what are the gaps? You might have noticed this at your own doc’s office. Samples that I receive or prescriptions are not always filled, and heck the Walgreens pharmacist oftentimes recommends an alternate brand [Consumer figures, pharmacist probably knows better. Docs are wooed by sales folk all the time anyway right?].
-As Prof. Naik says, Pharma brands are only recently new to the concept of advertising [and heck, do they have some serious legal issues to overcome before each ad they put out]. Companies deep in research and science and studies are only recently opening up to ‘marketing’ and ‘advertising’. So predictably takes a while. But if I were to suffer from restless legs syndrome, I doubt this ad would convince me to consider medical help [and hey, couldn’t they just send folks to a website for disclaimers?]

Didn't like Crystal Pepsi? How about Green Coke?

Add one more company to the thousands of others who are attempting to redefine their brand as eco-friendly. Although this time, it's one of the largest ad spenders and marketing savvy companies that the business world has ever seen. Coke is joining the green push, although they are going about it a different way. Coke's new 10 million dollar campaign attempts to broaden the definition of environmentalism and instead promotes the idea of "sustainable well-being".

In a recent article on Adage.com, Michael Bush describes Coke's new campaign as an attempt to paint the beverages giant as a social "good guy" which is concerned about meeting consumer needs and supporting local educational and sports programs as well as the environment. "We're thinking of well-being from a mental, physical, community and environmental perspective that encompasses every part of our North American business," a Coca-Cola spokeswoman said. "We're using this to talk to all of our stakeholders and show our desire to be a better partner to all of them."

Last month Sapna posted a blog which ended with the question, "How important is the [green] label to what you purchase?" I'd like to follow that up with another question; As a Coke shareholder would you rather Coke spend their (and your) money on this green campaign or on initiatives that more directly improve the bottom line? Sure, this campaign may increase revenue eventually, but isn't the eco-friendly concept too played out for Coke to get much ROI from this campaign?

Regardless of the outcome, the bottom line is that companies that begin painting their brand green need to insure that they actually follow through on this commitment and it is not simply lip service. It appears that Coke really intends to be the social "good guy", but it may take consistent effort and action to convince skeptical consumers and green advocates that they truly have a green thumb. Illustration by Marc Simon

Sign up for the Google Challenge!

Hi Marketing Association Members,

Want to be a part of the Google Challenge and help a local business with its marketing plan?

Well, here is your opportunity to shine!
Google is sponsoring the Google Online Marketing Challenge, which provides a compelling learning experience for students. Additionally, you'll compete with other students from around the globe for a chance to receive a trip to the Google Headquarters in Mountain View, California, with 7 nights accommodation in a 5-star hotel in San Francisco.
Here's how the Challenge works:teams of students will receive US$ 200 in Google adsto drive traffic to a business website of their choosing. Student teams willcompete with other teams from their institution along with student teams from allover the world. Teams can run their campaign over any 3 consecutive weeks between the 10th of February and the 24th of May 2008. Teams must submit their final report before the 14th of June 2008. Global and regional winners are announced July 2008.
This is not a simulation; teams gain real-world experience with a
real client. Google provides US $200 in vouchers, teaching materials and other resources.
The Challenge is open to undergraduate and graduate students teams anywhere in the
world. You will find details at http://www.google.com/onlinechallenge/
Sign up information: Please let Satish Ramachandran (satishr_00@yahoo.com) and Rena Chhit (rena.chhit@gmail.com) know if you are interested by February 18th. Information about teams: We've registered for 8 teams that can be comprised of 4-6 members, so if you're interested, there's plenty of room! Feel free to form your own teams, or if you'd like, we can place you into groups based on your location. Please keep in mind that you will be working with a local business, so you may want to work with people that live in fairly close proximity to you. We hope you will take part in this exciting opportunity! If you have any questions about the Challenge, please email Satish and Rena.

I'll take the yellow and blue, no wait, maybe the black...

By now has everyone seen or heard about NikeiD? If not, let me explain. NikeiD lets average Joes like myself play make-believe rock star by allowing consumers the ability to customize their shoes and apparel. Always wanted to rock your initials on a pair of kicks? Now you can. Always liked the way purple and green looked together, but could never find a shirt with that color combination? Now you can have Nike make one just for you.

This, in my opinion, is genius. The Marketing folks at Nike have uncovered a key branding truth here. Your Brand is not what you say it is. It's what your customers say it is. We've all heard that "Perception is reality" and from a branding standpoint, this is absolutely true. Granted marketers can attempt to influence and control their brand perception through various marketing strategies, but the bottom line is that people will always view your brand through their lense.

By allowing consumers to customize their hightops, muscle shirts soccer cleats, etc., Nike has found a way to give consumers the Nike brand as a blank canvas and then provided a way for customers to express themselves using the brand. Brilliant.

Book review: Microtrends

I finished reading Microtrends: the small forces behind tomorrow’s big changes, by Mark Penn. The book was authored by the pollster/political strategist who identified the “Soccer Mom” segment in the mid-90’s. These moms turned out to be the swing voters in Clinton’s 1996 re-election; Clinton tuned his message to address the concerns of these undecided voters and win their votes.

In Microtrends, the author identifies 75 new trends culled from journals, articles, observations, and polls. The premise of the book is that only 1% of the population (3M people in the US) can create enough momentum to start a movement or launch a business. Each microtrend won’t necessarily transform into a major trend; rather, each represents a changing mindset or attitude that can impact many people beyond those directly associated with the trend.

With each trend, the author provides some stats for scale, attempts to provide some explanations, and identifies some implications as well as some potential market opportunities. The book is a quick read and provides good food-for-thought on market segments and market opportunities. It could generate some ideas for the upcoming New and Small Business Ventures course (Summer ’08). The book’s format, with 75 chapters covering the 75 themes, and each chapter about 4 pages long, makes for very convenient “in-between” reading.

Global Markets-What you sell defines how you sell

Allright, I admit my interest in Global marketing arose from a work requirement, but heck, McKinsey articles are not always my bedtime read [I know, biz school is supposed to make me think deep thoughts 24/7 but I refuse to fill my bedside table with research articles by consultant as yet]. My personal interest in companies reaching out to Global markets arose from the fact that I used to live in India when McDonalds made its entry [yep, i am not ashamed to say I made my weekly trek and stood in line for 45 minutes for a McDonalds meal]. Much as the advent of a Global company caused excitement, I believe its strong success arose from the fact that McDonalds customized. There was not a single McMenu in the country that served hamburgers--nope! there were pizza pies, and veggie pies and Veggie burgers.

Cut to 2007, opportunities in global markets for clothing retailers are described thus in the McKinsey article [subscription required]

""China: Small budgets, small wardrobes" shows how the country’s fickle consumers and strong local competitors threaten to undermine the multinationals’ efforts.
"India: Shopping with the family" explains the different roles that Indian women, men, and children play in making decisions about apparel and the way the market there is evolving.
"Brazil: Fashion conscious, credit ready" describes that country’s enthusiastic shoppers, as well as the efforts of banks and retailers racing to meet their credit needs. "

I related the most to the description of the Indian families, but note how differently the multinational retail chains, for example, would need to customize their offerings based on spending patterns. Last I checked, about 10% of India's retail sales came from 'chain' stores-yes, urbanization is changing all that. But remember, rural population and semi-urban cities are still strong.

So in effect, if a Macy's were to think of inroads into global markets given the sinking numbers in US, they could not carry forth their US marketing tactics to each of these countries. How different would the products need to be? How different should marketing and service be? [altering is a BIG necessity in Indian clothing biz] and how would loyalty programs change? Hardly any retail store in India offer 'credit cards' [there wouldnt be many takers anyway]. They do, however, have redeemable point cards [a HUGE hit]

The store to watch out for , I believe, is Wal-Mart. This is the only truly diverse brand I have seen so far, even in how it communicates to its audience in US. I see regular ads for Wal-mart on Indian channels. And their entry into countries like China includes customized offerings like 'bazaar like' fish markets and in India, they plan for a 'market-like spice stall'.

Yep, there are a lotta crazy things going on with Wal-Mart. But they get the idea of 'diversified marketing' and 'customized offering' in a way no other retail store has, so far.