Know Your Target Customers: Subaru Thrives in Great Profit in Great Recession

Positioning a product to target certain market requires a great deal of diligence. A marketer starts by selecting a market as her target, taking into consideration of the company’s vision, product fit, competitive landscape and its winning roadmap. Once the target market is decided, the marketer examines the needs, wants and demands of the target customers at multiple dimensions and decides how it creates, communicates and delivers value to its target customers. By courting financially solid buyers with a taste for the quirky, tiny Subaru of America sped through 2009, logging record sales and market share along the way. Last year Subaru became the 11th most popular U.S. auto brand, up from No. 19 just a year earlier. Record sales in cities like Los Angeles, Atlanta, Dallas, and Orlando helped make Subaru the fastest-growing mass-market car brand in the U.S. for the last two years. It's the growth leader again so far in 2010 — up 41 percent through April. For the first time, its unit sales exceed those of such better-known brands as BMW, Lexus, Mazda, and Volkswagen…


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Targeting Different Markets with Different Products: Starbucks Rebranded Seattle's Best Coffee

Prudent marketers understand that customers have diverse needs and wants and, therefore, products have to be positioned to target selected customer segment(s). What if a business wants to take market share beyond its target segment(s)? Starbucks has saturated the market that it currently occupies, showing stagnant demand. In an attempt to drive future growth, the company is brewing a fresh image for Seattle’s Best Coffee, a specialty brand it acquired in 2003. The coffee giant last month kicked off a rebranding effort, which includes a simpler, more contemporary logo and design. It hopes to grow Seattle’s Best into a billion-dollar business by expanding it to fast-food channels, convenience stores, drive-through restaurants and even vending machines this fall. Rebranded Seattle’s Best Coffee is positioned as a premium set of products, which will be complementary to and not competing against the low-cost coffee products currently carried by those marketing channels…


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Google Fails to Revolutionize the Cellphone Market

Business model is one of the critical elements in business success. An effective business model is dictated not only by the grand strategy of the business but also by the key attributes of the product and the key preferences of the target customers. Google’s decision to bring an end to its online sales of its Nexus One handset shows how a poorly-configured business model led to a failure in marketplace…


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Five Steps for Consumer Brands to Earn Social Currency

Consumer brands can earn social currency. Launching promotional campaign using social media is, however, just the beginning. Effective social media campaigns are achieved by acting upon five key fundamental themes: 1) advocates trump followers – building promotions around turning real people into online celebrities and then endorsers; 2) the social context during consumption matters – creating relevance in consumer's daily life; 3) not every brand should be social – distinguishing those which can have upside in social currency, 4) social tools are a means, not an end – converting viewers into evangelists; and 5) gimmicks marginalize trust – focusing on present true values to consumers…


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Why Consumers Spend Their Precious Resources on Lavish Purchases during Recession?

Feeling powerless is an aversive psychological state that people try to eliminate or diminish. Behaviors such as associating oneself with figures of power, wealth and fame and emulating what they do are driven by the desire to build status and compensate their feeling of lack of power, although they usually leads to decline in self-confidence. Researchers found that, in a time of economic downturn, consumers are more likely to feel powerlessness and, therefore, spend beyond their means to purchase status-related items. Their experiments showed that subjects who experience a sense of low power 1) were willing to pay a higher price to acquire status-oriented items, like silk ties and fur coats, but not regular products like minivans and dryers; 2) expressed increased willingness to pay for a picture of Northwestern University, but only when it was portrayed as an exclusive item providing high status, rather than a mass-produced item available to anyone; 3) were more likely to perceive status-oriented products as providing a sense of power. As marketers determine target market segment and develop persona, they need to take the compensatory consumption into consideration…


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Back to the City

Business success depends highly on discovering and seizing opportunities. Opportunities, on the other hand, are associated with events, changes and trends. If someone tells you that he is going to move to an urban area, it is not an isolated incident (event); it actually represents a change in mentality and a trend of urbanism. Young workers and retiring Boomers are actively seeking to live in densely packed, mixed-use communities that don’t require cars – that is, cities or revitalized outskirts in where residences, shops, schools, parks, and other amenities exist close together. Prudent executives are adjusting their strategies and market focuses accordingly…


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Apple Unveils Ad Platform and Phone Software

To better cultivate its apps ecosystem, Apple demonstrated its iAd which places ads on applications so that the third-party apps developers do not have to worry about building advertising components in their applications and placing ads themselves. Mr. Jobs says. “We have figured out how to do interactive video content without ever taking you out of the app… We think people are going to be a lot more interested in clicking on these things.” Apple will host the ads and give developers 60 percent of the ad revenues, keeping 40 percent…


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Developing a Social Media Strategy: 6 Lessons from Kodak

Consumers are talking about your brand in social media channels, and you need a strategy to engage in these conversations. Ignoring them – or jumping in without a plan – is a missed opportunity. Kodak, whose direct sales and online share-of-voice are on an upward trend, learnt 6 lessons: 1) listen before you speak; 2) add value when joining the conversations; 3) don’t be intrusive; 4) use real people behind the brand; 5) treat consumer and business customers differently; 6) transparency is paramount…


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Microsoft Office for Free?

Two years ago, I wrote to a Microsoft executive, urging the company to offer Microsoft Office for free. The idea is to deliver an online version of Office and provide links to highly relevant online information on the interface using user’s context for automatic search. Given customers’ concern with privacy, the most likely early adopters would be enterprise users who need to gather information from intranet. According to an IDC report, Microsoft has made a progress in this regard and the company is going to offer to corporate customers web-based versions of Word, Excel and PowerPoint for free early this year...


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iPad for Enterprise?

My students at University of Washington are fascinated by customer perception. If customer perception is more or less mysterious to you as well, take a look at that of iPad. It is supposed to be about web surfing, email and photo and movie watching experience for consumers, according to Apple’s promotion campaign. Customers, however, want a stretch – taking it into an enterprise product category. With over 150,000 applications already produced and much more on the way, customers’ “wrong” perception has a pretty good chance to be proven right…


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The Devil Is in the Detailing

Executives who strive to improve the effectiveness and lower the costs of their businesses are often frustrated by the fact that they have run out of ideas. In fact, opportunities can often be uncovered by diving down to the details. In pharmaceutical industry, for instance, marketing efforts usually focus on physicians who prescribe higher volumes of drugs. However, an analysis of prescription data suggests pharmaceutical companies should focus on a more refined target: heavy prescribers who treat higher percentages of new patients, since patients are seldom switched to a different drug within a specific drug class, even if they switch doctors and the likelihood that a physician will choose the last drug prescribed for a patient is greater than 90%...


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Choosing a Marketing Plan: Traditional or Social Media?

Social media has been increasingly considered as a media for marketing promotion. Marketers are eager to learn whether it actually works. EPC Cigar Company decided to promote its brand using social media, which allow the company to communicate directly with cigar buyers, retailers, tobacco growers and others with whom it does business. “To have a lot of people talk about the limited-edition cigar after only a few months, in a market that’s challenged, in an industry that’s not really growing, is very exciting,” The head of the ad agency said…


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The Art of Persuasion - Aligning Consumer Goals with Level of Abstraction

Marketing professionals understand the roles of selective exposure, comprehension and retention in marketing communications. They are interested in finding out the most persuasive types of messages. For example, would you be more likely to buy a TiVo if an ad described it as offering you freedom or if it explained how you could replay sports events? Research indicates that the key to an effective message is finding the fit between the consumers’ goals and the level of abstraction…


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Is Nexus One's Rocky Start a Product of Google's New Approach?

Initial sales figure of Google’s Next One was not impressive. It was significantly lower than that of iPhone 3GS, Droid, and My Touch 3G. But Nexus One definitively is trying to be a different method of distribution, one done only by Google and directly to end users…


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Windows Phone 7 Spurs Microsoft's Mobile Strategy

Microsoft recently announced the new version of its phone operating system, Windows Phone 7. It’s a sweeping redesign, coupled with an aggressive new partnership with handset makers and mobile carriers. Initial reviews are not only positive but actually excited…


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Top 10 Tools to Measure User Experience

Pragmatic Marketing proposes 10 tools for user experience improvements: 1) heuristics; 2) expert review; 3) web hits/usage; 4) user testing; 5) session analysis; 6) online surveys; 7) A/B and multivariate testing; 8) eye tracking; 9) emotion/trust measurement; 10) neuro-marketing…


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Targeted Ads in the Works

Marketers have long dreamed of a day when they can stop blasting ads out to the world at large, and instead send TV commercials for Pampers, Chevrolet and Barbie dolls only to those people in the market for diapers, a new car or a child's toy. Comcast Spotlight, the ad-sales unit owned by Comcast Corp., and Starcom MediaVest Group, the media-buying unit of France's Publicis Groupe, have completed a second test of technology that delivers different ads to different households, and they say the ads in both cases have proved to be about one-third more effective in keeping audiences from tuning them out. They also believe the time is drawing nigh for discussions about creating a business model around the new ad format…


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Marketing In a Weak Economy

Experts' views from the Wharton Marketing Conference: 1) recent research shows that 80% to 90% of people are willing to trade off or trade down when it comes to shopping and many of those customers might not bounce back with the economy; 2) trading off and trading down is not happening across the board - the middle range of products has suffered far more than the top-of-the-line items; 3)general consumer pullback masks some interesting dynamics that marketers could benefit from. People are starting to change what they're doing with their time and that's where opportunites emerge. The experts discussed about the issues of high consumer anxiety, threat of private labels, and keeping up with consumers...


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Why Be an Ethical Company? They're Stronger and Last Longer?

A focus on short-term profits to the exclusion of all else led to the current financial crisis. And guess what? Companies with the steadiest moral compasses have sailed through it…


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Can You Say What Your Strategy Is?

It’s a dirty little secret: Most executives cannot articulate the objective, scope, and advantage of their business in a simple statement. If they can’t, neither can anyone else…


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