The Tom Dougherty Blog


Posts categorized “Marketing”

Predictions for 2014

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Tom Cruise walks through a shopping mall in 2002’s Minority Report where his identity is at risk by personal, interactive advertising as he walks through each store.

The movie is takes place in 2054, but it might as well be 40 years earlier here in 2014.

As we embark on a new year, in which the personal and the technological have taken over, I’ve got a few predictions of what we’ll see in the coming 12 months:

15732588-happy-new-year-2014-message-over-black-backgroundRetail stores will become more interactive: Not quite like the high-tech version in Minority Report that says your name when you walk in, personal interaction tactics will become the nadir for retail stores. Retailers are clamoring for ways to keep customers from just browsing, then ordering products online from somewhere else. Recent holiday shopping numbers showed that in-store purchasing was down this year while online sales were up. That’s cause for panic.

You already see in-store, video demonstrations of products in stores, but I predict retailers are going to go one better. It’ll be a sort of customization of the product that you build – much like what car manufacturers do on their websites – and/or interaction that tells you where to find those products, lists costs and enables you to either buy there or order for later pickup/delivery.

The online streaming services will begin showing ads. Hulu already does this, mainly to keep its subscription prices low and even offer a free version. But don’t be surprised if Amazon Instant Video and even Netflix flirt with the idea. It’s not so much that the services themselves are hurting for income. It’s that there’s an opportunity for advertisers in a world in which advertisers are looking for new avenues to promote their products.

With TV advertising less relevant, advertisers will do just about anything to reach audiences. If there’s an opportunity, they’ll take it. Jackals.

For B2B companies, sales reps will become less important. Many B2B companies will tell you they live on the relationships that sales reps build. In fact, B2B customers are becoming less interested in that kind of contact and more interested in things being made simple.

In the rush to increase sales, many B2B companies have large sales staffs to fill in any gap or expertise they think the customer needs. Instead, B2B customers are looking for fewer sales reps, concise messages and the ability to order online.

Those are just a few things I expect to happen this year. There are other subjects I’m sure I’ll cover in that time frame, from the use of mobile video to the return of the jingle to the importance of music in attracting younger generations.

Technology has forced the world to change at a faster rate than since the Industrial Revolution. Attempting to adapt to those changes, companies will falter, while others will rise. Looking ahead and changing are the keys to remaining relevant in 2014.

There is one thing this blog is not: Quality.

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I’ve decided that I hate the word quality.

I know. Hate is a strong feeling to have about anything. But, when this word is plastered on billboards or lingering around slogans, I can’t help but feel a welling sense of anger.

Is there any term as commonly used and equally as meaningless?

Old vector round retro vintage labelHaving a sense of quality should be an absolute with any company seeking to steal market share. It, however, shouldn’t be a measure of differentiation, ever. Consumers should expect that what you do will have a degree of excellence (or quality) stamped on it no matter what. If not, you shouldn’t be in the game to begin with. So when I see the term quality, I see a brand that has taken the easy way out, and lacks all originality.

Here’s the gist of what I mean:

You may not realize this but at Wendy’s, “Quality is our recipe.”

Ernst & Young will offer you, “Quality in everything we do.”

Oh, and by the way, at Ford, “Quality is job one.”

Here are some of my own, which most likely you could find in the marketplace, too:

“Quality Service, every time.”

“Quality is our middle name.”

“Where quality comes first.”

It’s time to take meaningless drivel like this out of the equation. So listen up, those of you who believe “quality is key” — it isn’t!

The way manufacturers can win this holiday season

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It may be only late October, but the holiday season is just about upon us – whether we like it or not. Halloween is next week. The following weekend, watch for the rush of holiday TV spots.

Manufacturers have some interesting strategies to consider this year. The holiday season will be shorter because Thanksgiving isn’t until Nov. 28, with Black Friday on the eve of December 1. That means more sales have to be squeezed into a shorter period of time.

black-friday-macysHow do they do that? Some marketers are suggesting manufacturers fight a price war earlier in the game. But that just sounds like a regular Black Friday to me (or Cyber Monday, if you’re so inclined). That strategy is intended to get consumers to buy early.

A more interesting strategy is to make your product scarce, then steadily your product more and more available. Here’s what I mean: Already, the pre-orders for the PS4 are already sold out. There are rumors that Apple will announce new iPads tomorrow, which if true would probably mean pre-orders.

The idea of pre-ordering suggests, “If you don’t sign up now, you might not get one.” Then there is the mad scramble when they are available at a limited rate, followed by a steady rollout to keep the urgency in place.

This strategy plays on the value of scarcity. Those things that are scarce are considered more valuable. It’s one of the reasons why diamonds are considered so desirable. They are scarce.

There are other factors manufacturers – and retailers – must consider this season, but fighting a price war is not the way to win in any holiday shopping season. Being coveted is.

Burger King continues to imitate the rest

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In such a ho-hum market as fast food, I am constantly amazed at the ridiculousness of its participants. Burger King, the king of switching out new menu items, recently announced it is going to roll out a new limited-time sandwich called the BK Rib Sandwich this summer.

Uh. Ever hear of the McRib?

What is so bizarre is that Burger King believes it can out-innovate the fast food market. Its executives have flat-out said it. But what they call innovation, I call copying.

ht-bk-Rib-Sandwich-kb-130515-wmain-jpg_164628Let’s look at a couple of other innovative offerings for its 2013 menu: Sweet potato fries and a pulled pork sandwich – both of which can be found at Carl’s Jr. Arby’s have had sweet potato fries in the past. Subway and Hardee’s both have pulled pork sandwiches.

To compete in the fiercely competitive fast food segment, it takes more than trying to out-menu your competition. People don’t eat the McRib sandwich only because they like it. They eat it because it comes from McDonalds and McDonalds has been smart about practically building a mythology around it.

Burger King is currently number three in the fast food market, trailing McDonalds and Wendy’s. To overcome them, BK must stop copying the market leaders and be different and better. Not just in food, but in the way it looks, feels, sounds and acts. Time to get with it.

The HTC One tagline for its phone is a bit off

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Nokia just released its HTC One phone. While the instrument looks good, its marketing tagline doesn’t work: “Everything your phone isn’t.”

HTC-One-PhoneIt’s at odds with HTC’s brand theme of “Quietly Brilliant” because there is nothing quiet or understated about “Everything your phone isn’t.”

Also, the tagline is about the phone, not the customer who uses it. That makes it easily forgettable. Potential customers will ignore it.

OK, HTC has produced a nice-looking phone. But the iPhone, Galaxy, Blackberry and Experia smartphones also provide visually appealing models, so a fetching phone doesn’t make the product viable. By itself, it doesn’t steal market share.

With that forgettable tagline, HTC won’t threaten its competitors.

Over emphasis on quarterly earnings is bad for business

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Marketing campaigns and business models change at dizzying speeds. Problem is, many are scrapped before the true results are known.

The culprit? Quarterly earnings.

Shareholders use quarterly reports to judge advertising campaigns. That’s a mistake. Successful marketing moves should ultimately increase earnings, but one bad quarter doesn’t mean the strategy isn’t working.

Take JCPenney, for example. The retailer is in dire need of revitalization. Last year, the company unveiled its “square deal” initiative, which offered everyday low prices instead of coupons and other discounts. Once the first disappointing quarterly report came in, impatient shareholders stomped their feet and demanded a return to sales gimmicks.

Thanks to quarterly reports, long-term strategy and shareholders are often pitted against each another. As a result, there is little chance to see big change.

Zipcar and Avis can be a success but will depend on brand

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With the acquisition of Zipcar underway by Avis Budget group, Avis should take this time to consider how closely the Zipcar should be integrated. The joining of Avis, a traditional car rental company, and Zipcar, a car sharing company in which members pay for access to a network of Zipcar vehicles (located throughout large cities such as Portland and Chicago), is a match that makes sense from a business sense but one that will need more attention from a brand sense.

From a business sense Zipcar’s can expand its fleet easily with vehicles already in use by Avis, and Zipcar can help Avis diversify itself a bit from rental competitors like Hertz.  However, things are a bit less cut and dry when it comes to brand. From a brand perspective Avis is about utility and Zipcar is about a lifestyle.zipcar brand avis brand

The brand considerations are more about context than anything else. Take for example the Avis customer. They are someone in a position in which a car rental has become a necessity. The context in which they choose the Avis brand is most likely at an airport and in that moment, either due to business or vacation, a rental vehicle is needed. Zipcar on the other hand is about the day-to-day. Zipcar is for the city dweller where vehicle ownership might simply be impractical. The end result for an Avis customer and a Zipcar member might be the same (each gains use of a car for a period of time), but the context is very different.

There is certainly a commonality between Avis and Zipcar, and from an acquisition standpoint, it should not have many people scratching their heads as to why. But speaking as someone who first sees brand implications and then business implications, Avis needs to find the emotional thread that is shared between the Avis customer and the Zipcar member and should use that intensity to bridge the two brands. The fact that the two companies rent cars should simply be  filler.


Major changes are coming to the video game industry

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Over the past month, two pieces of news have caught my attention. The first was Sony’s purchase of Gaikai, a cloud-based video game site that allows big-named game titles to be played through an Internet browser. The second was that Ouya, an inexpensive game console that runs the Android operating system and Android-based games, is teaming up with OnLive to allow cloud gaming of some AAA content.

These moves have exciting and curious implications for the market. It’s exciting to see the industry rumbling towards digital, which will lead to the instant ability to play and be simple to use.

But how will the existing brands transition?

It will be interesting to see what, if any, integration Sony has planned between Gaikai and its next Playstation. Sony puts a lot of weight behind its high-priced hardware, using it to push new technologies. But streaming services, like Gaikai, don’t require much in the way of hardware. The Ouya is set to sell for $109 and that includes the processor chips, storage, etc.,needed to run Android-based games that would be downloaded to the unit. That $109 ticket price is quite a bit less then the $599 pricetag Sony slapped on the original 60GB PS3 in 2006.

Because of Ouya’s marriage with OnLive, Sony will have to think very strategically about how it utilizes Gaikai. If the company is too soft in its approach, Ouya has an opportunity to take market share. Sony needs to be aggressive, which means stepping out of its comfort zone and leaning more towards software than hardware.

There is a happy medium. Sony can achieve profits for its system and still retain preference for its brand, but if OnLive is successful at acquiring larger amounts of AAA content, Ouya’s existence will eat away at Sony’s margins.

Sony’s best bet is to champion the digital change rather than react to it.

No brand winner in Viacom/DirecTV debacle

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During an almost two-week long blackout, millions of DirecTV customers were unable to watch about a dozen popular Viacom channels, including MTV, Nickelodeon and Comedy Central.

The stand-off between Viacom and DirecTV over fees might have ended last week, but neither brand comes out a winner.

DirecTV was already in a tough spot. Few rave about his or her television, Internet, or cell phone provider, which means it is easy to get mad at DirectTV in this instance.

It did not matter who most pointed the finger, Viacom or DirecTV, because a lapse in service meant the service provider failed. The bright spot for DirecTV is that since all providers are viewed negatively, there is no impetus necessarily for viewers to switch. The blackout, however, did help further perpetuate a negative brand perception.

The flip side to that customer perception is the value Viacom placed on its own brand. Owners of content can thank Netflix for spotlighting just how much power they wield. Distribution once was a massive undertaking. Netflix’s DVD service was unmatched because the start-up costs for distribution of that magnitude were prohibitive. Where there was a greater dependency on physical distribution, the changing environment of digital distribution has increased control for those with the content.  I say “increased control” rather than “complete control” because content providers are not yet confident enough in their brand or their content to capitalize.

The great thing about content is that in addition to defining your market it acts as a differentiator. Make great content worth watching and customers have a reason to switch and increase usage. A good example of this is comedian Louis C.K., who avoided traditional distribution channels and sold his latest standup special digitally through his website. His success proves that, if your content is worth consuming, customers will inconvenience themselves in order to get it.

If Apple has taught us anything, it’s that there is a thriving market for simplicity – in usability, design and consumption. If ever there was an industry where simplicity was lacking, it is television. DirecTV and Viacom did little to elevate either of their brands during the recent dust-up and, in the process, demonstrated weaknesses in the system and highlighted change that might be slow but is inevitably coming.

OnLive’s brand must be about more than the technology itself

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OnLive is no longer new to the world of gaming. Yet, almost three years after its release, I am still not sure the brand will be a success unless the company quickly re-evaluates its focus.

Both my interest in OnLive as well as my frustration with the brand is rooted in a desire to see it succeed. I have talked many times about the natural progression toward digital formats and OnLive alone is carrying the flag for this transition within the console gaming market.

My frustration with the value of OnLive’s brand is that the value has been placed too heavily on technology. The technology is impressive, but when it comes to content, OnLive is lacking.

Sony had a similar problem when it pioneered e-book readers that used the e-ink technology that is still used in some circles today. Sony may have been first but today Amazon’s Kindle easily eats Sony’s lunch in e-reader sales. In the world of e-books – and video games – content is king.

Amazon understood that. Sony didn’t.

I first tried OnLive to see if the technology worked. Did it ever. That was all I needed to be sold on the idea of a purely digital transition for the market.

But then I looked beyond OnLive’s technology to the content and was disappointed.

In the video game market, brand and content are the two biggest points of differentiation. PlayStation 2 was a huge success because it commanded both. PlayStation 3 had a rocky run because it commanded neither. OnLive is new to the market and still trying to develop a brand. That won’t be easy with its content so weak.

This is not to say that OnLive is not making some smart moves. There is a push that could increase OnLive’s visibility, with rumors that Sony is looking to partner with a digital game service like OnLive that would run on Sony’s PS Vita and news that OnLive is teaming with Vizio on a new set-top box. Yet, due to its limited content library, it might be putting the cart before the horse.

Technology cannot drive preference all by itself. Technology must be driven by purpose. Content provides that purpose. As it stands, OnLive has no exclusive IPO, no big deals in the works with developers, no massive additions of current generation content to its digital library, and above all else, no brand message that defines who the OnLive customers are and why they should prefer OnLive.

It’s not too late. OnLive has the ability to turn this industry on its head. From how the market views content ownership and distribution of that content to how it can increase profits to developers, OnLive could change everything.

If OnLive fails, there will be at least one more console cycle stuck with the status quo. With or without OnLive, I believe the market will eventually make this shift. It just might take longer.