Category Archives: Marketing

AIG Stock and Marketing Connection

Here and on message board, for two years I said AIG was going down.  I predicted $30 per share; it’s been in the low $20’s for a few months now.  Back when I said it was going down, it was in the $60’s and way over priced in my opinion.  Something that I find interesting is how, as the stock price goes down, the amount of marketing AIG does, has gone up.  Is there is a connection?

 

As I said two years ago in a previous post (you can do a search and find it on here), marketing isn’t going to save AIG, especially with the commercials they have going on right now.  This series in which they use kids, I don’t know who came up with that but it’s in the running for the worst ad campaign of the year!  I could get a couple of sugar buzzed high school kids to brain storm better ads.  Nobody sits there and say “oh, honey how cute!  That little kid is talking insurance and financial needs, let gets some AIG products!”  The commercials are just so off base.  The kids ramble on, you know they have no clue what they are saying, just reading a script and it mono tone.  Just bad all around and I’m sure they are not seeing an ROI on these ads that justify the expense.

 

 

 

Then you have AIG American General, ok, a little better but still just nonsense.  This commercial catch attention for 5 seconds, then, mass ADD kicks in and we zone out and focus on something else.

 

 

 

 

As I said in my previous post, marketing isn’t going to save you AIG because you don’t get marketing!  The only commercial series with potential is these facts commercials like this one.

 

 

 

 

It’s nice, good work on the crew that did the filming, I like it.  But AIG misses the punch.  It’s like, yeah, adds 8 years to my life, and what’s that have to do with you AIG?  Nothing as far as I can tell because you don’t make the connection and I’m not doing your job and doing it for you.  So nice graphics, bad follow through. 

 

I think AIG is so close to their own products (or totally clueless, but I’ll give them the benefit of the doubt) that they can’t tell, the rest of us don’t sit around thinking about their products all day, we have a life and insurance is a side issues in our lives.

 

So AIG, since I know you come to visit my blog any time I post about you, here’s my challenge, I can fix your marketing, if you guys actually want marketing that works instead of just pretending to do marketing, here’s my email: Edward@echenard.com.  Seriously, since you are here reading this, why not figure out how to make money with your marketing because I can tell you have not caught up to the times in marketing.  $40 lose in share price proves that, so seriously, send me an email and chat.

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The Van Gods

I have to say I like this commercial, maybe because I used to listen to that song when I was younger. I know that there has been a lot of talk in the marketing circles about this commercial and if it hit the mark or not. There are too many factors in the market to say if it has or not, but the elements of the commercial are interesting.

You have a song from 1977 and references to the 70’s pop culture. The target market for such cars has been the soccer Mom. Now only those over 30 are going to get the references in the commercial, anyone under 30 probably doesn’t get it. So already they lost a good portion of their market.

Plus the elements in play, I don’t know of today’s soccer Mom’s want to remember the 70’s “Van God” or be associated with them. The husband might be another story.

Either way, I give Honda credit; it’s a creative commercial for something that is generally extremely boring. Who pays attention to mini van commercials anymore, and yet there is more buzz on this one commercial than has probably been generated by all of the commercials on mini vans in the last 5 years. So, Honda got something with this, it got buzz.

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Marketing and the Mind

We spend billions getting people to buy what we want them to buy and do what we want them to do. I have degrees in marketing and branding and that’s pretty much what I was trained to do was get you to do and buy things you probably would not if left along. Almost all of this is geared toward the conscious mind, impulse buying, emotional selling, rational product features, etc… But the interesting thing is, some research suggests we may be focused on the wrong part of the brain. Benjamin Libet, a neuroscientist did some interesting studies to what happens in our brains when we make a decision. What was found was that a spike of brain activity took place in the subconscious mind before the conscious mind. Interesting.

The sub conscious seems to be the true driver of human intention, yet this is the part of the mind we know the least about. There isn’t a single ad agency that can tell you how it truly works, if they did, they would be able to charge any price and every Fortune 500 would be their client. In fact why bother with that, just rule the world! So what is happening in the sub conscious mind? This process that takes place that tells the conscious mind “go do this.” According to Guy Claxton the author of The Wayward Mind, “no intention is ever hatched in consciousness; no plan ever laid there. Intentions are premonitions, icons that flash in the corners of consciousness to indicate what may be about to occur.” Ok, I can understand that, but where does the thought come from? Where does the subconscious gather information and ideas to come to a conclusion that it wants us to do something specific like, ready this post? We just don’t really know. We have a good understanding of the conscious mind and how it works but the sub is such a mystery, we have theories, but not much else.

It really speaks to something more than we actually know is going on in our minds. If you are selling something to someone, you are probably best to treat the conscious mind as secondary in the decision process, the sub is where you first have to go for, but again, we know so little about how this part of the mind works. Where do you even start? For many the sub is a dark unknown of old thoughts, ideas, and memories that bubbles up every now and then. You can consciously decide not to go along with the sub, we “rationalize” our way out of that sub nudge that we get. We sometimes call that free will; it takes place after the sub has given us the intention and before we act on it. This is where most marketing is geared towards, getting your free will to go along with the message. But this is the secondary, what would happen if you can go for the primary decision maker?

As most kid’s product marketers know, advertise during cartoons, get the kid (sub) to want it and demand it and even if the parent (conscious) doesn’t see the point to it, sooner or later the parent often gives in and buys the kid what it wants. I guess that is kind of how it works but again, we don’t know actually know for sure.

To truly make marketing a more impact driven activity, this is something we need to get answers to. Now the marketer in me sees value, the humanitarian in me sees red flags. This goes back to neuro marketing which was all the rage 5 years ago. It all sounds great when you are making money off it, but not so great when you realize, people may want to use it to get you to do things you may not agree with. That is the negative to all this, the potential can be there if someone is smart enough to use it. Or will we just find there is another layer beyond the sub that drives us which we again find, we do not understand?

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Return on Revenue

Return on Revenue (ROR) is used to determine the profitability of a company by taking Net Income/ Revenue.  It is a financial tool used to year to year profitability performance.  But, you can take this same formula and apply it to marketing projects as well. 

 

Essentially what the ROR does is tell you the impact expenses have on the marketing project.  So it will help to tell you if the project is truly giving you a better return or not.  If you know the impact then you have a better ability to say if the project is worth keeping or not or how those expenses need to change in order to maximize your ROR.

 

This formula is also helpful to bridge the gap between financial tools and marketing tools, something that has been hurting marketing for years.  With this tool, finance knows how to use it (if your finance department doesn’t, they you might want to shine the light on their cost activities).  It’s simple, takes 5 minutes and can help in many situations to improve marketing’s position as an investment center rather than a cost center.

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Black Friday

One of my favorite days of the year is the day after Thanksgiving here in the US.  Why?  The madness that we know as Black Friday, is why.  A few years ago, I went out to partake as a relative wanted me to join them.  Up till then, Friday morning after Thanksgiving was for sleeping, not shopping.  But once I showed up and saw the craziness of the morning deal dashing, I was hooked as a marketer.  The psychological motives that drive otherwise normal people to get a look of premeditative murder in their eye over some heavily discounted item, draws my curiosity.  What combination of factors drives people to act this way?  That’s been my once a year quest to learn about.

 

This year I got up at 4:30am to hit the stores.  It was pretty cold at 15F and the morning schedule had been mapped out.  To really get the full impact you need to check the ads, I do it the old fashion way and just read the Thanksgiving day paper to see who has what.  Now I was actually starting late, some stores had opened at midnight but I was not interested in those this year, this year, I was off to see the electronics.

 

I hit the highway and quickly made my way to Circuit City which had a line going around the store already.  People had camped out all night and others were trying to cut in line to get in with the few deals available.  As my theory was, the electronics stock even less of the hot deals than other types of stores and that theory seemed to hold true, I was in the store in the first 5 minutes and they had sold out of the on sale items already; and they certainly had way more people than the fire marshal would have liked, in the store.

 

From Circuit City I head to WalMart where security was standing guard quite nervously.  It was a mad house!  I headed to the electronics area and a fight had already broken out, which may account for the nervous security guards at the front.  The crowd was a bit to lively for my taste, more likely to brawl at any moment, so I left to take a breakfast break. 

 

Next was to OfficeMax which had about 50 people in line when I showed up 20 minutes before the official open time.  As I walked to the door, they opened up early and I quickly got in line and went with the wave of people who were pouring into the store.  I was carried on to the discounted sales table and grabbed a nicely priced 500 gig hard drive.  It was like a feeding frenzy and arms went diving in for the deal like piranha going in for the kill.  There was a kind of rush getting in there and grabbing a deal before the others could, I admit there was a kind of buzz one can feel to it as you actually get something you wanted.

 

Next I took a detour to World Market and won some free chocolate, Intense Dark 85% cacao, a bit harsh but it is suppose to be good for you.  Then I headed to Target where it was pretty much the same, a mad rush for items, but by then it was 8am and the buzz was gone, so I headed home.

 

The stores do a great job on getting the word out but I have to say their strategy is way off, it doesn’t work anymore.  Here is what they do, they put in the paper a great deal, like a $300 laptop that is actually decent, and then they only have 10 in stock or something really low like that.  They expect those who don’t get the laptop will just buy something else, that’s not happening.  There were more people out this year looking for deals, this is because the dollar is weak and things cost more so people want a good deal or they won’t play.  So if they can’t get the deal they will just wait.  This means, stores are going to have to offer more deals. 

 

Most people I know are waiting for the deals, they expect deals and good deals and will wait instead of paying retail or 10% off, they want a really good deal, 50% or such.  I suspect retailers are going to find people are not fooled by their Black Friday tricks and will wait for better deals.

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Cost of Ownership

We live in a time with a race to the bottom in a lot of sectors.  The product with the lowest price, so goes conventional wisdom, wins.  As a marketer, I don’t like this approach, for obvious reasons, if price is king, you don’t need me.  But as a consumer I also don’t like this for many reasons of which I will focus on just a few for simplicity.  I can get a box of pens for 10 cents now, note books for the same price and a number of other products for equally low up front cost.  However, I’ve learned from experience that price is not king, but at best a usurper of what is truly important.  As a marketer and a consumer, I always focus on the cost of ownership for that is where you find the real gems.

 

I wrote many years ago in an article I once did on this very subject about the difference between US and China made bicycles.  The American bikes cost more up front yet they lasted longer and had fewer break downs, so over the 5 year life of the bike, they ended up actually costing less than the China made bike which had to be replaced entirely.  This as a marketer and a consumer is highly important!  If you are buying or selling a durable good, you want to focus on the cost of ownership as a key factor in the buying process.

 

The reason for cost of ownership focus for the marketer, are many.  For starters, it gets away from this ridiculous idea that price is king.  Now, quality is king and people will pay for good quality.  Those 10 cent pens I bought, they don’t work so great, but the $6.99 pens I bought the year before, I still have and use because they work!  When I need more pens, I’m skipping the cheaply made and cheaply sold pens and going for the ones that work.  As a marketer you have a great angle to use with that, quality means reliability.  It means you can be sure the product will last.  It also gives you more room other than price to work on and anyone who has tried to brand knows that price is a bad option to use as a selling point.  Someone can always under cut you, so find something that works better and is harder to counter by competitors.

 

As a consumer, cost of ownership is a far better measure than price to really determine the true value of a product.  We have a lot of cheap products flooding into the US these days.  We also see a lot of these cheap products being recalled.  The fact is, most people who are impacted by the recalls, will not get a refund, that’s just how the system works, we get busy and just throw away the product.  So you lost money, and now may have to go replace it or do without it, all because you went on price.  Price is a very easy way to look at a product, which is cheaper, that’s pretty much it.  Cost of ownership forces you to ask questions to learn about what you are buying and the value it will give you over the expected life of use.  Now we are talking!  Those questions help you learn, is that cheap product from China full of lead and going to go be thrown out in 6 months on a recall?  Sure, it is half of the domestically made product but if the cost of replacing the recall means spending more in the long run, it’s a waste.  Not to mention the time and indirect costs put into finding the replacement.

 

So you can see, cost of ownership is a far better way of looking at the world than price.  Unless you sell bad products cheaply, then price is what you want people to focus on.

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SWOT

SWOT stands for Strengths, Weaknesses, Opportunities and Threats.  It is one of the most popular tools in marketing used today.  For good reason, it is a simple tool, easy to use and gives a nice general heads up on what is going on in a given market.  Like all tools, it has its positives and negatives.

 

The plus about the SWOT is in its simplicity.  You don’t need to be an expert in marketing to do this; it is very qualitative so it is easy to use.  The strength of this tool is really in the skill of the person doing the analysis and that is the weakness.  A SWOT is only as good as the person who is doing the analysis.  The SWOT can be a very subjective tool, which is why the strength of it is in the ability to really understand what it is they are analyzing.  Without the strength of a good analyzer, the SWOT’s ability to really inform loses a lot of what it can offer. 

 

Often large companies hire an consultant to do this or a junior person, I do not recommend this as part of a good analysis program.  If you get a junior person, ensure the more experienced executive is around to answer all the detailed questions to fill in the knowledge gap.  The SWOT can and often is very subjective when used; I highly recommend you have someone who can detach themselves from the results.  Often on the threats and weaknesses, people can over look certain things based on their own biases.  For example, you may not see a new technology or competitor as a real threat because of your own view of them.  This can weaken the tools ability to really tell you what you should be looking at. 

 

To really help counter the weaknesses of the SWOT, it is best to use it with quantitative tools along side it.  These tools can help shore up some, not all of the weaknesses in SWOT.  If you don’t use these tools with SWOT, you really need someone who understands the market and the tool really well!  Otherwise, use caution with this tool, it’s easy but sometimes too easy if not used right.

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