NSA Logo

Wal-Mart is experimenting with not only delivering your groceries to your door, but with actually coming in your door, entering your kitchen, and stocking your fridge and pantry with your groceries. Seriously. I’m not making this up. You can read all the details for yourself here.

To be fair, this is a good idea not so much because of the specific approach they’re testing, but because of the thinking that Wal-Mart seems to be demonstrating in desperate response to the big chunk of their business they are losing to Amazon and the like. Kudos to them for asking how they can differentiate themselves by offering additional value for their customers.

It’s a bad idea because not only are there way too many moving parts in this approach, and not only because I predict it’s highly unlikely that there will be a big enough target market who will trust Wal-Mart with the “keys to their home”, but because they are getting too far outside what they know they can do well. Their core competencies if you prefer the fancy schmancy MBA term.

On the grocery side, Wal-Mart does a super job of using their buying power and the efficiency of how they operate to offer the consumer a vast selection and a remarkably low price. Bravo, Wal-Mart. Expanding the services they offer in that vein to include online ordering and curbside pickup makes excellent sense. Grocery delivery seems like a bit of a stretch and a gamble, but operationally that isn’t terribly far fetched, so that’s an idea worth a look. But to think that Wal-Mart will be able to cost-effectively field a team of competent delivery staff who their customers deem trustworthy enough to let into their homes I think will prove to be a promise they’ll have a hard time delivering on.

Whenever you chase after another target segment, chances are you’ll chase away your original customer. Whatever you do, you should not get greedy but stay true to your product type, your attribute, or your segment.” – Jack Trout and Steve Rivken, Differentiate or Die

 

Comments Off on Why Wal-Mart’s newest idea is good (and bad)

Wrigley’s says gum sales are down. Why? Largely because of technology. Yes, you read that correctly. Technology.

Most chewing gum is sold at the checkout counter thanks to its being conveniently placed right by the register as you complete your shopping experience. In days gone by, the colorful displays and packaging might catch the customer’s eye and entice a purchase. But today, buyer behavior has changed. Rather than browse the displays, shoppers at checkout stands are often preoccupied, if not completely absorbed, with their smartphones.

Recall from posts-past, such as this one, that you have two basic categories of competition. Direct and indirect. Wrigley is the leader, the dominant force in the chewing gum category, yet they are now facing their toughest competition from an indirect competitor in the form of the smartphone.

So what’s a marketer to do?

One of the nation’s largest media firms, the Hearst Corporation, has researched what areas of the store are less prone to shoppers grabbing for their phones, and have started placing magazine displays in such areas of grocery stores so they won’t have to  compete with the smartphone.  Coke and Pepsi have sought different locations in the store with these concerns in mind as well.

We can’t control the forces of the environment, but they can sometimes be predicted. By always doing your own environmental analysis, you may not only avoid being blindsided by a threat, you may be able to more quickly take actions to counter it.

If we knew what were doing it wouldn’t be called research” – Albert Einstein

 

One very useful tool we have to help understand how consumers make decisions is the 5 stage consumer decision-making model. The model proclaims there are 5 specific steps consumers go through in every decision they make.

The steps, in order, are:

  1. Problem/Need Recognition
  2. Information Search
  3. Evaluation of Alternatives
  4. Purchase Decision
  5. Post-Purchase Evaluation

The developers of the theory go on to say that we don’t necessarily spend an equal amount of time at each stage, we may not follow the process in a linear order, and they say we may not even be consciously aware of going through the stages or of which stage we’re in. When you factor all of that in and think about any purchase decision you’ve ever made, you can see where it does apply and is quite a neat theory. You can also readily get an idea of how YOUR customers, or if you’re a business-to-business marketer, the customers of your customer (who are ultimately YOUR customers too if you’re truly practicing the marketing orientation) make decisions. That knowledge can, in turn, help you develop your entire marketing campaign from choosing your target market to developing ad copy and sales presentations to making it easy for the customer to make the purchase to ensuring the customer is happy once the relationship is opened, so they can help influence other consumers when they go through the stages of the decision-making process. Powerfully useful stuff indeed!

On the other hand, if you’re skeptical of this nifty little 5 stage process, you won’t be without a team to root for. Another lesser-known but consideration-worthy theory is that of the “black box.” This “alternate theory” asserts that, though the 5 stage model has some application, ultimately it is very difficult indeed to truly, fully understand how and why consumers make decisions. Or how/why human beings make decisions about anything. The black box theory states that marketers can know what stimuli “go in” to the mind of the consumer and that a decision “comes out”, but understanding the exact process remains a mystery. If you and I both think about some of the purchases we’ve made and then tried to justify them, we’d probably agree.

Who knows who’s “right,” but I do think you’ll find understanding these theories can give you some valuable insight into how your messaging efforts find their way into the world of your customers.

All models are wrong. Some are useful.” – George E.P. Box, Statistics Professor

 


Comments Off on How and why do customers buy?

Box me in?

By Dr. Burt Smith March 28th, 2014

Many organizations live and die by personality or behavioral typing. Personally, I’ve always been a little skeptical of how it’s possible to take a creature as remarkable as a human being and type them as this way or that way based on a few questions or on some limited observation.

Here’s a free resource for personality typing, and it uses the Myers-Briggs/Jung Typology system, one of the most popular.

http://www.humanmetrics.com/cgi-win/JTypes3.asp

Though this is a widely respected tool, and I think it has some uses, I am still strongly opposed to trying to “categorize” people and I caution us all about doing so. That’s a good way to misjudge and alienate people.

I’ve often wondered if a good character actor could take this test and produce whatever results he or she planned on in advance. This guy appears to have done just that.

Years ago I had to take a psychological test to land a corporate gig. I knew there was no shot if I answered honestly and directly (two qualities right there that would’ve disqualified me). So I imagined what, and who, the ideal candidate would be, and responded accordingly. I simply counter-programmed myself for a wider audience. I became Mr. Opposite. (Remember that episode of Seinfeld when George went against his basic instincts and uncharacteristically succeeded every time?)

I was no longer an introspective loner; I was a jovial team player. I valued obeisance over individuality. I preferred tranquility to creative tension. It was the most fun I ever had on a written exam. And I got the job. (Fortunately the division merged after three months, and I was not offered another position.)” – Lee Robert Schreiber, Poker As Life

 

Keep that in mind next time someone tells you how powerfully predictable these instruments are.

 

 

Comments Off on Box me in?

Kia is trying to move into the luxury car category. They blasted onto the scene with an impressive Super Bowl commercial (one of the few that were truly Super Bowl-worthy in terms of grandeur, in fact). Just in case you missed it…

Wow!  A noble effort, to be sure. The commercial is an impressive piece of work that tells a good story. To Kia’s great credit, they have earned a very respectable reputation for quality and reliability.

But there’s a big problem.

In the mind of the market, which is the real battleground on which branding takes place, Kia isn’t considered a luxury car. And trying to change an attitude toward a brand is a tough, expensive undertaking. One that’s best avoided, in fact. There are a number of examples I could share for why this is, and I could cite some of my favorite marketing authors to support my point, but I’ve got a better idea.

A good friend – and frequent commentator here (in the “Comments” section, anyhow) – Mike Bosley, presented a superb example of how the market is likely to react to what Kia is attempting. Here’s a response he offered to a previous post and he told me I could use it here. Thanks Mike! (He’ll stick around after you read this post to sign autographs if you wish.)

I’m ALWAYS fascinated when a company like Kia takes on the challenge of telling a new story about themselves. Considering how well received were their life-size Kia hamsters, I think they have a ways to go. I still don’t even view Hyundai as a luxury vehicle but I’ve now been fooled twice from a distance into thinking their flagship luxury car was a Bentley! Sometimes, I’m not sure it’s possible. The time-telling features of a Timex and Rolex are indistinguishable but the apparent ‘benefit’ is that each tell a very different story about the wearer. Can you imagine your buddies all walking up to your new Kia when they see it pull in the parking lot only to find out it is, in fact, “just a Kia?” I love Kia’s boldness and I must say the car in the commercial is beautiful. Of course, my heart will always belong to Toyota.”

 

Exactly, Mike! The commercial may garner the attention of the target market, and the target market may even concede, if not heartily agree, that their reputation for service, quality, and overall VALUE is noteworthy. But when it comes time to sign the deal, are they really going to pay 70 grand or whatever for a…a…Kia? Don’t bet on it.

What can they do instead? That, my friends, will be the subject of the next entry…

 

Comments Off on Can Kia pull it off?

Good marketing is indeed that which gets RESULTS! As David Ogilvy famously said, “If it doesn’t sell, it isn’t very creative.

The Kodak commercial below is worth a look. And yes, I hear you, it doesn’t matter if I love it or if millions love it or if it brings tears to our eyes or if it wins awards or if we buzz about it to the point that it goes viral. The only real measure of whether it’s “good marketing” or not is whether or not it sells product. All that aside, I LOVE this commercial!

I think there is still a lot to be said for being able to powerfully DRAMATIZE the benefit YOUR product offers in a way that connects with the customer not just on a logical level, but on an emotional one.

Oklahoma City Jeweler, BC Clark, used the same jingle for their Christmas promotion year after year. Then a few years ago, they got to thinking that maybe the market was tired of this jingle, because they were getting tired of it, so they decided to change it. They quickly learned it was a big mistake because their customers let them know! They very quickly changed it right back. You can get the whole story here.

While some might consider this a “strategic hiccup,” it’s actually quite a story in the power of their brand, and a profitable lesson for us all. If a customer is so attached to any aspect of your business they’d miss it if you changed it, you know you’ve got a loyal following. Any time your customers will take time to speak up and let you know they’re unhappy with something, that’s a golden opportunity to fix it. You’ll likely keep and grow a customer relationship, and you may even impress them so much with your handling of the situation that they’ll tell all their friends about it and your net result will be even MORE customers and more profit!

Keep in mind that customers you get from referrals have no acquisition costs attached to them, so the margins are that much better! Strong customer service is a critical component of effective branding!

It also reminds us precisely When We Should Change A Strategy.

The wise person isn’t the one who makes the fewest mistakes. It’s the one who learns the most from them.” – Harvey Mackay

 

Comments Off on Thanks for a timeless branding lesson, B.C Clark!

Legendary marketing guru Seth Godin has some interesting thoughts on how Black Friday is a fallacy.  Plus, if the question “What is Cyber-Monday and who is its founder” ever comes up in a game of Trivial Pursuit, or if you just want to impress folks around the water cooler with that knowledge, you’ll be equipped do so all by clicking here.

The easiest thing is to react. The second easiest is to respond. But the hardest thing is to initiate.” – Seth Godin

 

 

 

Comments Off on Black Friday further indicted (This time by a REAL guru!)

sale sign snowflakeThere’s a lot of hype surrounding the time of year we’ve come to call Black Friday. Stories abound about how retailers are opening earlier and earlier (some are even attempting to hijack the Thanksgiving holiday itself!) with all these supposedly sweet deals that await consumers looking for the “bargains of the year.”

But are these really bargains?

After you fight the mob (no kidding, people have been hurt as they scrap for bargains at these crazy sales) to get access to the merchandise, can you really be assured the store will have enough stock so you get your bargain  in the first place?

Not only that, but have you checked out some of the savings you can now get, YEAR ROUND, on such great sites as Amazon.com (Nod to “Amazon Prime”), where you can get your bargain shipped right to your door (or the door of your gift’s recipient)  without having to dodge a single flying elbow in the store? Why not let your fingers do the walking and let someone else foot the fuel bill (lest we forget, when gas is as high as it has been at times this year, driving your own car costs you about 60 cents a mile!)?

When you figure up your true, total COST of participating in Black Friday, the dark truth you may discover for yourself is that it isn’t such a bargain after all.

And if you’d like to hear the dark truth for RETAILERS as it relates to Black Friday, along with why it’s called Black Friday in the first place, click here.

 

 

Comments Off on Black Friday: The dark truth for consumers…

tunnel what lies aheadA while back we talked about what your customer thinks about all the time. You can click here to revisit that article if you like but the simple thing your customer thinks about constantly is the future. Perhaps not surprisingly, that relates very closely to what your customer ultimately, REALLY wants – A BETTER future!

It’s just basic human nature. If things aren’t so good today, tomorrow we hope they’ll be better. In fact, most of the actions we’re taking today, including the less pleasant ones (like dieting or saving instead of spending), are about getting to a better future. If today things are going great, we hope to keep it that way tomorrow. Whatever a “better future” is, that is the benefit the customer is ultimately buying.

So how can we use that information?

Well, for one thing, we need to understand what “a better future” really means to our customer. You may know this through formal market research or through what your most satisfied customers have told you they appreciate most about your product, or you may have observed how your product benefits your customers first hand. There are any number of simple ways to visit the customer’s world and understand what’s most important to them, what they value, and what represents a better future to them.

Once you do, you know what to dramatize as you’re promoting the value of your offer. View any number of commercials on television, view ads in print, or listen to commercials on the radio, and chances are the really good ones, the ones that ultimately get you to want to learn more about them or take the actions they suggest, are the ones that dramatize the benefit of their product or service in terms of how it delivers a better future for you.

 The philosophy behind much advertising is based on the old observation that every man is really two men – the man he is and the man he wants to be.” – William Feather, Author

 

Comments Off on What does your customer REALLY want?