Vol 28 Issue 1/2
I 2 4 I Community media
Marketing Mix looks to see if local is still relevant.
I 0 2 I Ed’s note I 0 3 I Retail marketing guide: POPAI’s Scott
Adcock takes a look at the state of the marketing at-retail industry.
I 2 9 I Expert opinion: Nici Stathacopoulos
Nici suggests that in order to keep true loyalty, all contact POPAI Trend and points must be considered.
I 0 6 I Retail marketing guide:
I 0 8 I Retail marketing guide:
Mike Aitken of the
I 3 0 I Custom publishing
Marketing Mix dives into the world of custom magazines and their benefits.
Coupon Clearing Bureau looks at the art of coupons.
I 1 0 I Retail marketing guide:
Kennedy Zakeer of
Barrows looks at the real shopper insights.
I 3 4 I 2010 Marketing trends
Marketing Mix offers its predictions for the year ahead.
I 1 2 I Retail marketing guide:
I 3 6 I Book review: 2010 Flux Trends I 1 5 I Expert opinion: Richard Duncan
Richard looks at the retail recovery Down Under.
I 3 7 I Expert opinion: Maruis Wait
Marius looks at the cost of selecting the right salespeople.
I 1 6 I 7 day [b]itch
Matebello Motloung, media and advertising writer, Financial Mail.
I 3 8 I Expert opinion: Aardt Davidtz
Aardt looks at the connection between brand and packaging.
I 1 8 I Brand anatomy: Liberty I 2 0 I Magazines
Marketing Mix probes the future of magazines in South Africa.
I 3 9 I Word of mouth marketing
Marketing Mix listens to what the experts have to say.
Database: List Perfect
PROPRIETOR AND PUBLISHER: Systems Publishers (Pty) Ltd. Tel: (011) 234 7008 North Block, Bradenham Hall, Mellis Road, Rivonia, Johannesburg PUBLISHER: Terry Murphy MANAGING EDITOR: Michelle Sturman email@example.com DEPUTY EDITOR: Tshepiso Seopa firstname.lastname@example.org ADVERTISING MANAGER: Terry Murphy email@example.com PRODUCTION: Spencer van Graan firstname.lastname@example.org EVENT ENQUIRIES: Noelene van Niekerk noelenen @systems.co.za SUBSCRIPTION ENQUIRIES: Marianne Nzioki email@example.com
vol 28 / issue 1/2 / 2010 •
3 292 (Jan-June 09) marketingmix.co.za
Turn up traffic to the till point
he holidays are long gone and we are all back into the swing of things. So much has happened that the New Year doesn’t feel so new anymore: A devastating quake killed at least 217 000 people in Haiti; the revelation of President Jacob Zuma’s 20th child just as SA was preparing to celebrate the 20th anniversary of the unconditional release of Nelson Mandela from prison; Toyota facing a PR nightmare over its faulty cars and more than a few sex scandals ruining sporting heroes. I’m afraid the first 2010 Marketing Mix edition isn’t quite as scandalous, but it does offer lots of info on the South African retail landscape. One question I have always asked myself is if South Africans, especially in Johannesburg, really do love to shop and to sell? There are shopping malls everywhere; some are so big they’ll give you a good day’s hike from one end to the other. The retail marketing guide aims to give insight on how to turn up the traffic to your point of sale and get the cash register ringing. Getting the shopper to part with their hard-earned cash in times of economic strife it is not an easy task. On top of this, the shopper and consumer is complicated, the shopping environment unpredictable, and products and brands are competing for the consumer’s attention in more ways than one. The magazine section offers Q&As with some of the top publishers in the country, providing an overview of the state of the magazine industry. The publishers answer some of the probing questions that marketers and planners want answered, particularly as the print industry is so volatile at this point in time. Also in this issue are features on community media, custom media and a review of the 2010 Flux Trends edited by Dion Chang. Enjoy your read and don’t forget to visit www.marketingmix.co.za Happy 2010
In the Nov/Dec 09 issue of Marketing Mix we stated that total circulation for the Amakhosi magazine was 21 342. The actual figure is 21 324.
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Retail marketing guide
International MAR trends 2010
arketing at-retail has developed significantly in the past five years. Every area of the business has changed and developed as realisation has grown that the store is a vital and valid vehicle for communicating with shoppers. The hackneyed phrase ‘the last three feet’ (referring to the point of decision in-store for the shopper) has started to be appreciated for what it really is, the last and most significant opportunity for a brand to influence the buying decision of a shopper. Brands have made great strides in developing the professionalism required at point of purchase (POP). Permanent POP development is a complicated process and demands a level of technical understanding to gain the best results. This has always been an issue for brand staff who still have a high churn rate in positions related to POP Nevertheless standards are rising. .
Brands have also started to embrace the concept of ‘Shopper Marketing’. This is and will have a huge impact on the MAR industry.
Brands have also started to embrace the concept of ‘Shopper Marketing’. This is and will have a huge impact on the MAR industry. One definition is ‘all marketing stimuli, developed based on a deep understanding of shopper behaviour, designed to build brand equity, engage the shopper (ie a consumer in ‘shopping mode’) and lead them to make a purchase’. Once brands start to understand shopper behaviour they will also understand how this relates to MAR. The impact of this will be brands that are better
informed as to what MAR impacts best on their shoppers and where it should be located. This is the first time that these ideas have been examined. In the US and Europe they are starting to impact on brand spending decisions. Brand spending on MAR has continued to increase and is forecast to continue. Actual figures are hard to get hold of, but a recent survey from POPAI, the industry trade association, reports that brands are generally increasing spend and are moving money from above to below the line. This is extremely significant for the future and highlights that some of the more sophisticated brands are now genuinely integrating above and below the line thinking and bringing
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the thinking on in-store execution to the beginning of the planning process rather than the end. It means also that marketing directors are getting involved in retail which, historically, has rarely been the case. This is by no means prevalent but it will be. The continuing emphasis on the grocery sector in the trade press, globally, hides the fact that the majority of MAR is placed elsewhere. Groceries’ much publicised ‘clutter-free’ or ‘clear-floor’ policies have really impacted only on the temporary sector and even there not to a dramatic degree. In value terms much has been cleared from ceiling displays as people realise that shoppers look up for direction, and level or down for information. The sectors that are taking MAR have not changed much in the past few years. Cosmetics, health and beauty, telecoms, luxury goods, consumer electronics, sports and leisure, and entertainment continue to be major users of displays largely provided by the brands. This looks likely to continue. What is changing are the types of displays and the level of sophistication. We have seen a great increase in displays featuring some form of interactivity. There are several reasons for this, not least of which is the simple principle that shoppers notice things that are moving. Allied to the constant quest for information, particularly on products that are not a commodity, shoppers now look to displays to provide this facility and back up or confirm what has been found on the Internet. The quality of assistance in retail is still low and displays are starting to take the role of, in most cases, ‘the silent salesman’ by providing screens, web-based information systems and the like that deliver relevant information to the shopper. As the cost of technology continues to fall this is sure to form a greater part of POP market. An area that has not developed at the expected speed has been the use of digital screen networks in retail. In a recent POPAI survey 15 per cent of all stores in the UK’s top 10 shopping malls have screens in their stores. However, only a small percentage is formal digital networks, the rest are individual screens showing a wide range of generally ill-thought content.
MAR companies will have to think more like agencies to appeal to the new brand marketers and maintain a close watch on their production overheads.
Retailers in general are gradually coming to terms with what digital screen networks are and what they can deliver, and there is some realism coming into an over-hyped business area. In the future the steady growth of digital screen networks will continue as they do have unique benefits for retailers, particularly in the flexibility of content that can be shown. The potential of this are enormous and has not yet been addressed in a coherent way across the industry. Successful networks have a range of objectives and ways of delivering them rather than simply being based on an advertising revenue model. In some cases, shoppers may be bored
by constant advertising, and brands/advertising agencies are not hearing convincing arguments based on media audience standards that would make them want to buy the space. The threat from online shopping has been with us for several years and will not go away. As things stand, for the next 10 years at least as far as commentators are aware, people will continue to go shopping thus providing the opportunity to influence their purchases. Retail must work harder to firstly, attract shoppers into store and, secondly, deliver a good experience at an attractive price. The MAR industry has a major part to play in this and we must expect retailers either directly or via the brands they stock to respond to the threat and act on it. It is surprising that retail has not made more use of its traditional benefits that still hold true. The move of above-the-line advertising agencies into the world of MAR is the most significant development in the past three years. The reasons for this are clear and relate to reductions in fee income from above the line and the desire to retain the relationship with the client at all levels. While there are few of these that have fully established themselves in MAR, a number have started to make inroads. The significance of this is related to points made earlier regarding where future budgets may come from and who will control them. Advertising agencies have a far greater knowledge of the brand, its history and ethos, and this will give them a potential advantage over MAR companies whose main areas of expertise relate to creative design and practical manufacture. The agencies also deal at a higher level within brands. Agencies are working more closely with MAR companies, which is positive as it brings more money into the sector. The difficulty will come if agencies believe they have learned all they need to from the MAR industry and decide to do it all themselves. This brings us to manufacturing. Most MAR companies outsource some or all of their manufacturing, particularly metalwork and injection moulding, the most capital-intensive processes. Additionally, most technology applications, such as interactive screens, are also bought in. The ready availability of cheap manufacturing capacity in Eastern Europe and China has started to change the way the industry works making it easier for new companies who provide a design and project management capability to establish themselves. In a very small number of cases clients have also either for themselves or as a result of information from overseas offices started to get directly involved in the manufacturing of displays. A great deal of manufacturing and assembly still takes place in the country where the MAR company is located but this will reduce over the next three years. Given that clients are becoming more professional and POP is thought about earlier in the process, the key reason now for manufacture, timescale, will have less relevance. In conclusion, MAR along with retail will have to adapt continually to keep pace with social change. The future for MAR over the next three years looks positive as many of the factors that can be forecast bode well for the industry. A period of limited consolidation may follow as companies merge to gain the financial strength to compete in a bigger market. MAR companies will have to think more like agencies to appeal to the new brand marketers and maintain a close watch on their production overheads. POP has finally attracted the attention of clients at director level and the industry has to capitalise on it. K
Scott Adcock executive director POPAI South Africa firstname.lastname@example.org
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POAI 2010 spend and trend study
OPAI South Africa (an international trade Importance of media categories association for the marketing-at-retail industry) Comparing the importance of media categories 2009 actual vs. 2010 estimate has released wave 2 (2009 actual vs. 2010 estimate) of the recent spend & trend survey research, specifically Rank 2009 (actual) 2010 (estimate) focusing on the impact of below-the-line marketing and 1 Digital media Digital media how it’s changed from 2008 to 2010. While the wave 1 (2008 actual vs. 2009 estimate) online 2 National media National media response rate was fairly low at 28 per cent, wave 2 3 In-store marketing In-store marketing generated a 100 per cent response rate. Interestingly, and 4 Custom publishing Experiential marketing encouragingly, the data remained fairly stable regardless 5 Experiential marketing Commuter media of the higher response rate in wave 2. The survey 6 Community media Custom publishing conducted by Research & Planning Intelligence (rpi), a 7 Commuter media Community media division of The Smollan Group, focused on the following 8 Direct to home Direct to home objectives: to emphasise the importance of the POP sector, highlight the category growth and decline by identifying the changes from 2009 actual vs. 2010 estimates and by providing benchmark data for members against estimate was: National Media (67%), In-Store Marketing (64%); which they can measure their own performance. The data was Experiential Marketing (61%), Commuter Media (50%) and interpreted by taking into account local and international trends. Direct-to-Home Distribution (30%). There was no change in The questions were designed to look specifically at POP spend importance in the 2010 estimate for Custom Publishing (50%) and from manufacturers, advertising agencies, retailers, brands and POP Community Media (50%) vs. 2009. “There is definite move towards service providers. Quantitative online interviews were conducted. below-the-line spending, and the importance of digital media is Respondents were invited to complete a 10 minute self-completion increasing,” says Lizette Kritzinger, account director, rpi. questionnaire. The online collection tool is automated and responses were monitored on a daily basis. Reminder e-mails to encourage Spend by media categories participation and telephonic interviews were conducted between Despite the stated importance of National Media, budget allocation 14 August and 1 October 2009 to achieve the required response rate. to National Media declined from the 49 per cent estimated in 2009 Survey participation was representative of the following to 29 per cent actual spend in 2009. However, for the 2010 industries: brands (30%), retailers (13%), ad agencies (20%), estimates, National Media has declined to 28 per cent. There were POP service providers (10%) and other representative (27%) – also increases in Community Media and Direct-to-Home manufacturing, media agencies, mobile marketing, content Distribution from 2009 estimate to the 2009 actual spend. However, providers and market researchers. 2010 estimates keep Community Media at eight per cent and in-line with the actual 2009 spend, while Direct-to-Home Distribution declined from six per cent to five per cent. The results Despite declines for National Media overall it still receives the Media categories highest allocation of the budget, followed by Digital Media (16%) The POPAI 2010 Spend & Trend Study highlighted a significant at number two. In third place is In-Store Media (13%) and despite a increase in Digital Media, with over three-quarters of respondents decline in ranked importance for Custom Publishing, it is still citing the media category as important or very important. Ranked estimated to received 13 per cent of the budget spend in 2010, order importance for the rest of the media categories for the 2010 similar to In-Store Media. Experiential Marketing will receive an estimated 12 per cent of the marketing budget in 2010. Importance of promotional tools Overall, less than 20 per cent of the marketing Comparing the importance of promotional tools 2009 actual vs. 2010 budget is spent on any media category with National estimate Media, Digital Media, In-Store Marketing, Experiential Marketing and Community Media Rank 2009 (actual) 2010 (estimate) getting the bulk of the spend each, between 20-40% 1 Pricing Pricing of the marketing budget.
2 3 4 5 6 7 8 9
Digital: mobile ads Digital: networks In-store promoters Displays: temp Displays: branded counters Displays: permanent Digital: signage Displays: gondola
Digital: mobile ads Displays: temp Digital: networks In-store promoters Displays: branded counters Digital: signage Displays: permanent Displays: gondola
Importance of promotional tools
Price (64%) is still the key promotional tool although it hasn’t increased in importance from last year. For 2010, ranked order importance of the top five promotional tools are: Digital: Mobile Advertising (52%), Displays: Temporary (51%), Digital: Networks (50%), In-Store Promoters (48%) & Displays: Branded Counter (48%).
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BTL budget: % However, the most significant increases in importance were for the following Temporary displays categories: Displays: Temporary, Displays: Branded Counter and Digital Signage. Permanent displays “Although allocation of budget to digital Digital displays media is still relatively small, the importance of digital media seems to be increasing,” says Kritzinger. The least important promotional tools in 2010 are Shopping Trolleys (17%) and Shop Baskets (18%), although they have increased in importance.
BTL budget: % spend on BTL categories
2009 (actual) 6% 6% 18% 2% 4% 8% 3% 5% 1% 3% 3% 6% 2010 (estimate) 10% 10% 10% 7% 6% 6% 6% 5% 4% 3% 2% 2%
spend on displays in 2010
0% 14 28 16 1- 20% 26 25 26 21-40% 25 24 25 41-60% 23 14 10 61-80% 6 6 8 81-100% 7 3 14
Spend by promotional tools: In-store
The allocation of the marketing budget to Promotional Tools: In-Store is focused around Permanent and Temporary Displays, In-Store Promoters and Pricing. Less than 20 per cent of the marketing budget is spend on any kind of displays with between 20-40% of the marketing budget mainly allocated to Permanent and Temporary Displays. “With In-Store Promoters, there seems to be a growing concern around compliance, measurement and return on investment,” says Kritzinger. Other Promotional Tools: In-Store that received some marketing budget is Digital: Mobile Ads, Digital: Networks, Displays: Branded Counter and Digital: Signage. A comparison of the 2009 actual vs. 2009 estimate shows overall marginal increases for most of the in-store promotional tools, except for In-Store Promoters, Coupons/Coupon Holders and Games/Sweepstakes that showed declines. The marketing spend on digital is less than 20 per cent although it is increasing in importance. “There is little change in the efficacy of In-Store Displays from 2009 actual vs. 2010 estimate. Price reductions are still rated as the most effective. Due to the recession consumers across categories are re-evaluating their brand choices and purchases and they are switching brands because of the price vs. value offering,” says Kritzinger.
Floor-standing unit/display Free-standing unit Mobiles Counter Shelf talkers Gondola ends Hot spot shelf display Floor displays Case-stacker Pre-packed displays Clip strip Dump bins
Above-the-line and below-the-line advertising spend
Spend by promotional tools: In-store
Average % 2009 (actual) Displays: Permanent 12% Displays: Temporary 13% In-store promoters 10% Pricing 10% Digital: Mobile ads 9% Digital: Networks 7% Displays: Branded 7% counter Digital: Signage 5% Displays: Gondola 6% Displays: Ceiling 4% hanging boards Displays: Stack cards 3% Refunds/rebates 4% Digital: Kiosks/ 3% interactive screens On/in packs 2% Coupons/coupon 2% holders Games/sweepstakes 1% Shopping trolleys 1% Shopping baskets 1% Digital: Shelf-edge 1% systems 2010 (estimate) 14% 13% 11% 9% 9% 8% 7% 6% 4% 4% 3% 3% 3% 2% 1% 1% 1% 1% 1%
In-line with international trends, the allocation of the marketing budget between Above-the-Line (ATL) and Below-the-Line (BTL) is changing. Previously the split between ATL:BTL used to be 70:30, currently it is 50:50 and are trending towards 60:40 in 2010. This is in line with international trends, particularly as traditional media, such as newspapers and magazines, are in decline and TV and radio advertising budgets are cut, safeguarding what little marketing budgets remain. Proportionately the ATL budget is mainly allocated to National Media such as magazines, TV outdoor and radio, while the BTL budget , is allocated primarily to Floor Standing Units, Free Standing Units, Shelf-Talkers, Gondola Ends, Wall-Mounted POS and Mobiles. However, as Kritzinger points out, while we know just about everything regarding top-end retail, we know very little about what is happening in-store in the so-called ‘emerging market’. “How many people actually know anything about what goes on in a spaza shop or at a hawker table? You can’t rely on the wholesalers or independent retailers to provide this info so we simply don’t know how to target the shopper with BTL activities in the emerging market,” says Kritzinger. The percentage of spend allocated to any BTL category is less than 20 per cent. Only Floor Standing Units, Free Standing Units, Shelf-Talkers, Gondola Ends, Wall-Mounted POS and Mobiles are receiving at least between 20-40% of the BTL budget. “Community leaflets and newspapers are becoming very important as consumers are shopping around for the best prices,” says Kritzinger. However, when respondents were asked to allocate their BTL Budget in 2010 between permanent, temporary and digital displays the results were as follows: Based on the mean score 36 per cent were allocated to permanent displays, 26 per cent to temporary displays and 38 per cent to digital displays. This again indicates the rise in the important of digital. K
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The art of coupons
onsumer coupons have been part of the marketing landscape for about 40 years. In the early 1970s, the industry was small, very fragmented and the number of coupons in circulation was limited. Only 50 000 coupons were redeemed in the first three months when the clearing house was created in 1977. In 2010, the situation is very different. In the 1990s, coupons became a small but important part of many marketers’ marketing programmes to the extent that between eight and 12 million coupons were redeemed on average each year in SA. This may be small fry compared to the four to five billion coupons redeemed in the US and 300 to 400 million redeemed in the UK. However, one must look at these redemptions in terms of the comparative sizes and make-up of the countries’ populations. Coupon campaigns, distribution and redemption have fluctuated from year to year. This is probably a function of what competing advertising media are in vogue at a given time. The mid-2000s saw many successful campaigns with large numbers of coupons being distributed. The numbers waned through 2008 until October 2009 when a dramatic turnaround occurred. At the time of writing, monthly coupon redemption stood at two-and-a-half times that for September 2009. The Coupon Clearing Bureau has been averaging one new inquiry about coupons per day and the existing supplier base has also been incredibly active. It seems2010 is going to be a good year for coupons. The distribution of coupons at point of purchase has grown in strength over the years to become one of the most effective methods. Currently, 71 per cent of all coupons redeemed were distributed at the point where the products were on display. The methods used were coupon dispensers, on-pack coupons, neck tags and in-store demonstrators. If we add coupons printed by the stores themselves, this figure climbs to 92 per cent.
When considering the use of coupons to move a product, one must bear in mind that not all products coupon well. The utility value of the product must be considered as well as its target market.
We are seeing initiatives to distribute coupons via booklets, newspapers and magazines. The heydays of coupons were the early 1990s when You, Huisgenoot, Drum and Bona carried 16 coupons in each edition. So we may well see growth in the market from these quarters as well. Recently noted is coupons appearing in Free-Standing Inserts (FSIs), which is the preferred method of distribution in the US, but so far has not been effective in SA. Perhaps it is because we don’t have a ‘coupon-clipping’ culture in
SA. Generally, though, SA companies prefer to do small, well targeted coupon campaigns because they seem to work well for them. We have also seen initiatives to deliver coupons to shoppers in electronically using cellphones and the Internet. These are early days for them and we are looking with great interest at how shoppers will take to these new forms of couponing products. It should be mentioned that the Coupon Clearing Bureau is in a position to accept electronic coupons and processes them in the same way that it does the physical ones. In this highly sophisticated electronic age, I do, however, recall what John Naisbitt wrote in his book, Megatrends, about how in the “high-tech” world, there is also a desire for “high touch”. Shoppers enjoy walking around shops and I would say they also prefer to have the coupon in their hands. Somehow the discount seems more real. When it comes to what products coupon well, the mix has shown very little change over the years although we feel that detergents are under-represented, particularly if one looks at redemption elsewhere in the world. Currently, 56 per cent of coupons redeemed are for food products, 15 per cent for household products, 15 per cent for toiletries and four per cent for detergents. The remaining 10 per cent largely relates to pet and baby products, OTC medicine and product replacement. Product replacement vouchers have grown significantly over the years albeit from a small base. It has proved safer to post personalised vouchers to shoppers than the replacement products. When considering the use of coupons to move a product, one must bear in mind that not all products coupon well. The utility value of the product must be considered as well as its target market. Our experience has been that coupons do well when targeted at the upper LSMs. Limited usage products, like Tabasco, do not. Overall, we are expecting coupons to do well in 2010 and beyond if the growth that we are seeing is anything to go on. K
Mike Aitken Coupon Clearing Bureau www.ccbsa.co.za
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The real shopper insights
arketers actually know very little about what happens once a person enters a store. A year ago that widely accepted statement actually held water but as of late, the sentiment is rapidly back stepping towards the exit door. Intuition and experience in the field can finally be underscored with tried and true “ insights. Shopper marketing research has shot to the top of the priority list across the industry, and as more and more insights rise to the surface, the better the position brands are in to fortify a credible understanding of their audience and environments. And it’s interesting. We now know that 80 per cent of a shoppers’ time in-store is spent simply moving from one place to the other; which means that only 20 per cent of time in a supermarket is spent interacting with products and adding to trolleys. So, it makes sense that we start paying attention to how shoppers move, why they move, why they stop, how to leverage open spaces, and how to create more relevant interruption points. Here’s another stinger: 50 per cent of all shopping trips are for 10 items or less. So, if you thought placing milk at the back of the store was a clever way to lure customers deeper in, dreamily making impulse purchases along the way – think again. It turns out that’s an irritation to a large number of ‘top-up’ shoppers whose only aim is to get in and out with speed and ease. And if you think the ‘choice galore’ trend is still on the up, start reading because consumers have a new found appreciation for edited selections of brands and SKUs. The point is, that the more information that is uncovered and available, the better equipped we are to shape effective promotional tools at retail and, more importantly, give shoppers the experiences they want. The old faithful, ‘Marketing 101’ sales-boosting methods such as discounts, freebies and couponing will always move the needle, but there are no ‘one size fits all’ solutions guaranteed to work in all channels, and appeal to all shoppers. Shoppers don’t want to be foiled by clever offers – they respond to straight forward pricing, value and clear messaging.
Shoppers don’t want to be foiled by clever offers – they respond to straight forward pricing, value and clear messaging.
Value for instance, will always be a winner. But it is no longer strictly tied to discounting. For instance, convenience seeking is on the rise, “I will pay more if my life is made easier,” said 37 per cent in a recent poll by TheCheckout. Value can be passed on to consumers in the form of better or healthier ingredients, loyalty rewards, and innovative perks like free parking when you purchase X brand. Best practice today is thinking; developing channel strategies,
defining what jobs must be achieved at retail, and weaving meaningful shopper and category insights into briefs before the design process begins. According to a 2009 Miller-Zell report, two-thirds of shoppers arrive at the store with a shopping list in their grip, but 60 per cent of all brand decisions are made in-store. Equity builders used to hang their hat on traditional advertising hooks, but the experience at retail is fast becoming the big equity driver, and smart impactful displays can bring the message home. The trick is to form relationships and alliances with key retailers to understand where they are taking their brands and, when possible, to wade into their pool of shopper marketing research. You don’t want to come into play with a new brand or product that doesn’t fit with your key retailer’s vision. Retailers today are looking for actionable content, easy-to-read signage, attractive displays and well-considered design. When brands and retailers collaborate to offer shoppers what they want, when they glean direction from useful insights – the outputs can only be positive experiences and a connection that extends beyond the till. Short-term promotions will always trigger a surge, but the way forward is to forge memorable and lasting connections that consumers value when there is no promotion. The experience is the product after all… K
Kennedy Zakeer Barrows shopper marketing team & TradeEYE reporter email@example.com
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Best retail marketing practices
arketing is never static, and nowhere is this more easily seen than in the retail marketing space. Marketing Mix hosted a two-day workshop on best retail marketing practices, which covered everything from digital networks, the use of mobile, category segmentation, merchandising, experiential retail and the use of analytics. Keynote speaker, Gwen Morrison, CEO of The Store, says that consumers’ changing lifestyles has affected the way they shop, and retail needs to keep up with the changes. She also lamented the fact that so much time and effort, and creativity is put into above-the-line advertising, yet when it’s time for a shopper to purchase the product, uninspired in-store displays can often ruin all the work that has been put into creating the brand. “The reality is it’s easier to manage and control TV ads and the online space. The retail environment, however, is an active space in-store and all kinds of things can get in the way,” says Morrison. This is no excuse not to take experiential marketing in particular, right to the edge. To back up Morrison’s position, Jason Knight, strategic director, Ogilvy Activation, says that we need to celebrate and drive creativity in retail as much as we acknowledge and respect the science. “Media fragmentation and increasing competition mean that as brands we either innovate or die.” Unfortunately, in South Africa there are few – if any – mind-blowing examples of turning retail on its head – unlike one Gap store in Canada. The store turned everything in its store upside down, including its sign and cars parked outside the shop front to promote its sale. Knight adds that many so-called limitations that exist in retail marketing are imposed by the marketers themselves. “You can say that every single touch point has the potential to connect with the consumer. There is no need to say that any channel is boring,” says Knight.
“The reality is it’s easier to manage and control TV ads and the online space. The retail environment, however, is an active space in-store and all kinds of things can get in the way.” – Gwen Morrison, The Store
This is where technology can play a huge role in innovation, personalisation and connecting with consumers at every touch point. Take the voucher and coupons industry. While not as industrious, sophisticated or as large as the US and UK, for example, the advent of mobile coupons could change all this. Paper-based vouchers can be subject to fraud and counterfeiting
and there is limited opportunity for targeting and CRM. Distribution, tracking and redemption can all be done digitally using a cellphone and personalisation is a major benefit. Language, for example, can be tailored and campaigns can be done by region, store and product. Customer relationships can easily be tracked with the addition of SMS, mobisite links etc. “It’s a clear and measurable way of obtaining important CRM information from customers,” says Chris Rolfe, CEO, Mobilitrix, which has just launched secure digital vouchers in SA. The advent of digital vouchers and coupons is especially important in SA where the majority of lower LSM markets use a cellphone and also fits in with the advent of the mobile wallet, which is becoming more prevalent. With many in the lower LSM market unbanked and/or unable to participate in e-commerce, along with a very real need for consumers to be able to send money to friends and family elsewhere in the country or abroad, m-commerce can provide a much-needed service. There are a number of services available with Standard Bank’s Mimoney being one of the leaders. Its mobile wallet, MoWaly, is a simple mobile handset interface to Mimoney that allows users to check balances, request and send mimoney, buying goods and other items, > p14
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and services such as credit card generation, are in the pipeline. However, as John Campbell, business manager, Beyond Payments, notes: “Only big brands will successfully launch mobile wallets, which are a great CRM tool with the ability to sell online products such as airtime, which offers a huge market.” The move to mobile wallets in the lower LSM market will take time, so in the meantime, point-of-purchase activation strategies are still key for purchasing goods. Coca-Cola has been one of the most successful brands in appealing to the lower LSM market and, according to Tony Lewis, director, TL & Associates, it’s due to Coke’s OBPPC – occasion, brand, pack, price and channel. He says that once the OBPPC is developed, a brand has much better insight into its consumer. Using OBPPC, Coca-Cola has found the right locations, most impactful communication, the right in-store support and most relevant product for its different consumer categories. “Consumers and shoppers are willing to buy products if offered an understanding of the purchase or consumption occasion; the brands they want; the package that suits their needs; a price they are prepared to pay for the occasion with the right place, delivering the right experience,” says Lewis.
“It is possible to sell green to everyone and it can be done through point of purchase. Get your product first into a category with a focus on the products USP and stop aiming for the ‘green segment’ specifically.” – Tracy Allen, Builder’s Warehouse
Understanding the consumer occasion is imperative – which product is bought at which time, at what venue and by whom – as there are many types of shopping occasions such as quick mission, on the go, pantry stock up etc. The consumer need state, consumption timeframe, purchase frequency, brand portfolio, consumption location and competitor brands also play a role in the rules of engagement, that is the availability, space, merchandising and pricing of a product. On top of this, merchandising and messaging should be dictated by the local environment and LSM levels. Coca-Cola, for example, has in-store activation that differs between different tiers: Tier 1 has only pricing posters with affordability as the main theme; tier 2 has only pricing posters with great value as the main theme and tier 3 has only pricing posters with recommended selling price. Going one step further, in terms of merchandising and up the
LSM scale, using the example of Best Buy in the US, Morrison notes that it is a prime example of using shopper research to segment shoppers –and then actually applying the results in a physical store. “All too often marketers have a lot of knowledge but don’t do anything with it! Best Buy, on the other hand, created hubs within its stores based on their highest value customers,” says Morrison. It is this concept of personalisation that has come to the fore in marketing, brought about by the introduction of technology and changing consumer behaviour. Retail marketers must also rethink the actual concept of stores to become more hands-on – the Apple stores are a prime example, and the latest trends include homeware stores in the US offering in-store cooking classes, for example. “You can’t change mood, mission type, time, store/brand loyalty and expectations for shoppers, but you can alter the environment,” agrees Craig Henry, head of Trade Marketing, Cadbury. “There are simple point of buying drivers: be in a relevant location; make a category logical and easy to shop, optimise the placement and impact of key brands; ensure optimal SKU coverage; manage price and target promotions,” adds Henry. One store that has begun looking at these principles and revamping its in-store merchandising is Woolworths. The brand has one distinct advantage in that it only advertises its own products, but basic principles still apply. According to Andrew Levermore, director of Stores, Woolworths, merchandising should engage, demonstrate a reason to buy, provide a feel-good factor, offer volume (where appropriate) and show clear value. Levermore says that engagement is vital, particularly with some product categories such as fresh produce. With the introduction of new products, tasting is important. Woolworths is now offering recipes at the shelf edge where produce is part of the ingredients; its own custom magazine Taste is opened at the correct recipe page next to produce, for example. “Big displays of volume products work and clear value is more important than ever considering the economic climate,” adds Levermore. Woolworths also offers co-products cross-merchandising (pizza cutter next to the pizza shelf, bottle opener next to the wine) and meal solutions such as a braai solution, picnic solution. “They are a no-brainer additional purchase. Very simple ideas but they certainly help when it comes to selling add-on products in-store,” says Levermore. He also points out that most signs in-store do not make life easier for the shopper. To this end, Woolworths is revamping its signage (eye level not hung from the ceiling) in order to make it easier for customers to navigate around the store. Levermore also points out that retail must start going ‘green’. Woolworths offers energy-saving light bulb disposal bins (so do other retailers), but also conveys its green credentials through offering consumers information on which fish is eco-friendly, for example. “Once our children become the next generation of shoppers and consumers, the retail industry better be ready,” he says. Tracy Allen, strategic brand manager for Builder’s Warehouse, takes the green issue further, saying that green is becoming the norm although the overwhelming majority of consumers buy from need, not because a product is green. However, there is increased awareness in the general population along with products that are evolving to connect with thoughtful spending: reduce your energy and water bills, reuse etc, are becoming more prevalent. “It is possible to sell green to everyone and it can be done through point of purchase. Get your product first into a category with a focus on the products USP and stop aiming for the ‘green segment’ specifically,” says Allen. K
marketingmix.co.za • vol 28 / issue 1/2 / 2010
Retail recovery down under
he retail landscape down under is big business and like in many other countries, serves as an effective barometer of business health. Judging by the 0.4 per cent hike in retail sales in November 2009, the best in eight months, there seems to be some light at the end of the proverbial tunnel; a point not lost on economists and journalists, all of whom have undoubtedly been looking to report some good news after the bleak global financial crisis (GFC) last year. This is a sentiment recently echoed by the influential and laconic Australian retail magnate and chairman of Australia’s largest electronics retailer Harvey Norman, Gerry Harvey: “The retail sector has been recovering strongly since April last year, and most retailers will tell you that.” His view is strongly supported by the performance of Australia’s largest department store chains Myer Holdings and David Jones, both of which posted higher sales in their first fiscal quarter. As further proof of the sector’s recovery, Australia’s currency jumped to a one-month high against the US dollar as a result of consumer retail spending. This gentle upswing in retail sales was very much supported by the local (and different to the South African brand of the same name) Woolworths brand, which is central to the Australian retail industry and ranked 22nd biggest retailer in the world. It has maintained its three-year growth curve in sales, earnings and market share. Plus, with the performance of its liquor business flagship brand Dan Murphy’s and the Discount Department store chain Big W passing its rivals Target and Kmart, the retail landscape looks very promising. This is further assured by the recent announcement by Woolworths Australia that it and its one-third joint venture partner, US retailer Lowes, plan to invest in the region of AUD$2 billion (R14 billion) to build a 150-store national network out of its recent acquisition of Danks Holdings wholesale hardware chain, so that they can compete head-on with their formidable competitor Bunning’s Warehouse. With more than 77 000 retailers across the nation, managing over 200 000 retail outlets and turnover in excess of AUD$200 billion (R1.4 trillion) in annual sales, the sector plays a significant part in shaping the country’s future. Like their peers in South Africa, Australian retailers watch and follow global trends, adopt tried and proven retail tricks, are fuelled by the usual seasonal promotional periods, run similar promotions and even have their own version of lay-bye. The one ‘unique’ thing that the country has is its own version of the US retail gold mine, Thanksgiving. Known as Australia Day and celebrated at the tail-end of the traditional January sales. On 26 January, the country goes into overdrive with a plethora of patriotic promotions and pocket-saving prices and discounts; all designed to breathe life into what is usually a quiet period post the traditional Christmas retail meltdown. One of the reasons the retail sector serves as an important economic herald and prophet is because it’s the biggest employer in Australia, accounting for 50 per cent of all adult employment in the country. Thus, a great deal rests on its shoulders and its impact on unemployment, inflation and the currency market is always profound. So when the retail sector starts to sing, the whole country tends to get excited. With an additional 99 500 new jobs in the three months through November last year and a small (0.1 per cent) corresponding drop in the jobless rate to 5.7 per cent in November, there is much to celebrate down under. While the country was one of the few in the world to largely skirt last year’s recession, an ironic benefit of its geographical location, government policies and fiscal initiatives; the marketplace was not totally immune from the effects of the GFC. The recent 1.5 per cent growth forecast for formal retail sales in SA by the Bureau of Market research (BMR) at UNISA, it would seem that Australia might share a number of common traits with SA, which shouldn’t be ignored. These should give further hope to economists around the world. Perhaps I’m just an eternal optimist and drink from the glass half full, but it certainly makes life a darn sight more fun and worth living!
Richard Duncan The Partnership, Sydney, Australia +61-411-549-791 firstname.lastname@example.org
vol 28 / issue 1/2 / 2010 •
7 day [b]itch
Media and advertising writer, Financial Mail
It’s 5.30am and I’m on the road; first day back at work. Waking up was a drag, finding something to wear was even worse. Mental note: I’m going back to gym. Then I stop at McDonald’s and grab two coffees. I’m tempted to get a muffin too. I arrive at the office, and as expected, no one is there. I start with my Monday morning ritual – chatting to my aunt in Durban. As usual, we always have a good laugh. My desk is as I left it – stacked with newspapers, magazines and annual reports. I decide to catch up on what’s been happening. At 8.30am, I get a call from my sister to find how my day is so far. It’s too early to tell. It’s 9am and my colleagues are beginning to arrive. It’s good to see everyone.
I’m standing at the bottom of the steep hill in Dobsonville trying to psych myself up to run up. Damn, the Christmas pudding and the wine. “Masiye my sister” (Let’s go my sister), I hear a voice say behind me. It’s one of the guys I see jogging regularly. I try to protest but he won’t have it. He offers to jog with me. “We will take it slowly,” he says. I’m too embarrassed to turn him down. Two kilometres later, I think I’m going to pass out. Another kilometre and I can’t feel my legs. It’s 6.15am and we’ve been on the road for 40 minutes. I put my foot down. I refuse to go on any further. Going back is easier. The road is downhill. On my way to work, I stop at Westpark Cemetery. It’s my mother’s birthday today. She would have been 65. I leave flowers on her tombstone. It’s the beginning of a new week at the FM and I have not included any story ideas on the diary system. I decide not to stress. Something should come up. It always does. I make a few calls.
The life of deadlines and headlines has definitely begun. We are busy working on our annual January ‘Hot Stocks’ cover. Thank goodness I sent my copy before going on leave. The features editor informs us that he’s short of stories. I scrounge around for an idea. Got it! The ABC’s newly introduced rule allowing publishers to include copies sold at less than 50% of the original cover price in their certificates. I chat to Starcom Mediavest’s Gordon Patterson about it. As usual, he’s of great help. I write the piece and send it through. My day was better than I thought it would be. I leave the office at 4pm. Can’t wait to get home.
I write the piece and send it through. My day was better than I thought it would be. I leave the office at 4pm. Can’t wait to get home.
I managed to run 6km this time and I’m pretty chuffed. I get to the office and the buzz is different. Most people are back from leave and it takes me 15minutes to get to my desk with all the catching up to do. Thank goodness all my articles are in. I logon to Facebook to find out what’s on people’s minds. Everyone in the office is talking about the Google – China stand off. The SABC is in the news again. I meet up with my sister and niece for lunch across the street from the office. I leave the office relatively early at 7.30pm. Hmmm… movies? K
Waking up to go jogging was a drag. I do it anyway managing 3km. Get to the office at 9am. I’ve decided to write an article on the 2010 FIFA World Cup and whether media and advertising still think it will cure their financial woes. I get a call from Exclusive Books in Rosebank. The GMAT exam book I asked them to order is ready. It’s 5.30pm and the office is now almost empty. Traffic to Soweto shouldn’t be that bad. I’m tired. Thank God it’s the weekend.
I’m not having a good day at all. It’s deadline day and people are losing their sense of humour. Tempers are rising, including mine, and my section head is breathing down my neck. Finally, the gods smile down on me and I send my piece through and reward myself with a slab of chocolate. I go have coffee with a friend. Back at my desk I find a box of chocolates with a note: Happy New Year! I’m smiling ear to ear. I leave the office at 8pm. No one leaves the office at the FM without having proofread all their own articles and signed the final printouts. I feel like another slab of chocolate.
It’s 10am and I’m stressing because I’ve not been able to find people to comment on my 2010 article. My deadline is in two hours. A reminder pops out. I need to go pay the registration fee for the PMD course I’m doing with GIBS. I write a reminder on a post-it and stick it on my computer screen. Things begin to look up around 11am. I manage to do two interviews. I send my piece two hours late. My editor is not charmed. What a way to start the year. I share this with my Facebook pals. They all agree. I feel worse about myself.
marketingmix.co.za • vol 28 / issue 1/2 / 2010
Liberty goes for makeover
eeling old and frumpy just a few years before turning 50, Liberty Life did an analysis of its brand and how it is perceived by consumers. It came to a realisation that even though consumers recognised the Liberty Life brand, there wasn’t a full understanding of its business offerings, products and services. It was time for change. Liberty set its target on moving from a domestic-focused life insurance company to a wealth management company operating on the African continent and in other developing markets. Liberty extended its products and services to be holistic in terms of a customer’s needs at any given life stage; with life, health, wealth and investment all key focus points. The company’s corporate structure was revamped to facilitate the group’s new wealth management growth strategy, products were also changed to demonstrate the new brand and business philosophy, and policy documents were simplified and reduced from 16 to three. The name that the corporation had been known by since its establishment, Liberty Life, was changed to Liberty. “The reference to life gave the impression that life insurance was Liberty’s main source of business. We wanted to move away from being an insurer to a wealth company that aims to empower people to own their lives,” says Howard Fox, divisional group marketing, Liberty.
The Own Your Life campaign launched at a time when the world was reeling from the financial meltdown. “A lot of thought went into what was going on. At the time of the launch in September 2009, we were just seeing the beginning of green shoots – the economy was starting to grow and giving people hope,” says Fox. He also says the overall goal of the rebranding is for consumers to see themselves with Liberty. “Our message is that Liberty is a trusted financial partner for life.”
However, the major changes within the company, and internal marketing campaign had to be rolled-out to employees before the public campaign could begin. According to Fox, all the departments worked together to gain an understanding of the new philosophy and direction that the company was taking, which helped to improve credibility and strengthen the bonds of trust between leaders and employees. “This was important as the global financial crisis impacted negatively on a lot of people. There were a lot of insecurities – employees were concerned for their jobs and livelihood.” He says the timing of the internal marketing campaign was perfect as
Liberty sponsored a lone rower, Peter van Kets, who took part in the Woodvale Atlantic Rowing challenge in an attempt to break a world record by rowing solo across the Atlantic in 50 days. “This race is the epitome of perseverance, proper planning and taking calculated risks. In this way it is a lot like life, which is why Liberty is supporting Peter’s commitment to achieving his goals. Liberty is about empowering people to own their lives, and Peter is an extraordinary individual who certainly does own his life” says Howard Fox, divisional director group marketing, Liberty.
marketingmix.co.za • vol 28 / issue 1/2 / 2010
The birth of Liberty
Liberty Life was established in 1958 by Donald Gordon, a chartered accountant by profession, with only R100 000. By the end of 1958 it had a total of 83 policies on its books. In 1962 the company was listed on the Johannesburg Stock Exchange (JSE ) with first year earnings of R32 000 after listing. Gordon retired as the chairman of Liberty Life South Africa to London in 1999. At the time, the company was said to be the third largest insurer in the country. He continued working on expanding Liberty International’s portfolio of regional shopping centres to a portfolio worth around R72 billion.
it allowed everyone concerned to iron out any wrinkles and also air any apprehensions, which could then be dealt with. “We invited business guru and media personality Rene Carayol to speak to staff members about the Own Your Life campaign linking it with personal branding and its value. This approach is taken when people are united in purpose and know where they are headed, positive results occur.” In addition, Bruce Hemphill, CEO of Liberty, personally addressed staff members about the direction that Liberty was taking.
The new advert
Liberty’s advertising agency at the time, Metropolitan Republic, was tasked with not only coming up with the new ad campaign, but also to take the brand to task, revamp it and ignite the world with a new brand that fully represents Liberty’s new philosophy. Once the Own Your Life pay-off line was launched, it was followed by a call-to-action media campaign motivating the target market to take charge of their lives. “The whole premise behind this is that if they do take charge of their lives, then Liberty’s products and services will assist them, both in the long term and in the short term, says Peter Khoury, executive creative director, Metropolitan Republic. The vision of the campaign is to inspire people to improve the quality of their lives by planning ahead. “The campaign is based on human truth allowing us to execute many different ads across all media that spoke to the different needs of different consumers, at the different stages of their lives. We used marriage, child birth, a first home buy, a bigger home buy and retirement as a way to speak to consumers in a way that they can understand and be inspired to take action,” says Khoury. Fox adds: “This campaign takes a fresh angle on how we all live our lives, and demonstrates that if we take charge of our lives and plan ahead, we can live the life that we want.” The television ad shows a timeline of photos of one man’s life from birth to death and how he fulfilled his role as a son, a friend, a husband, a father and a businessman. “We navigate through his life, all the circumstances he faced all the decisions he made. He planned for everything, the good times and the bad. The ad is narrated by the man’s son, who pays homage to his father for the life he chose to live. The down-to-earth tone throughout television, radio, print and outdoor really demonstrates the positives of planning ahead, regardless of income or social status,” says Khoury. Fox says: “The advert is aired on all SABC TV stations, e.tv, M-Net and DStv to reach a wide audience across all demographics in SA because Liberty’s target market is every South African who has money to invest.” Interactive competitions using various characters on radio that highlight some of their own life moments are used to engage with consumers and create an emotional connection to the brand. The outdoor campaign includes street-pole advertising and billboards that reflect the comprehensive health, life and investment solutions of the group. K
vol 28 / issue 1/2 / 2010 •
Magazines – above and beyond print
Print advertising revenue has been evaporating for some time now, thanks to the Internet, forcing it to go digital in order to stay relevant. The global financial crisis also affected the publishing industry through ad spend and circulation figures. Has the magazine industry weathered the storm? Will the much-anticipated World Cup bring much-needed oxygen in the form of ad spend? Will Apple’s much-hyped latest gadget mark a watershed and accelerate the take-up of paid-for multimedia content. Or is it just something for the geeks? Marketing Mix caught up with magazine industry players to get insight on the state of the industry.
John Relihan, CEO of Media24 Magazines
Marketing Mix: What will the local magazine industry look like this year and beyond? John Relihan: We appear to have weathered the economic storm fairly well, but not without some casualties in the form of fluctuating circulation and advertising levels. This recession might’ve been a wake-up call, but there are far bigger factors at play that are bound to change the face of magazine publishing, for example, the migration online for a bigger choice of leisure and entertainment. There has also been growth in demand from consumers to be able to access content where, when, how and on whichever platform they want. Nevertheless, I do not foresee any major changes and/or shake-ups in the composition of publishers’ portfolios in 2010. Rather, this is expected to be a year of consolidation, innovation in publishing across multiple platforms, of leveraging the strength and equity of the more mature brands and fine-tuning the value proposition of titles aimed at the emerging market. I remain very positive about the future of magazines. We have the advantage of learning from the mistakes and developments in more developed markets before the trends hit our shores. We used to have about a three to five year lead time, but technology has shrunk this considerably. The agility to adapt and respond to the changing market will be key for survival and growth. MMX: Despite the reduced ad spend what other challenges did the industry face in 2009 and how can it learn from that? JR: Although the trading conditions might’ve been challenging in 2009, I think 2010 will actually be a year of the real challenges for magazines, among them: G Reverting to rate-card rates after the discounting game that some publishers employed when the going got tough G Getting digital right and gearing for the growth in mobile Internet usage G Finding alternatives to the traditional publishing model and generic revenue streams to compensate for loss of income to digital media G Remaining relevant in the media mix by clearly defining target audiences. MMX: Publishers are struggling to come up with business models for online content – do you think a remedy can be found soon? JR: The debate around paid and free content online will remain until somebody comes up with a perfect solution. I think Apple’s iPad might just be that solution, together with the e-reader joint project of five major publishers in the US. Only replicating magazine content online is not the solution; we need to move beyond the constraints of magazine pages and develop experiences that are both true to the brands and tap into those components that cement the respective title communities. Players in the US market that are successful with paid-for online content models agree: people are willing to pay for truly premium content, aggregated and otherwise. MMX: What is the main driver of magazine readers’ engagement? JR: Content. Content. Content. And even more so if packaged in a visual language that entertains and informs. The magazine experience is deeply personal and readers build an emotional relationship with their title(s) of choice. As long as we continue to produce compelling content, we will continue to build loyal reader communities that are also attractive to advertisers. MMX: Do you think the magazine industry caters well for the emerging markets, if not how can the gaps be filled? JR: There has been exponential growth in this sector of the market over the past two to three years. The existing range of titles aimed at this market is fairly diverse and does cover all sectors. In addition, some of the mature ‘traditional’ titles have also been experiencing growth in multicultural readership. I do not expect to see the emergence of a flood of niche genre titles, such as home interest, food or health, published exclusively for the emerging market. Publishers might rather be investing in making their titles more relevant for and representative of multiple consumer markets. MMX: Where do you think growth areas in this industry will come from, could it be from new titles being launched? JR: I think it is unlikely that we will see any major launches of new
marketingmix.co.za • vol 28 / issue 1/2 / 2010
local titles over the next year. The women’s interest sector remains heavily fragmented, despite the number of closures over the past few years. Any new titles will in all probability follow the global pattern of big international publishers launching licensed brands into developing markets. However, success is highly dependant on how the content is translated into the local context. South Africans are firm believers in ‘local is lekker’ and they vote at the tills. There might still be some gaps in a few niche environments, but very few of them can sustain a flood of new entrants. For the next year or 18 months, I expect the only growth to come from mature titles launching standalone brand extensions in print and otherwise. Also, more consumer publishers are venturing into customer publishing – one of the few sectors to have withstood the economic downturn really well and which are reported to be on a good growth curve in developing markets.
MMX: Any plans to expand Media24 portfolios? JR: We are already very well represented in all the genres. Nevertheless, any publisher worth their salt would always keep their eyes open for potential opportunities that would contribute to sustainable future growth. MMX: Media24 recently bought the specialised magazine division of Primedia Publishing, which includes about 17 titles. What necessitated the move? JR: We consider the acquisition to be of strategic value and the portfolio of business titles is a good complementary fit to our portfolio of predominantly consumer titles. The economy is bound to recover and we expect this already strong and healthy business unit to follow.
Andreline van Tonder, associate publisher for Associated Magazines
MMX: Are magazine readers changing and is the industry changing with them or doing anything to tap into the new consumer? Andreline van Tonder: Looking at the latest readership figures it’s clear that there are more black readers entering the market and reading our magazines. Black readership across all Associated Magazines’ titles, including Cosmopolitan, Marie Claire, House and Leisure and O, the Oprah Magazine are on the increase. It indicates that a new market ofreaders is forming and that they like what they see in our magazines. Media consumption in general is changing with younger consumers preferring to engage with various different media platforms, including magazines. We are experiencing a total integration of media and we are already delivering our trusted content on various platforms, including the Internet and mobile, but with the print versions of our respective magazines driving the brand experience. MMX: What would you attribute, not only to your own growth, but the overall upward trend for the local magazine industry? AVT: Magazine content evolves constantly. Today, we have more magazine titles to choose from than in the past. As our country becomes more literate and educated, more people want to read about the world they live in – and magazines deliver that in a unique manner. MMX: Distribution is one (rather important) piece of the puzzle for magazines. Are you looking at new and interesting distribution methods as a way of changing the way magazines operate? AVT: We are constantly investigating more cost-effective, innovative and alternative ways to deliver our content to our reader communities. The magazine print form is just one such channel. Our international partners keep us up to date with the latest innovations overseas. We want to make it easy for our readers to find our content and engage with it, whether it’s in print form or electronic form such as Kindles or an Apple iPad. MMX: Brand experiences are a powerful way for brands to engage with consumers, and possibly also, to drive loyalty, is that statement true? AVT: Brand experience is the driving force behind brand loyalty. At Associated Magazines we realised many years ago that our brands need to come alive and deliver a unique experience for our readers. Our reader events and activation support the overall positioning of our brands and further enhance the experience of the brand. For example, the Cosmopolitan Sexiest SA Men calendar was the first of its kind in South Africa and today is not only a sought-after calendar but readers partake in the voting process and get the opportunity to attend one of South Africa’s leading social events, the Cosmo Sexiest SA Men party. Another example is O, the Oprah Magazine, where we have the unique opportunity to host reader events with one of the world’s most influential icons, Oprah Winfrey. We are also the only magazine in South Africa that can offer our readers the opportunity to attend The Oprah Winfrey Show in Chicago, allowing our readers to truly experience the bigger brand, which is Oprah. We are all about creating communities through our content. MMX: Are you looking at integrating digital media fully with mobile campaigns, mobisites, smart phone applications, online and social networks as a way to engage with readers, extend your brands and offer integrated advertising solutions? AVT: We are no longer just magazine publishers, but content providers across multiple attractive platforms with various channels to our advertisers that can be measured. Our readers interact with us
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via mobile, the Web, events and magazines. Strong brands that have these platforms will survive the recession. Content is king and should be relevant to readers and fulfil their needs. A magazine brand is a true brand religion – it creates a sense of belonging to a community, is your best friend, has a clear, holistic view of life, tells stories, gives reliable advice, creates change and has strong principles and opinions. Cosmo’s readership has grown during the recession because readers trust the brand. MMX: What is your take on the new ABC 50 per cent rule? AVT: The amendment to the 50 per cent rule might have some benefits to help drive circulation, but we’re not planning to change the way we do business. Print and production costs are expensive and we simply cannot afford to discount our magazines any more than we already do for the sake of circulation. We also believe that if a reader is willing to pay a decent price for a magazine it’s because they see the value attached to it. If you discount your brand too much you devalue it, your readers will feel cheated and your profit margin will become
non-existent. In today’s tough economic environment one simply cannot afford to build a business on low profit margins. MMX: Looking ahead, do you think 2010 will be a good year for the magazine industry? AVT: I think 2010 will be a very challenging year for the magazine industry, but there is light at the end of the tunnel. As retail slowly starts to recover, we believe we should see better circulation figures towards the end of the year. MMX: How best can marketers and media planners prepare for the year ahead? AVT: The recession has taught us many lessons, and one of them was to go back to evaluating our marketing spend and to ensure a better return on investment. When things go well, marketers often forget about that. Focus on the bottom line, don’t try to be something you’re not, but take calculated risks and stay true to your brand promise.
Mike Eilertson, CEO and publisher, LiveOutLoud magazine.
MMX: Do you think the 2010 FIFA World Cup will be the answer to most publishers’ prayers? Mike Eilertson: It is going to be an amazing year and I believe publishers will definitely benefit from it, but the financial crisis has presented larger opportunities than even the World Cup as it has streamlined media channels. MMX: Do you think South African publishers will ever find a winning formula integrating new and traditional media into their business plans? ME: They have to. The formula publishers use has barely changed in over 80 years which is absurd, and was also taken directly from overseas markets and not adapted to our own. Just in our segment, LiveOutLoud has broken every publishing norm, and this has been the key success factor in integrating the different segments. MMX: LiveOutLoud caters for the high net worth market, any chance of extending the brand to cater for the emerging market, SA’s growing middle class? ME: No, in order to be successful you have to have a strong sense of self and can’t cater for everyone’s taste and preferences. LiveOutLoud is for the mavericks of industry, those who dared to be different and made a name for themselves. We have other publications that cater for the more inspirational market. MMX: Brand experiences are a powerful way for brands to engage with consumers, and possibly also, to drive loyalty. What strategies would you say worked best for you to make the LiveOutLoud experience worthwhile? ME: The strategy that has worked best is that we understood that LiveOutLoud is more than just a magazine, and extends beyond the page of print to bring the lifestyle to life. This in turn created the opportunity for our advertisers to get involved with our clients on a personal level, creating well-rounded advertising campaigns. Our clients get the benefits of one of a kind events, whereever detail is a collaboration of the top luxury brands of the world. MMX: Do you think there is a need to revisit the current distribution methods, or maybe there is a need to change the way magazines operate? ME: I do, as mentioned earlier, the industry hasn’t changed for over 80 years and is in need of some clever thinking. We took this challenge to heart and the answer was the fastest growing exclusive subscription base in SA in less than six months. Publishers have to throw away old processes and re-invent the wheel. MMX: In your view, what is the general state of the magazine industry? ME: Old, stale and tired. MMX: Has the industry been innovative in winning readers and advertisers? ME: No, not at all. On the odd occasion you see signs of brilliance and they reap the rewards tenfold, but the diminishing number of subscribers as a whole and readers in general show the state of the industry.
marketingmix.co.za • vol 28 / issue 1/2 / 2010
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2010 D elegate R ates
One day conference 1 - 2 delegates 3+ delegates R2 950 per delegate excl Vat R2 650 per delegate excl Vat One and Half Day Conference 1 - 2 delegates 3+ delegates R3 950 per delegate excl Vat R3 650 per delegate excl Vat Two day conference 1 - 2 delegates R5 750 per delegate excl Vat 3+ delegates R5 250 per delegate excl Vat
Useful c ontacts
Sponsor Contact: Noelene van Niekerk, email@example.com / 011 234 7008 Delegate Contact: Marianne Nzioki, firstname.lastname@example.org / 011 234 7008 Speaker proposals: Terry Murphy, email@example.com / 011 234 7008
For more information visit www.marketingmix.co.za
Local still relevant
y virtue of its nature, community media is a mirror and content hub of the community it aims to serve. Its ability to reach into niche communities makes it an affordable and viable medium for advertisers to communicate with its target audiences within particular geographic areas without much wastage. The more targeted approach makes room for campaigns to be altered according to geographic zones; this means that even the smallest budget can deliver to targeted audiences. “Marketers and planners need to understand the different nuances between areas like Sandton and Constantia, and understand why their approach to Edenvale should be different to that for Alberton. This level of micro marketing will ensure that all the ‘parts’ work together to make the ‘whole’ a success,” says Chris Botha, joint managing director, The MediaShop. Much of this information can be gleaned from the ROOTS survey from the Newspaper Advertising Bureau (NAB), which is an urban retail and readership consumer research survey. The ROOTS survey aims to provide media planners, marketers and advertisers with useful insights on consumer buying habits from retail, furniture, fast food and shopping centres. “The trends will be invaluable for marketers and advertisers as it will clearly depict how areas have changed and how shopping habits in particular have developed and how shopping habits in Soweto have been influenced by the opening of Maponya Mall, for example,” says Lynne Krog, research manager, NAB.
There has been a lot of infrastructural and commercial development in areas such as Soweto and Tembisa setting standards for economic growth. These developments have created the right conditions for community media to operate within the previously disadvantaged areas. In Soweto, “the building of four major shopping malls, Protea Gardens, Bara, Jabulani and Maponya Mall have notably changed consumer purchasing behaviour in the area and benefited not only Jozi FM but other community media companies that operate within the area. Soweto houses major institutions that employ a lot of people from the area and has opened new opportunities for Jozi FM as retailers scramble to get to consumers,” says Nono Mcunu, station manager, Jozi FM. Even though community media is thriving and enjoying growth, it has had to face insurmountable odds. In particular, community broadcasters have had to overcome obstacles and turn the economic tables around to make the best of the non-commercial model required by the Independent Communications Authority of South Africa (Icasa).
The regulator requires community broadcasters, radio and TV to generate their revenue through paid-for advertising, ICASA has the responsibility to limit the amount of national advertising on community broadcasters, however, this hasn’t necessarily been implemented. For Cape TV to overcome some of the problems it
marketingmix.co.za • vol 28 / issue 1/2 / 2010
Top 10 community radio stations (RAMS Nov 2009)
1 2 3 4 5 6 7 8 9 10 Jozi FM Unitra Community Radio Alfred Nzo Community Radio Radio Tygerberg Radio Khwezi Qwaqwa Radio Voice of Cape Thetha FM Zibonele Community Radio Mosupatsela FM
Gauteng Eastern Cape Eastern Cape Western Cape KwaZulu-Natal Free State Western Cape Gauteng Western Cape Free State
Past seven days Nov 2008
560 000 375 000 32 000 312 000 132 000 211 000 205 000 227 000 208 000 129 000
Past seven days Nov 2009
566 000 343 000 317 000 307 000 274 000 237 000 220 000 211 000 207 000 196 000
experienced during its teething stages it partnered with various organisations to assist with much-needed operational infrastructure. “Our principal partner, the South African School of Motion Picture Medium and Live Performance (AFDA), provides Cape TV with free office space, as well as access to its television studios, equipment and student operators. In return, Cape TV provides these students with experience in a real broadcast environment as well as some mentoring and lectures,” says Mike Aldridge, broadcast manager, Cape TV . “The model under which we are required to operate does not hinder us at all; we believe this to be an advantage to public service broadcasting. We are fostering partnerships with government and other institutions to build a diverse financial support base for community broadcasting. Donations from the public are another source of income. Cape TV staged its first fundraising telethon in 2009,”says Aldridge.
SAARF data, Soweto TV boasts viewership of 1 622 180 for the period June 2009 and July 2009 while Cape TV had 463 480 for the same period. When Soweto TV was first given the go ahead to be on air, it was only granted a short-term licence, and that according to its managing director, Tshepo Thafeng, “gave us a lot of headaches, because at first we had operational issues we couldn’t start broadcasting immediately after receiving broadcast licences we needed to first get facilities, then go out and get advertising.” Advertisers were reluctant to come on board because “we couldn’t guarantee them that we would still be available in the long run. They wanted long-term engagement, which we could not guarantee because we only had permission to operate for a short time,” says Thafeng. Icasa recently granted Soweto TV a class licence, permitting the station to operate for seven years, “this will assist us to turn the economics around, because we can now plan for the long term. We are still waiting for the rules and regulations for the class licence from Icasa. I am very excited that we have this licence, we can now start making long-term strategic plans, which will include advertising and marketing, and how to turn the viewership numbers into currency for the station,” says Thafeng.
Despite the hindrances faced by the TV stations, community TV in South Africa is still relatively new and Soweto TV and Cape TV are proving to be forces to be reckoned with.
Despite the hindrances faced by the TV stations, community TV in South Africa is still relatively new and Soweto TV and Cape TV are proving to be forces to be reckoned with. So far there are only three licensed community TV stations in South Africa: Soweto TV and Cape TV with Tshwane TV the newest addition. According to
Community radio has come a long way and settled down. In the early days, it relied on volunteers to function. It is able to retain staff for longer and generate revenue despite the economic downturn. Simon Milne, media manager, the Media Connection, describes “community radio as a sleeping dog that is under utilised, it commands 20 per cent of the radio listeners’ pie, 7.2 million listeners, who listen to over 90 radio stations broadcasting in all 11 official languages. Community radio reaches into niche communities, has great influence and is at the hub of the community, a perfect fit for listeners, advertisers and marketers. Boxer superstores and Shoprite, for example, stood up and took note, because their businesses depend on this market.” He acknowledges that there is still a need for skills training in areas such as business management, marketing, brand management and governance. Milne says there are plans to build the image of the sector through capacity-building projects and engagement with strategic partners. Jozi FM, which broadcasts from Dube in Soweto and is one of the most successful community stations in the country, managed to
vol 28 / issue 1/2 / 2010 •
Top 10 free newspapers (ABC July-Sept 2009)
1 Eastern Express 2 PE Express 3 Plainsman 4 People’s Post Mitchell’s Plain 5 Vukani 6 Algoa Sun 7 Vaal Vision 8 Maritzburg Sun 9 Randburg Sun 10 The Mirror 144 442 89 793 83 504 83 340 81 160 76 170 68 652 68 425 66 733 65 100
Corresponding previous period
New member 89 798 83 504 83 340 81 160 76 154 64 908 68 361 60 658 64 894
turn the economics around and tapped into the local economy without relying on donor funding. Jozi has grown to become the largest community radio station in the country (566 000 RAMS Nov 2009).
Community newspapers can somehow be classified as a communications medium for the retail and wholesale industries. It is supported by the knock-and-drop model, which draws and guarantees regular readership for newspapers. “For most categories of advertising, research shows community newspapers are, by a long shot, the most viable medium for advertisers to communicate with their target markets. There is nothing new in this and we’ve no reason to suspect advertisers don’t see it this way or have changed the way they see it. The data show that nine out of 10 readers of a community paper claim that they find the advertising in their paper useful,” says Bruce Sturgeon, chief executive officer, Caxton Community Newspapers. Caxton Urban News publishes up to 30 000 newspapers a week to areas such as Diepkloof, Orlando, Pimville, Protea and Dobsonville and other micro-geographic regions that have their own identity and local news. “Considering the economic conditions at present, we think our papers in areas such as Soweto have progressed well. We
researched 10 areas in Soweto and average issue readership overall sits at 61 per cent, it does vary between areas: Zola is at 58 per cent with 78 per cent in Diepkloof,” says Sturgeon. According to Sturgeon, recent research shows readership of Caxton’s free newspapers generally remains as high as ever and has improved in some areas over the past few years. “The data show that the average issue readership of community papers has increased in Gauteng, Durban and Cape Town from 2007 to now. Gauteng is at 67 per cent to 69 per cent, Durban 70 per cent to 83 per cent and Cape Town 68 per cent to 72 per cent,” he says. Sturgeon says reader profiles have remained much the same, and are expected to continue in that manner at least until the economy and the property market pick up and people start to move around again.
Even though MyWeek magazine has closed shop, Get IT, Homemakers and Inside Out have a net distribution of 1 191 069 (ABC July to September 2009) and can still be integrated into other platforms to deliver relevant, lifestyle-entertainment info to communities. Their strategic value comes from the fact that they are available free of charge, yet are also able to serve as a tool through which publishers can engage with communities.
Top 10 free magazines (ABC July-Sept 2009)
Joint 1 Joint 2 Joint 3 4 5 6 7 8 9 10 Home Talk Johannesburg Homemakers Fair Johannesburg Home Talk Pretoria Homemakers Fair Pretoria Home Talk Cape Homemakers Fair Cape Get It Cape Town Get It Northern Suburbs Joburg Get It Ballito to Umhlanga Get It Joburg South Get It Joburg West Get It Pretoria Get It Joburg East 229 550 119 615 115 30 30 25 24 24 24 23 110 311 153 136 530 490 389 646
Corresponding previous period
232 500 122 000 115 849 New member New member 20 103 24 540 24 074 New member New member
marketingmix.co.za • vol 27 / issue 11/12 / 2009
DMA SA Launches
Membership for Individual Direct Marketers
he Direct Marketing Association of South Africa has launched the 121Club – www.dma121club.com – giving individual direct marketers the opportunity to join the professional industry association in their individual capacities but still enjoy the benefits afforded to corporate members. “Given the number of responsibilities that marketers need to juggle on a daily basis, many will think long and hard about joining a professional organisation and committing their time to yet another business activity. However, being part of a professional body for individual direct marketers such as the 121Club brings with it critically important benefits in terms of professional career development, exposure to and alignment with best practice trends, business opportunities and networking,” says Brian Mdluli, CEO of the Direct Marketing Association of South Africa. “In particular, given the complex legislative landscape dominating the direct marketing industry at the moment and which will have a fundamental impact on the manner in which DM practice is implemented and conducted, being part of the DMA’s 121Club provides absolutely critical insights, guidance and interpretation of these laws. Joining a professional body such as the DMASA through the 121Club means that individual members now have access to some of the best minds in the industry from various perspectives including legal and financial, creative and strategic, database and analytics and more. This is where the true value of being a member of an industry association comes to bear,” adds Mdluli. But being a member of an industry association as vocal and active as the DMASA also calls for proactive engagement and participation from the member. “The core purpose of an industry association exists for the betterment of its members in terms of conducting their business in a manner that is professional, fair, ethical and to the overall betterment of the entire industry. But some onus also lies on the member. Simply showing up once or twice a year to a meeting will not help you get to know the other members of the group. It is at the committee level where the real networking occurs and where you will develop deeper relationships with other members of your association and realise its true value,” explains Mdluli. And it’s exactly this value that the 121Club aims to bring to its members. “These benefits usually come at a price not affordable to individuals, however the 121Club brings all these benefits to consultants, direct marketers and SMMEs at a fraction of corporate membership. You’ll make valuable professional contacts and gain access to a wealth of useful information, exclusive online resources, discounts on education and training programmes, conferences and seminars, special offers from our DMA members on products and services and early notification of important announcements and events. But most of all, you will have the backing of an industry association that has significant political and legal clout and can help you navigate the ever-changing DM landscape,” concludes Mdluli. Joining a professional organisation is beneficial for your own professional development and the future of your business. The connections you’ll make, the resources made available to you and the ideas and advice you’ll discover represent an outstanding return on what amounts to a modest, manageable investment of time, money and effort. It could turn out to be one of the best things you could do for yourself and your business.
For more information on the 121Club go to www.dma121club.com
marketingmix.co.za • vol 28 / issue 1/2 / 2010
How easy is it to overturn the loyalty effect?
eaders who truly understand the loyalty effect will continue to enjoy success stories, despite changes and new influences that the customer is exposed to. I have been living in Cape Town for 13 months, after an entire lifetime in Johannesburg. I thought I would take stock of my own ‘loyalty’ behaviour since my move and check to see what types of patterns have emerged, changed or disappeared. Firstly, my airline loyalty has without doubt shifted. Flying locally (Durban and Johannesburg) for personal reasons has increased, which meant that I really did need to shop around. I choose BA whenever I can; I like its offering, the planes and its service from start to finish. Mostly though I like the fact that by paying with my Investec card I can make use of its airport lounges and earn dividends points. This gives me a double dip in earning BA Miles as I earn for flying and can convert my dividends. I have therefore increased my loyalty to Investec and to BA. My loyalty to coffee shops has shifted dramatically. In Johannesburg I only went to the coffee shop around the corner from my office, virtually every morning. It had no loyalty card, but greeted me by name, served me quickly and treated me and its other morning regulars like royalty. Now I am still struggling to find the ‘right one’. When I lived in Sea Point I tried 10 coffee shops to find one which suited me, I eventually chose one in Green Point, joining its loyalty programme and every so often had free coffee. Then I moved down the road to Mouille Point and discovered two coffee shops with a view of the sea. So without even thinking about one free coffee every two months, I simply stopped going to the Green Point coffee shop; the overall offering wasn’t compelling enough for me to keep going there. I loved the Virgin Active gym in Melrose Arch, and was inherently loyal to it and to my Discovery Vitality programme. I tried two of their gyms down here in Cape Town, and hate both. When my membership expired, I never renewed it, and sadly my Vitality status has dropped to blue. I examined the whole Vitality offering and realised that I really don’t use it much and have every intention of cancelling my membership. Saving the monthly fee will pay for my yoga
classes at a small centre. Transactional loyalty is no longer as easy to garner from your customer as it used to be. There are more shopping centres to pop into than ever before. If your loyalty was to Clicks and there is now a Dis-chem much closer to your home or work, or en route to the school, you are quite likely to go there. How many people are more likely these days to stop at the little shopping centre on the corner rather than struggle with parking and crowds at the bigger malls? Two perfect cases are the new Cape Quarter that has opened in Green Point and the new Morningside Shopping Centre in Sandton. Dipstick research with friends in these areas shows they are definitely stopping off there and if their local retailer isn’t available, the substitute is ‘good enough’. Retailers aside, there are so many more products available on the shelves, with major brands such as P&G extending brand lines into new areas; suddenly the choice of toothpaste or dishwashing liquid is more prolific. Media messaging is no longer simple. From TV to print to the new digital (mobile, e-mail etc) channel clutter is created in the consumer’s mind, and they stop receiving these messages as they used to. The Internet has revolutionised the way we relate to each other and our communication expectations and, in fact, in itself is a ‘location’. I have four friends that have recently started online fashion boutiques, stealing away customers from the boutiques in malls and the larger department stores. The clothing is unique, the buying online easy, and prices highly competitive. So how do we, as marketers, keep the loyalty we have enjoyed for so long? To truly understand the brand experience, one needs to consider all points of contact between the brand and the customer, harness these and integrate our holistic offering through understanding their behaviour and lock that in. This means integrating delivery and marketing strategies to offer propositions that are not only relevant but are also woven together in such a way that concept, communication and delivery resonate. If we get this right we can turn the loyalty effect in our favour. K
Nici Stathacopoulos is the owner of a consultancy, the Tipping Point, and is currently under contract to Woolworths, heading up the integration between their retail and financial services companies firstname.lastname@example.org
vol 28 / issue 1/2 / 2010 •
marketingmix.co.za • vol 28 / issue 1/2 / 2010
ustom publishing is one of the most cost-effective mediums a brand can use to capture a customer’s attention, improve its image, create higher levels of awareness, increase loyalty and get a return on investment. Companies across different industries have realised the effectiveness of customer magazines in delivering measurable results, and have outsourced services to specialised companies to produce quality editorial content that will meet the needs of the reader, client and advertiser, “major retailers use it as a medium to communicate and engage directly with their customers,” says Mark Beare, director, The Publishing Partnership. The primary objective of custom publishing is that of a marketing tool not publishing, and measurement of results is vital. “The benefits of customer publishing are clear when the right medium is combined with the right audience for a particular message. Customer magazines connect customers to brands through relevant, engaging content. The result is that customers spend more time engaging with the brand, and the relationship with the brand is strengthened through this positive experience. Once a brand has the customer’s attention, there is an opportunity to improve brand image, increase loyalty and ultimately impact the bottom line,” says Bridget McCarney, managing director, New Media Publishing. Successful customer magazines work to specific objectives, which must be measured and met, the read must balance the needs of the client against the aspirations of the reader. Take Jet Club magazine, which is one of the highest circulating magazines in the country, with a total figure of 1 220 929 (ABC July-Sept 09). “The magazine is only circulated to Jet Club account holders, offers a range of benefits designed to make a real difference in the day-to-day lives of club members, meets the needs of readers who want information that will assist them in making quality decisions regarding their personal finances and it has a strong community feel, addressing topical social issues and offering our readers relevant and useful advice, which has helped us to achieve readership levels well beyond our circulation,” says Beare. Content remains king and a well thought out editorial structure with bespoke content relevant to the market remains the most important aspect of customer publishing. Publishing strategies are built around the unique selling point, which is to create dialogue with customers. “Relevance is the integral weapon in the fight against marketing clutter. So the tools you use to build this loyalty will be totally dependant on the market and what issues matter to them. As a general rule, the more personalised the better; the more tailored the content is, the better the results are likely to be,” says McCarney. Pick n Pay’s Fresh Living magazine, a lifestyle monthly aimed mostly at women who shop for their families, found the perfect balance between capturing the customer’s attention and increasing brand loyalty within a year of its existence. It bucked all trends in print media with its sales soaring by over 40 per cent to nearly 80 000 and shot past other food magazines after it was launched in November 2007. Pick n Pay had just repositioned and rebranded after 40 years in business when it launched Fresh Living with the aim of extending its brand, as well as to help grow its brand equity, entrench customer loyalty and increase the size of shoppers’ baskets. What should be considered is the content, the readership and the relevance for a particular advertiser and marketer. A well-produced title that is relevant and on target, “can provide extremely engaged audiences. A lot of New Media Publishing’s titles don’t accept third-party advertising, but when we do, we ensure that the advert makes sense for both the magazine owner and the third-party advertiser,” says McCarney.
According to McCarney, research conducted by advertisers in Edgars Club magazine showed an increase in uptake of specific offers – one client reported a 100 per cent increase in response rates after an advert was placed in the magazine. “Many of the core advertisers in this title claim they could not do without it, as sales uplift is so strong. Edgars Club delivers the second-highest LSM 8-10 penetration in SA (AMPS 2009A), beaten only by Huisgenoot. No one can argue the relevance for beauty and fashion brands stocked at Edgars stores when advertising in our magazine.” There are several business models, and finding one that meets the client’s expectations is the key to success. In these difficult advertising conditions, publishers will definitely move away from risky business models. “I honestly believe that the secret to an effective custom magazine is still to concentrate on quality editorial. Independent quality editorial will ensure that readers engage with the client’s brand by reading the magazine, and this is the foundation of success for all parties concerned; the client, the reader and the advertiser,” says Seraj Toefy, publisher, Touchline Custom Publishing.
Successful customer magazines work to specific objectives, which must be measured and met, the read must balance the needs of the client against the aspirations of the reader.
The global financial crisis led to a decrease in retail sales, but the custom publishing sector was not adversely affected. As Toefy, points out, “during a downturn there is an even bigger focus on securing market share. If you can increase your piece of the dwindling pie, then you don’t only maintain your bottom line but you position yourself to take advantage of the inevitable upswing that follows. Custom titles play a crucial role in maintaining brand awareness and growing your brand affinity, which results in higher turnover.” All too often, marketers wrongly perceive custom magazines as junk mail that is not read, mainly because they are free. “We ensure that the magazines we print do not become glorified sales brochures by making certain that every issue has a substantial amount of editorial. If the reader is inundated with product ads, they’re less likely to read the magazine. This decreases its effectiveness over time, which will have a knock-on effect on ad revenue and marketing objectives. We have a top-flight publishing team that runs our titles. We treat them as if they were news-stand titles,” says Beare. Toefy also agrees that good custom titles are targeted, relevant and often have a large guaranteed circulation. “Internationally, we have seen that custom magazines’ circulation has grown. This could
vol 28 / issue 1/2 / 2010 •
Five insights on the best ways to use custom media by Bridget McCarney, New Media Publishing
1. Know your customer Be clear about who your target audience is. With this vital information, a customer title can deliver more relevant and valued offers through personalised interactions and targeted messages. 2. Set communication objectives This allows the customer title not only to deliver a marketer’s brand message effectively, but also to emotionally connect a brand with its customers. A customer title should always enhance a customer’s life. 3. Distribution is key Customer media often has a real edge when it comes to distribution. By understanding a brand, clever distribution can unlock an opportunity for engagement with the relevant brand. 4. Segment your audience By splitting the audience, marketers personalise their message so much better. 5. Measure Research is crucial in measuring effectiveness and understanding the needs of the reader even better.
be because with the credit crunch, people bought fewer consumer magazines but still had the desire to read a magazine, so they engaged with their free publications even more.”
Globally, the customer-publishing industry is growing, and has become the second-fastest growing medium after the Internet. The UK’s Association of Publishing Agencies (APA) estimates that the value of the total UK customer-publishing industry will reach just over £1 billion by 2013, despite the economic slowdown. McCarney says the APA’s Advantage Study also found that customer magazines keep consumers’ attention for 25 minutes, which is significantly more than the eight seconds spent looking at
a poster or 20 to 30 seconds spent listening to a radio ad. “Readers of customer magazines are more likely to hold positive views on the brand with the result that customer magazines are found to increase brand loyalty by 32 per cent. It’s clear that customer titles are effective long-term loyalty tools that have the potential to carry brands through boom times as well as a recession.” Effectiveness doesn’t only come from the quality of the printed marketing message. It is also about the quality of attention given to the message. “Customer media facilitates true two-way communication and constant feedback allows customers to be a part of the continuous evolution of the brand,” says Beare.
Applying different models and content approaches to different segments of a well targeted and distributed database makes it easy for marketers to gauge success, and measure the ROI and loyalty ratings. “The tight economy requires proof that a marketing piece can deliver on its promise. Unless a piece truly speaks to consumers, creating an emotional connection with a brand, it’s not worthwhile and it’s not really custom publishing,” says Beare. His advice to brands that do not have a customer title yet, and are considering launching one is: “The basic rules of marketing apply. Objectives need to be clear and target markets identified; there has to be a return on investment and a firm strategy should be in place. The decision around the viability of launching a custom title actually has nothing to do with the size of the brand or the budget. Instead, it has to do with the quality of the database. Relevant content plus accurate data equal no budget wastage. Segmentation plays a role both as a means of managing an existing database as well as offering cost-saving opportunities to clients and a better product to each market.” K
Segmentation plays a role both as a means of managing an existing database as well as offering cost-saving opportunities to clients and a better product to each market.
Top five custom publications – July – Sep 09
Dish & Skottel Vodacom Magazine Jet Club Foschini Retail Group Club Magazine Edgars Club Magazine
Monthly Quarterly 10 x Monthly Monthly
1 353 039 1 224 502 1 220 929 913 727 861 948
Corresponding previous period
1 887 603 1 171 316 1 195 265 929 271 907 495
marketingmix.co.za • vol 28 / issue 1/2 / 2010
A new decade
The past 10 years
At the turn of the century, the millennium bug caused global havoc with the threat that computer systems were going to collapse – in the end, it was all a load of hoo-ha about nothing. With this threat out of the way, online became an experimental tool for brave and forward-thinking marketers and signalled a change in the way consumers thought about purchasing – eBay, Amazon.com etc. The excitement didn’t last as the dot-com bust hit and even innovative marketers scurried back to traditional ways of getting marketing messages to consumers. Conversely, the past few years have seen the very survival of traditional media being challenged due to the online, digital and mobile environment. Publishers and broadcasters have realised that there is a need for a working business model that will successfully integrate both traditional media and digital. The big question for this decade is not whether digital media will completely phase out traditional media, but how the two will work as complementary media tools? Print and television will likely always be with us; however, the money that brands spend on using these marketing methods is decreasing and is being redirected to digital marketing activities. The basic principles of any marketing campaign are to increase awareness, have the cash register ring and increase traffic to a point of sale. This won’t change, just the delivery mechanisms. As consumers don’t consume media for adverts, but for entertainment, education and information, integrating traditional with digital media is key, with digital more apt for providing the all-important entertainment elements. the green space will accelerate awareness and offerings. Brands will further explore differentiating factors in the pursuit of a green identity within the general eco space. Prosumers want to be aligned with socially responsible companies and reward brands that champion the issues they believe in with their purchases and, ultimately, their loyalty. Brands that claim to be environmentally responsible need to be authentic and transparent in their marketing efforts in order to achieve true customer commitment – no green washing, please. The 2010 FIFA World Cup: Despite the rules and regulations handed down from FIFA regarding outdoor advertising, the sector will gain from the event, particularly in innovative use of the medium. Marketing Mix is hoping to see extraordinary outdoor creative this year. TV will also gain from football advertising, hopefully with some great innovation by South Africa’s marketers in their attempt to snatch some of the FIFA sponsors’ limelight. The World Cup will also serve as a learning curve for the local and foreign media in the months leading to the tournament as they experience one another’s working methods, engaging in conversation about media, the country and much more. For all sectors of the media, be it traditional or digital, this year is a huge opportunity to showcase what the SA marketing and advertising sector is really made of, and to highlight our creativity to the rest of the world – who will be watching with beady eyes. Customer service: The explosion of new communication channels into everyday life has directly impacted on consumers; the modern consumer will not abide being talked at – engagement is imperative. Prosumers insist on being referred to as individuals and will no longer respond to the ‘consumer’ tag. More importantly, businesses that grapple with customer service and interaction will find themselves being lambasted with the information immediately being available in the social networking space. On the other hand, do something fabulous, and this fabulousness will spread like wildfire.
Brands that claim to be environmentally responsible need to
be authentic and transparent in their marketing efforts in order to achieve true customer commitment – no green washing, please.
Sustainable branding: Increasingly, products across the board will force consumers into more sustainable behaviour with additional eco-products emerging on the shelves. This will be cyclical in nature as brands give in to consumer demand and increased availability of green products will increase consumer demand. Various sectors of the market, such as car manufacturers, have begun catering to consumers within the eco-context and those brands already in
marketingmix.co.za • vol 28 / issue 1/2 / 2010
Each brand needs to develop its own approach developed within the context of its internal culture and its ability to take social networking support to scale. A peer-based approach – setting up networks that allow customers to support each other through information sharing – is becoming popular. The bottom line is that no brand can afford to be lax about customer service at any point of contact. Customers have a fast and easy way to vent their anger, and they are doing it.
can become a brand, a brand doesn’t need to offer tangible benefits, an emotional one serves the purpose. People brands give people something to talk or tweet about and are generally famous for being famous. The social media space has also helped to develop people as brands, and this decade will see this happening more and more as ordinary people make ordinary people famous. The beauty of this is that people brands don’t advertise themselves, their fame and popularity come through interacting with the people they want to attract. Conversations with tribes: Marketing has started moving from a one-way communication streak into two-way communication with consumers forging relationships with consumers, especially the tribes that have been formed online. As the decade progresses, it will become increasingly important to monitor online brand reputation and be aware of what’s being said and done by the different communities and follow this with damage control to address any issues as they arise. Finding out which brand belongs to which tribe and how influential that particular tribe is (positively or negatively) is absolutely vital. The quest for value continues: In a difficult economic climate there will always be casualties, including much-loved brands. While it is impossible to say that every brand that shut its doors during the recessionword/s missing, it is a fairly good bet that those brands that failed simply didn’t understand the quest for value from consumers. And it’s far more complicated than simple price cutting. One of the key strategic issues facing most brands is the ability to develop a strong yet nuanced interpretation of the global society’s quest for value. Brands that are innovative and consistent in their messaging and offerings have reaped the benefits, but it will take considerable time for consumers to get over the value-first mindset that becomes so prevalent during turbulent economic times. As a consequence, those brands which promote value while still retaining core brand values will do well over the coming years. K
Word of mouth: Word of mouth has always been around, but new communication channels have opened up the arena offering consumers the ability to get instant reviews, recommendations, information etc from a trusted source, which could be a friend or someone they know. We could see the beginning of a backlash from this as consumers become more aware of marketers’ input into word of mouth through affiliate marketing. Engagement: Social media is a part of an overall customer engagement and customer experience model; it helps a brand to cultivate relationships and engage with customers. As more brands make use of Twitter and Facebook, for example, there is a danger of marketers pushing branding initiatives instead of respecting the social media space and using it as a place where consumers meet and engage with their favourite brand – on their terms. PR: During a recession, most marketing budgets are cut or shifted, so opting for public relations makes sense as it has always been about engaging with people. This decade will be the time of ‘the personal touch’, and coupled with the still troubled economic times puts PR firmly back in the limelight. Normal rules still apply; however, no spin and be genuine. Consumers find out much more quickly than they used to, and will spread the word more quickly too. Two recent examples where PR failed miserably are the Toyota recalls and Tiger Woods’ ‘I’m sorry’ press conference. Take note! People as brands: As Damon Stapleton puts it in the 2010 Flux Trend Review, anyone
Brands that are innovative and consistent in their messaging and offerings have reaped the benefits, but it will take considerable time for consumers to get over the value-first mindset that becomes so prevalent during turbulent economic times.
vol 28 / issue 1/2 / 2010 •
The 2010 flux trend review
he 2010 Flux Trend Review serves as a handbook of trends across a wide range of industries with many insights that marketers can take away and work with. It provides a forecast of the marketing industry, including a reflection on how marketers speak to and reach the evolving consumer. Contributors (Mondli Makhanya, Irwin Manoim, Damon Stapleton, Carina Louw, Doctor Marlene Wasserman, Randall Abrahams, Gary Bailey, Italia Boninelli, Dion Chang, Damon Stapleton, Mike Stopforth, Rutger-Jan van Spaandonk and Bishop Paul Verryn) observe the manner in which the conventional methods of doing things are becoming obsolete. The marketing industry is also going through change; new technology provides new tools and experiences for consumers who prefer to be engaged in two-way conversations rather than being talked at. Different chapters are written by thought leaders from a wide range of industries, for example, the editor of Sunday Times, Mondli Makhanya, provides insight on current affairs. Damon Stapleton, executive creative director, TBWA Hunt Lascaris reviews new trends in advertising; co founder and editor of the Weekly Mail, Irwin Manoim writes about the media industry. Doctor Marlene Wasserman aka Dr Eve, looks at sexuality in SA. Other topics covered include lifestyle trends like changing careers, football and living with attention deficit disorder. The recession, global warming and the advancement of technology have induced a lot of change in everyday life in the 21st century, such as purchasing decisions that are now based on values in addition to wants and needs. Consumers are now demanding greater authenticity and complete transparency from brands. As Carina Louw observes, “The consumer’s mindset is jittery and distrustful. So, if you say your product is authentic, it had better be, since informed, connected consumers can see right through sales tactics.”
The State We’re In, The 2010 Flux Trend Review Edited by Dion Chang Pan Macmillan R195
Globally and locally, the days of a passive consumer are long gone; the new consumer is very active and vocal, and wants to be engaged with, not talked at. Damon Stapleton says that for advertisers and marketers this is a dramatic shift from interruptive advertising to interactive engagement, and brands that do not deliver on this will ultimately be outperformed. It is now necessary for companies and brands to not only engage with their target market, but also embark on multiple conversations to secure loyalty. The 21st century is an era in which technology and word-of-mouth rule. “People don’t crave information the same way anymore, they crave interaction. Advertising can no longer be the thing that interrupts what consumers are interested in. It must be what the consumer is interested in,” writes Stapleton. The era of ‘the mouth’ does not allow for marketing strategies that aim at mass audiences that are not only ineffectual, but also outdated. The traditional, tried-and-tested methods of marketing and advertising are being thrown on their head. Web 2.0 challenges the way things have always been done and makes no provision for consumers to be categorised according to their geographic locations, race and cultural backgrounds. ”People now feel the need to connect with like- minded individuals forming ‘tribes’ challenging the idea of LSMs, which takes into account the unique interests of people, and the ever-splintering niches that define them. You are no longer able to box people in set categories and assume their behavioural patterns are based on an empirical, soulless definition of them as a target market – this understanding (and the types of interaction it presupposes) is moving towards a more organic model that celebrates individuality as a primary factor,“ says Louw. The 2010 Flux Trend Review is a good book to start the year with. Reviews from thought leaders could come in handy when planning for the year ahead. It has insightful chapters and the themes gel together with the title. It reviews a changing SA in a thoughtful and analytical manner with brilliant local reviews that are relevant. A must-have! K
marketingmix.co.za • vol 28 / issue 1/2 / 2010
any academics and employers agree that for salespeople to be successful they need to have various traits, skills and characteristics, including stability, self-sufficiency, self confidence, goal driven, decisive, intellectually curious and accuracy. The crucial question then becomes whether the presence or absence of these traits is determined through genetics, experience or training. Companies spend huge amounts on the selection and recruitment of salespeople to determine the level of these traits. Sales recruiters remark that when it comes to selection procedures, psychological test scores have the greatest predictive validity for evaluating a potential employee. However, the use of tests has had bad reviews in the past because of legal concerns and cultural bias. Many companies now rely heavily on the input of psychometric evaluation when recruiting salespeople.
Are the correct sales people selected? M
Consider the following selection principles:
Describing a candidate’s current traits, skills and characteristics isn’t a very accurate forecaster of future performance. Consider a medical examination. Data is collected from several sources like blood, X-rays and stress tests. But all they do is describe your present health in great detail. They can provide general information on how to improve your current situation, like do more exercise. This is the problem with most interviews and the various selection tests, they are only descriptive. These methods are useful when trying to discover existing situations but weak in predicting future results. You can’t train a person for a job they can’t do. There is a difference between skills that can be learned and talent-based skills. Sport skills are talent based and hobby-type interests are learned. You can’t train a sprinter to run the 100m if he doesn’t have the talent. Several business skills are innate and talent based, and can be refined with coaching, mentoring and experience but can’t be learned through training. People with talent start showing these traits at an early age. Also, consider the saying… You can teach everybody to dance, but not everybody will be a dancer! Talent-based skills are very narrowly applied and don’t generalise to other positions. No critical business positions seek out average to general skills when selecting recruits. In business, talent-based skills are the same. If sales are not important to the bottom line of the organisation, very general skills are
good enough. If sales are important, very different criteria will apply when selecting a candidate. This principle of narrow and specific skills sets for talent-based positions versus the more generalised and learned skills explains why the most talented ‘stars’ are not good managers and the best managers have played and understand the game but were never superstars. Thus the expression ‘promote the best salesperson and three bad things happens; you gain a weak manager, lose a great salesperson and nobody is happy.’ Managing people and making sales, require different traits, skills and characteristics. Less is more when it comes to job analysis and identifying selection criteria. There’s the old saying that explains the existence of a camel as the result of a committee trying to design a horse. Statistical regression analysis when applied to careful, thoroughly and objective measures of job performance almost always substantiates the myth about job descriptions. That is, the more detailed the job description is and the more specific the skills or competencies listed, chances are the least effective candidate will be selected. When weighting is used to determine the importance of a job, only the first four to six most important skills actually contribute to success in the job. Typically, the most important factor will carry the most weight, and as the skills go down the list, so does the weighting. The famous 80/20 rule of business is the Kiss of Death. This rule can be applied in many directions, for example, 20 per cent of the customers provide 80 per cent of the business, or 80 per cent of the problems come from 20 per cent of the customers, or 20 per cent of the salespeople bring in 80 per cent of the sales. This principle is known as a normal curve or a random distribution in an organisation. In strong economic times, average can be good enough because as the saying goes ‘a rising sea floats all ships’. But in a competitive environment, average is not good enough. Consider this: a company with 100 salespeople and R100 000 sales turnover. If the 80/20 principle applies, it means that the top 20 salespeople bring in R80 000 worth of business. If a firm improves hiring accuracy by only 10 per cent and there are now 30 top salespeople instead of 20, the increase in sales would be over R40 000. Taking the time and spending money to select well pays big dividends. K
Marius Wait department head: Bunting Road Campus, University of Johannesburg (011) 559 1276 email@example.com
vol 28 / issue 1/2 / 2010 •
Connect your brand to your packaging
eveloping and launching a product in today’s meteorically paced marketplace can be a potential minefield. So in an attempt to facilitate your safe arrival, here are a few things to consider. Whether you are a start-up or well-established brand, most companies plunge full-steam ahead into the development of their new brainchild with the energy and enthusiasm of a six-year-old in the midst of a post party sugar rush. Once all the frenetic activity has died down and the magic formula is tried, tested and given the thumbs up, the time comes to consider the structural and graphic elements. Although this way of working is all too common, it also tends to mask an opportunity of truly embracing the power of the ‘brand in the hand’, with all the potential rush and satisfaction of an industrial strength espresso. I suggest a more omniscient approach, allowing brand innovation and activation to develop side by side. A good place to start is to have a thorough understanding of your brand. Products should accurately reflect the values of the brand from the inside out. These values are the core equity of the brand, and should be the branch from which all else grows. Solid brand values and a commitment to quality all set the stage for long-term growth of the brand as well as customer satisfaction. Once a sound brand platform has been established, product innovation needs to be exhausted – it’s not enough just to be good, you have to do good as well. Ensure that your brand’s proposition is aligned with current environmental issues, the marketplace and your consumer. It’s time for companies to practically embrace the new green movement. The newly launched range of household laundry cleaners from Method is a fine example of developmental symmetry – revolutionary in its product range through a highly concentrated liquid that requires just four tiny squirts to wash a load of washing – who can say no to that! On shelf, it is immediately noticed for its clean and striking graphics, and on closer inspection, you will find that this is no ordinary detergent, but one that explodes with environmental goodness. The ‘hardware’ is that of a structurally unique and eye-catching container that is both lightweight and recyclable, as well as being ergonomically innovative. The products look like they have been developed in the world’s most advanced technical laboratories, and are graphically endorsed with a subtle molecular icon which reads – ‘powered by plant-based smart clean technology’. The holistic effect is of a company seriously set on making a difference. This is clearly conveyed right from its brand innovation through to its graphic and structural design – all three facets of successful brand building working together.
Aardt Davidtz managing director, Liquidlab (021) 448 4636 firstname.lastname@example.org
In today’s marketplace with the plethora of brands flashing their wares, companies can’t afford to ignore good design as a key driver of a solid brand platform. Hence a reason to partner with a carefully screened design agency in the early stages of product development. It is imperative that you allow the design process to run side by side with your product development. Resorting to hyperbolic design as a glossy veneer to sub-standard product content is as destructive as marketing a revolutionary hair growth serum in a paint can – the two need to work together! K
marketingmix.co.za • vol 28 / issue 1/2 / 2010
arketing Mix recently hosted a one-day workshop on word-of-mouth marketing, providing insight from industry experts on the best practices when using effective influencers as a part of the marketing mix. The word-of-mouth marketing cycle starts when a brand gives customers something worth mentioning to pass on to their acquaintances. A friend, role model and celebrities are those that consumers look up to and can influence them to create further word of mouth. The message comes through loud and clear about the need for word-of-mouth campaigns to be original and to cut through the clutter, with ethical codes becoming increasingly important as consumers look to brands to have an honest relationship with them. Don Packett, managing director, Thunk, talks about the psychology of word of mouth, which he considers the most powerful and persuasive form of marketing. Packett says: “Marketers need to accept the importance of word of mouth and then appoint champions who will spread the word and create a disruption in your brand’s otherwise, consistent message, something incongruent with what consumers regularly associate with a product.” He warns that “If the idea is too out of sync with the fundamental truth behind the brand, the message will fall flat. Word of mouth is an honest exchange of information from one person to the other. A true advocate has no affiliation to the brand, but endorses it out of its own right.” Jason Stewart, director, Have You Heard refers to research data that says one in three word-of-mouth recommendations are acted on, in contrast with one in 325 marketing messages. There is general mistrust concerning traditional marketing messages and consumers are increasingly turning to friends for information about brands. Stewart refers to various research figures which show that consumers trust advertising and company marketing less when it comes to seeking out advice on new product purchases. “Traditional advertising is akin to a one-night stand whereas word-of-mouth is a marriage – you find the right person, invest in, develop and sustain the relationship,” he says.
Key components of word-of-mouth
It starts with a product That defines the messaging G That the right influencers spread G Based on their experience and value exchange G Identify how to leverage the new word of mouth G Tracking and qualifying the campaign’s impact. Jason Stewart, director, Have You Heard
A credible campaign needs the right influencers (people who are connected, credible and trusted within a target market) to spread the word based on their experience with a product. “Improve your brand’s social status without selling it, educate customers about a product and the category that it falls under, allow them to experience the product for an extended period and provide them with the product, materials, tools and platform. Develop a working relationship with your sources of influence and actively advise and assist them,” says Stewart.
“If the idea is too out of sync with the fundamental truth behind the brand, the message will fall flat. Word of mouth is an honest exchange of information from one person to the other. A true advocate has no affiliation to the brand, but endorses it out of its own right.” – Don Packett, managing director, Thunk
Word-of-mouth marketing is most prolific in the online environment, which allows the average consumer to publish and share opinions and experiences with the world. Technology is a powerful tool for influencing buying behaviour and one of the greatest threats to a brand’s reputation. This makes it imperative for brands to take note of conversations taking place online and add their voice to them because ignoring the conversations that consumers are having can be suicide. “Reputation management allows a company or brand to respond timeously and appropriately to any mention by consumers, thereby creating a more honest and open conversation. If consumers are criticising your brand, perhaps it’s time to listen and make the changes they are asking for,” says Scott Greg, client strategy director, Quirk eMarketing. Greg uses the example of how failure to assist an unhappy customer on United Airlines damaged its reputation. Dave Carroll and his band were flying from Chicago to Nebraska on United Airlines. His guitar was damaged on the tarmac by the airline’s baggage handlers – an event he
vol 28 / issue 1/2 / 2010 •
watched from his window onboard the plane. He was unable to get the airline’s customer service staff to make good on his claim, despite nine months of effort. He vowed to produce three songs and videos about his experience. “Dave’s first song/video went live on YouTube and within one week it had five million views and had been covered by numerous well-trafficked blogs. It topped the US and UK iTune charts; United Airlines’ share price dropped by 10 per cent costing the company about US$180 million,” says Greg.
The youth market
Greg Potterton, co-founder of Instant Grass, says companies that have never ventured into the world of Web 2.0 should not be threatened by the youth market and their knowledge of technology. The generation that was born after 1985 is agile, vigilant and connected. They publish their thoughts and opinions and a friend is a person they believe in. Marketers need not freak out, says Potterton. “Marketers can do whatever the youth are doing; find evangelists who will be advocates for their brand; after all, word of mouth is still about passing along content. It is designed to be disseminated through social interaction. Word of mouth happens with or without you online or offline, the principles are the same.” He advises marketers to understand the youth mindset as highly suspicious of marketing messages. This market does not care about you or your brand. “The youth tribe is a source of opinion, influence and identity for youth. To influence the youth, you need to influence the tribe leaders. Brands that are created in the boardroom will never survive the streets in the youth market,” says Potterton.
A disgruntled employee can do as much damage to a brand
using the exact same technology and media as a consumer.
However, brands start in the boardroom, filter through employees and out into the market. Most often, employees, who can be a brand’s greatest ambassadors, are neglected. A disgruntled employee can do as much damage to a brand using the exact same technology and media as a consumer.
Four tips to kick off a word-of-mouth campaign
Understand what is being said on the ground Use this to drive improvement within your product offering G Use influencers to test the improved product G Use influencers as catalysts to make your market aware of improvements in your product. Ryan Mcfadyen, marketing director of ONYX Pharmaceuticals
Similarly, an employee that doesn’t believe in the brand or simply hasn’t been nurtured can do damage. Employees are the image of an organisation and are key to the external market yet they are often not treated as such. The majority of employees are enthusiastic when they start a new job, but after a while their morale declines sharply because they feel they are being asked to do more but are receiving less. According to Grace Harding, managing director, Actuate, “Until recently when the world financial markets started to meltdown, a lot of businesses were focusing on acquisition; getting more and more. Now that the money to attain more is no longer available they are starting to look elsewhere. “Businesses have been making a lot of money with people who are giving them less, because more efforts were put in external marketing while nothing was done internally,” says Harding. She refers to a case study by Zappos.com, a US-based online store that was founded in 1999 and has grown to be one of the biggest shoe stores on the Internet. Zappos did not go to great lengths to promote its products in 1999, but made over $800 million in merchandise sales. How? Zappos places great emphasis on company culture and core values. It publishes an annual ‘Culture Book’ that is made up of contributions from employees describing what the company’s culture means to them. According to Harding, “Zapopos’ core value is to deliver ‘wow’ through service. All employees that are hired for its corporate office, regardless of position, are required to undergo a four-week customer loyalty training course, which includes at least two weeks of talking on the phone with customers in the call centre with a full salary. After a week of training, the new employees are offered $2 000 to leave the company immediately, no strings attached. This is to ensure people are there for the love of the job and not the money – over 97 per cent turn down the buyout. The company’s culture focuses on making sure every interaction with the customer results in them saying, ‘That was the best customer service I have ever had.’ Harding recommends companies perceive employees as media who have an impact on the corporate’s decisions. “Work with them to bring your brand to life. You don’t need a special team of internal ambassadors everyone within the workforce should be an ambassador,” she says. K
marketingmix.co.za • vol 28 / issue 1/2 / 2010
HP print station programme
services SME market
P Print stations are HP co-branded stores operated by HP partners, offering high quality digital printing services primarily to business customers in the small business and small office segments. HP Print stations stores are opening their doors all over the world, from South Africa, which will boast 100 stores by the end of 2010, to Morocco, Jordan and Egypt. HP plans a full rollout of the programme to additional countries next year.
In uncertain economic times, companies tend to delay investing in their infrastructure, which affects spending on their printing solutions; smaller businesses, on the other hand, refrain from investing altogether. Despite the reluctance to spend, companies need to focus on differentiating themselves and providing greater value to their customers. Shane van Rensburg, graphic designer at the Channelware Pretoria branch, explains that the business she operates and manages offers a unique service to the SME market. “To compare an HP Print station to other standard Print Service providers is near impossible,” she says. HP has developed the Print station programme to cater for a market without easy access to marketing or design services. The HP Print station concept has been tailored to meet this business need.
Should an established SME, start-up business or entrepreneur require marketing collateral designed and created from scratch, the HP Print station programme is the first point-of-call. A client of the HP Print station at Channelware approached the business to produce a small number of folders and business cards, which had to be designed and professionally bound for an urgent tender that had been opened. The HP print station successfully completed the order within hours and presented it to the customer in time to meet his deadline. The result is that the customer was so pleased with the results that he returned for additional prints. The defining difference between an HP Print station and a similar other standard Print service providers offering is simple: an HP Print station offers modern digital equipment, and is capable of providing consulting and marketing skills thanks to its unrivalled printing expertise. HP Print stations employ qualified and skilled graphic designers to create individual and unique designs tailored for every type of client. Whether your business needs only a handful of business cards produced, or 2 000 leaflets or brochures printed, the HP Print station can think it, create it and print it!
For more information on the HP Print Station programme contact HP’s partner ACT on (+27) 11 695 1600 or HPPrintStation@ACT3.co.za. Visit www.hpprintstation.com to find out about your nearest HP PSP store.