Ford Motor Co.'s Lincoln brand has introduced a new tool at the Pebble Beach, Calif. Concours D'Elegance to test design concepts on consumers. Lincoln asked attendees of the classic car show Aug. 20-21 to look at three design concepts based on vehicles from the '60s, '70s and '80s. People could click on the designs to give vehicles a sportier look, or change from a more retro look to a modern look. When they see a design they like, they click "save" and Lincoln records their preferences. Lincoln will also gather demographic data on the customers to better understand how different groups feel about different designs. The so-called "co-creation" program, which runs on an iPad, is called "Virtual Voice of the Customer" and was developed by Detroit-based 360 brandmachine in coordination with its ad agency, Team Detroit. Select participants will be invited to continue the discussion in an online panel post-show to gather more feedback, says Jim Peters, Lincoln experiential manager. Results of the panel will be made public at the Los Angeles Auto Show in November, Peters tells Marketing Daily. Lincoln is also considering using the "Virtual Voice of the Customer" process at future auto shows, he added. With "Virtual Voice of the Customer," designers can test design concepts with consumers in real-time in a virtual environment. This tool will give automakers a sense of how consumers feel about their designs, and can do it in a cost-effective manner. Lincoln has always prided itself on being forward-thinking and technologically savvy, Peters says. The "Virtual Voice of the Customer" initiative allows the brand to use technology within a marketing initiative and to start a dialogue with prospective customers. "This technology basically allows people to be designers for a day," Peters says.
Tablets and iPhones are fundamentally changing the way people get their entertainment, and they may eventually make those DVD players, GPS and other single-use electronic devices obsolete. According to a new survey of more than 1,400 consumers by research agency Chadwick Martin Bailey (CMB), people are using their smartphones and tablets for a variety of entertainment outlets, from games to watching movies and television. According to the research, more than half of smartphone and tablet users play games on their device. As a result, nearly two-thirds of tablet owners are using other devices (particularly portable gaming devices) less for this purpose. Similarly, two-thirds of tablet owners are using their devices to watch feature-length movies. With further tablet adoption, the stand-alone DVD player may become obsolete, says Chris Neal, vice president of CMB's tech and telecom practice. With just over a quarter (26%) of U.S. adults saying they expect to purchase a tablet in the coming year, that development could come relatively quickly, he says. "As people get more tablets, these devices are an endangered species," Neal tells Marketing Daily. "Those specialty devices do one application really, really well. Now you've got a device that does multiple things." Even worse are the prospects for stand-alone GPS systems. According to the research, 80% of tablet and smartphone owners have used their devices for mapping and directions. Of these users, nearly 90% of them said they are using other methods such as a standard GPS less. "Some, like TomTom, have already placed their bets and said they're not a device manufacturer anymore -- they're making software only," Neal says. "It will be one of many [GPS-type] apps on an iPhone or iPad." For every downside, however, there is an upside. On the whole, the increasing prevalence of tablets is leading to more content consumption overall, the agency reports. "The majority of tablet owners are watching full-length movies, TV shows, in addition to standard Web videos," Neal says. "It's carving into standard TV time a bit, but it's increasing the amount of time people are watching in general, which is good for media companies."
It's not an easy time to be Walmart. First, economic worries are hanging heaviest on lower-income shoppers, its core audience. Next, there's a growing sense among those shoppers that Walmart's "Everyday Low Price" positioning is eroding, and that there are better deals in dollar stores, supermarkets, and even at Target. For now, shopping at Walmart is cheaper than Target, one of its primary rivals. A just-released pricing study from Kantar Retail shows the Bentonville, Ark.-based chain has regained its edge, with a basket price 1.2% below Target's. But for shoppers using Target's REDcard to purchase items in the basket, the price would have beaten Walmart by 4%. (Previous Kantar research has shown that 14% of Target shoppers do sign up for the card, in order to get the 5% discount.) "Looking ahead, Walmart's EDLP strategy appears set to intensify," writes Leon Nicholas, SVP/insights for Kantar Retail, and a contributor to the study. "Management's direction indicates that Walmart is aggressively working to advance its lower price position." Demographics play a major role, Kantar says, with 26% of up-market ($85K+) Walmart shoppers now cruising the Target aisles more often -- higher than at any other single retailer, it says. Of course, Target is not Walmart's only headache. A recent report from WSL/Strategic Retail shows that dollar stores, supermarkets, and other mass merchants are all more appealing to bargain hunters, and that 86% of the Walmart shoppers it surveyed no longer believe that Walmart has the lowest prices. Walmart's most frequent shoppers "agree that dollar stores have lower prices than Walmart, more national brands than they used to carry, are nicer to shop, and are more accepted by everyone as they are now mainstream." The study also confirms that the economy is weighing more heavily on those in the Walmart demographic, with 82% of its shoppers saying they haven't seen any improvement in their financial situation in the past year; 70% don't expect their finances to get better next year. "The economic downturn, credit crunch and higher gas prices, among other factors, squeezed the discretionary spending out of the wallets of Walmart shoppers," it notes. Earlier this summer, an analysis from Blueocean found that Walmart was losing sales precisely because of that continued economic uncertainty. Walmart's high engagement shoppers, its most valuable customers, are reportedly making the most significant cuts in Walmart trip frequency. Walmart recently released its second-quarter results, which included a bigger-than-expected decline in its U.S. sales. On a same-store basis, sales in its U.S. Walmart stores fell 0.9%, when observers had been expecting a decline of just 0.6%. At the time, Walmart executives cited concerns about the economic pressure on its customers. "With this volatility," it says, "it is as important as ever to deliver on Walmart's one-stop shopping promise for broad assortment and everyday low prices."
The Internet has become so embedded in the consumer purchase consideration process that more than 40% of customers now say they will not buy a brand if they can't find the right information about it online. And for big-ticket items like cars, TVs, computers and mobile devices, that percentage climbs to more than half of all customers. But online research by consumers also influences the purchase decisions for everyday products like shampoo and fast foods, where over 20% of customers say they will not touch a brand without first seeing the required online information about it. That's according to a new consumer survey by Initiative, the Interpublic Group media agency. The shop surveyed over 4,000 consumers in five markets, including the U.S., Australia, China, Germany and Spain. The agency also conducted interviews with consumers in China, Colombia, Thailand, Italy, the U.S. and the U.K. "Brand consideration has become a key pastime for over half of the population -- 52% of our interviewees said they enjoy searching online for a wide range of brands and products," the survey reports. One lesson for marketers, per the study: "Consumer involvement with brand communication is a key to unlocking growth. The more we can get consumers to participate with our brands in paid, earned and owned media, the more a brand will grow." The survey also found that the research that individual consumers do is often spread far and wide. More than half of the respondents said they would share brand information such as coupons or special sales events via email and social media. About 40% said they do this to inform other people, but more than a quarter said it has just become second nature to spread the word -- they almost do it out of habit. And it's a habit that Initiative says is a "wake up call for marketers. Consumers are becoming ever more active in their brand choice, and engaging in brand messaging across earned and owned channels, particularly online." As a result, the study concludes that marketers "must seek to increase the level of engagement they have with consumers across all channels. The battle for brand choice is increasingly a battle to engage and involve consumers in the purchase process with brand messaging in order to win consumer purchase choice." The agency offered client Hyundai as an example of how to apply the insights. The carmaker had a problem in the U.S., where it believed it had a high-quality product but low consideration among consumers. The company discovered that while it received numerous positive consumer and expert reviews for it vehicles, that word wasn't getting out in a scaled way. So the company aggregated all the reviews on a new Web site, which it featured in its TV advertising. The new Web site, the agency said, created "a powerful owned media asset for the brand." And TV ads touting the Web site created a "powerful combination of paid earned and owned media which was responsible for significant growth in consideration and market share." Purchase consideration rocketed 70% and market share soared nearly 60%, per the agency. Following the campaign, Hyundai recorded the highest opinion and consideration scores in its history, Initiative said. To optimize the combined power of paid, owned and earned media, the shop concluded that brands must map their consumers' touchpoints and connect to the consumer at every point in the purchase path -- both online and off. "Give consumers an experience, not a rotation of messages," the shop urged those attempting to orchestrate paid, earned and owned media to maximum advantage. "It's not a mathematical exercise. Creating compelling consumer experiences in which touchpoints interconnect across all media requires innovation and creativity." And that, the study concluded, is the key to success.
Marketing problems continue for The Gap. Last year, the company adopted a new logo, only to reverse course and reinstate the old logo after negative backlash from consumers. Now the CEO is blaming at least part of the company's poor financial performance on its marketing program. Gap Inc. Chairman and CEO Glenn Murphy took the company's marketing to task this week, saying that the effort shared some of the blame for the company's lackluster first-half results. Murphy's remarks came during a conference call with analysts to discuss second-quarter earnings that were issued Thursday. The company reported a 19% drop in net income to $189 million on a 2% gain in total sales to $3.4 billion for the quarter. But same-store sales -- a key metric -- were down 2%. According to a transcript of the earnings call produced by Seeking Alpha (www.seekingalpha.com), Murphy said: "We had some ineffective marketing in the first half." He specifically called out subsidiary Old Navy, stating that the company "had some good story lines but the marketing did not pull -- did not drive traffic as much as we wanted. We're still very fixated on getting new customers in our stores." Murphy told analysts that an Old Navy TV ad campaign that launched in March, from Crispin Porter + Bogusky, was being put on the "back burner" and that a new "stop gap" campaign would launch this weekend. "The Old Navy creative and marketing messages and the strength of Old Navy's aggressive marketing to drive traffic to their key customer ... it needs to get better," he said. A CP+B rep said the agency had no comment on the matter. Murphy also indicated there would be a "shift in our media mix in the back half [of the year], definitely a lot more online media. We've been testing that for the last six months. We like the early response." Last December, the company consolidated its $350 million global media assignment with PHD, which had been the U.S. incumbent. The U.S. is where the company places most of its ad dollars -- $275 million in 2009, according to Nielsen. Gap executives said that marketing expenditures were up in the second quarter versus the same period a year ago, and that third-quarter spending would also be up. In addition to an increase in online expenditures, direct marketing will also get a boost, they said.
My grandmother's canning closet was a place of wonder for me as a child. Rows and rows of clear, unlabeled glass Ball jars displayed their treasures: peach halves floating in their own juices, crimson salsas and pickles nestled with dill stalks. My grandmother had created something instinctive, involving and one people wanted to identify with -- a recipe for Brand Purity. By purity I don't mean innocence or fragrance-free, recycled, or without trans-fat or animal testing. I mean freedom from adulteration or contamination. Pure brands are instinctive because they grab you by the gut and you reach for them almost without thinking, like the smooth shell of an iPad or curving hood of a Mustang. Pure brands are involving. The experience keeps you coming back for more. Starbucks advertises very little and can rely on a logo without its name because the experience immerses you and draws you back. Pure brands are identifying. We're proud to associate, own and shout about them to anyone who will listen. People pay a lot to have A&F stitched across their chests and will tweet about their latest purchase. The First Leg - Instinctive IBM's transformation to a service company is a success story in itself, but its purpose-driven brand idea keeps people focused on a bright shiny object that everyone wants a piece of -- a Smarter Planet. With an instantly recognizable visual language and playful iconography, the brand communicates multiple complex stories in a manner that is appealing to both CEOs and young mothers. IBM analysts estimate Smarter Planet has expanded its market potential by as much as 40% globally or $2.3 billion. Instinctive Lessons learned: