retail marketing - spotting buying patterns and maintaining a consistent trafficflow all year round

SPOTTING BUYING PATTERNS AND MAINTAINING A CONSISTENT TRAFFIC FLOW ALL YEAR ROUND

www.myCNI.com.my www.OOBEY.com

ALL YEAR ROUNDCase Study, Concepts, and Debatable Ideas

Kenny OngCNI Holdings Berhad


Intro: CNI

1. 22 years old2. Core Business: MLM3. Others: Contract Manufacturing, F&B Retail,

Export/Trading, eCommerce, Shared Services4. Malaysia, Singapore, Brunei, Indonesia, India,


4. Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam

5. Staff force: ± 500 6. Distributors: 150,0007. Products: Consumer Goods and Services

Types of Buying Pattern Strategy

• Macro •Strategic


• Micro •Tactical

The World Today;


The World Today;

13th April 2009

•Two Domino’s employees

•YouTube

•Apology from Domino’s after


48 hours

•1 million hits

•Twitter: questions on silence

•LinkedIn: suggestions by users in forum

BusinessWeek, May 4, 2009

Guess Who?

Buying Pattern: What and Why?

1. Study of when, why, how, and where people do or do not buy

2. Multi-discipline: psychology, sociology, social anthropology and economics


3. Used for retail mix: nature of merchandise and service offered, pricing policy, advertising and promotion program, approach to store design and visual merchandising, typical location

• How to fail without trying

1. Wrong Business Model


The Roadmap to Failure

Fred Wiersema and Mike TreacyPerform

ance


Perform

ance

Time

Clear Sailing

Today’s performance

Denial & Defense

Doom Projections

Denial and Defense

• “It’s not really good value our competitor is offering, because it doesn’t include a lot of our features.” - ABC vs Air Asia

• “It’s good value but not in our preferred customer market.” - ABC vs Toyota


customer market.” - ABC vs Toyota

• “Sure they’re hurting us, but with their unfair advantage, what can we do?” – ABC vs MILO

• “The rules we are playing by have always worked before” – AMEX vs VISA



ance

Downpresure of Unclear Strategy


Perform

ance

Time

Clear Sailing


Denial & Defense

Doom Projections

Ad Hoc Tactics• Selectively hold discounts to hold business that has

started to go elsewhere

• Introduce new promotions, terms, conditions, and offers to confuse and cloud the market

• Beef up customer service by adding people to fix mess-ups and quicken delayed shipments


ups and quicken delayed shipments

• Delay capital investments and adjust accounting methods to portray quarterly financial results more favorably

• Introduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasers

• Introduce Balanced Scorecards and Performance Management Systems



ance

The Moment of Truth

X

Downpresure of Unclear Strategy


Perform

ance

Time

Clear Sailing


Denial & Defense

Doom Projections

Overdue Failure

Performance Freefall

Tomorrow’s actual

performance

“What is the moral of


“What is the moral of

the story?”

Alignment: 4-Wheels Model

Business

ModelGrowth Strategy

PP


Customer

StrategyP

P

P

Business Model and Strategic Marketing


Marketing

The biggest impact


The McPlaybook*

Make it easy to eat

• 50% drive-thru

• Meals held in one hand

Make it easy to prepare

• High Turnover

• Tasks simple to learn & repeat


Make it quick

• “Fast Food”

• Tests new products for Cooking Times

Make what customers want

• Prowls market for new products

• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007


What is the Business Model?

USP

•Google

•Tata Nano


Market Discipline

Profit Model


USP


Market Discipline

Profit Model

Business Model: USP

Unique Selling Proposition (USP)

=

Targeted Customer

=


Core Buying Purpose/ Customer Value Proposition/ Job To Be Done (JBTD)

Business Model: USP

Obstacles to JBTD:

1. Insufficient WEALTH

2. Insufficient ACCESS


2. Insufficient ACCESS

3. Insufficient SKILL

4. Insufficient TIME


USP


Market Discipline

Profit Model

Business Model: Profit Model

Revenue

CostAssets


MarginCash Flow

Market Discipline

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!" "Exactly what I need"

Product Leadership

OperationalExcellence

CustomerIntimacy•Air Asia

•LV

•Ramly


"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Excellence


Product Leadership

(best product)

Market Disciplines


Operational Excellence

(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Customer Intimacy

(best total solution)


Product Leadership

(best product)

Market Disciplines



(low cost producer)


Customer Intimacy


Operational

Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

Customer Intimacy

• Management by

Fact

• Easy to do

business with

• Have it your way

Product Leadership

• New, state of the

art products or

services

• Risk takers

• Meet volatile

Market Discipline: Disciplines, Priorities, and KPIs


• Simple

• Responsive

• Consistent

information for all

• Transactional

• 'Once and Done'

• Have it your way

(customization)

• Market segments

of one

• Proactive, flexible

• Relationship and

consultative

selling

• Cross selling

• Meet volatile

customer needs

• Fast concept-to-

counter

• Never satisfied -

obsolete own and

competitors'

products

• Learning

organization


Product Leadership

(best product)

Alignment & Consistency



(low cost producer)


Customer Intimacy


Product Leadership

(best product)

Alignment & Consistency

Apple powerful products, premium

pricing, limited range

Still Doing



(low cost producer)


Customer Intimacy


HP well-balanced portfolio, mass customization

Acer super lean cost structure, aggressive pricing

Still Doing well in

2009/2010

Alignment & Consistency: Business Model

USP


Market Discipline

Profit Model

Alignment: 4-Wheels Model

Business

ModelGrowth Strategy

PP


Customer

StrategyP

P

P

Growth Strategy

1.Base Retention

2.Share Gain5.New Business

“Double-Digit Growth”, Michael Treacy


2.Share Gain

3.Positioning4.Adjacent Market

5.New Business

GROWTH


Growth Strategy

1. Base Retention

2. Share Gain5. New Business

“Double-Digit Growth”, Michael Treacy •Increase switching cost

•Customize products

•Preempt Defections

•Brand


3. Positioning4. Adjacent Market

5. New Business

GROWTH


•Neutralize Competitor advantages

•Superior Value

•Buy market share

•Spot growth opportunities

•Organized search

•Promising Market?

•Make or Buy?

How Markets determine Growth Strategies (1)

• Growth Rate

Growth

Rate

Strategy Why?

Fast 1. Market Positioning

•Maintain market share in strategic segments


2. Share Gain

3. Base Retention

•Prepare for market decline

•Competitors focus too much on getting new customers

Flat 1. Base Retention

2. Share Gain (Acquisitions)

•Lose customers slower than competitors

•Create scale economics, squeeze costs


• Churn Rate

Churn

Rate

Strategy Why?

Low 1. Share Gain (Acquisitions)

•Buying customer base is cheaper than own efforts



2. Adjacent Markets

•New products, old customers strategy

High 1. Base Retention

2. Share Gain

3. Adjacent Market

•Lose customers slower than competitors

•Customers are always open to the best value and offer

•Desperate to gain revenuewww.myCNI.com.my www.OOBEY.com


Fast Growth,

Low Churn

1.Market Positioning

2.Share Gain

•Example: XYZ Sector


3.Base Retention

4.Adjacent Markets


Business Strategy vs. Consumer

Post Recession Trends and Implications

Industry Convergence/ Extinction

Social Networking

Increased RegulationsWhat do these mean to us?


Green & CSR

Non-Profit/NGO increase

Increased Regulations mean to us?

Global Trends

Back-sourcing

Bottom-up Innovation/Disruptions

Mobile Devices

Power re-balancing

Mergers, Acquisitions & Divestment

Lower Middle Class rule


Nationalism and Protectionism

Currency Wars

Mobile Devices

Extreme Emerging Countries

Lower Middle Class rule

BRIC and PIIGS

Retail Trends?

Cutting back

Let consumers help themselves

Smaller stores

In-store Ads

RFID technology

Niche private labels


Ready-made products

Ethnic stores

Smaller stores

Eco-friendly stores

Niche private labels

In-store restaurants

Most Popular Question

“When will we return to the last time?”


� Wrong Question

Marketing Today


Retail Adaptation: McDonald’s Menu

Product Variation:– 80% Global, 20% Local

– home-style meals (Boston Market)

– burritos (Chipotle)


– coffee (McCafé) ��

– DVD rentals (Redbox)

– Premium menu items (snack wraps, sweet tea Frappes) ��

Retail Adaptation: McDonald’s Design

$2.4 billion to: •redo at least 400 domestic outposts,


•refurbish 1,600 restaurants abroad, and •build another 1,000

Retail Adaptation: McDonald’s Design

1. Corporate design leader for each operating regions; that person contracts with a regional designer who can figure out what other local design elements might make a space feel individual and


might make a space feel individual and authentic

2. Solicits ideas from leading design firms such as Ideo, Rockwell Strategic, and boutique firms around the globe.

Grocery Store of the Future


Future“Supermarket Strategies: What's New at the Grocer”,

Bloomberg Businessweek, June 8, 2009

By Damian Joseph

The Grocery Store of the Future

By Damian Joseph

Going Small

Who's Doing It: Wal-Mart, Safeway, Super Value, Tesco

What's New: Companies known for vast supermarkets are opening

up small-format stores. Wal-Mart's Marketside (WMT), Safeway's

The Market (SWY), Super Value's Urban Fresh (SVU), and Tesco's

Fresh & Easy all focus on selling fresh produce, ready-made meals,

and organic or natural products. The idea is to penetrate densely

populated neighborhoods and inspire daily shopping visits.

Going EthnicGoing Ethnic

Who's Doing It: Wal-Mart, Publix

What's New: In an effort to serve the growing Hispanic

population, companies are opening up stores dedicated to

them. Wal-Mart's Supermercado and Publix's Sabor sell

Latino-style bakery products and ingredients, prepared foods,

fresh tortillas, and the stores have bilingual staffs.

Meal AssemblyMeal Assembly

Who's Doing It: Super Suppers, Dream Dinners

What's New: Somewhere between takeout and a grocery store,

meal assemblers sell entire dinners that have yet to be cooked.

The meals follow restaurant-style recipes and come with fresh

ingredients that are pre-cut or proportioned. The customer takes

the food home, puts it together, and cooks for an immediate meal

or to freeze for later. Dinners that serve six people are popular for

entertaining.

Smart Packaging

Who's Doing It: Sira Technologies, University of Rhode Island, Who's Doing It: Sira Technologies, University of Rhode Island,

Manchester University

What's New: Researchers are developing packaging that senses

when food spoils. Working with the University of Rhode Island, Sira

Technologies created bar codes that turn red, and therefore cannot

be scanned, when a special ink detects temperature increases,

which can breed contaminates like E coli or salmonella. Scientists at

Manchester University are working on refrigerators that will text or

e-mail an alert when packaging senses fresh meats have gone bad.

Shopping Cart Wash

Who's Doing It: PureCart SystemsWho's Doing It: PureCart Systems

What's New: Anything that people put their hands on becomes a

surface that can spread germs. To keep that from happening,

PureCart is selling a car wash for carts. Employees run shopping

baskets through a machine that looks like a metal detector and

sprays them with a mixture of water, peroxide, and vinegar to kill

bacteria. Though the device costs $10,000, each wash takes only a

few seconds and is cheaper over time than sanitizing carts with

disinfectant wipes

GrocerantsGrocerants

Who's Doing It: Whole Foods, Wegman's, Roche Bros.

What's New: What started as a deli counter or hot food section

has become an entire restaurant. To keep up with competition

from local eateries and ramp up store traffic, grocerants—a play

on grocer and restaurant—are doing the cooking. Whole Foods

(WFMI) and Wegman's are among chains adding sit-down areas

with tables and chairs.

Niche Labels

Who's Doing It: Safeway, Trader Joe's, Target, SuperValuWho's Doing It: Safeway, Trader Joe's, Target, SuperValu

What's New: Private labels are finding their own niches. Safeway

now has Bright Green natural cleaning and laundry products

made from biodegradable ingredients and Organics foods, like

cereals, sauces, and cookies. These products successfully

compete with name brands and typically bring bigger returns to

grocers. Other examples include Wild Harvest at SuperValu's

Jewel, Archer Farms at Target (TGT), and Trader Joe's eponymous

products.

Smart Shopping CartsSmart Shopping Carts

Who's Doing It: Stop & Shop, IBM, Springboard Networks

What's New: Wireless-enabled shopping carts with mini-

computers on board—like IBM's Shopping Buddy (IBM) and

Springboard Network's Concierge—allow customers to keep a

running tab by scanning products as they shop, see what's on

sale in the aisle they're in, search for products, pay, and leave

without waiting in line. Grocers can save on labor costs and

advertisers can connect with highly specific target audiences.

Mobile CouponsMobile Coupons

Who's Doing It: Kroger, Cellfire, Zavers

What's New: Companies are offering coupons on cell phones and

online. Customers can save the coupons to their store's "loyalty

cards" or simply show their phones to the cashier. For customers,

the service makes saving money easier. It cuts costs for grocers,

too, since they don't have to hassle with paper coupons. In

addition, e-coupons provide real-time market data and boost

customer use of loyalty cards.

Mobile Scanners

Who's Doing It: Metro Group, Big in Japan, OccipitalWho's Doing It: Metro Group, Big in Japan, Occipital

What's New: Customers can now use cell phones to scan product

bar codes to comparison shop or read reviews about a particular

item. Big in Japan's ShopSavvy and Occipital's RedLaser relay

product info to consumers after they scan items via the built-in

cameras on their phones. Metro Group's Real hypermarkets in

Germany are testing a system in which customers would register

their cell phones to use as a payment/checkout device.

Advanced In-Store TV NetworksAdvanced In-Store TV Networks

Who's Doing It: Wal-Mart, Premier Retail Networks, Studio 2, DS-

IQ, Kroger, In-Store Broadcasting Network

What's New: Individually programmable video monitors display

advertising and product information. The in-store networks let

advertisers target ads by day, time, and aisle, and provide them

with proof of performance and sales reports. Two years and $10

million in the making, Wal-Mart's Smart Network is powered by

internet protocol television.

Marinade on Demand

Who's Doing It: Sealed Air

What's New: Eliminating the mess, excess packaging, and hassle What's New: Eliminating the mess, excess packaging, and hassle

of marinating raw meat, Sealed Air's (SEE) Marinade on Demand

system puts meat and marinade in separate compartments in the

same package. When consumers get home, they squeeze the

marinade pocket to break the seal between the two and leave the

meat to marinate as long as they like.

Whole Canned Chicken

Who's Doing It: Sweet SueWho's Doing It: Sweet Sue

What's New: Sales of canned meats such as Hormel's Spam have

increased in the recession. Now Sweet Sue, a unit of San Diego-

based Castleberry's offers a precooked, whole chicken that can

be eaten right out of the can. The listed ingredients on the 50-oz.

tin are only chicken, water, and salt.

Instant Coffee WarsInstant Coffee Wars

Who's Doing It: Starbucks, Nestlé

What's New: It was only a few years back that Nestlé (NESN)

introduced "stick packs," one-serving instant coffee packages of its

Taster's Choice brand. Starbucks (SBUX) jumped in this year its own

version, Via, which garnered a lot of attention due to the

company's barista roots. Nestlé has since fired back with a lower

price per stick and an array of flavors.

Social Grocery Shopping

Who's Doing It: Zeer.com, Most Grocery StoresWho's Doing It: Zeer.com, Most Grocery Stores

What's New: Grocery stores are building networks of followers

on Twitter, Facebook, blogs, and other social media sites.

Shoppers can join Zeer.com, an online social shopping site that

lets users scan reviews on more than 110,000 products, join

communities of customers with similar tastes, and create

shopping lists with favorite items automatically added. Zeer has

an application for iPhones, too.

Natural Pet Products

Who's Doing It: Purina, Rachael Ray, Eukanuba, Nature's RecipeWho's Doing It: Purina, Rachael Ray, Eukanuba, Nature's Recipe

What's New: For years, pets munched on indistinguishable

processed food, with only a few brands offering high-quality

products for dogs and cats. Today, natural and organic pet food is

all the rage, with lines from Nature's Recipe (DLM), Procter &

Gamble's Eukanuba, and Nestlé's Purina. Rachael Ray has a

signature line of natural dog food. Canada's Medi-cal sells a vegan

version, and for dessert, TBD Brand of Exeter, N.H., offers Yöghund

organic frozen yogurt.

New Recyclables

Who's Doing It: Frito-Lay, Primo Water, Biota BrandsWho's Doing It: Frito-Lay, Primo Water, Biota Brands

What's New: With the push for green products, companies are

upgrading packaging. Frito-Lay's (PEP) Sun Chips soon will come

in compostable bags made from a plant-based plastic called PLA.

Similar eco-plastics made from corn or sugar cane are being used

for beverages, such as Primo and Biota bottled waters. Another

company, Boxed Water is Better, sells water in cartons made from

85% recycled waste that are re-recyclable.

Conveyor Belt Ads

Who's Doing It: Kroger, EnVision MarketingWho's Doing It: Kroger, EnVision Marketing

What's New: Those revolving black belts that groceries ride to the

cashier's waiting hands are now valuable marketing space. Little

Rock (Ark.)-based EnVision Marketing patented a process to print

ads directly onto the belts, which are nearly impossible for

customers to miss. Kroger (KR) is trying out the system in some of

its stores.

Home Delivery 2.0

Who's Doing It: AmazonWho's Doing It: Amazon

What's New: The world's biggest online retailer is testing the

viability of grocery delivery to homes in parts of Seattle. The

concept isn't brand new—PeaPod and Webvan arose almost a

decade ago—but Amazon's (AMZN) shipping operations are

second-to-none. If Amazon finds big profits where others couldn't,

it probably won't be long before the service expands to other

markets.

Made in Transit Produce

Who's Doing It: Wageningen University, Agata Jaworska

What's New: Instead of growing produce in a field or hothouse

and then shipping it, scientists from Wageningen University are

experimenting with mushrooms that grow as they're shipped. The

school is working with Agata Jaworska, who invented the method

as a graduate student at the Design Academy Eindhoven in the

Netherlands. They think the process could be adapted for micro-

vegetables or baked goods, too.

Three-Tiered Private LabelsThree-Tiered Private Labels

Who's Doing It: Kroger, Food Lion, Winn Dixie

What's New: Introducing a "good," "better," and "best" approach

to food sales, grocers are using tiered labels to reach different

strata of consumers. At Kroger, Kroger Value products are the

cheapest; Kroger is the mid-level, and Private Selection is the most

expensive. Similar approaches have boosted sales at Food Lion and

Winn Dixie (WINN), while providing the chance for higher markups.

Green Grocers

Who's Doing It: Price Chopper, SuperValu, Kroger, PCC Natural Who's Doing It: Price Chopper, SuperValu, Kroger, PCC Natural

Markets, Giant Eagle, Target

What's New: Grocery stores used to burn electricity like Hummers

burned gasoline, but times have changed. Call it green-washing or

a way to cut costs, grocery stores have begun racking up eco-

certifications from the U.S. Green Building Council. From efficient

lighting to bamboo flooring, grocers are becoming lean, green,

energy-saving machines.

Super Discount Shops

Who's Doing It: Aldi, Local Surplus StoresWho's Doing It: Aldi, Local Surplus Stores

What's New: With a sinking economy, shoppers are straying from

expensive name brands and seeking the best deals available.

Though super-discounters like Aldi don't carry wide selections or

brand names, the prices are dirt cheap. Surplus stores are also

springing up that sell slightly older products at lower costs.

Dangers of Best Practice, Benchmarking & Market Research

“Abraham Wald’s Work on Aircraft Survivability”, M. Mangel and F.J. Samaniego

Where would you focus reinforcement?

www.myCNI.com.my www.OOBEY.comwww.myCNI.com.my www.OOBEY.com


Company Performance

high

zero Performance

Trend


Performance

low

‘Best Practice’ theories

low high

Trend

line

“Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005


Company Performance

high

zero Performance

Trend

line


Performance

low

‘Best Practice’ theories

low high

“Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005


Selection Bias:

1. Success Traits = Failure Traits

2. Successful Cases + Failure Cases

3. Worst effects in ‘Old’ industries

4. Overvalue ‘best practice’ theories


4. Overvalue ‘best practice’ theories

5. Current accomplishments unfairly magnified by past achievements

6. Reverse Causal



Also known as ‘Beware of Consultants’:

1. Selection Bias (availability, brand, recency)

2. Big vs. Small company


2. Big vs. Small company

3. Selective success stories

4. Correlation vs. Causal

5. Survey problems

6. Practical vs. Glamour-to-have


Correlation vs. Causal

1. 8 out of 10 rich people drive Mercedes in Malaysia

2. 4 out of the top 5 supermarket chains have a loyalty program

3. 4 out of the top 5 supermarket chains increased


3. 4 out of the top 5 supermarket chains increased sales after having a loyalty program

4. 4 out of the top 5 supermarket chains increased sales after having a loyalty program and adapting promotions

Geo-Marketing: Where?

1. Where do my customers live, and where do they buy?

2. Where are my competitors?

3. Where are my marketing efforts invested?

4. Where are my opportunities? i.e. Where should I put my next Point of Sale?


5. Where are my sales representatives?

6. To what advertising medium do my customers respond? Billboards? Mobile coupons? Where were they when exposed to my campaign?

7. Are products sold better in particular zones? Where and why?

Geo-Marketing & Consumer Behavior

Some characteristics of consumer behavior are closely related to the:

• place where they live,

• climate,


• climate,

• location and culture

The New World Order

•history •race •ethnicity


Newsweek, September 26, 2010

•ethnicity •religion •culture

The New World Order

• Generous Welfare systems

• 6 of the top 8 on Legatum Prosperity Index

• some of the world’s


• some of the world’s highest savings rates (25 % or more),

• impressive levels of employment, education, and technological innovation.

The New HansaDenmark, Finland, Germany, Netherlands, Norway, Sweden


The New World Order

• Poverty rates are almost twice as high, labor participation is 10 to 20 percent lower (vs. Hansa)

• Huge government debt


• Huge government debt

• Lowest birthrates

• Some of the world’s oldest population

The Olive RepublicsBulgaria, Croatia, Greece, Italy, Kosovo, Macedonia, Montenegro, Portugal, Slovenia, Spain


The New World Order

• Rich in minerals, fresh water, rubber, and a variety of foodstuffs

• Suffer varying degrees of political instability.


political instability.

• Trying to industrialize and diversify economies.

• Household incomes remain relatively low,

• Potential high-growth region.

The Rubber BeltCambodia, Indonesia, Laos, Malaysia, Philippines, Thailand, Vietnam


The New World Order

Newsweek, September 26, 2010• The Border Areas

• City-States:

– London, Paris,

Singapore, Tel Aviv

• North American

Alliance

• Stand-Alones:

• Brazil, France,

Greater India, Japan,

South Korea,

Switzerland

• Russian Empire


Alliance

• Liberalistas

• Bolivarian Republics

• Iranistan

• The New Ottomans

• Maghrebian Belt

• Middle Kingdom

• Russian Empire

• The Wild East

• Greater Arabia

• South African Empire

• Sub-Saharan Africa

• Lucky Countries

Recession Generation


Men vs. Women: Getting Dressed

Men vs. Women

Basket Analysis


Basket Analysis


None of these 1,800 SKUs are top sellers!

Basket Analysis

• Low-frequency/high-correlation SKUs

• These items – sell rarely,

– sit on the shelf for along time,


– sit on the shelf for along time,

– will only sell if the paired item is available

• Problem SKUs

• Capital hogs and always show up in inventory issues.

Concrete vs Abstract Mindset

AbstractBroad and

general

Kelly Goldsmith, Jing Xu, Ravi Dhar,

MIT Sloan Review, Fall 2010


Concrete

general

Over-arching Purpose

Shared Product

Attributes


AbstractShared Product

AttributesExecution or Usage


Concrete

or Usage purpose

Lower level

details



Color Psychology

remind us of something familiare.g. blue = calm

Children = Bright Primary Colors e.g. toys, clothes and

Cultural Variations; white = marriage (western) = death (China). Purple = death (Brazil) Yellow = sacred (Chinese) = sadness (Greece) =


toys, clothes and children's books

sadness (Greece) = jealousy (France)

Young = bold colors; older = subtle palettes.

Red , Orange = to eat quickly and leave

Carpeting to influence patterns of travel

Target: Decision Chain

Influencer Again: different type, different strategy


Buyer

User

Target: Customer Types

1. Don’t know you

2. Know you, Buy from you

3. Know you, don’t buy from you

4. Know you, Hate you



Buy From you

Value Swing Former


Value Swing Former

Opposition

Downturn: Customer Types vs. Branding

Hand brake

Customer Types

Ess

entia

ls

Pos

tpon

able

s

Exp

anda

bles

Your Products/Services


Surviving

Well Off

Don’t Care

Ess

entia

ls

Tre

ats

Pos

tpon

able

s

Exp

anda

bles



Essentials Treats Post-

ponables

Expan-

dables

•Necessary •Indulgences •Needed or •Unnecessary


•Necessary•Survival

•Well-being

•Indulgences•Justifiable

•Needed or desired

•Can be put off

•Unnecessary•Unjustifiable

How should I Service Them?

Self Reliant Need Help

Seek Change

Searchers Collaborators


Change

Seek Stability

Streamliners Delegators

The real goal of Marketing and Branding


Branding

Understanding our role in the whole scheme of things


What is the purpose of Marketing & Branding?

Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”


prices.”

Sergio Zyman

“Retention and Loyalty are useless if No Conversion is happening.”


What is the purpose of Marketing & Branding?

“Retention and Loyalty are useless if No Conversion is happening.”


“Communication is useless if No Conversion is happening.”


Which Company?

American Customer Satisfaction Index (ACSI)

• 64 out of100-point scale: lower than IRS (Tax)

• 2nd last among 30 companies surveyed

• Lowest 5% among 223 companies surveyed

• Bottom 5% of all measured private sector


• Bottom 5% of all measured private sector companies

• 500 million customers

2010 American Customer Satisfaction Index (ACSI) E-Business Report

Popularly Unpopular

Popularity

≠


≠

Affection

Philosophy

Loyalty is Useless;

• Virtual Consumption vs.


Real Consumption

Philosophy

Loyalty is misleading;

• Heavy Consumption ≠ Loyalty


• Loyalty ≠ Heavy Consumption

What is the Objective?

1.Marketing = Relationship (something like Dating)

2.Marketing ≠ Media glitz 3.Marketing ≠ ATL/BTL/BwTL/ArTL/FTL


3.Marketing ≠ ATL/BTL/BwTL/ArTL/FTL4.Marketing ≠ CSR5.Marketing = Get more people, to buy

more, more frequently, at higher prices


Loyalty 1: Experience

Operational Excellence: Quality and selection in key categories with unbeatable prices


* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes

Price

Quality

Time

Selection

√

√

Smart Shopper

Relationship Image


Product Leadership: Unique products and services that push the standards

www.myCNI.com.my www.OOBEY.com* Treacy & Wiersema, The Discipline of Market Leaders, 1995


√

Brand

Time

Function

√

√

Best Product

Relationship Image


Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships

www.myCNI.com.my www.OOBEY.com* Treacy & Wiersema, The Discipline of Market Leaders, 1995


√

√

√

√

Service Trusted Brand

Relationship Image

Relations


• Competitive price• Error free, reliable• Fast (on demand)• Simple• Responsive

Customer Intimacy• Management by

Fact• Easy to do

business with• Have it your way

(customization)

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

Strategy: Disciplines, Priorities, and KPIs


• Responsive• Consistent

information for all• Transactional• 'Once and Done'

(customization)• Market segments

of one• Proactive, flexible• Relationship and

consultative selling

• Cross selling

customer needs

• Fast concept-to-counter

• Never satisfied -obsolete own and competitors' products

• Learning organization

Each Value Discipline Requires A Different Emphasis

Operational

Excellence

• Production,

Logistics,

Finance

• Order fulfillment,

Resource

stewardship

Customer

Intimacy

• Marketing Sales,

Service

• Market

mgmt, Customer

satisfaction

Product Leadership

• R&D, Legal

(Licenses),

Engineering

• Product

development,

Concept-to-

Customer

Functional emphasis

Process Emphasis

Information


stewardship

• Transactions,

costs, time

• Costs, quality,

speed

• Trends (past),

Transactions

Employee

tools/tasks

• Customers,

analysis, linkages

• Satisfaction,

cust. success,

share, anecdotes

• Today, Relation-

ships, Employee

empowerment

• Linkages, insight,

comm, groupware

• Ideas-thru- funnel,

patents, etc.

• Tomorrow, Product

Portfolio, Ideas and

Risks

Information emphasis

Key metrics

Key concerns


Buy From you

Value Swing Former


Value Swing Former

Opposition

Loyalty 2: Swing

Loyalty = Best alternative at the current moment until I find another alternative


Solution Strategy: Base Retention

Loyalty 2: Swing

Swing Customers are “loyal” because:

• Individual Relationships

• Convenience (at that point in time)

• Tied-up

• Product Uniqueness


• Product Uniqueness

• Promotions

• No better alternative

• Downlines

• No known alternative

• Psychologically lazy

Sample Strategies for ‘Swing’

• Increase switching costs

• Mega packages

• Community

• Reward programs

• Newsletters

• Personalized alerts

• Survey

• Suggestion Box

• Switching Techniques


• Reward programs (Points)

• Membership Subscription

• Email communication

• Switching Techniques (e.g. Balance Transfer of credit cards)


Hand brake

Customer Types

Ess

entia

ls

Pos

tpon

able

s

Exp

anda

bles



Surviving

Well Off

Don’t Care

Ess

entia

ls

Tre

ats

Pos

tpon

able

s

Exp

anda

bles



Essentials Treats Post-

ponables

Expan-

dables

•Necessary •Indulgences •Needed or •Unnecessary


•Necessary•Survival

•Well-being

•Indulgences•Justifiable

•Needed or desired

•Can be put off

•Unnecessary•Unjustifiable


Hand brake

Customer Types •Price

•Smaller Pack•Private Labels

•Low-cost ‘Value’ products

Essentials


Surviving

Well Off

Don’t Care

•Low-cost ‘Value’ products•Fighter Brands

•Less Variety/Customization•Immediate cash back


Hand brake

Customer Types

•Shrink sizes•Hold down prices

Treats


Surviving

Well Off

Don’t Care

•Hold down prices•“You Deserve It”

•Less Variety/Customization•Immediate cash back


Hand brake

Customer Types

•Low-cost Financing•Exceptional Deals

Postponables


Surviving

Well Off

Don’t Care

•Exceptional Deals•“Danger of Postponing”•Immediate cash back


Hand brake

Customer Types

•Offer D.I.Y. versions

Expandables


Surviving

Well Off

Don’t Care

•Offer D.I.Y. versions•Awareness

•Immediate cash back


Hand brake

Customer Types

•Lower Price options•Bonus Packs (Stockpile)

Essentials


Surviving

Well Off

Don’t Care

•Bonus Packs (Stockpile)•“Dependability”•“Good enough”

•Immediate cash back


Hand brake

Customer Types

•Reward Loyalty

Treats


Surviving

Well Off

Don’t Care

•Reward Loyalty•“Improve Morale”

•Affordable vs. Luxury•Immediate cash back


Hand brake

Customer Types

•Simpler Models, Lower Prices

Postponables


Surviving

Well Off

Don’t Care

Prices•Lower TCO models

•Repair services•Immediate cash back


Hand brake

Customer Types

•Awareness

Expandables


Surviving

Well Off

Don’t Care

•Awareness•R&D of Core Products•Immediate cash back


Hand brake

Customer Types

Essentials


Surviving

Well Off

Don’t Care

•Awareness


Hand brake

Customer Types

Treats


Surviving

Well Off

Don’t Care

•“Outstanding Quality”•“You deserve it”


Hand brake

Customer Types

Postponables


Surviving

Well Off

Don’t Care

•“Save from Buying Now”•“You are missing out”


Hand brake

Customer Types

•Discreet purchase (avoid

Expandables


Surviving

Well Off

Don’t Care

•Discreet purchase (avoid flaunting)

•“Impress Your friends”


Hand brake

Customer Types

Essentials


Surviving

Well Off

Don’t Care

•Awareness•“You can’t live without it”


Hand brake

Customer Types

•A.R.O.

Treats


Surviving

Well Off

Don’t Care

•A.R.O.•“Seize the moment”


Hand brake

Customer Types

Postponables


Surviving

Well Off

Don’t Care

•Monthly Payment Plans•“Quality of Life”


Hand brake

Customer Types

•New products

Expandables


Surviving

Well Off

Don’t Care

•New products•“Must Have”

•“For exclusive people;”



Seek Change

Searchers Collaborators•touch and feel


Change

Seek Stability


•touch and feel•‘first’ to know

•Talk to technicians/experts•pros and cons, trends, lots

of info

•Offer choices•Online resource

•innovations, new stuff



Seek Change

Searchers Collaborators

•Minimize risk•Standardization and consistency (routines)

•Wants systems to follow their habit


Change

Seek Stability


their habit



Seek Change

Searchers Collaborators•Treats Store Personnel as

consultants

•Pilot projects, process improvements


Change

Seek Stability


improvements

•Co-discover new applications for existing

business/products

•Ongoing coaching and value-added services



Seek Change

Searchers Collaborators•narrow choices


Change

Seek Stability


•narrow choices•Pre-package, pre-select

(default)

•Make it easier to renew than to cancel

•Focus on a specialty (niche)

•Honesty, reliability, Trust


STORE DESIGN & LAYOUT

Tactical

Apple Store

• Apple tracks retail store revenues at four-minute intervals, and Visitor traffic is tracked at 15-minute intervals

• 5,800 visitors a week per store

• 100,000 persons come to Genius Bars per week


• 100,000 persons come to Genius Bars per week

• each Apple retail stores averages $3,000 in annual sales per square foot. (national average for malls was $341)

Apple Store

• 5,800 visitors a week per store

• customer experience = design around the customer's life + ownership experience

• Most expensive, highest-traffic locations: high-end malls, hip streets and "lifestyle" and


end malls, hip streets and "lifestyle" and "destination" centers.

• Store layout: simple, intuitive and logical; for new and established customers

• Perceived as a public place: like a great library

Apple Store

• product zones, vs. solution zones: products are paired with software and peripherals for specific purposes.

• Genius Bar: face-to-face support in neighborhood for high-technology for Free


neighborhood for high-technology for Free

• interactive front display windows

• Glass Staircase: designed to encourage people to climb the stairs

• store employees not work on commission,


PROMOTIONS & INCENTIVES

Tactical


AbstractBroad and

general




Concrete

general

Over-arching Purpose

Shared Product

Attributes


AbstractShared Product

AttributesExecution or Usage


Concrete

or Usage purpose

Lower level

details



Mindset vs Basket Size

• � Variety of Related but Different Product Categories, Distant Future


Abstract

Mindset vs Basket Size

• � Products Similar enough to Substitute one another, Immediate Use


Concrete

Manipulating Mindset to �Basket Size

• Promotions “Overarching Purpose” : Oral Care

��


Abstract

• “Simple Purpose”: Clean Teeth ��

Manipulating Mindset to �Basket Size

• Promotions: Individual and Unique benefits ��


• “Overall Purpose”: Quench Thirst ��

Concrete

Promotional Strategy Trends


What do Shoppers LIKE about Promotions?


What do Shoppers DISLIKE about Promotions?


Changing Promotional

Strategies (2007 vs 2009)

www.myCNI.com.my www.OOBEY.comSource: TNS Worldpanel 52 w/e July 15 2007 vs 52 w/e July 12 2009

In the eyes of the shopper

www.myCNI.com.my www.OOBEY.comSource: IGD Consumer Unit, 2009

Dangers of Direct Incentives

1. lessen internal motivation, 2. switch to mercenary mode, 3. do something and do not do something else, 4. easier for competitors to poach, 5. less and less impact for same value,


5. less and less impact for same value, 6. mockery of base pricing7. rebellion from non-incentivised

products/groups, 8. end up incentivizing everyone for everything?,


CNI Traditional Retail


CNI – changes in Retail


CNI – “Retail Experience Marketing”


CNI Retail: Products


End Notes


Asian Retail Trends

1. 100 Yen Stores (Dollar Stores)

2. 24-hour Retail1. Tourists/Business Travellers

2. Shift Workers

3. Sleepless


3. Sleepless

4. Last minute shoppers

3. Retailer � Banker

Alignment & Consistency: Business Model

USP


Market Discipline

Profit Model

“;in the past 18 months, we have heard that profit is more important than revenue,

quality is more important that profit, people are more important than profit, customers are more important than our


customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our

performance is inconsistent"CEO, Anonymous

What is the purpose of Sales & Marketing?

Ultimate Objective of Marketing: “Get more people, to buy more


things, more frequently, at higher prices.”

Sergio Zyman


Thank You.

soft copy of slides:

http://totallyunrelatedrandomanddebatable.

blogspot.com/