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  Many of the entries are columns written by Bruce or Kären Love. 
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January 10, 2004

Marketing 101

by Bruce A. Love

“How many of you have ever been involved in marketing?” I frequently ask that question on the first day of classes when I am teaching Marketing 101. Depending on the group, I may get one or two responses in the affirmative. I then challenge the class that I am willing to bet that everyone in the room has used marketing at one time or another. I suspect you have too!

What exactly is marketing? The American Marketing Association has a formal definition that states, “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.” Right about now you are saying, “If that is marketing, I sure haven’t done that!” Oh yes you have!

If you have ever sold anything (even lemonade as a child) you have performed the basics of marketing. If you have ever applied for a job, you have used marketing. Look at the AMA definition for marketing again. Let’s start at the very middle “a very good place to start … when you read you begin with ABC …” When you market you begin with PPPP.

At the heart of our marketing definition is the concept of the “marketing mix,” frequently referred to as the “4 Ps of marketing.” The pricing, promotion, and distribution (place) of ideas, goods, and services (product) form the 4 Ps of marketing. Every first semester marketing student learns about these fundamental marketing tools.

As a child, when you came up with the idea to get rich by selling lemonade, you established the product you would sell. You probably also did a careful market analysis to determine what “price” your customers would be willing to pay for your wares (5 cents a glass sounded about right). The curb in front of your parents’ house was an ideal “place” to set up your business (WARNING: today’s kids should not try this at home). The sign you made for your stand fulfilled the advertising, or “promotion,” component of marketing. Finally, the part of the AMA definition that refers to creating exchanges to satisfy goals, is simply the agreement reached between buyer and seller to exchange money for goods in order to satisfy the customer’s thirst needs and the seller’s profit needs.

Here is another example of marketing:
When you are applying for a job, what is the product you are trying to sell? YOU! What is the price of the goods you are selling? This is the wage that you seek. How do you promote these goods? You write cover letters, send resumes, and use all sorts of creative methods to land the perfect job. The place is obviously the location of employment, which includes how far you are willing to commute. The exchange relationships are the employer’s need for skilled labor, and your need for a fair wage.

Are you ready for your homework? Marketing is used in many situations. Can you list the marketing mix for your place of worship? Your answers can become highly philosophical. Do you want to have some real fun? Apply the marketing definition to finding a suitable spouse. Your answers for these marketing exercises will provide some interesting commentary about who you are!

Now that you know what marketing is, have you ever marketed? I thought so!

Posted on January 10, 2004 12:33 AM | Permalink | Comments (0)

February 21, 2004

The price is right for success

by Bruce A. Love

Price determination is an important weapon in the arsenal of the entrepreneur. The prices you set can have a significant impact on your bottom line. Prices set too high will discourage sales. Prices set too low will threaten profits. Understanding the intricacies of pricing strategy is therefore essential for the success of your business.

Factors influencing price come from internal strategic objectives and external forces in the market environment. Internally, business owners can choose pricing strategies to maximize profit, maximize sales, or capture market share. Outside factors, such as the level of competition, the maturity of the product, economic factors, and the psychological behavior of customers will also play major roles when establishing price.

According to basic economic theory, demand for most products increase as prices decrease. Business owners therefore expect to sell more if they reduce prices. If the objective is to sell more, and gain market share and brand awareness, keeping your price low may be a good strategy. This is sometimes called a market penetration strategy. Lower prices, however, can lead to lower profits, and potentially lower revenues if not done properly. If your focus is to maximize profits, you will carefully consider your costs to produce the product, and price it accordingly to achieve profits on each sale.

Companies in established industries often price goods and services relative to existing competition. The chosen price can be higher or lower than those charged by other businesses. If you choose to price higher than the competition, the difference in price should be accompanied by changes in the way the product is packaged, distributed, or promoted, to rationalize your higher price.

Some businesses seemingly defy economic principles. For instance, Ben and Jerry’s sell quarts of their ice cream for twice as much as other name brands sell half gallons containers. Devotees of B & J’s will justify paying the higher prices by claiming it is a superior product. Assuming this is true, in terms of the marketing mix, they have chosen to use their “product” to make their brand distinctly different. However, the tactic used by B & J’s goes beyond product differences. Extremely creative promotional efforts targeting the psychology of the consumer enable B & J to price their ice cream higher. In the mind of the consumer, higher price equates to higher quality and therefore the product becomes more desirable because of higher price. This is a classic example of what is called prestige pricing. Such pricing is intended to appeal to wealthier consumers (and those who want others to think of them as wealthier or more sophisticated). The social missions of B & J’s also appeal to many consumers. They typically donate a portion of profits to various social concerns.

When launching new products, companies have important price decisions to make. Innovative high-tech products are typically priced high initially to try to recoup development costs. Once competition learns of successful product introductions, they descend as sharks in a feeding frenzy, in hopes of getting a piece of the action. The company that originally introduced the product can then gradually lower prices to remain competitive. This is a price-skimming strategy. It is the strategy of choice when consumers exist who want to be the first on their block to own new gadgets. With it, companies “skim off” sales from customers willing to pay top dollar, before lowering the price and skimming off the next layer of willing customers.

Obviously, some pricing strategies are opposite from one another. Knowing the needs of your company, and the mindset of your customers is essential to implementing the best pricing strategy for your products.

Posted on February 21, 2004 4:37 PM | Permalink | Comments (11)

February 28, 2004

Superpowers fear WMDs in hands of small business

by Bruce A. Love

WMDs have been discovered in the arsenals of many small organizations worldwide. These independent entities do not even attempt to hide the fact that they have developed, and used, these weapons. They claim that it is the only way they can survive in a world dominated by superpowers.

Unlike the weapons of mass destruction used by some infamous military regimes, the goal of using Weapons of Market Distinction (WMDs) is to develop precision marketing programs designed to reach specific targets. While larger organizations with extensive financial resources often rely heavily on sheer budgetary strength to overwhelm vast numbers of the population, the WMDs used by creative leaders of smaller organizations, are frequently low budget (and sometimes free) collections of assorted marketing tactics. These tools help to establish a competitive advantage, and are ideal for reaching some markets that are inadequately served by larger organizations.

Small businesses and other small organizations find that by developing a commando style approach to marketing, they see remarkable results. Author Jay Conrad Levinson has made a career teaching this philosophy, which he calls "Guerilla Marketing." While consistent with traditional marketing principles stressing the use of the marketing mix, guerilla marketing builds upon the usual tools of product, price, place, and promotion to create an innovative no-holds-barred approach to marketing.

The WMDs I refer to are what Levinson calls guerilla marketing weapons. Some WMDs should be developed and deployed at the outset and can make or break an organization. Factors such as name, colors, and shape can dramatically impact the way a product is received. I saw this concept dramatically illustrated when a client offered two identical hot sauces under different labels to a large gathering at the International Fancy Food Exhibition in Philadelphia. The first jar was labeled Jalapeno Hot Sauce, which accurately described its contents. The second jar, however, was sampled 1500% more than the first. It's colorful name and amusing label are credited for this incredible popularity. This creative packaging (in addition to being a tasty product) enabled Ingleby Farms to win a Scovie Award for its most famous product: Heinie Hurtin Hot Sauce. Over time, attributes such as name color shape and logo contribute to establishing branding (the process of designing a distinctive look for your products and packaging), and enable existing customers to feel comfortable trying new products that you introduce.

Some WMDs take a long period of time to develop, and require patience. For small service organizations, active community involvement, association memberships, seminars, informative web sites, and newsletters all enable you to help others in the community while establishing awareness for what your organization does. In this way, you market not by selling, but by helping. A polite, friendly, enthusiastic attitude will go a long way to establishing consumer confidence, developing resource networks, and attracting sales. If a sale is made on a first encounter, that’s great. The seeds for some sales however may be planted months, or even years, before the fruit of your marketing efforts are actually harvested. In the mean time, your willingness to give back to the community will have created a win-win for all involved. Large organizations find it difficult to provide the same personalized service that their smaller counterparts are able to offer.

Small organizations have two important advantages over larger organizations: speed and agility. The key to being a successful guerilla marketer is to view everything around you as a potential WMD, and knowing when to launch specific weapons for maximum effect. By adopting a guerilla marketing philosophy and using WMDs, stores increase sales, associations increase membership, consultants attract clients, politicians secure votes, and small municipalities promote economic growth.

Posted on February 28, 2004 5:20 PM | Permalink | Comments (2)

April 10, 2004

Reach out and touch customers

by Bruce A. Love

Advertising is a means by which organizations communicate with their customers. As consumers, we are the focus of their advertising efforts as they attempt to persuade us to try products, purchase services, or vote for the candidates they represent. Television commercials, newspaper advertisements, and billboards, are some of the advertising medias used to impact our lives on a daily basis.

Advertising includes all fee-based non-personal selling approaches directed at large audiences. Advertising methods exist in many forms and are usually priced according to the amount of exposure they receive. Advertising medias can be evaluated in terms of reach, frequency, and longevity, although media novelty can also contribute to the effectiveness of the advertisement. No one right advertising approach works best for all occasions.

The Altoona Mirror reaches 100,000 readers daily. Weekly community papers reach far fewer readers. On the basis of “reach,” the Mirror can justifiably charge more for advertising space than your community paper. On the other hand, community newspapers may have slightly greater “longevity” (the length of time it sticks around to impress potential customers) because residents typically keep their community papers until upcoming weekly events have come to pass. Local weekly papers may also be more appropriate for highly localized businesses. Newspaper ads are priced by the column-inch. Ads on “break pages” (backs or fronts of sections) are priced higher than ads in the middle of a paper since they are more visible.

Magazine advertisements have the greatest longevity of all print media, often remaining in homes for months (in my home, years). Magazines have the added benefit of serving very specific audiences with highly defined interests. If your business serves people sharing these same interests, this may be a method you want to use. Boating supply companies, for example, may consider advertising in Sailing World. Such focused advertising, though usually more expensive than newspaper advertising, can give businesses in specific industries more bang for their advertising buck.

“Frequency” refers to how often an intended target is exposed to an advertisement. This term is frequently used to describe the benefits of radio spots, television commercials, and billboards. Commuters are exposed to the same radio commercials and billboards on daily commutes. While the longevity of such advertising is fleeting, the frequency of exposure helps to strengthen the message in the conscious or subconscious minds of potential customers.

If you feel that you can communicate your message best through audiovisual means, but your budget or target market does not justify the high priced, wide-reaching audiences that network television stations reach, consider running more affordable local cable commercials. Web sites can also offer audiovisual display capabilities. Their messages reach worldwide.

Many advertising medias have what is called a media kit. Companies thinking about advertising can request this kit from the sales offices of newspapers, radio stations, or your favorite cable company. In addition to pricing information and audience size, some media kits will also describe their audiences demographically in terms of age, gender, and income levels. Psychographic data (information regarding lifestyles, values, hobbies, etc.) may also be available. If so, you may be able to choose a media outlet whose audience profile most closely matches your target audience.

Advertising should be thought of as an investment. Your choice of advertising media is based upon who your target market is, and how much you can afford to spend. Before you spend your entire advertising budget on searchlights, blimps, or inflatable gorillas, assess the value of the advertising in terms of reach, frequency, and longevity. Ultimately, however, your advertising investment will be measured by how many customers purchase from your business as a result of your advertising.

Posted on April 10, 2004 3:07 PM | Permalink | Comments (1)

April 17, 2004

Manage your 15 minutes of fame!

By Bruce A. Love

The investigative staff of 60 Minutes arrives at your store and wants to know why you produce a product that contributes to the physical decline of society. Your crime is baking high-carb cinnamon buns that everyone seems to love a bit too much. You suddenly realize that the same media that once called your buns “the best in town” is now on a campaign to bust your buns. Obviously, some media attention is “a good thing,” but as Martha Stewart learned, bad press can severely impact company value. Handling publicity, both the good and the bad, is a job for public relations.

Public relations (PR) is the marketing function that is responsible for developing programs and messages intended to create public awareness and maintain a positive image for the organization. For those rare instances when bad press happens, the best defense is usually an aggressive approach to release truthful information. Too often, however, businesses, politicians, and individuals attempt to make the mess go away by ignoring or distorting the truth. This tactic usually leads to bigger messes. In the case of our bun crisis, don’t be tempted to hide from reporters. Your guilt will be implied if the news media has a chance to report, “calls to the bun maker were not returned.” Instead, hold a news conference and acknowledge, “Yes, it is true that our buns are high in calories and carbohydrates, and can be so incredibly delicious that they can become habit forming. Our studies have shown that our buns are safely enjoyed by anyone wanting to balance an active lifestyle.” Such a response will leave the media with no ammunition to launch against your business, and give you lots of free press.

In addition to crisis management activities, public relations also include issuing press releases, sponsoring events, and holding consumer educational forums. Press releases are business announcements that are covered by the media as news events. A large percentage of news stories originate as press releases. Believe me, the Krispy Creme “story” about the overhead bins of airlines being filled with doughnut boxes by dedicated customers flying to Krispy Cremeless Hawaii is not the result of investigative reporting, but work of a skillful publicist hired by Krispy Creme. Companies launching new products, contributing to charitable causes, or receiving awards, are all examples of newsworthy events for which I have issued press releases. Many of these were either printed verbatim in newspapers or, better yet, resulted in visits from news crews for comprehensive stories.

While there are no guarantees that press releases will be published or broadcast, you have nothing to lose and potentially lots to gain by engaging in this promotional tactic. Since published press releases are covered as stories, they often receive more attention from the intended audience than do advertisements, which are relatively expensive and often ignored by many intended viewers.

Another form of public relations, which is typically a win-win for everyone, is event sponsorship. Examples of this are the companies that become “official sponsors” of events like the Olympics. Smaller companies can gain similar exposure on a smaller scale by sponsoring the Special Olympics, little league teams, or Community Theater. Other public relations activities include running free seminars and contributing wit and wisdom to a weekly newspaper column on some topic of public interest. It is widely believed that an educated customer is a better, more loyal customer.

In case you were wondering about the “best buns in town,” my wife wins that contest! Do you want to launch her into business? Just send 60 Minutes over and I am sure we can spin them a great story!

Posted on April 17, 2004 12:30 AM | Permalink | Comments (1)

April 24, 2004

Political Advertising Gone Wild!

By Bruce A. Love

Less than six months remain until the general election. I can’t wait! It is not my sense of civic duty that prompts this attitude, but rather my realization that a great deal of mud (and other stuff) will be slung over the next several months from both the left and the right. When it’s all over, the only things left standing will be a large mountain of public cynicism heaped against the American political system, and the politicians that manage to garner one vote more than their opposition.

Politicians have become marketing animals. They have learned to use and abuse the time-honored principles of marketing without having to adhere to ethical guidelines that regulate marketing efforts in private industry. One example of this is the alarming amount of negative advertising that we see this early in the political campaigns. Comparative advertising is used effectively, and tactfully, in other industries to demonstrate distinctions between one company’s products and those of the competition. If this approach to advertising were used in politics, political commercials would simply describe the honest differences between candidates.

But the negative attack ads that have emerged as the advertising weapon of choice in politics, attacks the very character of the other candidate. These ads usually include a grainy unflattering video of the political opponent, distressing music, and disturbing commentary. Campaign managers justify the use of this malicious form of comparative advertising by reporting that it is the most effective way they can influence voters in thirty seconds. Studies show, however, that the long-term effect of attack ads fuel public cynicism toward politics and is a cause for declining political participation.

Studies have also shown that negative political advertising adversely affects both the target AND the sponsor of the ad. Obviously, it would be better not to be associated with the ad at all, but it is required by law that the sponsor be identified. If, on the other hand, an independent organization sponsored the negative advertising, the candidate could theoretically be insulated from the backlash against the sponsor of the ad. This appears to be the next frontier of negative attack ads. Look for such advertisements coming from ghost organizations as we get closer to the general election!

Negative advertising goes back many decades. One factor contributing to the upward trend in political attack ads is the 1934 Communication Act, which made an important distinction between political ads and those for products or services. It stated that broadcasters could refuse all deceptive advertising except for political commercials. In other words, politicians had the vision to pass a law that gives them exclusive permission to lie to us!
In contrast, the Federal Trade Commission (FTC) also established guidelines for businesses that states:

> advertising must be truthful and non-deceptive or misleading
> advertisers must have evidence to back up their claims; and
> advertisements cannot be unfair.

Two weeks ago, I was pleasantly surprised to see a very positive, upbeat political commercial. A fit young candidate jogged through the streets of his hometown while listing his very admirable credentials. He commented as he ran past his wife that having graduated from the U.S. Naval Academy, he was an “officer and a gentleman” and continued on his run to find more hands to shake. I thought to myself, “How refreshing! Such a positive attitude deserves my vote.” A week later, our “gentleman” launched a new commercial depicting his opponent as a clown/puppet and suggested that the opponent’s political camp had engaged in practices reminiscent of the Watergate Break-in. The commercial concluded by saying that it was time to cut some strings. Oh well, the positive message was nice while it lasted!

Posted on April 24, 2004 2:28 PM | Permalink | Comments (4)

May 15, 2004

Major League Sports and Big League Advertising

By Bruce A. Love

Apparently, Major League Baseball (MLB) stepped over a line last week, and into foul territory. When the Commissioner of Baseball disclosed plans to place Spiderman movie logos on the bases of major league ball fields, a brief, but spirited, protest erupted as baseball fans declared their mission to preserve the “purity of the sport.” MLB responded by withdrawing their ill-conceived plan – for the time being.

From a marketing standpoint, the plan seemed brilliant. In exchange for efforts to help promote the new movie, Baseball would receive $3.6 million. Everyone wins – or so Commissioner Selig reasoned. There was no reason to suspect that the public might react unfavorably. After all, fans have remained virtually silent, during the evolving commercialization of professional sports.

Without a doubt, racecar driving wins the most commercialized sport award. Nearly every square inch of every racecar displays corporate logos of every variety and crash boards around tracks feature sponsor ads. NASCAR participants wear tapestries of corporate sponsors as proudly as veterans, and brave young men and women in the military, display their medals of valor. Unlike other sports, however, this hyper-commercialized look is expected, and even admired, by its fans. It is testament to the success of the driver to be able to become a walking billboard!

Another example of the evolving commercialization of sports is the recent trend to name sports stadiums after corporate sponsors. Veterans Stadium, the former home of two Philadelphia teams (Phillies and Eagles), was recently reduced to rubble to make way for two new monuments to capitalism – Lincoln Financial Field and Citizens Bank Park. These stadiums join a third financial pillar of the community – The Wachovia Center (home of the Flyers and 76ers). Once inside these sporting complexes, visitors experience as much advertising as they would at home watching TV.

Upon entering a hockey arena you will notice the decorations on the boards around the perimeter of the rink. Flat surfaces that TV cameras sweep are prime real estate for advertisers. As a result these walls have become sport’s answer to billboards. There’s more! Look at the ice. Embedded deep below its frozen surface lay the logos of still more sponsors. If you try to turn away from the action and look up, guess what you see rotating around the upper levels – full-motion Technicolor advertisements of enormous proportions!

Basketball is not quite as commercial as hockey. The NBA prohibits ads on the floor surface, but the rotating Technicolor ads are still present, and there has even been talk of some players offering space on their bodies for commercial tattoos! Football also prohibits advertising on its playing fields. But follow the gaze of the camera as it pans to the sidelines, and you will see Gatorade displayed in ways that only their $46 million/year agreement can buy!

We have always had billboards in the outfields of baseball stadiums. Even minor leagues and little leagues have learned long ago to use this opportunity to generate revenue. One new twist for MLB, however, are the virtual ads that appear distractingly behind batters as TV viewers await for some action to take place between signals, spits, and scratches at home plate. Fortunately, these ads are a product of television technology and not visible to anyone in the stadium.

Yes, there was a line crossed by major league baseball, but it was crossed years ago. It is the nature of professional sports to find ways to make money. With the growing financial appetites of professional players and their owners, expect this trend to continue, and look forward to the time when baseball uniforms resemble those of NASCAR drivers and plate advertising becomes commonplace!

Posted on May 15, 2004 12:28 AM | Permalink | Comments (1)

July 24, 2004

Celebrities say and do the darndest things!

by Bruce A. Love

Several years ago I had the privilege of meeting a legendary sports figure who skated for my favorite hockey team, the Philadelphia Flyers. I was at an annual dinner meeting attended by all of the most respected companies in the county when it happened. I spotted Bernie Parent at a nearby table and knew I just had to talk to him. After all, he was the goal tender for the Flyers when they won their only two Stanley Cups!

I waited patiently for the right moment. Bernie was surrounded by a gaggle of guardians assigned to ward off undesirable commoners – like me. But when I saw him slip away from his escorts, I made my move to intercept this hockey legend.

I don't remember everything that we talked about, but I do remember him being very interested in what I was doing with small business. I also remember his face lighting up as we shared memories of the “Broad Street Bullies,” and seeing that emotion fade several minutes later as one of his handlers came to whisk him away to meet higher value targets.

Bernie Parent was at that dinner meeting for one purpose. He was hired by a security systems company to help promote their products. They knew the value of his celebrity status in the Philadelphia area. The message the company hoped to convey was that Bernie protected against goals, just as their products guarded against unwanted intruders.

Celebrities, viewed as opinion leaders, are often hired to endorse a variety of products and services. The expectation is that they will influence potential consumers to buy whatever product they are representing. Persons of celebrity status include actors, sports figures, politicians, and others who are widely known and respected.

In the world of marketing, the more recognized and admired a person is, the higher their Q-rating. One year after his third retirement, Michael Jordan still ranks high in this popularity contest. With higher ratings come bigger endorsement contracts. For example, Tiger Woods, who has the highest sports Q-rating recently reached a $100 million deal with Nike to represent their products for the next 5 years.

Obviously, celebrity endorsements are big business. There is an expectation that these large corporate investments will translate into larger corporate profits. With such high stakes, it is understandable that companies devise safeguards to protect their investments. Endorsement contracts typically include a “morality clause” that give corporations the right to terminate contracts if the celebrity becomes associated with criminal, or immoral, behavior.

In recent years, we have seen these clauses invoked with greater frequency. Dell quietly let its contract expire with the “Dell Dude,” after he was arrested while trying to buy marijuana. The indiscretions or alleged crimes committed by Kobe Bryant have cost the basketball star millions in endorsement fees. Ten years ago, Hertz terminated its contract with O.J. Simpson after he was arrested for murdering his former wife.

Criminal behavior is not the only grounds for invoking the morality clause. Big mouths and moral indiscretions of celebrities can also trigger contract termination as companies attempt to preserve their image during a celebrity scandal. In this politically charged election year, companies cannot afford to lose half of their customers when the celebrity endorsing their product uses crude remarks to bash one of the candidates. Whoopi Goldberg should have let the professionals (politicians) handle that dirty deed.

The Dixie Chicks, Tonya Harding, and Magic Johnson, have all allowed their mouths, their actions, or their associations, to cost them huge endorsement fees. It's little wonder why some companies like GEICO turn to a computer-animated lizard to promote their services. At least the lizard won't embarrass the firm!

Posted on July 24, 2004 5:35 PM | Permalink | Comments (0)

July 31, 2004

Professionals use profiling to capture their targets!

by Bruce A. Love

Headquarters has issued a directive to pursue new “persons of interest.” The targets this time are unmarried, college-educated, African-American males between the ages of 18 and 25. Successfully completing this mission will probably mean big financial rewards for the organization, and the individual who coordinates the operation. Activities, such as these, involve the sort of profiling that takes place every day in the boardrooms of many companies.

In business, it is acceptable to conduct what is called target marketing. This is a form of profiling that makes assumptions about individuals based upon sets of characteristics they share with others in associated groups. The purpose of this is to try to reach segments of the population with carefully crafted ads designed to have strong appeal with the identified market segments. Criteria such as age, gender, race, religion, location, and economic status, are all factors that are examined by marketers who look for ways to segment markets and capture customers. Similar tactics, if used by law enforcement, are often criticized as being politically incorrect, a violation of civil rights, and even illegal.

Target marketing uses resources effectively and efficiently to pursue only those customers who are the most likely to be interested in products or services offered by an organization. Businesses, motion picture studios, politicians, and others, have all used target marketing to reach specific populations, and to get us to buy what they are selling. Before they are able to do this, however, organizations need accurate information about us.

Information comes from many sources. Some companies buy the information from list brokers whose business is collecting, and selling, information about us. Brokers get information from various sources including phone interviews, product registration cards, online surveys, magazine publishers, and other forms and questionnaires. Some county offices also sell addresses, names, and statistics about their residents. This information can be used to target us individually, but many times it is used to paint a profile of a group of people so that marketing efforts can be created to appeal to larger segments of the population.

Of course, there is the potential for abuse when using target marketing. R.J. Reynolds Tobacco Company has demonstrated this numerous times. Several years ago, the cartoon-like character “Joe Camel” was introduced to help Camel cigarettes appeal to younger audiences. Hook them young and have a customer for life seemed to be their strategy. In another instance, a Reynolds internal memo revealed that a new cigarette, called Dakota, was to be marketed to "virile” white females between the ages of 18 and 24 who attended tractor pulls, and who had no education beyond high school. Such deliberate attempts by R.J. Reynolds to prey upon economically disadvantaged young people were met with outrage, and those campaigns were eventually discontinued.

For the most part, target marketing makes good business sense and has been implemented ethically and effectively. As consumers, we are frequently the subject of targeted advertisements based upon our interests and needs. Such targeted approaches save us from being bombarded by many more ads than we already receive, and often provide us with discounts on items that we use most. From a company’s perspective, target marketing ensures that companies do not waste their time and advertising budget on efforts that broadly target the entire population, when their primary focus is often much narrower. For example, a company wouldn’t launch a marketing effort that reached the entire US population, when their intended to focus was limited to a segment comprised of middle-eastern men, age 18 to 35, who have just arrived in the United States using one-way airline tickets. That just wouldn’t make sense!

Posted on July 31, 2004 2:58 PM | Permalink | Comments (1)

February 5, 2005

Opponents prepare for Super Bowl battles

By Bruce A. Love

Let the games begin! It's Super Bowl Sunday tomorrow, and my Eagles are ready to soar! I am in eastern Pennsylvania, the very heart of Eagles country, as I sit down to write this column. The streets are lined with green, Eagles jerseys are everywhere, and there is only one topic discussed on local talk radio and television programs -- Super Bowl XXXIX. Believe me, Philly Phans have got the Phever!

The Super Bowl is the time to "put it all on the line." Wide Receiver Terrell Owens is doing just that as he ignores the advice of doctors, suits up, and risks it all for what could be the biggest game of his career. Owens is not the only one putting it on the line this weekend. In addition to being the biggest sporting event of the year, the Super Bowl provides the ultimate stage for advertisers as they roll out carefully crafted commercials for their big broadcast debut.

The Fox network has sold 59 slots to advertisers so they can take advantage of the largest television audience of the year. An estimated 90 million viewers in 63 percent of US homes are expected to view the game and the commercials (which are watched by some more closely than the game).

Unlike the Eagles and the Patriots who had to defeat other teams to earn their right to play on Sunday, the opportunity to present a 30 second commercial during the game is open to any company. The only catch is that it will cost $2.4 million to do so - and that's just for airtime! Production for some commercials, such as the one Go Daddy is planning to run, will cost companies over $1 million to produce!

One has to question the motivation behind advertising during the Super Bowl. Is the exposure really worth the cost? Anheuser-Busch has bought 10 of the 59 slots available. That's $24 million! If we make our math simple and assume a case of beer costs $12, the effect of Super Bowl advertising should at least translate into 2 million more cases being sold just to cover the cost of advertising during one game! When you factor in the cost of the product and overhead, the expectation should be that the 5 minutes of commercials lead to 4 million more cases of Bud sold. Is that reasonable? Maybe. What Anheuser-Busch is attempting to do each year is influence the consumer audience coming of age. If persuaded by these clever and entertaining commercials, a new generation may become loyal consumers for years to come. One look at the Busch bottom line suggests that this strategy appears to work!

Most people believe that there is more to Super Bowl commercials than just the expectation of increased revenues for the companies. Part of the allure of running these high profile ads is for bragging rights. After all, if only 1 beer brewer is featured during the Super Bowl (a condition specified by Bud in an exclusive rights clause of their contract), couldn't they arguably claim to be "the King of beers?" If your beer is "second best," it won't be seen on Sunday!
Another competition that takes place is between advertising agencies. This is a chance for them to showcase their best stuff so that potential clients will be impressed with their abilities enough to seek their services. They are probably the biggest winners off the field during this annual ritual, as they are paid for displaying their own talents.

Super Bowl XXXIX will be the first one in a long time that I actually have more interest in the game than the commercials. As a marketing professor/professional, I enjoy analyzing the technical execution, effectiveness, and entertainment value of these commercial productions. Part of me regrets that I don't have an extra $2.4 million lying around so that I could compete against the big boys. OK, maybe all of me regrets that. But if I had ads featured during the game on Sunday, I would have to believe that they would generate revenues greater than the cost to produce the ads.

So, let the games begin! Show us what you've got. Fly, Eagles Fly!
In the words of the late, Tug McGraw, "Ya Gotta Believe!

Posted on February 5, 2005 2:18 PM | Permalink | Comments (2)

July 23, 2005

A Rich blend of teas and marketing make for good business

By Bruce A. Love

As I sit down to write this week’s column, I am listening to the ethereal sounds of New Age diva, Enya, and sipping a cup of Earl Grey Winter White tea. The serenity of this moment is a stark contrast to earlier events of the day, which involved a flat tire and a reluctant spare that had to be pried from the undercarriage of my Dodge Caravan.

Fortunately, I’ve just returned from an outing to “Tea Merchant 101” in Duncansville, which offered a unique experience and several concoctions that have allowed me to put all stressful thoughts aside. Tea Merchant 101 is an oasis of tranquility and sophistication located in the Olde Farm Office Centre on Old 22. It’s in the large white Civil War-era Victorian house we’ve all passed as we travel between Hollidaysburg and Duncansville. I’d say, “You can’t miss it,” but I did several weeks earlier when I first attempted to visit this merchant using directions provided online by MapQuest.

Joe Doyle, proprietor of Tea Merchant 101, seems to know all the right moves in presenting and selling his gourmet teas. Upon entering the store, customers are greeted by soothing music, stylish displays, and an attentive, knowledgeable, and genuinely appreciative, host. Joe’s eagerness to share his passion for teas is evident, but not annoyingly so. He seems to enjoy and respect his guests as much as he does his teas. Doyle has sampled all of the 101 varieties available in his store (which may explain his high energy level), and can therefore provide descriptions and opinions on each, if assistance is needed.

Teas, like wines, can be intimidating until you learn a bit about them. I have enjoyed a variety of teas for years, but my knowledge about this beverage is still very limited. Fortunately, we have a local expert on the topic (Joe Doyle is just the third Pennsylvanian to be certified by the Specialty Tea Institute of New York). Unlike wine connoisseurs, Doyle does not look down his nose at novice tea fanciers, and he won’t make any disdainful remarks if you happen to pick the wrong crumpet to go with your selected tea. In fact, I don’t believe there is a wrong crumpet (or scone, or biscotti) for any tea! This is probably because the tea culture was elevated to an art form by the British, not the French.

Joe Doyle uses many of the business tools available to the skilled marketing retailer. First and foremost is the store itself. The loose teas are meticulously and attractively displayed in clear glass canisters. The colors and textures have a way of seducing customers to take a sniff. Unusual teapots from around the world are arranged throughout the store and add a museum-like ambiance. Of course, these are available for purchase too. There are even a couple of tables where customers can sit down to enjoy a pot of tea.

In addition to the stylish store layout and tranquil atmosphere accentuated by New Age music, Joe uses a variety of other techniques to entice patrons to visit his store and sample his wares. Joe maintains a mailing list and publishes a quarterly newsletter announcing new additions and helpful suggestions. This helps to keep his store fresh in the minds of his faithful followers. Joe Doyle also accepts invitations to speak about teas and share some of his favorites. His knowledge, sophistication and flair would be an ideal addition for any “Red Hat” society gathering.

In the role of business consultant, I offer just a few recommendations for improving Tea Merchant 101. As a customer, I am disappointed with the limited hours of operation. I would like to see Tea Merchant 101 open at least one evening each week. Another recommendation would be to put this business online. The artistry and décor of the store can be closely approximated by well-designed Web pages featuring close-ups of the various teas. These, and carefully crafted descriptions of each tea, would be almost as enticing as the aromas one would experience in person. While Doyle attracts customers from a 5-county area (and beyond), Central Pennsylvania is not known for large concentrations of gourmet tea enthusiasts. By selling online, Tea Merchant 101 would reach a much wider market and greatly increase their bottom line.

If your idea of a gourmet tea is a cellophane-wrapped box of Celestial Seasons, I suggest broadening your horizons by taking a trip to Tea Merchant 101 to try one of their many loose teas. If you are a struggling retailer, I suggest taking a page out of the marketing book of Joe Doyle, and find ways to connect with your customers. His marketing efforts are as tasteful as his teas. Tea Merchant 101 can be reached at (814) 696-0192, or by email: teamerchant101@aol.com.

Posted on July 23, 2005 3:50 PM | Permalink | Comments (7)

October 10, 2008

Win Free Stuff Here!

By Bruce A. Love

The title of this column is bound to attract a lot of attention. It may be a cheap marketing ploy to get you to read this column, but I promise that this column will provide powerful resources that will increase your chances to win valuable prizes. First, however, I want to provide a quick lesson in Marketing 101.

Every first-year marketing student can tell you that the 4 Ps of marketing are product, price, place, and promotion. Marketing professionals work with these 4 components of the marketing mix to develop strategies that will entice their intended audience. The “product” component can be ideas, services, or actual goods. “Price” is the selling price that an organization establishes for the product, service or idea they are marketing. “Place” refers to the place or distribution channels that are used to move the product. These can be an actual store location, the internet, or some other medium to get the item into the hands of the consumer. Promotion is what people associate most with marketing. The promotion component includes all advertising options (newspaper ads, television and radio commercials, spam, etc.), personal sales efforts, public relations activities (such as publicity and press releases), and sales promotion (which is where the possibility of winning valuable prizes comes in).

Sales promotion involves any activity that offers incentives to induce a desired response by salespersons (i.e., sell my product), intermediaries (i.e., sell my product), and/or final customers (i.e., buy my product). Sales promotion activities include several interesting tools that typically are used to boost sales in the short term and complement other promotional activities as part of the master marketing plan.

Two sales promotion tools that customers enjoy most are contests and sweepstakes. Contests, by definition, require the use of some sort of skill to win a prize. Bake-offs and essays submitted with the hope of winning a prize are good examples of contests. In contrast, sweepstakes merely require filling out a form and dropping it in a box (or clicking “send” if you are doing an online entry). Sweepstakes have become a big part of American culture. As a child, I remember my mother entering a variety of sweepstakes. Over the years, she has won a television set, a movie camera and projector, and a brand new 1968 Pontiac Catalina! I’ve not been so fortunate.

By definition, sweepstakes are advertising tools by which prizes are awarded to participants by chance with no purchase or fee required to win. Let me stress this point – No Purchase Is Necessary! It’s the law. Even when you mail in entries that ask you to indicate on the envelope whether or not there is a “Purchase inside” it will not affect your chances of winning if you don’t purchase anything.

Both contests and sweepstakes produce increase brand awareness and ultimately quick revenues - which is the whole reason for why organizations use sales promotion tools! It’s truly a win-win for everyone!

If you enjoy entering sweepstakes, the following Web sites are both winners:
o CashNet Sweepstakes
o Online-Sweepstakes

Posted on October 10, 2008 3:35 PM | Permalink | Comments (200)

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