Marketing updates- 25/07/2012

Nike’s Ambush Campaign

Nike, famous for being an Olympic ambush marketer (Remember the 1996 Olympics!), is set to test the Olympic rules on ambush marketing, launching a global campaign featuring everyday athletes competing in places around the world named London.

The new ad touts athletes in other towns around the world named London (include East London in South Africa, Little London in Jamaica, London Ohio in the US and a health club called London Gym.). The subtext to the ad is “don’t get all worked up about the Olympics, people” — which Nike isn’t sponsoring!

Nike, not an official sponsor of the IOC or the London 2012 Olympics, have clearly designed their “Find your Greatness” campaign’s to cash in on the Olympic fever and get one over on arch-rival Adidas, which has paid about $60 million for its official status.
Have a peek- http://www.youtube.com/watch?v=Nz1gWajl0g8

GM’s Cadillac Campaign
General Motors has just launched its new ad campaign for the Cadillac ATS luxury brand during the opening ceremony of the 2012 summer Olympics in London.
The advertisements show the ATS on a cinematic adventure and it explores destinations such as the deserts of Morocco, the streets of Monaco and Patagonia, Chile.
The ATS is crucial to GM’s product line-up as Cadillac’s entry into a competitive market segment currently dominated by BMW and Mercedes.
The Cadillac ATS goes on sale later this year with a base price of $33,990 and a mileage of 33 mpg.
The “ATS vs. the World” trailer – http://www.youtube.com/watch?v=o5oTpxaffW0

Coke’s Olympic association
Coca Cola has been associated with the Olympics for 83 years. So it is no surprise to see Coca-Cola sponsoring the 2012 Summer Olympics in London with a huge “Move to the Beat”-themed global campaign created in conjunction with Mother London.
The “Move to the Beat” campaign, which is aimed at the world’s youth, is made up of content that is to be largely distributed via the social media by the target audience.
This tactic falls in line with Coca-Cola’s Content 2020 manifesto which intends to forgo a reliance on traditional advertising and to instead focus on producing content with a storytelling bent that is “liquid and linked.” –  Liquid meaning it can flow through any medium, and linked in that it is in line with the brand’s business objectives.
“Move to the Beat” campaign – http://www.youtube.com/watch?v=lYcsbNtlbvg

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Channel Conflict

Channel conflict arises when two different distribution channels of the same manufacturer find themselves competing for the same set of customers. 

Since manufacturers sell their products through a variety of channels from online stores to super markets, these conflicts are bound to arise. 

 

Possible effects:

 

  • At times it could be a necessity of a normal competitive business environment , leading to increased efficiency in the supply chain forcing out-of-date players to adapt or perish.
  • It has a negative effect when the overlap of consumers is big and one channel has significant advantage over the other. Sometimes the threatened channel retaliates of stops stocking the products. Ultimately the manufacturer suffers.

 

Example:

This is quite easy to relate to the Bharti-Walmart case. If Unilever’s products are stocked in a Bharti-Walmart store as well as in the near-by mom -and-pop store, the smaller local store is bound to feel threatened. 

 

 

 

The Hindu

If you have been watching television for the past few days, chances are that you would have already had had a discussion on the sudden rebirth of the brand “The Hindu”. The Hindu has always evoked respect, a respect of a grand old man full of wisdom. It is one of the very few national dailies left which hasn’t yet glamourized and sensationalized journalism. It has used this very image to launch a series of attacks on the Times of India.

It all started when a young and handsome Times of India took on The Hindu on its own home ground Chennai. TOI appealed to the Chennaites to shun the boring newspaper that puts them to sleep with this ad http://www.youtube.com/watch?v=kxz4WvGG7uA&feature=player_embedded.

 

Hindu struck back with a barrage of advertisements taking Times of India to the cleaners. They combined their characteristic journalistic wisdom with creativity. Even their tagline “Stay Ahead of the Times” conveys the message effectively with a tinge of sarcasm. Hindu has launched a series of TV and print media campaigns. It remains to be seen whether this attack wouldscathe TOI or would they continue to forge ahead sweeping Hindu aside.

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How Toyota used Digg to change its brand perception

The brand renowned worldwide for its quality, took a rather nasty hit in 2010. Massive product recalls tainted the image of the company badly. Toyota, in the quest to regain the lost trust, rolled out an integrated traditional marketing and social media marketing plan.

While media was flooded with Toyota’s product recall news, Toyota invested heavily into both print and television advertising to ensure that their side of the story is also told to the people. Toyota then turned to the social media website Digg for online marketing. Digg is a social media website wherein people vote stories up or down. It generates “likes” and “dislikes” for each type of story. Toyota utilized the website to understand what sort of answers people are looking from Toyota. The most urgent questions generated the most “likes” and these questions were answered in a series of online interviews with Digg. They also used the number of queries about Toyota on the online website Digg as a way of measuring the “buzz” around the whole recall incident.

Online media helped Toyota understand what the customers really wanted to hear from the Toyota executives about the whole incident. The online buzz around Toyota that had peaked during Jan 2010 started tapering from Feb 2010 onwards and started getting really quieter by the end of March 2010.

Sources:
http://mashable.com/2011/09/01/toyota-digg-recalls/
http://www.csmonitor.com/Business/new-economy/2010/0208/Can-Toyota-Digg-out-of-its-recall-hole
http://tech.fortune.cnn.com/2010/02/08/toyotas-low-risk-dialogue-on-digg/
http://www.corporate-eye.com/blog/2010/04/toyota-turns-to-digg-to-change-negative-brand-perceptions/

Kellogs

Kellogg’s is, of course, a mighty brand. Its cereals have been consumed around the globe more than any of its rivals. Sub-brands such as Corn Flakes, Frosties and Rice Krispies are the breakfast favourites of millions.

In the late 1980s, the company had reached an all-time peak, commanding a staggering 40 per cent of the US ready-to-eat market from its cereal products alone. By that time, Kellogg’s had over 20 plants in 18 countries world wide, with yearly sales reaching above US $6 billion.

 

However, in the 1990s Kellogg’s began to struggle. Competition was getting tougher as its nearest rivals General Mills increased the pressure with its Cheerios brand. Kellogg’s management team was accused of being ‘unimaginative’, and of ‘spoiling some of the world’s top brands’ in a 1997 article in Fortune magazine. In core markets such as the United States and the UK, the cereal industry has been stagnant for over a decade, as there has been little room for growth.

 

Therefore, from the beginning of the 1990s Kellogg’s looked beyond its traditional markets in Europe and the United States in search of more cereal eating consumers. It didn’t take the company too long to decide that India was a suitable target for Kellogg’s products. After all, here was a country with over 950 million inhabitants, 250 million of whom were middle class, and a completely untapped market potential.

 

In 1994, three years after the barriers to international trade had opened in India; Kellogg’s decided to invest US $65 million into launching its number one brand, Corn Flakes. The news was greeted optimistically by Indian economic experts such as Bhagirat B Merchant, who in 1994 was the director of the Bombay Stock Exchange. ‘Even if Kellogg’s has only a two percent market share, at 18 million consumers they will have a larger market than in the US itself,’ he said at the time.

 

However, the Indian sub-continent found the whole concept of eating breakfast cereal a new one. Indeed, the most common way to start the day in India was with a bowl of hot vegetables. While this meant that Kellogg’s had few direct competitors it also meant that the company had to promote not only its product, but also the very idea of eating breakfast cereal in the first place.

 

The first sales figures were encouraging, and indicated that breakfast cereal consumption was on the rise. However, it soon became apparent that many people had bought Corn Flakes as a one-off, novelty purchase. Even if they liked the taste, the product was too expensive. A 500-gram box of Corn Flakes cost a third more than its nearest competitor. However, Kellogg’s remained unwilling to bow to price pressure and decided to launch other products in India, without doing any further research of the market. Over the next few years Indian cereal buyers were introduced to Kellogg’s Wheat Flakes, Frosties, Rice Flakes, Honey Crunch, All Bran, Special K and Chocos Chocolate Puffs – none of which have managed to replicate the success they have encountered in the West. Furthermore, the company’s attempts to ‘Indianize’ its range have been disastrous. Its Mazza-branded series of fusion cereals, with flavours such as mango, coconut and rose, failed to make a lasting impression.

 

Source : http://www.scribd.com/doc/7121491/Kellogs

5 Star

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5 Star has a special place in the Rs 2,000 crore Indian chocolate market. Chances are that it would have been your favorite chocolate at some point of time. Its unique caramel filling was a welcome break from the usual chocolate bars. Like several other brands, 5 star has also adopted the message of “Getting Lost in the Taste
for the past few years. They have done a commendable job maintaining the consistent message over the years but they are starting to get carried away lately.

Like several Dairy Milk products, 5 star has targeted the adult segment for the past few years. They have gone to the market with the message “Jo Khaye, KhoJaye” [Eat and get lost in the taste] wherein the one who eats 5 star temporarily goes into amnesia after eating 5 star. The idea worked well for them with consistent positioning and messaging.

Then came the two long lost friends, Ramesh and Suresh, who meet in front of a small shop. Then onwards, all the advertising activity of 5 star has revolved around Ramesh and Suresh. Creativity in the advertisements has taken a downfall and an attempt at projecting humor has made the whole brand personality seem idiotic.

Constant usage of these two characters has made them a projection of the brand 5 star and what its lovers appear like. Although they seemed okay in the first few advertisements, in the recent ones they appear idiotic in both looks and behavior.

If these characters portray a 5 star lover, then the brand has landed itself in a bad position. Also, why has the brand forgotten kids?

McDonalds’ Arch Deluxe

As far as brands go, McDonald’s is a biggie. Along with Coca-Cola and Marlboro, it is one of the few brands which is recognized in almost every country. As McDonald’s itself proclaims, its chain of fast food restaurants represents the ‘most successful food service organization in the world.’ There are now approximately 25,000 McDonald’s restaurants across the globe, catering to around 40 million people every single day.

 

The brand reached this position of dominance by arriving at a simple formula, and pushing it hard. As columnists Des Dearlove and Stuart Crainer point out, simplicity is the secret behind the brand’s success:

 

“Henry Ford mastered mass product production; McDonald’s has mastered mass service production. It has done so through strict adherence to simple beliefs. Quality, cleanliness and uniformity are the basis of the McDonald’s brand. [. . .] A McDonald’s restaurant in Nairobi,Kenya looks much the same as one in Warsaw, Poland or Battle Creek, Michigan. [. . .] In effect, the very uniformity of the brand is the crucial differentiating factor.”

 

However, the McDonald’s ride has not been all that smooth. Although it has consistently held onto the crown of the king of fast food, the company has experienced a number of setbacks over the years. Apart from run-ins with environmentalists, anti-capitalists and other activists; McDonald’s has also experienced a number of more conventional marketing problems. Most of these problems have been new products that have failed to entice consumers. McLean Deluxe (an attempt to cater to the health conscious customer) and McSoup are two obvious examples, but it was with the Arch Deluxe burger that McDonald’s experienced its most embarrassing flop.

 

Marketed as the ‘Burger with the Grown-up Taste’, the idea was to have a burger which wasn’t associated with children. Indeed, the advertising campaign for the Arch Deluxe rammed the message home with various images of kids shunning the ‘sophisticated’ product. The trouble was that nobody goes to McDonald’s for sophistication, they go for convenience. Part of this convenience is in knowing exactly what to expect. Most people who walk into a McDonald’s restaurant know what they are going to order before they reach the counter.

 

The other problem with the Arch Deluxe was the fact that it was sold on taste. Everybody knows that McDonald’s is never going to be awarded a Michelin star, yet everybody still comes back. In an article headlined ‘McDonald’s Missing the Mark,’ Dave Miller attacked the ‘compete on taste’ strategy apparent in the promotion of the Arch Deluxe:

 

“We don’t come to the Golden Arches on the merits of taste and tantalization and culinary delight. We prize your brand on friendliness, cleanliness, consistency and convenience. They are value propositions that you’ve abdicated in recent years and – luckily – competitors have neglected to capture. Exactly how many failed menu concepts does it take before all of those development dollars are instead ploughed into the value proposition?”

 

However, the problems encountered with the Arch Deluxe are symptomatic of an even bigger problem. As with other brands of such an enormous scale, McDonald’s has been accused of losing touch with its customers and being too far behind the market. Indeed, this is a problem acknowledged by the company’s CEO, Jack Greenberg, who arrived in 1998. ‘We have been taking much too long to develop an idea and get it to the market, then too long to decide whether we want to do it or not,’ he told The Financial Times.

 

As you would expect with a brand that has built its name through uniformity, McDonald’s is heavily centralized. Most branding and marketing decisions need to go through the company’s headquarters in Oak Brook, Illinois. The recipe for the Arch Deluxe itself came from the Oak Brook kitchen. This contrasts with McDonald’s major product successes such as the Big Mac, the Hot Apple Pie, the Egg McMuffin and the Filet o’ Fish, which were all invented in operators’ kitchens out in the field (whereas other flops such as the McLean burger and McPizza were also conjured up at the Oak Brook headquarters).

 

Another interesting aspect of the Arch Deluxe failure is that the product was well researched. After conducting masses of market research, it emerged that people would love to eat a burger designed specifically for adults. Unfortunately, these people seemed to be in short supply when the product was finally launched.