Week 8 EOC: Subliminal Advertising

Subliminal advertising, or unlocking the subconscious mind of the consumer, has become in fashion again after years of being a taboo topic. In the day and age of consumers facing a constant barrage of advertisements, brands are finding themselves diving into the psyche of Americans in which they can get a strong foothold into why they buy certain brands over another. “Shell is now in the process of coming up with some new customer-catching techniques — derived, Oeschle says, from the insights gleaned from his groups of mesmerized motorists” (http://www.salon.com/1999/09/27/persuaders/, 1). That is right, marketing agencies are turning to such tactics as hypnosis to gather consumer insight. These insights are no different than those of decades earlier who used subliminal messaging in advertisements to gain new customers. “In fashionable marketing circles, it has become acceptable again to speak openly about harnessing consumers’ brain waves for commercial ends” (http://www.salon.com/1999/09/27/persuaders/, 3). Everything from a certain fond childhood memory to what makes a person fearful can be valuable knowledge to a brand. This is what gives the brand a “leg up” on the competition and makes their marketing effective.

Subliminal messaging to “harnessing consumer brain waves” are necessary to create brand loyalists these days. It is the psyche that catches on to the meaning behind an advertisement or brand image that creates the need to have it. As dubious as this may sound, it is smart design. Dr. Sam Cohen is someone who is harnessing consumer insight for the good of global brands. “As a specialist in object-relations theory, Cohen says, he considers himself especially well-positioned to probe the purchasing decisions of consumers” (http://www.salon.com/1999/09/27/persuaders/, 4). Delving into the “why” of a purchase is the essence of brand loyalty. It is not as easy to gather this information from more apparent marketing research tactics in which people can give false statements or reasons. Unlocking the unconscious provides truthful answers and brand relationships not even the consumer knew they had. Welcome to the new brand marketing research-where no part of the mind is off limits.

Week 7 EOC: Retail PEST

H&M

Political-

·         Work with private, social, and government organizations to help improve the quality of life for the underprivileged (especially in countries from which they have factories like China and Bangladesh)

·         Incorporate lesser well-known brands to expand the overall lifestyle brand of H&M (companies bought include: Cheap Monday, Monki, and Weekday

Economic-

·         The US is the fastest growing market for H&M (they target to grow 10-15% yearly) in which the economy has slumped making their philosophy of “fashion and quality at the best prices” all the more appealing.

·         Flattened the supply chain by sourcing their own factories and combining their in house design with bought designs which creates a lower COGS.

·         Keep the company private so it does not have to deal with the fluctuating market.

·         Franchise stores in markets which are hard to gain access to such as the Middle East.

·         H&M does not operate on credit with their vendors or property owners (store leasing). Everything is paid for in cash making this a healthy company to work for

Social Demographics-

·         Global economies have seen a drop in the stock markets and other sources of income prompting consumers to tighten the belt on spending. This makes fast fashion retailers more attractive to the saavy bargain shopper.

·         In the US, families are decreasing in size and Americans are starting families later in life which is an indication consumers have more of their income to spend on themselves rather than on kids.

·         Recent news of Target reporting a 2^nd quarter loss in revenue prompts retailers to increase the amount of advertised discounts and “special deals” which H&M continues to do well

Technological-

·         This year H&M launches online retailing for those in the US market

·         They offer “e-dressing” which is a virtual dressing room available on their website

·         H&M continually updates their in house communication systems which leads to faster lead times and quicker turnover

Source: http://about.hm.com/AboutSection/en/About.html

Week 7 BOC: Largest retailers

The monster retailer Walmart is reported to be the largest retailer globally with worldwide retail sales topping at $453,976,000 (http://www.stores.org/2012/Top-100-Retailers). No other retailer even comes close. In 2011, the US sales alone were $316,083,000 which makes up a bulk of the earnings to date (http://www.stores.org/2012/Top-100-Retailers). Their strength lies in their profitability by providing low cost goods to consumers at high volume. They create relationships with their vendors that drive the prices down in that particular market to force everyone to compete for a chunk of the business.

According to Forbes Magazine, “The biggest International firm (based outside the U.S.) on the list is Spain’s fashion retailer, Inditex" (http://www.forbes.com/sites/andreamurphy/2012/04/18/global-2000-the-worlds-biggest-retailers-2/). They are the parent company responsible for the fast fashion retailer Zara which happens to be their oldest and most well-known brand. Inditex has eight brands altogether and consist of Zara, Zara Home, Bershka, Massimo Dutti, Oysho, Stradivarius, Pull and Bear, and Uterque (http://www.forbes.com/sites/andreamurphy/2012/04/18/global-2000-the-worlds-biggest-retailers-2/). These are all fast fashion retailers which has seen overwhelming growth over the past 10 years because of a failing economy and tighter budgets. People want “bang for their buck” when it comes to fashion clothing. Fast fashion retailers like Zara and H&M provide the latest trends from the runway at incredibly low prices because they source from their factories overseas at high volumes which they can provide at a deeper discount.

The third largest retailer in the US, Target, was recently in the news because of slumping profits due to an underwhelming introduction into the Canadian market. "The competitors have really done a good job in defending their space," said Stewart Samuel, program director at IGD Canada, pointing in particular to Wal-Mart, Loblaw Cos Ltd and Shoppers Drug Mart Corp” (http://www.reuters.com/article/2013/08/21/us-target-results-idUSBRE97K0HR20130821).  The US sales for Target in 2012 topped at $68,466,000 with a growth of 4.1% so the loss in profit recently is seen as very discouraging news (http://www.stores.org/2012/Top-100-Retailers). It is suggested that Target continue to feature steep discounts on their merchandise to help lure away customers from giants like Walmart.

Week 6 EOC: Rocky Ford-Restoring the Brand

After erroneously being identified with a cantaloupe farmer who was responsible for a listeria outbreak in Colorado, Rocky Ford growers have to be smart and reshape their brand image. They must follow in the footsteps of Tylenol and reintroduce themselves to the public in a new and fresh way. “People often associate rebranding as a name and identity change, but it can be more subtle than this; a rebrand can be just a slight alteration to an identity” (More Than a Name: An Introduction to Branding, 60). Rocky Ford has been known for their cantaloupe farms for over 150 years and it has been quite successful up until recently. They did not have anything to do with the outbreak, but now their reputation is on the line and are in need of crisis management. Tylenol did not throw away their brand because of the “Tylenol murders” in 1982. Instead, they were quick to react and implemented new measures to assure the public that they are taking every step to ensure that the tampering does not happen again. Todd Ragusa of Ragusa Consulting spoke about how people perceive a brand after a crisis and how to effectively manage it, “And always remember that the message delivered is not the same as the message received. Different people interpret and assimilate information differently based on their level of interest and, in particular, to what degree the issue affects them” (http://www.inc.com/jeff-haden/best-way-to-respond-to-a-pr-crisis.html). Rocky Farms needs to implement a clear marketing strategy in the media that communicates their products are safe and they have a proven record of providing delicious and nutritious products to consumers because of safe practices. It is essential to gain the public confidence back and rebuild the brand. Not all is lost. “Companies need to do their research.  And they need to be responsive to their consumers – and respond to their wishes (http://www.bellpottingerwired.com/noticeboard/2013/04/time-for-a-rebranding#sthash.0ZWTQwQb.dpuf). Rocky Ford should conduct consumer research and respond accordingly. Consumers feel wary of cantaloupes now because of the outbreak, so the farm should assure the public of their track record of safety. Do this by an extensive media push. Perhaps they should offer a wider variety of produce to further separate themselves from cantaloupes, but still offer that product as to not convey any type of guilt as well. It might take a few months or a few years for Rocky Farms to be profitable again, but with a strategic PR plan in place to rebrand it into a positive light, the company can bounce back and come back stronger than before.

Week 6 BOC : Tylenol Scare 1982

Johnson and Johnson, the manufacturers of Tylenol, took crisis management into overdrive after the 1982 scare that left seven people dead in Chicago. The extra strength acetaminophen pills were laced with cyanide and proven to be tampered with. Everyone thought Tylenol would disappear from the shelves forever, but with some extensive crisis management, the brand bounced back and became profitable once more. “What set apart Johnson & Johnson's handling of the crisis from others? It placed consumers first by recalling 31 million bottles of Tylenol capsules from store shelves and offering replacement product in the safer tablet form free of charge” (http://www.nytimes.com/2002/03/23/your-money/23iht-mjj_ed3_.html). Recalling products before this event was not heard of. Johnson and Johnson alerted the public to not take any Tylenol product whatsoever until the tampering was solved. Rather than continue to keep the bottom line, the company put public safety as their first priority. The effective management of the crisis by the CEO and the prompt response to frightened consumers gave the public some answers and subsequent relief.

 
After alerting the public and recalling the tampered with products, Johnson and Johnson quickly went into action to assure the public this would never happen again. “Under Burke’s leadership, the company spent $100 million to recall 31 million bottles of Tylenol and re-launched the product two months later in tamper-proof packaging” (http://business.time.com/2012/10/05/tylenol-and-the-legacy-of-jjs-james-burke/#ixzz2bygRo7hg). It was a relatively small monetary price to pay to ensure Tylenol would not disappear from the shelves and gain the public confidence back. It was this move that gave the public a sense that the parent company cared about them and cared about the safety of the products they were delivering. J&J didn't resume sales for three months, until it could package the pain reliever in new, tamper-resistant bottles. “Within a year, Tylenol had recaptured its 35% market share, J&J said. Use of such tamper-resistant packaging, such as the foil or plastic wrappers that must be peeled off medicine bottle lids in order to retrieve the pills inside, became widespread” (http://online.wsj.com/article/SB10000872396390444592404578030681224799460.html). It was the quick response and added security measures that put the brand back on top within a few months of the crisis. Thus would prove to be a much heralded way to approach a crisis within a company and would be studied for many years to come.

Week 5 EOC: Trend Predicting

The interview between Shari Swan and the author of More Than a Name: An Introduction to Branding, Melissa Davis, leads to very relevant perspective on the importance of tracking trends and relating it to a company’s brand. Social media is playing an ever important role in marketing on both fronts, both brand marketing and direct marketing. Millenials and younger demographics are finding it easier to research a brand and authenticate its message much easier through the power of the internet and social media sites. “Today’s youth interacts with brands that connect with it on an emotional level. They want to feel that a brand belongs and connects to their lives. They are interested in co-creating with brands and want to feel that they can influence product design, marketing, events and communications” (Interview with Swan, Davis, 153). Consumers today are more integrated with the brands they buy because they feel the emotional connection that makes them relate to the brand and become a loyal customer. It is smart for a company’s brand to involve their consumers in the design process as it leads the consumer to believe they too are a part of the brand. It is an increasing trend for brands to run interactive events through social media such as letting Facebook fans pick the new product. Sites like Crowder.com have seen this trend increasing and are producing a product for brands to entice them to interact with consumers.

Looking at trends outside of the company’s direct market group is an intelligent way to broaden the scope of a brand’s reach. “Radical innovations come about when elements from very different worlds are brought together” (Interview with Swan, Davis, 153). We see this increasingly more with brands creating partnerships with other brands to draw a bigger audience. H&M and Jimmy Choo, even though they have very different target audiences, have banded together to create a collection that increases brand awareness for both, and draws customers to their stores. Even more evident of this is the relationship between Burton clothing and iPod. They have teamed together to create a unique product that appeals to both Apple fans and athletic clothing wearers.

It has become a big trend for companies to identify themselves as being socially and environmentally responsible. “If corporations don’t take their ethical ethos and corporate principles seriously in the development of their brand – from design to development to logistics, operations and marketing – then they are going to struggle. Social and ethical responsibility is now a given for doing business in today’s environment” (Interview with Swan, Davis, 153). Consumers want brand credibility with what they buy. The internet has effectively changed the way businesses can conduct themselves as transparency has made ethos a company’s duty to the public. These trends is branding are becoming the norm in business and companies must not only be reactive to them but proactive in seeking new opportunities to expand their brand reach.