Eye on the prize..

“Malls plan to track shopper locations through cell phones on Black Friday”

We know cell phones now come with tracking devices, but who knew they would be used for understanding shopping patterns in malls. Trying not to get to much into conspiracy theory, but do you think that’s really all they are doing?

“[… I]t’s unlikely that customers will turn off their main device for communication and busy shoppers may miss the notifications posted within the mall.” Well, at least we know they’re really trying to get the word out there. We can probably guess why they aren’t making to big of a deal about it. In order to gather the information they need people to keep their phones on, and researchers can get away with saying they had “notifications posted within the mall.”

Anyway the point of this entry wasn’t to get into the privacy issue behind it all. It was instead to start thinking about the future. Could you imagine, what it would be like if you walk by your favorite store and you get a text that qualifies you for 20% off? Yeah, I’d be broke!

The article says it can’t really pinpoint exact locations, just the general vicinity of the mall. And while we wouldn’t want our cellphones to be going off with thousands of texts from the stores you pass, it would still be cool if they figured out a system. I’m thinking, you sign up for your stores online, then when you walk by, it tracks and delivers. Crazy right, but all so possible now with tracking systems.

For customers it could trigger all kinds of responses. Depending on the type of coupon it can have the scarcity effect. So, if they don’t use the offer right then and there it won’t be valid next time. Also, if offers are sent out randomly, it feels more like gambling. Customers never know when they will receive deals, so they feel more pressure to use them when they do get them. I can imagine the amount of dissonance that is going to occur when you go to the mall not planning on buying anything. Your phone vibrates and its a 30% off offer to your favorite store. What do you do? You might as well go look since you’re already in the store, right?

But that really is the best part. You’re not simply receiving coupons when you don’t need them and you don’t have to worry about going to the store before they expire. It all happens right as you walk into the mall. Could be a nice set-up for whoever gets it going…

Still Jenny from the Block?!

How effective are celebrity endorsements?

You ever wonder why brands choose to have spokespeople. Such a common tactic to promote a brand, most the time it is simply because the spokespeople are attractive, for example Ms. Jenifer Lopez and the Fiat. The psychology that marketers rely on when it comes to spokespeople stems from the values the spokespeople give off. Why do you think brands are so quick to drop a celebrity when they have negative light? Brands do not want the negative association. What they want is the positive association that will hopefully rub off on the brand the celebrity is endorsing (Kellogg).

Just because a brand uses an attractive spokesperson doesn’t mean it is effective. Usually it brings more light to the celebrity and not the actual product. However, when the celebrity actually seems authentic in either their engagement with the brand or similar values with the brand, it can enhance the perception of the brand. This is because people assign values to things, and they look more favorably to something if values are consistent. So, if a brand wants positive association they need to make sure they find a celebrity who actually (or appears to) fits the values or ideas the brand is trying to give off. It is not enough to rely on the balance theory, in which liking A means you must like B as well, because A likes B. While this initial attraction makes a brand more relevant in consumers eyes, whether it sticks or not will be reliant on how much a celebrity personifies that brand. In other words, it pays when a celebrity isn’t endorsing a product just for money.

I’m not sure where J. Lo really stands with the Fiat, but I can see why they would want her as their spokesperson. Shes free (recently divorced), being reintroduced to the world, still young and fabulous much like the Fiat being introduced to the US, a fun car with lots of spunk. The two really do line up, not to mention how much J.Lo features the Fiat in videos and performances. J. Lo is trying to have a genuine interaction with the fiat and does personify the values they are trying to portray.

With recent new of J.Lo’s body double, I wonder how it will affect the Fiat. This can make her and the brand seem less authentic.  This would lead J.Lo to simply being a pretty model for the Fiat. Like I said before endorsements like these are never as successful. Anyway, now that I think about it, if J.Lo’s commercials for the Fiat are about repping your roots, I don’t think a Fiat actually works so well, seeing as its an Italian made car.. #ijs

Oh, I just thought this video was hilarious..

Brand Equity

What exactly is your brand worth and why does it matter?

Brands, while they are an intangible assets, can be extremely valuable to a company. In order to try and measure the value of a brand, brand equity was created. Brand equity is basically looking at a product marketed under a specific brand and how well it does compared to the same product with no name. We can see brand equity from a financial perspective when a brand named product costs more than the generic version. The amount that a company can charge over the generic helps to understand the brand equity. Another way to view brand equity is through brand extensions. How well other products are doing simply because they have the same brand can be examined although it is harder to measure. While it is harder to measure, it is a known fact that people will purchase a new product simply because it was released by there favorite brand, such as Apple. Finally, brand equity can simply be measured from asking consumers and measuring their attitudes towards a particular brand.

But why do we stick to brands?

For one, a good brand means consistency. People know what they are getting and the quality of the product. If a brand is consistent it becomes something people can trust. Also, if a brand has a reputation they essentially stand for something. People will align themselves with values that are similar to what they believe in. They also want to be able to portray these values to the surrounding world. A brand can be succesful if it has the ability to represent values, goals, and/or motivations to observers.

In terms of brand extension, we can apply the halo effect. The halo effect is where considering a person good in one category can lead to similar evaluations in other categories. When applied to products, if a brand has excellent performance in one area why should it not have similar performance in another area. Even balance theory can be applied as to why people will try differnt products under the same brand. People like to be consistent as well, and so if they like a product which is a certain brand, then they think they will like a different product but the same brand.

The experiences we have with products are very important. It is the basis for loyalty in a brand. Consistent results will lead to stronger attitudes toward a brand. Just as it is hard to earn someones trust back, it is hard for a brand to come back. New brands need to be sure to come out with a bang. Do you think if Apple had flopped on the iPod it would be what it is today?

Yelp- 90% of Consumers Trust Peer Recommendations

“Reviews, Reputation, and Revenue: The Case of Yelp.com” by Michael Luca at the Harvard Business School, has evidence that suggest Yelp.com may actually be helping independent restaurants. In this study it was found that “a one-star increase in Yelp rating leads to a 5-9 percent increase in revenue, this effect is driven by independent restaurants; ratings do not affect restaurants with chain affiliation, and chain restaurants have declined in market share as Yelp.com penetration has increased.” While these are preliminary findings and causation can never be truly determined, there is something here that we can explore…

Before Yelp.com and, in fact, before much of the internet, we relied on a small network of family and friends.  We also relied on what we saw on television or in magazines to expose us to different products and services. Restaurants, mainly those that could afford marketing campaigns, raised awareness through these advertisements as well. Advertising isn’t cheap, and so chain restaurants had the advantage of getting their brand out there.

We know that awareness is extremely important. In order for people to buy a particular product or service they need to know about it.  While awareness does not predict behavior, a product or service cannot be successful if no one knows it exists. Success in this business requires overcoming the tipping point. If no one ever experiences the product, no one will ever talk about it, and it will go absolutely no where. There is also a problem if the audience network is small. This would allow for a few new customers here and there but no major growth.

Marketing campaigns for chain restaurants allow them to expand their network. Even if they don’t gain a new customer, there is a heightened level of awareness. It is hard for independent restaurants to compete with this. Also, because these are chain restaurants there is a level of certainty that comes with the consistency of it being a chain. This allows expectations that couldn’t be imagined when considering an independent restaurant.

When it comes down to deciding what to eat, you’d rather try the new chain restaurant you’ve been seeing advertised on TV then that little restaurant you’ve heard nothing about. Independent restaurants get passed by because we are either not brave enough or it has had no feedback. Social learning theory is where we watch and learn from other people. While we all can learn from trial and error sometimes it is safer to let others make the mistake first, especially when it comes to our tummy and money! Most independent restaurants I’ve been to, before discovering Yelp.com, were because of word of mouth, and never my own bravery.

Now, however, we have world of mouth! Your network  can be the whole universe, and that is what Yelp.com is showing. A study showed that 90% of consumers trust peer recommendations. The internet allows someone to have more recommendations than they could imagine. If your close family and friends don’t know anything about the restaurant down the street, maybe 10 people online do. With so many recommendations, on so many places, places you’ve never even heard about, you don’t have to be the brave soul. Source credibility is when people are more likely to be persuaded by credible, expert, or trustworthy sources. Everyone likes food, and assuming that we are all on the website for the same reason, there is a level of trust. There is also comfort in numbers, seeing a restaurant with more ratings (whether good or bad) would be considered over a restaurant with few good ratings.

Finally, there is awareness of these places and it’s all for free. This means that restaurants really are being evaluated on the experience. While adverting can be faked, experience cannot. Yelp.com and any other recommendation site show what consumers really care about. Other consumers can then choose to agree and try it out, completely turn away, or say it can’t be that bad. This free awareness is probably taking away from chains because people feel like they finally have more choices. Chains don’t need ratings, for the most part we all know what to expect. Independent restaurants however can be a huge risk, you not only leave hungry but a few bills lighter too.

*sigh* It makes it so much easier to be a foodie 🙂

What’s the point?

Sometimes I wish I could just turn off my mind.. but I can’t.. After just a few months of this program, I sit, watch, and analyze commercials. Trying to understand the point, what/who they are trying to speak to, the target audience, the creativity, etc.

Anyway, I’m sitting with Lisa, http://psychologyineverydaywork.blogspot.com/, and she starts talking to me about this KFC commercial that makes absolutely no sense. Basically, it asks what part of the chicken is nugget, and then goes on to introduce popcorn chicken. But it’s like wait.. what part of the chicken is popcorn?

Laughing as Lisa tells me, a Volkswagen commercial comes on:

The commercial was cute, and it made sense but for some reason it just didn’t sit right with me. It’s a good concept to show how much gas mileage one could get but it really just would not let me enjoy it. Finally, sitting with one of my friends, it hits me. Who exactly was the commercial’s target audience. Yes, I get it is for those who want to save money on gas but other than that, it wasn’t for Hispanics nor any race. Were they trying to target males who want to learn Spanish? Of course not.

Commercials can do so many things at one time, and while you don’t want to overload them, you can demonstrate more than one aspect of your product, and also speak to a specific audience. While it was for a general demographic of interested Volkswagen consumers, a more creative and fun commercial could have been used to demonstrate how much gas mileage the new Volkswagen gets.

In this case, Volkswagen is using the benefits/attributes of their product to sell, rather than trying to connect with underlying values and emotions. There’s nothing wrong with either technique, I just think that when using benefits/attributes you can be really creative. You have a concrete aspect, which means you can go outside of the box to market it. Using underlying values and emotion on the other hand can get out of control when you try to market it.

Here’s what happens when you market your product on values and emotions:

I actually really like this ad but after reading the comments, I realized what they did. It does leave it up to you to really figure out what it was about. I gathered that it is speaking to the power of the imagination. While that is great and I really love the ideas going on, how does that have anything to do with Batelco telecommunications?

If marketers want to use intrinsic values and motivations to sell products the audience has to be able to connect the two. With Batelco and their ad, the product and the values don’t lie on the same plane. While it isn’t a far reach, the fact that it is a reach creates dissonance. The things in the commercial aren’t really the things you think about when you hear telecommunications. While Balteco may embrace and encourage ideas and imagination it doesn’t line up with the ideas of telecommunication. It makes you think how does Balteco really make your ideas come to life?

It’s not like buying phone service will make your wildest dreams come true..

Whose got Soul?

I’m not quite sure why I like the Kia Soul commercials but I do. Does that mean I am interested in buying one.. not really!

It makes you wonder, though, who these commercials really resonate with. I once heard that based on how the hamsters dressed, people thought the Kia Soul was targeting the “thugs” or “hood.” The person who suggested this was very interested in seeing how Kia was doing and to who they were selling to. They knew, as do I, that if you drive around in the bad parts of town you’re not going to see a green Kia Soul cruising the streets. I knew however, that he was completely wrong. Even before I started looking up information on the Kia Soul I could tell you exactly who they were targeting.

Let us start with the hamsters. Yes, they have baggy clothes, hats, headphones and in some commercials walk around with a stereo. This, however, doesn’t mean “hood” (which I thought was quite ignorant when I heard this comment). In fact there is a large hip-hop culture that has nothing to do with the socioeconomic status of individuals. There are asian break dancers, white hip-hop DJ’s, indian groovers. Hip-hop as a culture has grown tremendously, so it is quite stereotypical to simply equate this dress and actions with someplace like Crenshaw.

Next, the music. LMFAO.. come on, how do you really think that the Kia Soul is targeting black or Hispanic people (that’s what the “hood” comment was really trying to get at). If we really want to be stereotypical we know that this is not traditional hip-hop. Throw on some Snoop/Biggie/Tupac if the real goal was to target them. The earlier commercials did actually play hip-hop music, but once again the culture isn’t about Black or White. LMFAO, while popular amongst hip-hop fans, is bringing in a new youthful crowd. This is party music for the movers and shakers, the techno heads, the youth, a completely different vibe than old school hip-hop.

So, no, driving through the hood you’re not going to see Kia Souls, but I bet on a night out in Hollywood, find a few club parking lots and you might see some here and there. You could probably drive through a high school parking lot and find some. Millennials are of course Kia’s primary target. It’s not about race or color, but rather culture. Why do you think they use hamsters? You can’t put a race on hamsters, and the hip hop culture has grown so much that you can get away with putting the hamsters in baggy sweat suits and not equate them to being African-American.

“Soul is aimed at the young and young-at-heart looking for a vehicle perfectly suited to their personalities,” said Michael Sprague, vice president, marketing, Kia Motors America (http://millennialmarketing.com/2010/08/the-kia-soul-wins-millennial-hearts/). This is a clear example of the means-end theory in practice. The means-end theory is marketing strategy that focuses on the underlying values of a product. Using this theory, it is believed that people don’t buy products because of their attributes, or the benefits they supply, rather people are motivated by a deeper meaning. For Kia, it wants to portray the idea of youth and fun. When people’s values line up with the product, they will support the product. This is what’s clearly happening with the Kia Soul. Who doesn’t want the cool hamster car, so all their friends can be jealous? Or the car that resonates with youth? The car that can capture the attention and create a dancing robot revolution?

My classmate Robert, actually writes about some other interesting tid bits involving the Kia Soul Hamsters and what makes it memorable. Check it out: http://robertdavies650.wordpress.com/2011/09/02/kia-hamsters-ad-campaign/

Anyway, the point is really segmenting the consumer audience and truly understanding how to reach them can do wonders for a product. Marketing strategy isn’t clear-cut of course. Sometimes consumers want emotion and sometimes they want information. Either way it takes a lot of research to be truly successful, and either way one campaign isn’t going to reach the entire population. In a way, marketers must pick and choose their battles. Choosing correctly can mean instant success, such as Kia’s 229% gain over the past year, where as choosing incorrectly.. well, I’m sure you can figure it out.

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