How We Work : Blog

Continued from Part 1

What’s next?  Selling through the Internet (even for low margin FMCG goods), and creating small product runs targeted at niche audiences (Asia Pacific Brewery’s Archipelago Brewery), will be among the many strategies adopted to seize the initiative that was so easily given up decades ago.

When (not if) this happens, the biggest losers will be the big box retailers who will find themselves in direct competition with the manufacturers.  The question is “How should the retailers view and evolve their relationships with the manufacturers in this increasingly customer-centric world?”

Retailers should leverage the end-customer reach they have to establish win-win relationships with manufacturers.  Historically, retailers have not efficiently used available shopper data.  This data presents a golden opportunity to get partners (manufacturers) to buy into their frequent shopper and loyalty programs.  For FMCG companies, this strategy is efficient and makes sense for several reasons:

1.      Creating a direct channel is expensive; 

2.      Relationship strategies are long-term and resource-intensive; and

3.      Standard, standalone loyalty programs are not practical given their generally high-volume, low-cost environment and lack of means to track transactions.

Involving FMCG partners in the program fray allows the retailer to build better customer relationships through more relevant and targeted promotions.  At the same time, as they drill down to analyze the purchasing behavior at the individual shopper level and offer more impactful research data to FMCG partners, we are opening up the possibilities of more innovative and exciting marketing initiatives.

By focusing on the customer as the ultimate bottom line, retail channels and FMCG manufactures can both come out winners.

Earl

First published in Marketing Magazine December 2006 issue

The Internet has empowered today’s consumers by transferring the flow of information into the hands of the masses and not just a few large organizations. Consumers want to know exactly what they are buying, provide input into the products they will be using and enjoy a personalized user experience.  As a result, gaining an intimate understanding of their consumers has become essential to any organization’s survival, and not simply about achieving a competitive advantage.

However, for FMCG manufacturers, they are facing a problem in the last mile of the purchasing cycle – no matter how much pre-purchase research they conduct, the end customer remains largely concealed.  

Big box retailers, like Wal-Mart and Carrefour, as gateways to the end customer, have a control over even the largest manufacturers.  Ironically, this imbalance came about because manufacturers leveraged retail channels for rapid growth during the Industrial Age.  At the time, it made business sense – manufacturers gained economies of scale and were freed up to concentrate on their core competencies.  However, it has blocked them off from building meaningful relationships which today’s customer demands.

For large FMCG players, the road ahead seems clear.  They are bypassing retailers to create direct access to customer information.  Evidence of this is in the establishment of Nike Towns and Apple Stores.  These consumer-centric companies have realized that unless they shift and reconsider their traditional marketing and customer outreach channels, they will be disadvantaged.

Beyond the traditional marketing channels, Coke, P&G and Nestle have also been launching relationship strategies through viral campaigns, social networks and event sponsorships to better profile and understand their consumers.  P&G recently launched a new TV program in Singapore, Girls Out Loud – in conjunction with their Being Girl portal, an online space for young women to get advice and information on issues they commonly face.

Earl

...Continue on to Part 2

First published in Marketing Magazine December 2006 issue

Happy Holidays!

Tis the season to be shopping and spending money. If you believe the constant barrage of advertisements, direct mailers, television commercials that have been inundating my inbox, newspapers and mailbox.

Christmas seems to have become the "shopping" season of the year for our snowless country. With faux Christmas trees and twinkly lights, Singaporeans are celebrating the season of giving by furiously spending year end bonuses.

Many marketers will tell you that this is the best time of the year to boost retail sales from big budget items like cars and houses to small convenient gift items like picture frames and beauty products. Not to mention the many of us who will want to pamper ourselves after a long year in the office.

"Sales" abound during this period, it's like a bargain hunters wet dream. Almost every weekend there is a 15% or 50% bargain to be had. In fact, if you were to buy something that was not on sale, it would seem very unwise indeed.

The fact is we are being conditioned in our purchase behavior by clever marketers. What makes the month of December the best time of retailers? It wasn't always like that of course. The creation of occasions and opportunities to open our wallets has always been the holy grail of marketers everywhere. Why sip champagne only when it is a special occasion when you can scoff it down for breakfast and as a subsitute to wine.

But when it comes down to it, who doesn't like spending money and buying pretty things. Here's a big thank you to all the marketers who make me feel that little bit less guilty about blowing our bonuses at Xmas time :) Without the savings and freebies as a balm for that hole in the pocket, surely Christmas would not be such a joyous occasion.

Dan

"Get closer to nature -

Visit the many beautiful nature spots in Singapore"

Today as I travel to work, I saw this huge billboard advertisement at the mrt station encouraging the public to visit Singapore’s nature spots & I thought to myself that this isn’t that effective. Would the public bother to check it out & even if they're interested, would they know where to look for more information?

When we think about nature spots in Singapore, the 1st few places that normally comes to mind would be Bukit Timah Hill, Macritchie Reservoir, Kusu Island & maybe Pulau Ubin. But do they know that there’s more?!! We have nature reserves like Sungei Buloh, SG Diving sites like Pulau Hantu, interesting marine life at Chek Jawa (which is btw at Pulau Ubin)? How about interesting facts like there's a trekking trail from Bukit Timah all the way to Macritchie? Or that Chek Jawa is gonna be wiped off & be a reclaimed land in SG within the next few years?

Awareness needs to be built. Perhaps what would be a more effective thing to do is to create an interesting awareness campaign, where there's a series of poster adverts, introducing these different nature spots. Highlighting the rich marine life we have in SG. Create a website like http://www.wildsingapore.com, provide information about the location & interesting facts. Put a url in the advertisement, encourage people to view the site, create online games for kids, forums, if possible, get green societies to participate, organise tours. Let people know that these places ain't far from them. Visit it, love it, protect it.

Ade

...Continued from part 3

Set the Right Targets and Measure Results

The Internet has allowed companies to move away from just marketing their best sellers through mass media to marketing their complete inventory online.  The attraction here is for marketers to take a broad-based approach.  However, while common standards for website performance are still being developed and click fraud still a thorny issue, marketers need to take steps to set objectives and track and measure the results for themselves.

Depending on the objectives, clear key performance indicators (KPIs) have to be set.  For example, if the objective is to build brand awareness, the KPIs should focus on page views and length of visit instead of number of registrations.  Setting clear objectives also prevents any misalignment of expectations. 

Especially in Asia, some marketers still perceive online marketing as ineffective – this often arises when clear objectives for the online element are not set or where it is difficult to track impact without introducing additional tools.  Research however has shown that Internet advertisements do have a positive impact on branding and sales – though it can be difficult to measure the latter except for pure online businesses.

The online advertising industry is slowly evolving, from cost per impression and cost per click, to pay per print (coupon) and cost per sale – the new models are increasingly transparent and performance-based.  Importantly, it is growing towards increased accountability, which will help marketers better evaluate their choices and allocate their budgets.

Tracking Campaigns and Leverage Best Practices

At a tactical level, marketers need to audit their campaigns and project execution to maximize resources.  Evaluate what worked and what did not, and leverage on best practices that might take longer to implement but which if invested in, could result in more satisfying long-term customer relationships.

Some general best practices include developing the discipline of creating relevant, targeted and compelling messages for each target audience; portraying a consistent image across multiple touch points and campaigns; providing multiple opportunities or outlets for user interaction and feedback (such as through the web, phone, etc.); and automated programs to nurture cold leads and inactive users.

Avoid Death Traps

Again, remember that the Web 2.0 user is a sophisticated being.  Do not be tempted to take the easy way out and adopt highly ineffective and yet strangely popular online marketing tactics:

·        Unsolicited and untargeted campaigns – companies purchase mass databases and send out unsolicited emails.  The potential recipient gets annoyed when asked for a receipt and receiving this spam on a daily and weekly basis builds a permanent negative image of the company.

·        Dirty search optimization tactics such as link farms (pages with multiple links but no real content), spam keywords (embedding keywords all over a page either in a background font or very small font), redirects (creating pages focused on a particular page but redirecting users to another page when they click on it), and malicious cloaking (users click on a link but very different content works along the same lines).

It is a new web world out there.  With consumers now being active participators, companies need to focus on building relationships with their customers versus employing short-term tactics.  With the measurability and targetability the web provides and is continuously improving on, marketers can expect more out of their online marketing dollars.

Earl

Excerpted from the November issue of AdAsia