I Want My Product Distributed

DetailsCreated on September 26, 2012 Posted by Paul Christ Craig Marks: I Want My MTV ( Studio 360 – NPR)

As we discuss in our How to Write a Marketing Plan tutorial, marketing success often is measured by whether the results lead to the achievement of specific objectives (i.e, goals). As we note, these objectives include two main types: 1) financial measures, such a revenue and profit; and 2) specific marketing areas objectives, such as gaining a certain percentage of market share or achieving a certain level of product awareness through promotion. Yet, marketers often discover that achieving these objectives can be heavily affected by factors that they do not control.

For instance, consider a company that is attempting to obtain distribution for a new consumer product. Marketers, who have enthusiastically worked hard to prepare the product for the market, often hit a roadblock because they cannot convince enough resellers to distribute their product. For these marketers, who have been generally free to design the product, set the price and create the promotions, they find the distribution component of the Marketing Mix to be frustrating as they cannot get their product distributed in desired outlets.

Of course, the Internet has lessened the impact of resellers’ reluctance to distribute a product by allowing companies to be their own distributor. But, to be truly successful, most consumer products marketers need to gain wider access to their product that is beyond their own website.

To address distribution problems, marketers can employ several tactics. One approach, called “push" promotion, has the marketer offering distributors incentives to handle the product. This typically means offering highly attractive financial terms (i.e., higher margins) or improved promotional opportunities (e.g., in-store promotions).

Another strategy takes a much different approach. Instead of directly offering incentives to resellers, marketers essentially bypass resellers and direct their message to final consumers. This type of tactic, dubbed “pull" promotion, generally contains a message that specifically directs consumers to request their product be carried by distributors. (See this post for a previous discussion of pull promotion.)

Now this audio link to a National Public Radio show offers insight on another example of pull promotion, this time with a more well-known brand – MTV. The discussion is with Craig Marks, co-author of a book chronicling the early history of this cable channel. The discussion of the pull promotion strategy occurs early in the program and does a nice job explaining how it impacted the company, and the cable industry.

In addition to the pull promotion discussion, this program provides several more examples of marketing decisions faced by MTV executives including circumstances that have lead to a changes in its product mix (i.e., types of videos it played) as well as changes to its target market strategy.

Thirty years ago, hardly anyone knew what a music video was. On the night MTV was launched, its founders — a ragtag bunch of music fans and rookie television execs — had to take a bus from Manhattan to New Jersey to watch the broadcast, because no New York cable company carried the fledgling channel.

Can the pull promotion technique used by MTV in the early 1980s still be relevant in today’s television market?

How Marketers are Innovating Beyond the Actual Product

DetailsCreated on October 08, 2012 Posted by Paul Christ

SERVILE BRANDS (Trendwatching)

In our What is Marketing? tutorial we observe how critical it is for marketers to build satisfying relationships with customers. In particular, we state: “A key objective of marketing is to provide products and services that customers really want AND to make customers feel their contact with the marketer is helping build a good relationship between the two.”

While, most leading companies have generally embraced this concept, they are now finding their customers are stretching their needs and expectations to levels that are making satisfaction much more challenging. In large part, significant technological innovations are leading customers to expect brands to provide much more. In most cases, what they are expecting goes beyond the composition of the Actual product.

For instance, as noted in this story, customers are particularly attracted to brands that are adapting to customer’s changing needs. These needs are being shaped by such issues as the desire for instant gratification and "need-it-now" information. For marketers, this means much greater emphasis needs to be placed on decisions that are not directly product related (i.e., product features). Instead, marketers need to focus more attention on decisions associated with the Augmented product.

The story contains many examples from around the world of innovation in the Augmented product including: printing customized recipes at the checkout counter based on products purchased during grocery visit; a website that allows customers to upload an image of their hand and then click to see what different nail polish will look like; and special refrigerator magnets that when pressed will automatically order pizza from a local pizza shop.

Yes, consumers are more demanding, time-starved, informed, and choice-saturated than ever-before (we know you know). For brands to prosper, the solution is simple though: turn SERVILE. This goes far beyond offering great customer service. SERVILE means turning your brand into a lifestyle servant focused on catering to the needs, desires and whims of your customers wherever and whenever they are.

What other examples of innovation in Augmented product are cited in this story?

E-Book Publishers Get Bad News on Pricing Strategy

DetailsCreated on September 12, 2012 Posted by Paul Christ Government's E-Book Case Helps Amazon Build Toward a Monopoly (Los Angeles Times)

E-Book Settlement Has Publishing World in Turmoil (Los Angeles Times)

In our past postings on the topic of price, we have often discussed how price is one of the toughest, yet often least understood marketing decisions. Consequently, many marketers often direct limited resources to issues related to this part of the marketing mix. The reasons for relegating price to the lower end of the marketing-decision checklist are numerous. For instance, to some marketers the pricing decision lacks real importance because they think their customers should not be thinking price first; rather they should be sold on product features and the benefits these provide. Others see price as an almost automated process where they just plug in a number to a standard markup equation (e.g., price is always 25% above cost) and whatever number comes out is what they charge.

Other companies, however, take price very seriously. Consider, for instance, how Amazon.com looks at price. For Amazon, price may rank as the most important marketing decisions they make. As the leader in online retailing, Amazon’s pricing strategy is certainly a key component of their success. Just looking at their website visitors will clearly see how price often takes center stage.

Because price is so crucial to Amazon, it was not surprising that they were clearly upset when several major book suppliers decided to get together to change what book retailers charge for their products. In 2010, leading publishers, including HarperCollins Publishers and Simon & Schuster, formed an alliance whereby they intended to limit how low book prices could be set (i.e., floor price). Additionally, retail sellers would only be able to sell these publishers’ books if they agreed to abide by the pricing rules. Of course, Amazon did not like this, nor did the U.S. Government which filed a lawsuit claiming the publishers were conspiring to restrict competition.

As discussed in these stories, a federal court has approved a settlement between the publishers and the U.S. Justice Department on issues related to collusion of book pricing. Specifically, it relates to the pricing of e-books, which the government claimed (and Amazon also argued) was being overly controlled by these companies. In particular, the companies were accused of joining forces to restrict competition by limiting how much e-books can be discounted at the consumer level.

The impact of the settlement has many thinking the bookselling market will never be the same. Some are even taking the position that Amazon is on its way to being a book selling monopoly. While that seems unlikely, this settlement is bound to strengthen Amazon’s position as the world’s largest online retailer.

The idea was (1) to entice Apple, which was just about to bring out the iPad, into the e-book market by guaranteeing Apple a profit on e-book sales, and (2) to create competition for Amazon. Amazon's $9.99 price often meant it was selling books at a loss, presumably to cement its dominance of a market that it then controlled to the tune of 90%. The publishers imposed the agency model on Amazon, Barnes & Noble and other e-book sellers too. The prices of e-books, which were keyed to the hardcover price, moved up to as much as $14.99.

How exactly will Amazon benefit from this decision? Besides the publishers, who else is likely to be negatively impacted by the decision?

Image by kodomut

Optimize mobile search ads

If you have a mobile website and use sponsored search adverting, but are not happy with low click-through rates, mention the fact you have a mobile website in the ad copy itself. If your shoppers are assured in mobile search ads that they will be directed to a site optimized for smartphones and mobile devices, click-through rates will be higher. For example, an IT company’s ad might read “Network down? Visit our mobile site now!

“Reasonable Care” in the Cloud: Decision-Making Pointers

Many firms use cloud computing services for remote access to data, email filtering, contacts and calendars, system backups and other hosted IT functions. In particular, lawyers are finding that cloud transfer and storage services (like Box, Dropbox, Google Drive and iCloud) are a great way to access client materials on their smartphones, tablets or off-site computers when working away from the office.

According to state ethics authorities that have spoken on the topic and the American Bar Association Commission on Ethics 20/20, a firm or an individual attorney may store client materials in the cloud ethically, provided that the lawyer takes reasonable care to protect the confidentiality of confidential client information. Most of these opinions explain that “reasonable care” includes learning enough about the technology you chose to use to make an informed decision about where to store client materials and staying up to date on developments in whatever technology you decide to use.

Using reasonable care to protect client confidences is nothing new for lawyers, of course—we make decisions about protecting client confidences when we read files on a crowded subway, discuss matters in elevators, decide what can be included in an email, or even take written notes during a conversation. But what might “reasonable care” entail in the context of cloud computing? While admittedly not comprehensive, here is a list to consider.

1. Know that the cloud will not be appropriate for all clients and materials.

You need to think carefully about the types of clients you handle. Clients who work in heavily regulated industries or who are extremely security-conscious (for whatever reason) may not permit any of their materials to be stored in the cloud.You must decide what can be stored in the cloud on a document-by-document basis. Publicly available information, like PDFs downloaded from PACER, can easily be stored in the cloud—but with more-sensitive documents you may decide to apply additional encryption before you move the materials to the cloud, or even to your tablet through cables.Even when you decide that a copy of a client-related document may be stored in the cloud, you should probably not store the only copy of an important document there.Know your options for the various materials you will store. Different cloud service providers may be appropriate for different client materials, depending on the sensitivity of each document.

2. Assess the agreements of every cloud service provider you use.

Read the promises being made concerning your data—especially any promises regarding what notice the provider will give you if someone else seeks access to your materials—and consider whether and how those promises can be enforced.Find out where your data will be kept, how it will be backed up, who will have access to it, and whether it will really be deleted from the cloud service when you delete it or when you close your account with the provider.Check online periodically for any changes to the agreement and, of course, whenever you get an e-mail notifying you that the terms of service have changed. Remember to save copies of all your latest agreements, too.

3. Keep informed—and keep notes.

Search for news reports regarding security breaches or service outages at any cloud service provider you intend to use. You might also want to set up a news feed to track reports on the topic.If you don’t see particular information you need online or in the provider’s documentation, or you don’t understand the information you’re given, call the company for clarification. Or choose another service.Keep notes about your conversations with each service provider, as well as other research you’ve done to support your decision, in case a problem ever arises.

4. Know that sometimes you get what you pay for.

You can find free cloud storage options, but you may get better security or better service with a paid account from the same provider.Even if your materials are secure once they get to the cloud, you should not use free, public, unencrypted networks to send them. Use your firm’s secure cloud-access system. If no firmwide system is available, use a password-protected home network or consider investing in a mobile hotspot so you can create a secure connection wherever you are.

Cloud storage services can give you flexibility in how and where you practice, and can allow you to be more responsive to your clients. You can use these services ethically, but it will take some due diligence and some decision-making each time you entrust clients’ materials to the cloud.

Carol J. Gerber is a lawyer and the owner and founder of Gerber Amalgamated LLC, a legal technology consulting company devoted to helping attorneys make better use of technology in their practices. 

Illustration ©ImageZoo.

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