Marketing Idea No. 263: Segmentation: Does it make sense to create a brand for left handed people?

Someone once said famously that youth is wasted in young people. The thought might hold some merit. But for a marketer the cluelessness of young people is one of the many reason why targeting young people makes a lot of sense.

Research shows that most of our value system, life choices and general view of what kind of brands we would like are formed by the age of seven. Combine that with the fact our brains do not complete forming till the age of around 23-25, it makes sense to target young people. The younger the better.

Young people generally are experimenters and more importantly they are yet to finalize their identity in this world. That’s what makes them ripe for picking by any brand who can create that identity on behalf of them. Brand for them is a way for signaling to the world who they are, internally making them believe that they are being “Different” and “Cool” than others and at the same time give them the passport to fit in. The brands that can balance that delicate act, wins.

But interestingly our obsession with youth is not allowing us to go beyond the traditional model of approaching “Cool people” and “Opinion Leaders”. The world is not full of good looking, popular people. And though it makes sense to create an aspirational presence in front of those “regular kids”, a more potent strategy could have been to create brands that identify with those micro-segments.

 That’s why while it makes sense to create brands based on demographic and lifestyle segmentation, there are micro-segments within that which we can approach. How about brands that target introverts only? One out of 3 people in this world are introverts, yet the whole advertising industry is set up for extroverts only. How about brands for left handed people? The entire shopping experience is designed for right handed people. By creating those focused brands for small niches, we can unlock riches that can benefit us.

Let us push the envelope a bit further. How about brands for people who are bullied in school? The social outcast? The horizontally and vertically challenged people?

The numbers may not justify having big presence followed by big bucks, but there are enough to justify a gentle peek.

Marketing Idea No. 262 – A fairy tale concept called “Brand Awareness”

Some wise marketer once said, if you have nothing new to say, sing a song.

In the spirit of 21st century interpretation, I put a modern twist to this: If you have nothing to say to defend your failed marketing activity, say its for creating awareness.

Creating brand awareness has been the insurance for lame marketing for years and the source of a lot of friction between sales, marketing and finance. When marketing activities fail to generate sales or revenue, its often told its objective was always to create awareness. When advertising often resembles more like an art or a film than a communication with clear selling message, marketers justify it will raise image and awareness. When marketing messages or activities are considered too risky or controversial in nature to damage corporate reputation, marketers justify it as a medium to create word of mouth and awareness. 3 million facebook likes with very limited activities or chances to turn them into sales prospects – all to create awareness. What many people fail to understand that high top of mind awareness is like a wedding promise of staying together in sickness and in health, with no guarantee that its ever going to be like that. Thats all it is: a future promise.

All that being said, awareness does have a space in marketers manual. A high brand awareness usually speaks of potential sales of future as well as a benchmark for new product launch success. However, the way most of marketing budget is used to create awareness is often not the smartest way to go. Its just playing safe or lazy.

Marketing Idea No. 261: The Paradox of Choice

The mom and pop store near your house maybe someplace you love to shop, but it only carries a limited number of juices. What if you crave for a jackfruit flavor juice? Due to limitation set by space, chances are low to zero to find that particular juice in your mom and pop store.

Contrast that with Internet. Set free from the pain of space limitation, Amazon can carry literally limitless number of book titles. So even if you are interested to buy a book from an obscure author who published a book on impact of theology in 50s, you may still be able to locate and buy it.

Its a game of choices. And although in our mind we are pretty clear which scenario we desire more (which is more choices and more options, hence the second scenario), the truth maybe not as simple as that. Because although we are in love with the idea of choices, we dont like to choose between a wide array of lucrative options. Because choosing is decisionmaking and us human being like nothing more than status quo and comfort zone.

You would not prefer your physician giving you choices A, B and C. You would want him to make decisions on behalf of you or recommend something for you. For the same reason, you would check in IMDB score before buying a DVD, ask for the chef’s choice soup and buy the shoe everyone is wearing. Because someone made the difficult act of choosing from you.

Lets forget shoes and soaps for a moment and come to more pressing life choices. Once upon a time we only had one decison to make – whom to marry. Nowadays we are blessed with freedom and with ever more freedom comes ever more choices – when to marry, which gender to marry, to have children quick or later, to have children before or after marriage, to have children at all, to have career or children or marriage or both or all 3 together. And you would think with more choices our lives will be happier. But the result of such choices is Chinese women are now not looking forward to getting married at all and that poses a significant demographic challenge on China.

We dont like making choices and yet the number of product variants in all categories and number of items super markets are carrying are exploding. Thanks to Internet we feel if we can bombard consumers with a whole catalogue of songs to choose from to download, they will be inclined to purchase more. But that is not the case. In fact in some cases, if someone influences our choice, the outcome is much more desireable. Studies show that if you ask employees to choose to be a part of Provident Fund?Pension savings program sponsored by company, often times they say they want to but opt to use that money for current consumption. On the other hand if you make the choices a bit different and ask employees that unless they state very clearly and actively on paper that they dont want to be part of company sponsored Provident Fund / Pension plan, HR will assume that you want to be part of it. Therefore by framing the choices a bit differently, you can acually nudge people towards a more desireable outcome.

So next time when you go to a HSBC bank ATM booth and after transaction see the choice between “Do you want a paper based receipt of the transaction?”  or “No i dont want a paper based receipt” and also you see that the second option is already blinking for you to choose, you will know that HSBC is trying to cut costs on paper and probably reduce environmental damage by influencing your choice.

To sum it up, the explosion of choices are making us worse off in two ways.

1) Too much choice is not liberating. Its paralysing us. With more and more choices to make everyday, we put of decisionmaking as further away from now as possible

2) Even if we make the choice, we dont enjoy the satisfaction that fewer choices would have. Thats why even if you are almost 80% satisfied with the life partner you choose, you always think what if you would have gone for someone else for the 100% satisfaction guaranteed. You think of it as a mistake or a doubtfuol choice. That creates regret. And the regret cuts away from the satisfaction.

Marketing Idea No 260: “Offshoring” and “Outsourcing” Vs. “Onshoring” and “Reshoring”

Just like 80s brought in merger and acquisitions, 90s brought in digitization and early 21st century brought in outsourcing and offshoring, we are maybe at the dawn of a new era called “Reshoring” and “Onshoring”.

Offshoring means moving work and jobs outside the country where a company is based. It can also involve outsourcing, which means sending work to outside contractors, which can be either home or abroad. For several decades global manufacturers and service companies outsourced their work to low cost suppliers in countries with cheap labour like China and India. General Electric was a pioneer in the field when they set up a big outsourcing center in Bangalore back in 1998. Its a strategy that made sense for a while.

However, 2 trends has changed this whole business paradigm. Firstly, wages in China has been increasing 10-20% a year for the past decade, whereas manufacturing pay in America and Europe has barely changed thanks to cyclical economic activities like recession. Not only wages, but shipping and other transportation costs has been on the rise. Therefore, the whole business case of earning more by sending work to cheap labor destinations no longer makes much economic sense. Also thanks to a lot of major catastrophes like tsunami the global supply chain was disrupted resulting in increase of price for a lot of brands. As a result, businesses are making a u-turn of bringing back job to home countries. Its a process called “Reshoring”.

Until a while back, bringing back job is a PR move by political goverments. But not any more. Well known companies like Google (now doing manufacturing of Nexus in America), General Electric (now making washing machines in USA) and Lenovo (making PCs in America, which at one point in time was perceived unthinkable) are bringing manufacturing  jobs back to America. The “Reshoring” trend is not that prevalent yet in Europe, and thats primarily because the European companies didnt jump into this  “Offshoring” bandwagon in the first place like American companies did. In fact companies like Inditex (owner of ZARA brand) showed how by keeping manufacturing very near to home (Portugal, Spain and Egypt) you can control supply chain which can have a great impact on how quickly you respond to changing consumer trends and preferences.

Secondly, the definition of how global companies operate is changing. Companies are now opening manufacturing facilities not based solely on cost and operational efficiency, but depending on the size of a particular market and how closely they want to operate to that market. China has been shifted from a global supplier to a global market. Everyone is trying to open a manufacturing facility in China or India or Brazil because they treat those as the next big frontier markets and staying as close as possible to the market can be a huge source of competitive advantage. General Motors, despite very poor performance in USA and Europe, is still leading over its other two USA based competition FORD and Chrysler because it is the only USA based car company thats doing very well in China thanks a to a very early and strategic decision to be present in that market. This new phenomenon of staying close to your market is called “Onshoring”.

“Offshoring” and “Outsourcing” had significant impact in the way business models shaped up in the last two decades. Only time can tell, if “Onshoring” and “Reshoring” will have that kind of impact.