Recession Marketing

It is obvious that we are in an economic recession, and it has been strikingly interesting to me how marketing campaigns are changing due to this downturn. There are so many examples of cheaper marketing ideas, new advertising slogans, special promotions, and more product introductions that have come about due to the current economic state.

One trend associated with the recession is that consumers seem afraid of purchasing high end products. This has had implications for many industries such as fashion, cars, jewelry, travel (hotels, airlines, cruises, etc.) These industries are associated with luxury and pleasure and they have to encourage weary consumers to continue to indulge in their offerings. This can be a tough endeavor and it will be interesting to see what tactics are used to keep companies in these industries afloat.

I have noticed that several companies have created new slogans and campaigns to show how their products are still necessary even during the recession. General Mills has aired several commercials showing a family eating dinner together and kind of using General Mills foods to show that the simple things are what matter in these hard times. McDonalds has also used the recession as a selling point for their cheap burgers.

In an article from Forbes.com, the author discusses how private label products have the potential to do well in this economic climate. These products are usually not heavily marketed and are outshone by their competitors. Companies that produce private label products could probably increase sales if they would use more proactive marketing strategies to leverage their price differential.

Some companies are launching new products that are recession specific or they are lowering their price points of existing products to appeal to recession cautious buyers. This can be a good tactic although product development is expensive and some customers might see through the recession targeted marketing.

Companies should look to the purchasing trends of consumers to gain insights about how buying habits are being affected by the economic slowdown. With job losses, diminishing stock portfolios, houses being difficult to sell, and lower disposable income, customer behavior must be different. Are these trends regional? Is the spending much less? Are people more price conscious? Are all industries suffering? Are consumer attitudes influencing decision making? All these questions would be very beneficial to know for marketers launching new products.

This economic recession seems to be a vicious cycle that involves consumers fearing spending and therefore creating more job losses and further recession. In this economic climate, marketing is more important than ever. Although some companies are cutting marketing budgets due to have more money for operational costs, I think that marketing is one thing that can help the economy back around. Unfortunately, the success of the US economy seems to be associated with excessive spending and credit purchases and if marketers can encourage people to spend again, this will be very beneficial.

http://www.youtube.com/watch?v=tvfSe8nHttA

Understanding Insights

I thought the Persuaders was a very interesting documentary that showed some of the different ways people evaluate and try to manipulate consumer attitudes and opinions. Dr. Rapaille used a very interesting three step process to decode what people associate with the word “luxury.” The process involves using a series of focus groups and activities to measure customers’ reason, emotion, and primal core to really gain insight. His techniques have proven to be successful in other industries such as the SUV industry. Dr. Rapaille found that the code for SUVs is “dominance” so he encouraged SUV makers to make their cars larger with tinted windows to portray the idea of dominance.

The first stage in his process involves using the subject’s reason. He basically just asks the people in the focus group a series of questions that are directly related to the subject matter. No real insight is gained in this step, but it gets the participants warmed up and lets them feel like they are contributing to the purpose of the focus group.

After a break, they begin the next stage of the process which uses the participant’s emotion to gain insight. He asks them to do unusual tasks like telling stories to young children from other planets. This helps them to escape logic and let Dr, Rapaille see what emotions the focus group subjects relate to the subject matter. They then take another break.

The goal of the third stage is to get down to the primal core where Dr. Rapaille really believes decisions are made. The chairs are removed from the room and this is done on purpose to confuse the subjects. They are asked to dig deep into their memories and write down notes about the first time they experienced luxury. Dr. Rapaille uses this information to decode the word. Although the code is not revealed on the show, it was interesting to see how Dr. Rapaille goes through this unusual process to reveal customer insights.

I think there are some definite good parts to the “Song Airline experience” as well as some major flaws. Delta took a completely different approach when marketing Song and tried to really capture people’s attention. They wanted to set themselves apart from Delta as well as from other low budget airlines like Jet Blue. Although the Song attempt was not successful, it will definitely not be soon forgotten.

One of the things that stood out to me in Song was their unique brand image. They talk about making everything from the flight attendants to the logos to the seat colors to the ticket kiosks uniquely Song. They set up Song concept stores similar to Apple stores to promote the airline. They used cutting edge marketing attempts to get people to wonder, “What is Song?” They never strayed from the brand image they wanted to create. They had a very cohesive approach to marketing the airline and I think this is something that really set them apart (and that was their goal).

However, this unique brand image somewhat backfired on them. Because the Song branding was so different from that of other airlines, people were not really sure what Song was. The commercials never really showed planes or destinations. Instead they showed people. Although this was an interesting attempt at branching away from typical airline advertising, it never really developed the brand awareness they were looking for. It seems that at the end of the day people really do want just an airline and not an experience.

Spaghetti Sauce and Pickles

One of the most interesting things about these two articles to me was the power of consumer choice. In this day and age, consumers have so many choices and have the power to choose a product based on a number of characteristics and feel empowered because they feel that they are getting a product that they truly want or need. This enhances consumer happiness. In the case of spaghetti sauce, Prego was able to capitalize on this idea of differing customer preferences by creating a variety of sauces. This is why today there are thirty six types of Ragu spaghetti sauce and we see so many options inside of grocery stores.

One thing that really got me thinking from the TED Talk was when he was talking about pickles and he said that rather than improving your original, you need to create a “zesty.” This was very interesting to me because in the realm of customer decision making and the power of choice, consumers really want to feel like they got to make an input on what they consume. By giving the consumer the ability to choose between original and zesty pickles, you are giving them more than just two types of pickles. You are giving them the opportunity for self expression, individuality, and the chance to make a decision on their particular preferences. Some may argue that purchasing pickles is hardly an exercise in personality expression, but I disagree. If marketers capitalize on this idea, they can use products to appeal to certain consumers’ persona and not just their taste buds. Malcolm Gladwell talks about the idea that Pepsi beat Coke in a blind taste test, but “no one ever drinks Coke blind.” This elaborates on the idea that consumers pick goods based on what the brand means to them, their power of choice, and what makes them happy as an individual.

Another lesson I learned was that consumers really do not know what they want. This idea was mentioned in both the TED Talk and Kenna’s Dilemma. They say the best way to find out about consumer preferences is to ask them, but in actuality consumers don’t report what they actually prefer. Malcolm Gladwell uses the example about coffee. He said when asked, the majority of coffee drinkers will report that they prefer a dark, rich, hearty blend of coffee. However, most coffee drinkers actually like weaker coffee. In Kenna’s Dilemma he talks about the best way to gather information about preferences is to observe. By looking at the way consumers dress, how they act, where they hang out, what is inside of their closet, and looking for trends, a marketer can gain a lot more insight than if they only focus on other types of market research like surveys, etc.

I was particularly interested in the study they did between Christian Brothers brandy and E&J brandy. The study showed that packaging can influence a customer’s decision making process on which product tastes better. I was surprised to find out that packaging could have such strong influence of a consumer’s preference even in a taste test. Christian Brothers simply had to change their package to increase market share. It seems like such an arbitrary factor when it comes to decision making, but apparently packaging can have big implications. I hope to research more about this study and similar studies to use in my paper since I am writing about customer insights and packaging.