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Showing posts from 2017

The American Gun Industry Pioneered 'Product Placement'

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How Kraft's Shreddies Revamped Itself Without Changing Anything

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What do you see in the image above? Is it a diamond? Is it a rhombus? Or is it a square, rotated 45°?

In 2008, Kraft Foods Canada capitalized on this confusion to revitalize a 78-year-old brand, Shreddies. Sales of this popular breakfast cereal had stagnated. According to a consumer research done in its Canadian market, customers wanted the brand to refresh itself without it changing anything. 
How to increase sales of a product that is loved by its customers just the way it is?
Kraft Foods accepted the challenge and launched the new & improved Shreddie, the 'Diamond Shreddies'. Hunter Somerville's idea, an intern with Kraft Food's creative agency Ogilvy & Mather Canada, became the basis of this campaign - an 'angular upgrade' to the original Shreddie, devised by a team of 'cereal scientists'. 
Packs of 'Diamond Shreddies' was launched with much fanfare. The tongue-in-cheek campaign triggered a widespread debate among consumers who were in o…

How Potato became a European Staple from Once Being Illegal

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Why does Unilever's Axe 'Sound' Masculine?

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Our sense of sound, sight, touch, taste, self-motion, and smell don't work independently. Professor Charles Spence of Oxford University has conclusively proved the intimate connection between our senses. He is, in fact, a leader in the field of Senseploration - the investigation of how our senses mingle and interconnect. 
Marketing departments and product-design agencies have increasingly started using Spence's findings. In 2006, the FMCG giant Unilever commissioned a study to find whether volume and pitch of the sound from an aerosol affected a person's perception of the pleasantness or forcefulness of the deodorant inside. Based on the findings, the company invested in a packaging redesign for Axe deodorant, complete with new nozzle technology. The underarm spray, which is targeted at young men, now sounds noticeably louder than the company’s gentler, female-targeted Dove brand
See how you score on this sensory test!
Source: Accounting for Taste by Nicola Twilley, The New Y…

How M&M's Became a Force by Not Melting!

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M&M's are part of the main operational food ration for the US Armed Forces. The candies have been part of NASA's every space shuttle mission since Columbia 1981 and are also on the International Space Station menu.
Do you know why?
Because the candy "melts in your mouth--not in your hand!" 
In 1932, confectioner Forrest Mars Sr. moved to England and began manufacturing the Mars bar for troops in the United Kingdom. He was looking to solve a key consumer problem of the time before air-conditioning: chocolate bars melted in the heat, so Americans stopped buying them. During the Spanish Civil War, he saw soldiers eating the British made Smarties, a color-varied sugar-coatedchocolateconfectionery, as part of their rations. Mars was thrilled by the unique construct of these candies and knew it to be the perfect solution to the sales slump that hit the family business every summer. He returned to the United States and obtained a patent for M&M's manufacturing proc…

100 Years Ago Sears Sold Cheap Mail-Order DIY Homes!

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In 1908, Sears issued its first specialty catalog for houses, Book of Modern Homes and Building Plans, featuring 44 kit-house styles ranging in price from the US $360–$2,890. That's the equivalent of US $9,147-$73,431 today


As Sears mail-order catalogs were in millions of homes, large numbers of potential homeowners were able to open a catalog, see different house designs, visualize their new home and then purchase it directly from Sears. Sears reported that more than 70,000 of these homes were sold in North America between 1908 and 1940.
In late 1918, Sears conducted a “race,” building two houses, a Sears Honor Built the pre-cut kit home and an identical house with no pre-cut lumber. The pre-cut Honor Bilt Rodessa was the easy winner in this race, with 231 hours to spare (compared to the stick-built house). 
Today, those two houses are still standing side by side as Sears struggles to survive the retail revolution brought in by the likes of Amazon. 
Check out the Sears homes that a…

How Brand became a Legit Financial Asset

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Brands are potent, valuable and rare. Successful brands drive consumer loyalty, creating long-term economic benefits and confirming with the definition of an asset. However, as late as the 1980s accountancy was unable to accommodate these assets. 
In 1984 News Group, the Australian flagship company of Rupert Murdoch's worldwide publishing empire decided to take pre-emptive action to correct this accounting anomaly and included a valuation for ‘publishing titles’ in its balance sheet. News Corporation did this because, being an acquisitive company, it had to find a way adjust its acquired "goodwill". Following the accounting standards of the day - deduct acquired goodwill from shareholder equity - would have ravaged the corporation's balance sheet. Thus, News Group reduced the acquired goodwill by treating the brands as acquired assets. 

Following the lead of Rupert Murdoch's News Corporation, the British Bakeries and foods company, Ranks Hovis McDougall, valued it …

Inside Costco's Success & their 'Treasure Hunt'

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As of 2015, Costco was the second largest retailer in the world after Walmart and its stock had soared more than 5,000 percent since going public in the mid-1980s.

However, this store doesn't install signs in its aisles. It rather lets it's customers wander in the store, looking for the things they intend to buy while browsing through stuff that they "notice" on the way. 
Poor customer experience, right?
Wrong! Costco, in fact, has mastered the psychology behind shopping. 
Costco constantly changes the location of its top-selling products - such as light bulbs, detergent, and paper towels - forcing the customers to search storewide. And as logic dictates, the more time consumers spend ambling around the store, the more likely they are to spend.
Costco rotates upward of 25% of its hard-goods and its products. The result is that, of the 3,600 items for sale, a full 1,000 may be offered only for that particular moment and may not be available for a future shopping visit. The…

A 165 Year Old 'Superstar' Developed Gorilla Glass in 3 Months

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Founded in 1851, Corning Inc. is one of the world's biggest glassmakers today. It boasts of annual sales of nearly $10 billion and billions in annual profits. Developer and manufacturer of the now ubiquitous Gorilla Glass, Corning is another sterling example of a "superstar" firm.





Corning has had a rich history of working with innovators from Thomas Edison to Steve Jobs. In fact, innovation is one of the key values driving Corning's business strategy. Corning regularly invests a healthy 10 percent of its revenue in R&D; to maintain and further it's technological leadership. And that's in good times and in bad. When the telecom bubble burst in 2000 and cratering fiber-optic prices sent Corning's stock from $100 to $1.50 per share by 2002, its CEO at the time reassured scientists that not only was Corning still about research but that R&D would be the path back to prosperity.
Corning has continuously reinvented itself – moving from the company that st…

How the Sears Catalog Captured America's Imagination

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Mail was the internet before the internet. The mail-order firms like Sears were able to penetrate underserved rural areas by leaning on the then-new infrastructures, such as the railroads that linked far-flung regions of the country. 
One of the first mail-order launched in 1872, sixteen years before the famous Sears catalog, was Montgomery Ward. Aaron Montgomery Ward conceived of the idea of dry goods mail-order business in Chicago, Illinois, after he observed that rural customers often wanted "city" goods. The first catalog consisted of an 8 in × 12 in (20 cm × 30 cm) single-sheet price list, listing 163 items for sale with ordering instructions for which Ward had written the copy. By 1883, the company's catalog, which became popularly known as the "Wish Book", had grown to 240 pages and 10,000 items. 

In 1888, Richard Wareen Sears started a business selling watches through mail order catalogs. The Sears catalog was the first serious competition that Wards enco…

The "Soap" Opera History of Content Marketing

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Content marketing began long before the internet. Radio was an early adopter of content marketing. And one of the most prominent examples of this type of advertising is the soap opera. In fact, content marketing led to the creation of the monicker "soap" opera. 


In the golden age of radio, advertisers sponsored entire programs, usually with some sort of message like "We thank our sponsors for making this program possible", airing at the beginning or end of a program. One of the most successful examples of such advertising is Oxydol's Own Ma Perkins - In 1933, P&G chose it's brand Oxydol to sponsor its first radio serial, Ma Perkins.The fifteen minute show ran five days a week and mentioned Oxydol's name twenty to twenty-five times during each episode. P&G received 5,000 letters complaining about Ma Perkins within the first week. But by the end of the first year, sales had doubled. In fact, this commitment is regarded as the reason behind the bran…

Attention Marketers: Humans are Blind to Change

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When we look at a scene, our eyes move around quickly, 70 to 100 times a second, locating anything noteworthy.  This visual input is translated into a mental memory map by our brains. These quick eye movements are called saccades
Saccadic movement is what causes Change Blindness: a perceptual phenomenon that occurs when humans fail to detect seemingly obvious changes to scenes around them. 

As a result when we see we unconsciously focus on areas that our evolutionary biases deem important (often anything moving fast, anything that looks like a living thing that may be a potential friend or foe). The brain automatically fills in the rest of the details from its memory map — often disregarding details that it thinks it has seen before. 
"The Door Study" a 1998 study by Daniel Simons and Daniel Levin is the one of the most popular study to demonstrate how change blindness occurs in the real world.

While "The Gradual Change Test" highlights how humans fail to notice slow…

Did you know? The company that help put man on Moon also ran the first TV ad

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The Bulova Corporation, formerly called Bulova Watch Company, is considered to be the pioneer of modern marketing techniques.
In 1926, when radio was a new phenomenon and not many understood the power of this new advertising medium, Bulova ran the first known radio commercial, "At the tone, it's 8 P.M., B-U-L-O-V-A, Bulova time". In the 1930s, 40s, Bulova were sponsors of all of the top twenty radio shows of the time. During this same period, Bulova became the first watch and clock manufacturer to start spending more than $1 million a year on advertising. 
It wasn't a surprise, thus, when in 1941 television advertising became legal, Bulova produced the first-ever TV commercial. This 10-second commercial depicted a Bulova clock and the map of the United States with the live voice-over  "America runs on Bulova time." This ad cost Bulova all of $9, which in today's money is $150, and was watched by 4000 Americans.

Apart from mass advertising, Bulova also expe…

The Rise of the Superstar Firms: Why McDonald's is thriving?

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Over 100 years after Theodore Roosevelt warned against the growing control of a handful of corporate giants, a small group of "superstar" companies—some old, some new—are once again dominating the global economy. As per a 2015 Mckinsey Global Institute report, 10% of the world’s public companies generate 80% of all profits. What's most intriguing is that the gap between these few “superstar” firms and the rest is growing
But what makes these "superstars" thrive?
These firms are known to invest in their core skills so as to relentlessly pursue their long-term goals. And thus it turns out, that a remarkable number of superstar companies are family owned or run by dominant owners who can resist the pressure for short-term results.
For an example, we can turn to McDonald’s. In 1948, the fast-food joint was already a success when Richard “Dick” and Maurice “Mac” McDonald, the original owners, decided to shut it down for three months to revamp the entire operation. 
Th…

How Barbie became a Pop Icon transcending generations

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Barbie, the teenage fashion model, was created by Ruth Handler, the co-founder of the toy manufacturing company Mattel Inc. It was inspired by a German fashion doll, Bild Lilli; a doll based on a character known as "a symbol of sex and pornography for the men of Germany".

Barbie debuted on 9th March 1959 at the American International Toy Fair and was a "crashing bomb," according to the New York Times. Sears, then a retail giant with the power to make or break a toy, refused to stock Barbie. A then-unprecedented $12,000 market-research test also found mothers hating the doll, even though girls loved her. But Barbie proved everyone wrong. In the first year of its launch girls snapped up 351,000 Barbie dolls at $3 apiece, making the doll a smash hit. 
The unmatched success of Barbie is attributed to it's unique and innovative marketing strategy. Barbie was the first doll to be heavily marketed with television advertising. Mattel had bought commercial time on the mos…

Brand Credibility: Bausch & Lomb & greed gone wrong

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Bausch & Lomb was the first company to receive FDA approval to market soft lenses and introduced the product in 1971. The popularity of its soft contacts soared after the launch of multiple regimens: “planned replacement,” “frequent replacement,” or “daily wear, two-week replacement lenses." As the market grew & became increasingly competitive, the production costs plummeted but Bausch and Lomb struggled to make profits: end-user prices also dropped and growth in the total number of lens wearers remained stagnant.

In late 1989, Bausch & Lomb repackaged its existing traditional daily-use "OptimaFW" lens as a "Medalist" extended-wear lens; later, it repackaged the same lens again as a "SeeQuence2" disposable. OptimaFW line was the most expensive at $70 per pair (with an expected life of a year or longer); Medalist occupied the middle price range at $15 a pair (with a planned replacement period of one to three months) and SeeQuence2 line was …

When Ray Kroc flew over towns looking for church steeples to open McDonalds stores

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Ray Kroc in the 1940s owned a successful Milkshake mixer distribution business. In the beginning of 1950s his business started to slow down. In the US there was an exodus from the cities to the suburbs and many neighborhood soda fountains were forced to close down. But one small restaurant in San Bernadino kept ordering more machines. He flew down and met the McDonald brothers who ran the restaurant.

When Ray Kroc joined the McDonald brothers, he envisaged thousands of Mc Donalds outlets across the country. In trying to identify the best locations, he used to fly over towns looking for church steeples. He believed that good American families would live around churches and that's the kind of customers he was looking for.

src Consumer Behavior by Schiffman/Kumar

Freemium Pricing Model: 25% of Europe's Most Profitable Airline's Seats Are Virtually Free

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CEO of Ryanair Michael O'Leary's vision is to make most of its seats free by the end of this decade.
The goal, he says, is to make money by getting a share of the shopping and retail revenues from airports, where the airlines attract traffic. In 2016, Ryanair earned $2 Billion in ancillary revenues from snacks, check-in luggage, seat selection, insurance etc, amounting to nearly 30% of its total revenues.

Mr Leary's predictions are bolstered by the fact that a quarter of its customers are already being offered free fares. Passengers only pay the taxes and duties while the airlines make money through extras like checked luggage, snacks, food, water and in-flight merchandise sales.

source: Principles of Marketing: A South Asian Perspective,  13th Edition, Kotler Philip

Further, the airline also saves costs by selling 99% of the tickets online with offers of travel insurance, hotels, car rentals and various other packages. To reduce costs, they have introduced non-reclining …

How Zara became successful through efficient use of technology

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The industry average in the clothing industry to take a design to distribution is around 9 months. Zara, through efficient use of technology, has developed a distribution model that takes new models from design to the store in just 3 weeks. As a result, the company produces approximately 20,000 designs a year!

To make this work, Zara uses technology to make sure departments and outlets the world over constantly know what is needed when and where. Designers keep in daily contact with store managers, discussing which items are most in demand and which aren't. This, supported by real-time sales data, allows the designers to action repeat orders and create fresh designs, and from La Coruna they are shipped directly to the stores, eliminating the need for expensive warehouses.

Some of the unique features Zara's business model is:
It employs 100s of designers at its HQ in SpainHalf its production facilities are close to its HQ in Spain, Portugal and Morocco - choosing not to outsourc…