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Darrin C. Duber-Smith

Since 2000, Darrin C. Duber-Smith, MS, MBA, has been president of Green Marketing, Inc., a Colorado-based strategic planning firm offering marketing and sustainability planning, marketing plan implementation, and other consulting services to companies in all stages of growth. He has over 25 years of specialized expertise in the marketing and management profession including extensive experience in working with natural, organic, and green/sustainable products and services. He is a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market concept and leader of the first U.S. industry task force that helped frame an industry definition of natural (c. 2005). He has published over 60 articles in trade publications and has presented at scores of executive-level events over the past 15 years. Mr. Duber-Smith is Visiting Professor of Marketing at the Metropolitan State College School of Business in Denver, CO and Affiliate Marketing Professor at the Leeds School of Business at the University of Colorado-Boulder. Mr. Duber-Smith was the recipient of the Wall Street Journal's In-Education Distinguished Professor Award for 2009, and is author of Cengage Learning's KnowNow! Marketing blog. He can be reached at DuberSmith@GreenMarketing.net

Coke Doubles Down

04-10-2014 10:12 PM with no comments

Yep. Another post about soft drinks. But I have no choice this time because the news is simply too interesting to ignore. We know from previous posts that for many reasons, the soft drink category has been contracting for well over a decade. Coke is particularly hard hit because it gets three quarters of its total revenue from the Coke brand, unlike Pepsi which is much more diversified and owns many different brands. Pepsi appears well-positioned for the future. So it makes perfect sense that Coke would recognize that the market has changed and it would shift resources away from the flagship brand and towards acquiring brands in growth categories. Surely this is what a prudent, mature company would do with regard to a product in the decline stage of the product life cycle. But that's not what Coke's CEO says they are going to do.

Instead of recognizing reality, the company will instead embrace hubris and will rather recklessly pump more money into the brand. The CEO's statement says it all, "Coca-Cola remains magical. We need to work even harder to enhance the romance of the brand in every corner of the world". Unfortunately working harder and using magic will not change the dynamics of the market and the various industries that serve it, but global growth might be possible for the sugary, carbonated beverage. Resources should be concentrated there because sustained growth here in the U.S. is highly unlikely. And so this strategy is likely to be a huge mistake, and might cost some high level people their jobs. Any gains made through an expensive advertising blitz will likely be at the expense of market share currently held by Pepsi and Dr. Pepper, so Coke would be better served by recognizing a declining product and product category, reducing resource allocation towards the brand, and moving on to less carbonated and sugary pastures.

Posted by Darrin Duber-Smith

Casinos Hit Hard Times

04-10-2014 9:38 PM with no comments

It seems that The Great Recession's negative effects simply won't go away. Economic recovery has been very slow, job and income growth has been virtually nil, and there is a very good likelihood that consumer buying patterns may have shifted permanently. Even casinos are feeling the pinch, and the industry is ripe for some serious downsizing.

Consumer demand for gambling has been brisk, reaching $38 billion this year, but growth has slowed considerably over the past six years. Mississippi, for example, saw revenue decrease from $1.2 billion in 2006 to $738 million, according to BusinessWeek. As a result, the largest casino, operated by Harrah's will close its doors, and it certainly wont be the last to do so. What's happening here?

Aside from the usual suspect, the economy, there are two other emerging trends that suggest a major downsizing for the industry. One is the over-saturation of the market. There are too many casinos for too few customers, and the weaker ones must be culled from the herd eventually. The other threat, one that is potentially more long-term and therefore scarier in nature, is the proliferation of online gambling, which may eventually be legalized here in the U.S. as has successfully been done in Canada. That means fewer people physically going to the casino. And where have we heard this story before? So many industries, from spectator sports to brick-and-mortar retail, are affected as consumer behavior moves further and further online.

Posted by Darrin Duber-Smith

Yahoo Seeing What Sticks

04-07-2014 4:24 PM with no comments

It seems that Yahoo may ultimately be destined for the scrapheap of former market leaders that couldn't keep up with the Zeitgeist. Who needs Yahoo when you have Google and Bing, among many others? After the high-profile hiring of a very young, rather inexperienced chief executive two years ago (she was 33), the former market leader has failed to gain any traction in the world of online advertising, which is dominated by Google and Facebook. In the absence of success in that particular vein, Yahoo must now turn to online video content to help turn around its fortunes.

The TV industry has become rather fragmented of late as consumer habits have shifted and online distribution models have emerged. It's not that people aren't watching as much TV, it's just that they are doing it on a variety of different devices, and so marketers must shift strategy and tactics to address these trends. Facebook was a bit late to the online advertising game, but due to its dominance in social media, the company was able to recapture lost ground very rapidly. So what about Yahoo?

By offering high quality video programming such as episodes of Saturday Night Live, Yahoo expects to get users to spend more time on its site so that more non search-related advertising revenue can be generated. Marketers are currently working on original content, such as what we are seeing with Amazon and Netflix, and will continue to seek lucratice licensing deals with outside content providers in an effort to regain cultural relevance. Indeed Yahoo has produced original series in the past but has failed to find a winning show thus far. The company recently hired ex-TV anchor Katie Couric, whose own latest show was canceled, and is in talks to make a $300 million purchase of News Distribution Network, an online video service provider, to help speed things up. Will it work?

In a word...no. It's too little, too late for Yahoo. Banking on the possibility of finding a hit show in a growing sea of highly variable and questionable content is not a sound marketing strategy in my view, but it's hard to imagine what else the company can do to grow. Online video is just getting off the ground, so perhaps Yahoo can still turn things around. But to realize that possibility, I'm afraid that it will need a much more experienced, entrepreneurial, and dynamic leader to make it happen. And a better marketing plan.

Posted by Darrin Duber-Smith

So Much (More) Sales Promotion

04-05-2014 7:52 PM with no comments

In the last column, I briefly discussed the potential pitfalls of overusing sales promotion as a marketing technique, so I thought it would be poignant to provide some reasons behind the proliferation of discounting and other methods.

One such reason is simply competitive in nature. When a market leader does something, others tend to follow suit, and the result can be a game of retailer one-upmanship. The other perhaps more compelling is reason is more disturbing to marketers because it involves a trend in consumer behavior. But it isn't only the retailer that takes a hit. In the wake of the financial crisis and Great Recession, consumers cut their spending, in many cases trading down to lower tier brands, including switching to many store brands. Unfortunately for Proctor and Gamble, Colgate-Palmolive and other consumer packaged goods providers, this means less revenue and more sales promotion.

For some categories such as toilet paper, soda, and potato chips, a full 50% of all purchases involve a discount of some kind. This seems like far too many for a sustainable business model. many consumers have eschewed brand loyalty to wait for the inevitable sale prices, which is certainly not what marketers want in the long run. When will it stop? Not until the economy truly turns around, and consumers gain more confidence and open their wallets. We might have to hope for more change before that happens. In the meantime, consumers are happy to do the math and marketers are forced to oblige.

Posted by Darrin Duber-Smith

So Much Sales Promotion

04-05-2014 5:14 PM with no comments

Sales promotion, defined as a short-term offer of value often used to elicit a response, can be an excellent tool for marketers. For instance, coupons and samples stimulate purchase while sweepstakes and contests get us names for our database and future direct marketing activities. Others, like giveaways at baseball games and rewards cards reinforce loyal purchase behavior. But a valid argument can be made that over the past decade, this particular element of promotion has become rather trite.

As a rule, marketers don't like to rely on sales promotions since they erode profit margins and exacerbate expensive price wars among competitors. Consumers love them because they like to feel like they are getting a deal, even when they are not really getting much of a deal. There is a great deal of evidence, for example, that most goods are more expensive around the holidays despite all of the heavy sales promotion that goes on. It seems that prices are elevated in advance throughout the supply chain in order to ensure some net income for companies.

The other main problem with an over-reliance on this highly effective technique is that consumers can get too accustomed to the promotions, particularly with regard to price--off deals and coupons. If overused, sales promotion can make it so that customers refuse to buy the product without a coupon, or even worse, when stores just go ahead and honor a coupon that the customer doesn't even have. Bed, Bath & Beyond comes to mind here. It seems that customers can have a hard time paying the "real" price once the promotion is over.

When are sales promotions most effectively used? In my experience, new product introductions and short-term, competition driven marketing programs are most effective with tactics like samples, coupons, and other deals, and programs that reward loyal customer behavior are particularly useful since it makes sense to spend extra dough keeping existing customers happy. When used sparingly and tastefully, sales promotion is a very effective marketing tool.

 

Posted by Darrin Duber-Smith

Another Controversial Selfie

04-05-2014 4:28 PM with no comments

First it was Ellen DeGeneres and the star-studded Samsung-sponsored product placement at last month's Oscars. And now Samsung is back in the spotlight enjoying even more wonderful, free publicity. This time it wasn't movie stars but Red Sox legend David Ortiz and President Obama who were involved in a high-profile selfie, and the White House in not happy with what Samsung did to leverage the event.

It all started innocently enough when Mr. Ortiz and Obama leaned in for a photo that Ortiz wanted to take with his Samsung phone. Mr. Ortiz is a paid endorser for the brand, so it is difficult to imagine him using any other phone, so the likelihood that this was all a Samsung-planned product placement is very, very slim. But there is little doubt the Ortiz thought that such an act might bring him added goodwill with his corporate partner. Either way, it happened.

The problem is that Samsung, never one to waste a good opportunity, immediately Tweeted the photo to, well, everyone. It didn't require any planning, just a rapid response by a savvy marketer. How hard is it to Tweet something? Nevertheless, this is considered a marketing activity, and as such, Mr. Obama would have to give his permission to a marketer to use his likeness in an attempt to market a good or service. Since he did not do so, and probably should not do so in his capacity as President of the United States, Samsung should not have done the deed.

But as they say, sometimes it is easier to ask for forgiveness than it is to ask for permission. Samsung will likely apologize and should suffer no consequences other than a promise never to do such a thing again. Think of all the free publicity that the entire act, however unintentional on the part of Mr. Ortiz or reactionary on the part of Samsung, has generated for the brand. But if this had happened to Mr. Ortiz (as an unpaid endorser), he would rightly complain that he was not paid for any endorsement and would demand restitution. Can the President do this too? Unlikely. And until there is legislation enacted that levies fines and other punishment for unauthorized use of the likeness, there is little doubt that other brands will consider taking similar risks.

Posted by Darrin Duber-Smith

A Farewell to Dave

04-04-2014 4:30 PM with no comments

I remember when a classmate returned from a trip to New York with her famous producer father all decked out in David Letterman gear. The year was 1982, and I was in 6th grade with no idea that its host, David Letterman, would enjoy a 32-year run and become one of the most prolific TV personalities in history.

The late night TV menu is currently in a state of flux with the recent retirement of Jay Leno, another iconic personality. As of 2015, Mr. Letterman will be the next to cede the chair to a more demographically pleasing (read younger) host in an attempt to attract younger viewers without alienating current viewers, a neat trick that Jimmy Fallon is working on as we speak. But who will replace Dave? And what will Paul Shafer do for a living?

No one knows, but we can be sure that the next eight months will be quite the farewell tour, one of Derek Jeter-like proportions. I think that Chelsea Handler, a very funny and likeable comedian who has hosted a talk show in E for many years and has recenelty announced she will be leaving the show, would be a good candidate. Her brand of humor, however, might be a bit too ribald for network television, so she would have to really tone it down. If she's willing to do this, we just might see a female host in the near future. Marketers at the network are certainly concerned about the departure of Mr. Letterman, but an astute marketer could see this as an opportunity to actually grow the program's viewership by hiring someone with more contemporary appeal. Viewership and ad revenues for all late night programs have been falling over the past several years due to the fragmentation of the media market, so change might not be such a bad thing. In the meantime, I will certainly be tuning in more often over the next eight months to see what happens, and I'm sure I won't be the only one. At least this probable spike in viewership should make the network smile while it is making this crucial marketing decision.

Posted by Darrin Duber-Smith

The NCAA's Dry Tournament

04-04-2014 4:07 PM with no comments

The NCAA is in the news a lot these days and not all of it is due to the annual national distraction known as March Madness. The lawsuit against the organization regarding the proposed payment of athletes for services rendered is well known, and now there is growing pushback among fans regarding the rather draconian rule against serving alcohol at tournament games. This rule apllies at all NCAA levels, and for years the NCAA has pressured universities to forbid the sale of booze during the regular season as well. So unless you are in a special suite or manage to smuggle in a flask of something, it's 48 ounces of sugary soda for you!.

Clearly the NCAA has good intentions. Keeping beer away from college students is probably a good idea, but the fact of the matter is that very few of the attendees will be of student age. The event is far too pricey for most students, and the timing after spring break isn't exactly perfect. So why deny adult American basketball fans their God-given right to consume alcoholic beverages along with their nachos and arena dogs?

Apparently some universities are asking themselves this same question, and it appears that the tide is beginning to turn as schools such as Texas have resumed vending operations. And there is something to be said for the fact that the rule has had the unintended side effect of encouraging binge drinking in the parking lot prior to the contest, which is not a good thing. The league should reconsider this ban and should also respect the right for universities and colleges to set their own standards. Consumers want the beer, and schools can make money from the sales, and inside the stadium at least the schools can control the distribution of the stuff.

There is growing evidence that game attendance is down partly due to the unavailability of alcohol. There is scant evidence that the ban has had any positive effect on the in-game experience, and the whole thing paints the NCAA as an organization that likes to bully and micro manage its members. This is a brand perception that this organization can ill afford to have. 

Posted by Darrin Duber-Smith

Giving Them Something To Yelp About!

04-02-2014 4:00 PM with no comments

The lawsuits are getting hard to ignore. Pretty much anyone can say pretty much anything these days online dspite the fact that we have anti-slander and anti-libel legislation on the books. For whatever reason, it doesn't appear that these rules yet apply to the lawless land of the Internet. And to add to the problem, most of what happens online is anonymous, and so the person or company who is being disparaged doesn't even know who made the comment. This is precisely the problem.

Sites like Yelp, which were designed to provide real comments from real people so that consumers can make more informed purchasing decisions, simply cannot verify the identity of the person posting, and this can become a major problem when brand reputations are at stake. The victim sometimes has little recourse but to file against the website in question, and the result has been a series of lawsuits. As a result, some marketers are now putting "non-disparagement clauses" into their contracts, and consumers who violate these terms can be held liable even if their complaints prove to be 100% true. Harsh!

Yet in 2013, Yelp had more than 53 million reviews on its site, almost double the number from 2012, so this sort of service is obviously big and growing business. It is unclear whether this sort of contract will hold up in court, but it is clear that much of the anonymity will eventually have be removed from these reviews at the very least. We can't have competitors writing disparaging things about companies under the guise of consumers, for instance, which is a practice that happens rather often. Also, folks tend to temper their opinions when they aren't anonymous. And remember that the reviews on sites such as these are considered "outliers" in statistics, and so the conclusions reached from such data are not based on actual statistical analysis. This doesn't mean that the opinions on the site are invalid, only that they should be taken with many grains of salt, and legislation to protect the businesses is on the horizon.

Posted by Darrin Duber-Smith

Battling Bad Buzz

03-31-2014 2:53 PM with no comments

One of the great things about technology is that, while it may be destroying entire product categories and the jobs that come with them, it is often at the same time creating other product categories and the jobs that come with them. The trick for employees, marketers, and consumers is to keep up with the times, and this can be a very neat trick indeed.

Social media, for example, is in the process of rapidly shifting advertising dollars away from traditional media, which is proving to be rather disruptive all around. The jobs in one category are shifting to another, and those without digital savvy will surely be looking for different kind of work. So too it is in the concentric worlds of marketing research and public relations, wherein the solar system of public opinion now revolves around social media. Focus groups and surveys? Who needs these costly and imperfect metrics when you can immediately see whether you are "trending on Twitter" and affect/monitor your brand reputation via a growing host of new tools. Talk about innovation!

Yet managing brand reputation is now a much greater challenge than it used to be, and full service PR agencies as well as marketing research firms, must now offer an online component with the commensurate expertise and menu of marketing services. It can be seen as both a threat and an opportunity if we wish look at things in terms of the SWOT analysis (never a bad idea!), and both the scale and the pace of change is a challenge marketers must meet head on..

Posted by Darrin Duber-Smith

Movies Both Up and Down

03-31-2014 2:36 PM with no comments

When was the last time you saw a movie in a theater? How many movies have you seen in the past year? Is that number up or down from the previous year?

We know for a fact that fewer Americans are going to the movies these days, actually down 11% over the past decade, but that overall revenues are still up. How is that? Fewer attendees with a rise in theater revenue usually means one thing...higher movie ticket prices. It seems that the core movie-goer is somewhat insensitive to price, and marketers have largely looked to foreign markets for audience growth. But it appears that ultimately lower prices might be in order to attract the increasingly-price conscious consumer with an ever expanding array of alternative entertainment choices.

The average movie ticket price is now over eight bucks, and we won't even begin to discuss what passes for "concessions". Let's just say that there are lucrative margins in addressing a captive audience (a fact that may also help to explain the increse in revenues), and more attendees maeans selling more stuff. Further, increasing the number of attendees means more eyeballs on the ads shown before the show, which at least theoretically should result in more expensive advertising placements. Yet, crowds do keep folks away so there may be a point of diminishing returns here.

Regardless, all forms of group-oriented spectator entertainment should be on notice. Prices for almost all spectator sports have steadily increased for decades, and these sport properties are also beginning to struggle a bit. Who will be the first to effectively address the proverbial "elephant in the living room"? Time will tell.

Posted by Darrin Duber-Smith

Half Bike Is Half-Baked

03-25-2014 3:45 PM with no comments

Yet another strange innovation has come to my attention, and every time this happens, I begin to think about the "marketing concept". This maxim reminds marketers to assess market needs first and then tailor a 4 P Marketing Mix to meet those needs. As a rule, one should not expend resources to develop and then commercialize something for which there is no real need in the marketplace. Enter the "Halfbike".

There is no seat, no handlebars, and only one wheel. The contraption seems to be operated by a steerable shaft and a handbrake, and appears to have no practical use whatsoever. It has none of the benefits of a bike or a scooter, and seems to have only the purpose of propelling a person from one place to another, however inefficiently. Of course the owners are selling this contraption online (for $799 per), since it would be difficult to imagine any retailer carrying this product for any discernable reason, and naturally they are looking to "crowdsource" funding through the popular portal, Kickstarter. Just who is this product intended for and for what purpose? What is the product positioning strategy if any?

Well good luck with all that! At least the Segway is a somewhat useful product, even if only to those in parking enforcement and a handful other industries where workers must stop and go frequently, but do not have to carry anything substantial around with them. And as a toy, the product has been a miserable disaster. Are there lessons to be learned here? For certain. Could this be the new vehicle of choice for bike messengers everywhere? Fat chance of this product ever moving from a few hipster Innovators (the first few to adopt a product) toward attracting the Early Adopters (a must-reach category for product success).

Posted by Darrin Duber-Smith

Tesla Fights Supply Chain Rules

03-25-2014 3:12 PM with no comments

By now you have heard of the pricey electric sports car manufacturer and its' high profile line of battery-powered automobiles. The company is barely profitable, and probably wouldn't be at all without government subsidies, but no matter. It's a cool-looking car, and rich folks love how it makes them feel. But the major problem at present isn't getting people to fork over the money for the prestige-priced product, although that is indeed a problem that Tesla must overcome in the long-term. The current problem lies with the state regulation of car dealerships.

Most states have laws that forbid direct selling of automobiles to consumers, instead opting for a "middleman" model involving dealerships. We are all familiar with how this works, and it seems that the laws might be somewhat antiquated. In other words, consumers can't buy new vehicles directly from the Tesla website after visiting Tesla showrooms, which are often found in shopping malls. Tesla wants to sell direct to consumer and the states won't let them. Why? Dealers say that allowing direct sales would "harm consumers, limiting their ability to shop around for the best price, trade in vehicles, or obtain financing for a new car". Is this true?

Perhaps for regular consumers, but high-income Tesla purchasers might not be interested in any of the above "protections".  And the company is small enough to operate without large facilities, for the time being. As Tesla grows, it will probably be forced to adopt a more traditional, full-service dealership model. The existence of value-adding intermediaries would surely boost the purchase price by 25% or more, and Tesla can ill-afford to raise its already prohibitive prices. What will happen?

Tesla should be able to do what it wants to do as long as it doesn't harm competition or the consumer, so the antiquated laws, which seem to favor large companies with deep pockets, should probably be changed. But don't hold your breath waiting for that to happen on the state level. Any real change would have top be enacted on a federal level, which would take years plan and execute. So what about Tesla? Don't worry. The Zeitgeist certainly favors "green" goods and services, and this adminstration in particular has demonstrated a propensity to forward the cause with taxpayer subsidies. Perhaps an exception will be made for those companies deemed "green" enough. Who knows? What is clear, however, is that Tesla's non-traditional business model is under a very serious legal and regulatory threat. Can the company affect that landscape politically? Time will tell.

Posted by Darrin Duber-Smith

Strahan's The Man

03-24-2014 12:56 PM with no comments

It seems that Michael Strahan is everywhere these days. Ever since his retirement from the NFL a few years ago after an outstanding career with the NY Giants, he has since accepted full time jobs with both Fox NFL Sunday and the popular daily morning show, Live! With Kelly and Michael. The NFL gig certainly makes sense, but Strahan replacing Regis Philbin on a morning show largely watched by middle-aged women? Believe it. This is much bigger than Drew Carey replacing Bob Barker on The Price is Right, and it clearly demonstrates that some athletes have staying power, or what we call "continuity" in sports marketing, after they retire from the game.

Strahan also has a handful of endorsement deals, and he has apparently signed on to be the host of a game show to be aired in the near future. But, wait. That's not all. He is also producing an undisclosed motion picture with Marky Mark Wahlberg, another celebrity who has reinvented himself. This is all truly fascinating. Not everyone has this sort of appeal, but Strahan's is truly wide. The only issue here is overexposure, as people may grow tired of seeing Michael gap-toothed grin every time they turn on the television. But if that does happen, it will take a while, and "Brand Strahan" will undoubtedly achieve vast success in the meantime.

Posted by Darrin Duber-Smith

Variable Ticket Pricing Catches On

03-23-2014 1:27 PM with no comments

First the Buffalo Bills announced that the franchise would take the league lead and begin to price some tickets based on anticipated demand. At least the Lions led the league in something...Nevertheless, this announcement referred to low-demand, pre-season games only, but now other teams have concluded that since variable ticket pricing has worked in other professional leagues, it is bound to work in the NFL.

And it will work, since most fans believe that not all matchups are created equal. And what's with charging full price for pre-season "games", a tradition that has irked season ticket holders for time immemorial? But don't get too excited about lower prices just yet. Variable pricing has been used in other leagues as an excuse to charge marquee prices for marquee match-ups, and to discount the occasional low-demand stinker (think Nuggets versus Raptors). But these leagues are beginning to struggle with attendance. And since the NFL has fewer games, it is a much scarcer product and thus the pressure to fill stadiums is not as great as it is for other leagues where there are many more home games. Yet, variable pricing has arrived. Why?

Remember that some teams had trouble selling out playoff games this past season, so no sport is immune to the substitutive power of the HDTV and home surround sound systems. Personally, I too would rather stay at home rather than brave the weather, concessions, traffic, brutish fans, and endless breaks in the action at the stadium. And the digitalization of the secondary market for ticket sales has made prices for the events more in line with what the market desires. This is a good thing. It is highly likely that prices for spectator sports in every major league will eventually have to fall in the future, and variable pricing might be the first step in that direction.

Posted by Darrin Duber-Smith

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