Darrin C. Duber-Smith
Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, Inc., and senior lecturer at the Metropolitan State University of Denver’s College of Business. He has almost 30 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 was a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market/industry model and was leader of the first U.S. industry task force that helped frame the Natural Products Association’s definition of natural (c. 2005). He has published over 80 articles in trade publications and has presented at over 50 executive-level events during the past 15 years. A frequent media contributor and recipient of The Wall Street Journal’s In-Education Distinguished Professor Award in 2009 and WSJ’s Top 125 Professors Award in 2014, Mr. Duber-Smith is author of Cengage Learning’s “KnowNow! Marketing” blog at http://community.cengage.com/GECResource2/info/b/marketing/. He can be reached at DuberSmith@GreenMarketing.net or firstname.lastname@example.org.
Oh those dreaded fees. Air travelers have become used to them, and these days we all have to do some math when figuring out how much our flights will truly cost when choosing among many options. This of course makes it tougher to compare actual prices, makes it easier for marketers to hide the true cost of getting from Point A to Point B, and allows for airlines to reap much in additional revenue by employing a more a la cart approach to pricing strategy. As a result, airlines are now enjoying record profits while the average price of a flight has risen almost 30% in the past year or so. Regulators have taken notice, however, and the Big Four are under scrutiny for price fixing as we speak. Nevertheless, the model has caught the attention of another, very much related industry, and now hotel surcharges are piling up at a record pace.
Surprised? Well, it has worked for the airlines, so why not employ it in the lodging business? It's simple. Just start with a very low room price to capture the attention of the target market and proceed to charge for each and every amenity. Want to get into your room early? Have an early arriving flight and want to leave your bags with the bell staff while you wait for check in time? How about canceling a reservation? Or receiving a fax at the business center? Or using the safe? Increasingly, hotels are charging for these and many other formerly complimentary services and in doing so hope to somewhat mimic the success enjoyed by airlines over the past few years, minus the regulatory scrutiny of course. So it looks like consumers will have to get a bit smarter and brush up on their math skills if they are to avoid a nasty surprise at checkout time. The a la cart pricing model appears to be here to stay.
The Food and Drug Administration is finally ready to "make it so", and implement long-awaited rules that force packed goods manufacturers to make their Nutrition Facts panels more honest. These are the panels on the labels that provide information so that consumers can make informed decisions about what they consume, and up until now, marketers have been rather liberal with how they communicate information like serving size. Ice cream, sugary soda, potato chips and other foods of questionable nutritional value have been the most common offenders, and the most common tactic is to overstate the number of servings contained in the package so that ingredients like sugar and salt as well as fats and calories are consistently understated. No more.
This all sounds like great news for consumers, but a recent study by Harvard's Behavioral Science and Regulation Group (and who would want to argue with those folks) has revealed that the new rules might have some unintended consequences, as well meaning regulations sometimes do. In short, the study found that many consumers would read the new label as somehow supporting the consumption of larger portion sizes. Another study published in the magazine Appetite supported these findings, demonstrating that many people will perceive that the new portion size (let's say one serving instead of two) is the new recommended normal and they'll eat more as a result. Now that's science! What's to be done? Obviously the government can spend money doing a national advocacy advertising campaign to educate consumers, but that's probably too much to expect. Eventually consumers will get used to the "new normal", and remember that most consumers don't really read labels much anyhow. The fix is in, and this genie won't get back into the bottle. Overall this rule probably will be a good thing, and will hopefully encourage brand marketers over time to be more honest and transparent about what is and isn't in their products.
Back in the day, Starbucks used to be all about coffee. Then it decided that it wanted to be more of a lifestyle brand and began to sell everything from pastries to custom-produced music CD's. All the while, the company expanded onto what has seemed like every busy street corner in the developed world. Recently, the big strategic move has been to vertically integrate and acquire many of the brands it sells. All of this has resulted in two plus decades of uninterrupted success. So what's next? How does Starbucks achieve further growth?
The company has been quietly test marketing the idea of selling wine and beer at various locations for a while now, and the widespread adoption of this concept would certainly be bigger than the imminent introduction of all-day breakfast at Mickey D's. Imagine a room full of people chattering away, half of them overly-caffeinated and the other group half in the bag. And that's not all. Perhaps you would like some small plate specialty food items to go with your wine and craft beer. This is also slated to happen soon. Will it work? Starbucks has already submitted liquor licenses for hundreds of select locations throughout the nation, so we can assume that the test market results have been at least satisfactory. And why wouldn't it work? Would the coffee and beer crowds experience guest conflict? Will the people enjoying a hot beverage and getting work done on their laptops or holding meetings mix well with a crowd that prefers something a bit stronger than a double espresso? This is surely an interesting development. And if Starbucks wants to be a place where people can sit and enjoy all types of beverages, then the company is probably on the right track for more growth.
Frequent users of the Internet by now are used to what has been termed behavioral targeting, the act of tracking consumer web behavior and then targeting folks based on a custom basket of demographic, psychographic, and geographic factors. Privacy issues have been largely swept aside. After all, if you aren't paying for access to content then you yourself are probably the product, and someone must pay for the content at the end of the day. Indeed the gathering and selling of user data has become very big business.
Soon television will be the latest medium to figure out how to target relevant ads to specific users by embedding software in cable/satellite boxes. The technology is available and awaiting widespread industry adoption, so your TV will soon know who you are, what you do, what you like, and where you live among other useful bits of information--just like the Internet. And as such, it too will soon be delivering ads tailored to your wants and needs. With TV migrating online, pretty soon the whole kit and kaboodle will be one coordinated, integrated, well-oiled market research machine. And privacy? In an age of social media, that's apparently a 20th century idea.
The indications that General Motors, makers of Buick and many other well-known automotive brands, would manufacture vehicles in China and ship them to customers in the U.S. rather than making them here in the U.S,. wasn't as surprising as much as it was a tad insulting to many observers. After all, "Government Motors" was a popular whipping boy in the wake of the major government bailout of "too big to fail" corporations several years ago, and so a move like this could be interpreted as a bit of a slap in the face as jobs go to Chinese workers instead of the American taxpayers that bailed the company out. PR problem? Yes indeedy!
We are all used to the idea of American companies outsourcing manufacturing so that companies can offer cheaper goods to American consumers, but over the past few years China's rising wages (combined with consumer backlash against outsourcing) have made manufacturing things over there a less attractive option, and so the cost savings and other benefits aren't as pronounced as they used to be. How will GM respond to this media maelstrom? So far the strategic move is mostly speculation, but now that GM has tested the waters of public opinion, it might be best for the company to consider domestic production for domestic consumption. Of course if most of the company's customers are in Asia, as is the case with Apple, it does make more fiscal sense to manufacture overseas than it does to make cars here and then export them on container ships. However, that is not the case with Buick as these vehicles are intended for North American consumers. So don't be surprised if the company makes an announcement in the near future that the vehicles will be made right here in the good ole USA after all. Public opinion matters in marketing strategy.
As marketing students near the end of their college careers and begin to look for gainful, relevant employment, it is helpful to remember that everything you have ever learned about brand management also applies to you. When searching for employment, you are the brand. Obviously looking good is a huge plus. The people doing the hiring want to see well-dressed, tattoo and multiple piercing-free applicants, but you won't even make it in the door unless your resume makes the initial cut. As such, you might consider utilizing the career support resources provided by every university to make sure that your resume meets contemporary expectations. There is always someone in career services that helps with resumes. In addition, a recent article by Catherine Conlan suggests that job prospects remove seven words and phrases from their resumes. These are:
1. Results-oriented: This word is too general. The applicant should be specific.
2. High technical aptitude: Doesn't need to be said. It's like a pitcher saying he knows how to throw a baseball rather than being specific.
3. Ninja, Rockstar, and other sophomoric titles: Enough with the gratuitous self-promotion already. You are probably none of these things, and they can see how great you think you are by monitoring your social media posts. You might want to edit those too while you still have time.
4. Assisted with: Say what you actually did while assisting.
5. Strong work ethic: This is not a skill or an asset, but rather an expectation of all employees.
6. Self-starter: Meaningless phrase. List projects that show that you are self-motivating and require little supervision.
7. Detail-oriented: What does that mean? Do you catch other people's mistakes or are your more of a problem finder. Again, be specific.
Indeed this is good advice. These terms were once resume standards, but have now become trite and therefore no longer help a resume stand out among the multitudes. And one typo or grammatical problem can destroy your chances of making into Pile A. Ignore this advice at your peril. It's time for you to be the brand for a little while, and crafting a perfect resume is worth the effort. Good luck!
In a recent post, we discussed the rather questionable but nevertheless common practice of "slack-filling" wherein companies use larger packaging to make the product appear larger and in some cases actively downsize the amount of product in their packages while maintaining the original package design without notifying consumers. It is helpful to think of potato chip bags that consist mostly of air when thinking of slack-filling. It might be unethical to mislead consumers in this way, but it's not illegal in most states (the FDA requires that a product state the correct number of grams/ounces after all), yet recently a civil protection lawsuit in California has shed a lot of unwanted light on this shady practice, resulting in lots of negative publicity as well as the attention of government regulators. It appears that California does have a law that prohibits the use of over-sized packaging to make the product appear larger, and that P&G is in violation of this law. In fact everyone seems to be doing it!
In response to this, Proctor & Gamble one of the leading packaged goods companies in the world and one of the most profound perpetrators of this practice has decided to settle the suit and will update some of its packaging. This is a huge step, and the important thing is that it sets some legal precedent. Marketers everywhere will be less willing to misrepresent and/or downsize their offerings, and many might follow P&G's example and reduce package sizes overall. After all, it's better for the environment, and one of the easiest ways a company can engage in sustainability. Smaller package sizes also mean less weight which makes transportation cheaper, and results in less shelf space being taken up, which provides opportunities for more product facings at the retail level. Everyone wins! So perhaps there will be smaller package sizes in the future as P&G makes moves globally to comply with California law. Yep. One state can have that much influence in the world of marketing. Pretty cool, eh?
The Entitlement Generation. Among the Millennial age cohort, it seems that everyone gets a trophy just for showing up. We've all heard about it, many of us have experienced it first hand, most of us acknowledge that it is indeed happening, but now the "entitlement debate" has taken center stage, at least for now, in our popular culture. NFL linebacker James Harrison, who has had plenty of troubles in his own right, wrote on his Instagram account last week that he had taken away participation trophies from his young children and will continue to do so until they "EARN a real trophy". He said what most of us have been thinking for a long time, and though controversial, it does seem that most of America agrees with him; and more importantly it is yet another sign that Americans may be tiring of what has been termed the Political Correctness or PC movement.
This may not be very PC for me to write, but it must be said that a vast number of people is getting fed up with how "touchy-feely" our culture has become. Make an unpopular or controversial statement in the wrong company and the PC police, led by the media, will be out in full force. You will almost certainly be vilified for being an insensitive person and subsequently bullied into submitting to whatever has been deemed politically correct. Sound familiar? In fact, Donald Trump's surge to the top of the GOP is almost certainly part of this new zeitgeist, and many Americans love what he has the guts to say even if they don't appreciate the course, sophomoric way that he says it. If Trump's popularity and the largely positive public reaction to both trump and to Harrison's statement are any indications, we might be on the cusp of a major cultural paradigm shift, as personal responsibility becomes popular again and social responsibility takes a back seat. It's all speculation now, but major shifts in cultural attitudes often begin with indicators like this.
Of course the trophy industry trade association has come out against the statement with a statement of its own. "Recently it's been rather trendy to be negatives toward participation awards and to blame them for kids feeling entitlement or not learning to be competitive. But what's really causing that? Is it really a participation award or the environment they are living in?" It is an interesting and rather defensive position to be sure, and of course the award industry has a vested interest in maintaining the status quo. But looking deeper, we see that trophies are probably just a symptom of a larger issue, and parents and schools are probably more to blame for the current unsatisfactory state of affairs. It will certainly be interesting to see how this all plays out. If a cultural shift is indeed in motion, the effects on what we buy and how brands communicate about their products will be huge.
After the U.S. Olympic Committee decided not to pursue a deal with the City of Boston, a place the organization had previously selected over several other cities to host the 2024 games, observers wondered who might step up to fill the slot. Unfortunately for the committee, overwhelming evidence suggests that holding the games does nothing but cost cities money, and there is almost always a net economic loss surrounding the event. Cities must build facilities that they have trouble finding uses for after the event is over and the local economy is severely disrupted as droves of people converge on only a few neighborhoods, leaving the rest of the city paralyzed. Simply put, during the Olympic Games it is not business as usual. Surely there are hard-to-quantify PR benefits to holding such an event as long as everything goes off as planned, but it is getting increasingly more difficult for organizers to sell the idea of holding the Games to the taxpayers that ultimately must bear the economic and emotional burdens.
This is why the announcement that LA will most likely fill the slot was so surprising. But we must remember that the city held a successful Olympic Games in 1984 and so has all of the needed infrastructure already in place, and this moribund place of my birth and upbringing could certainly use some positive publicity. LA certainly would have a lot of work to do to prepare for the event and it must beat out Paris, Rome and Hamburg, who are all expected to submit proposals. My money is on the City of Angels getting the Olympics in addition to one or more NFL teams in the very near future--some good news for a change. Let's see what happens.
Marketers who spend money on advertising would prefer that people, preferably people in large numbers, actually see the advertisements that they place. We all know that the DVR has become a major threat to the traditional TV advertising model as it has become very easy to regularly "zip" through the ads that pay for much of the content. There is no free lunch on TV, and there are also no freebies on the Internet. Someone has to pay for the content, and marketers must rely on advertising rather than direct payments from consumers since most consumers expect the stuff they get on the Internet to be free.
So when a recent report disclosed that the ad industry will lose $22 billion from the blocking of online ads this year alone, eyebrows were raised. Why is this a problem? Advertisers pay for eyeballs and the fewer eyeballs that see an ad and/or interact with it, the less the advertiser will be willing to pay to place the ad or the advertiser might eschew Internet advertising altogether. Fewer advertisers would probably result in far less content which will be of lower quality without adequate ad dollars to support the business model. One might also see a requisite increase in content that requires consumers to pony up for access, which has been a very difficult task in the 20 years since Al Gore invented the Internet (he really did say that!). But with more music, movies, and TV shows migrating online and an increasing number of consumers who demonstrate a willingness to pay a reasonable price to access Internet content, the situation might finally be changing. But this shift toward paying for Internet content will continue to be slow (and folks will only be willing to pay so much), and so content providers and the advertisers that support the content must deal with the new reality of more ads being blocked. They will almost certainly have to make these ads less invasive in the future (think about pop-ups and pop-unders as examples) and ads will have to be more engaging so that consumers will not want to skip them. They will also have to develop technologies to combat the ad blocking software currently being developed. Perhaps these will be topics at the next industry trade show. I would certainly suggest that they get started immediately.
Pay-TV companies are beginning to get nervous. For years they have been charging increasingly larger sums of money for large quantities of channels despite the fact that consumers do not want to watch many of them and certainly don't want to pay for them. Who needs three ION Television options? Or ESPN "The Ocho" for that matter? Nevertheless the dreaded "bundle" continues to evoke nationwide ire, but the providers and the producers of those channels have yet to respond to this new consumer zeitgeist.
Times are changing, and the stranglehold these companies have had on consumers is quickly diminishing as Pay-TV subscribers "cut the cord" in droves, favoring less expensive content found on the Internet. Last quarter alone, over 600,000 subscribers canceled their plans, and this doesn't even begin to factor in the fact that many younger consumers aren't signing up in the first place. Things must change soon in Pay-TV Land and we should expect to see a great deal of "un-bundling" in the near future as providers struggle to offer packages that are more reasonable priced. In the meantime, let the cord cutting continue!
After receiving a bit of negative media publicity that has been generated by both special interest groups (such as the far left Change.org) as well as activist individuals in various social media channels, Target has decided to stick to its guns and will not pull its popular "Trophy" t-shirt from its store shelves. Claims that the shirt is demeaning to women and even a Change.org petition have not changed the minds of marketers at Target Headquarters, as the company says it did not intend to offend anyone by offering the controversial shirt.
Let's face it. T-shirts are highly controversial by nature, and the folks who wear them do so as an extension of their "social selves", the part of us that we want everyone to see. Bumper stickers, tattoos, piercing, wild hair styles, and interesting wardrobe choices also serve this purpose. If a person, in this case an average female consumer, wants to wear something that demeans her in the eyes of a few activists but makes her feel good, then why should Target be concerned? After all, Target is in the business of selling things to people who want them. And the company says that the overall response to this product (as well as shirts that denote "Bride", "Mrs.", and "Team Bride") has been "overwhelmingly positive". The lesson? While marketers should be sensitive about offering products that may be offensive to people, they can't please everyone. And the beauty of living in a free country with our system of free market economics, is that people have the freedom to make choices that some might not agree with. In our age of "politically correct" behavior, it's certainly easier to cross this line than it has been in the past. But if the disgruntled folks aren't numerous enough to affect the bottom line, they should be largely ignored. Target responded to the accusations properly, and kudos to the high-profile retailer for having the guts to just say no to ideological moral pressure from special interests.
No, the U.S. Food and Drug Administration isn't watching reruns of the TV show. In truth, the regulatory agency is monitoring social media posts, and Kim Kardashian's comments in particular. Why? Apparently she has been promoting a prescription drug that treats morning sickness through various social media outlets, endorsing the wonders of #Diclegis in fighting the nausea that many women experience during pregnancy. What's the problem with this?
Celebrities endorse products all the time, but there are strict rules about what can and cannot be said in paid promotions about products categorized as "drugs". And since Ms. Kardashian is in fact a paid endorser (her posts even link to the product website), she is required by law to disclose the side effects of the drug in addition to the approved benefits, as all marketers must do in TV and in print advertising. So in the minds of the folks at FDA, it looks like social media is no different from these traditional marketing mediums in this respect, and Kim will have to either cease and desist, or somehow manage to communicate all of this information in her Instagram and Facebook posts. Clearly, this will be a Herculean task, and she can just forget about Twitter. Using Kim is smart marketing, but not legal marketing in the way it is currently being done..
From the Ministry of Very Interesting Strategic Decisions comes the news that Google, one of the most recognized brands in the world, and a truly global one in every sense of the word, is changing its name. Well, that's not exactly true. In fact, the Google search engine product will still be called "Google" since so much brand awareness and equity has been built up over the years that the name has become a generic term; however, since Google plans to further diversify its portfolio of businesses over the years, marketers want to have maximum flexibility when it comes to what they call their clever products. So what's going to happen?
I'm glad you asked! The company wants to organize its various current and future businesses under one umbrella brand and has chosen the word "Alphabet". A good brand name should be a simple, easy-to-remember word that says something about what the brand represents and fits with key brand attributes. In this, it looks like marketers have chosen an appropriate word since language is such an important part of what Google is all about. It will take a while for folks to get used to, but the term will primarily be used to describe what the parent company is doing and won't become nearly as ubiquitous as the word Google has become. It will be interesting to see what new non-search-related products Google will roll out and which brand names will be chosen to represent them. One thing we do know is that they won't all be called "Google".