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Marketing

Customers as Logistics Agents: Walmart’s New Idea

It’s no secret that Walmart saves its shoppers lots of money, but according to Dale Buss’ brandchannel post, the retailer may also start paying them for making deliveries.

Currently, Wally World’s online orders are filled at the nearest store, and then delivered by FedEx to the customer’s address. Under the proposed supply chain, those deliveries would instead be made by fellow Walmart shoppers who would volunteer their time and gas in exchange for store credit.

The idea would certainly “save money”, both the company’s and shoppers’, but will customers “live better”?

Buss warns of problems that could arise and is not sure if “crowdsourced” delivery is the best solution for the innovative retailer, and I agree with him, but not for the same reasons. He names sticky fingered drivers and customers’ unreliable cars as the main pitfalls, failing to realize the take-out food business has proven that, by and large, amateurs being paid next to nothing can be trusted with small deliveries.

However, while theft and untimeliness can be reported and dealt with through measures such as charging a penalty to the deliverer’s credit card, what cannot be remedied is the inconsistent service online shoppers would receive. This is in conflict with the strong corporate culture Walmart instills in all of its employees. Moreover, one must remember that online shopping is done not only by lazy young people, but also by the elderly and infirm who cannot leave home, and by those who live in remote locations. The former may feel especially vulnerable and would not appreciate having un-uniformed strangers showing up at the door, while the latter would probably have to wait a long time for someone willing to deliver to their address.

Walmart’s delivery idea would only stand a chance if measures were put in place to assure at least some consistency. While they’re at it, why not let customers volunteer to staff a few cash registers on busy days.

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Marketing Technology

Buick Shifts Gears

Daniel Barends’ blog entry about Blackberry’s brand repositioning attempts made me think of an even older brand currently reinventing itself. In both cases the idea is to attract new consumer segments, but can these brands really become everything to everyone, or will they end up meaning nothing to no one?

Not so long ago, the thought of driving a Buick would make many non-elderly people say “B-ew! ick!”. While I have always had a thing for large sedans (preferably with a vinyl roof and whitewall tires) General Motors agreed with those who saw a problem with the car division’s brand image. For the past few years, GM has used the 4Ps to reposition the conservative, affordable luxury Buick brand into a more youthful and up-market one.

Buick was well known for its comfortable and conservatively styled models.

Product

Recent additions like the Enclave, the new Regal, and the Verano are more compact and style-oriented than their predecessors.

New models like the Verano feature more aggressive styling and sportier handling.

Price

The use of price incentives has been much lower with Buick than with the other GM brands. In addition, low-price fleet sales to car rental companies have been greatly reduced in order to improve resale value and shed the “rental car” image.

Place

In 2012 Buick introduced new design and amenity standards for its dealerships. Over the next few years, it hopes to have most of its 1,900 Buick/GMC dealerships renovated.

Promotion

No expense has been spared in communicating Buick’s new image. Famous middle-aged people like Shaquille O’Neal and supermodel Marissa Miller have been featured in advertisements, all of which stress the innovative features and stylishness of the new models.

So far the repositioning has slightly reduced Buick’s average buyer age and has increased retail sales by 80% since 2010. As for those of us who miss the old Buick, there is still hope that vinyl tops will make a comeback.

Categories
Marketing

Despite Decline, LEGO Rebuilds

boardgames

For many companies in a declining product segment, simply staying in business is an accomplishment.

As physical toys are being replaced (like so many other things) by computer/tablet/cell phone screens, toy makers like Hasbro and Mattel are facing challenges. Americans per capita are spending 30% less on traditional toys/games than they did in 1998. To make matters worse, the new digital games market has proven to be much less profitable. Barbie must be losing her head.

Kindle-child

But the news is not all bad. Proving that niche companies fare well in shrinking segments, children’s building block maker LEGO saw a 25% increase in revenue last year, thanks to a successful product line expansion. Furthermore, while several brands of dolls and action figures crowd store shelves, LEGO maintains an 85% share in the building block market. As a company with a highly unique product and strong brand, it has a better chance of surviving the segment shake up.

Meanwhile with brands like Parker Brothers and Milton Bradley, its a roll of the dice.

 

Categories
Marketing

Hocus Pocus Focus Groups

Millions of dollars spent on market research in the early 80s had the team at Coca-Cola convinced: people, especially the younger demographic, preferred the sweeter taste of Pepsi.

In fears of losing even more market share to its younger competitor, the beverage maker developed a new Cola that beat Pepsi in taste tests. The positive response from focus groups convinced Coca-Cola to abandon its original product in favor of the newly formulated “New Coke” in April 1985.

Unfortunately, as Coke turned sweeter, loyal drinkers turned bitter. Customers responded with angry phone calls and protests. Pepsi celebrated the move and ran advertisements claiming victory in the “cola wars” and ushering in “the Pepsi generation”.

 

 

 

 

 

 

 

 

 

https://www.youtube.com/watch?v=z7Zz-QJCISo

By July, Coca-Cola had realized the inaccuracy of its market research and brought back the original formula.

So why was The New Coke a favorite in blind taste tests but not among real consumers? Firstly, they tested for only one variable: taste, while ignoring factors like strong sentimental value that contributed to sales. Also, taste testers only tried sips of each drink, which is not a realistic simulation of how the product is actually used. Lastly, the research did not differentiate between the more important opinions of loyal customers and those of occasional cola drinkers.

Marketers must make sure that their information truly is “The Real Thing”.

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