"Buy the Way…" Insights on Integrated Marketing Communication

Since Google released Google Places app for iPhone early in this year, location based services (LBS) becomes one of the most talked topic in the mobile marketing field. Those mobile apps can offer people navigation (e.g. Lonely Planet apps), allow them to obtain information and leave comments on stores (e.g. Yelp), and help them win discounts and coupons by simply “checking in” to shops (e.g. Foursquare).

How can LBS attract users? One reason could be the convenience it may bring to people. While accessing information it self is no longer a problem with the explosive growth of internet, the consideration of LBS is to enable people to access what they want whenever and wherever they want it. Therefore, the core is to integrate the three factores – information, time and places together, to create the convenience for people.

Moreover, LBS also contributes to the Online to Offline(O2O) commerce that is now using discounts and coupons to attract people. Technologies such as QR code and Near Field Communication (NFC) are nurturing possibilities for future business. Other business models such as Groupon are aslo trying to be integrated into the trend.

Except for the information and money factors, it is worth to look at other incentives for people to use LBS. While LBS is trying to take advantages from social media (e.g. facebook places) to maximize its marketing effectiveness through the word of mouth, it is the time to think about why people are willing to share their geographic information to others.  Does the fact that“ I have been to this restaurant/theater/concert” say something about myself? Why I want to show to others where I have been/am/want to visit? Will the information of “I am now here doing this” enable me to connect to people physically around me? The purpose of using LBS may not just be finding information about one place and spend less money there. It could be using the places s/he have been to express themselves.

Source: apps.facebook.com/whereivebeen/

While the existing apps and websites are mostly focusing on the first two incentives, the third one of self expression and social interaction are usually ignored. It would be great to see if the three incentives can work together for future LBS applications.

References:

1.Geolocation&Location Based Services – Opportunity Knocks: http://www.webmapsolutions.com/category/mobile

2. O2O Commerce is the New Hot Methodology for Local Business: http://www.buzzle.com/articles/o2o-commerce-is-the-new-hot-methodology-for-local-business.html

3. Why social Media Should Welcome Location-Based Services: http://www.businessweek.com/technology/content/sep2009/tc20090927_138649.htm

The growth in Web-enabled mobile phone usage is revolutionizing the way we use the Internet. The reason of dramatically increasing mobile internet usage can be attributed to the prevailing of  iPhone and Android devices in the consumer market and the BlackBerry in the enterprise space. According to an eMarketer forecast, by 2014 an estimated 53.9 percent of mobile phone users in the United States will access the Internet through a mobile browser or application. This translates to about 44 percent of the total US population.

The skyrocking mobile Internet usage will have a profound impact on the way businesses and content providers reach their audiences on the Internet. Any organization that is serious about reaching mobile Internet users will need an engaging and efficient mobile Web presence.

A substandard mobile Internet experience has wide-ranging implications. A study by Gomez, a leading Web performance monitoring group, found that mobile Internet users who had a bad experience on a mobile website were very unlikely to return. A total of 61 percent of users said they would be less likely to visit that website again. Worse, 23 percent of respondents said they would be less likely to make a purchase from that company, while 19 percent said they would have a negative overall perception of the company. Additionally, 40 percent of users said they would visit the website of a competitor that offered a similar service. The fact is when it comes to mobile Web presence, businesses have very little margin for error. 

Businesses catching on to the mobile Internet revolution often equate a mobile Web presence with a mobile application (often referred to as apps). Mobile apps certainly have a place in the market but there are pros and cons to consider.

First and foremost, mobile apps are costly to build. The average cost of $25,000 to build an app will never be an issue for a Fortune 500 company but is prohibitive for a large majority of small and medium-size businesses. Keep in mind this is the estimated cost for an app built to run on a single mobile platform. Building an app for the three major mobile platforms in the market—iPhone, BlackBerry and Android—could multiply that cost substantially. Apps also need to be maintained and upgraded, which further add to the total cost of ownership.

In many ways mobile apps are a bit of overkill for the average user. And if the level of engagement with the company’s product or service is not high, the end user is unlikely to consistently interact with the mobile app. In many cases it is a specific functionality or service that compels the end user to repeatedly use an app. Moreover, apps have limitations in introducing brand equity and value. So that in most cases businesses don’t need a mobile app. What they need is a mobile-optimized Web presence that solves the issues related to quick delivery of critical information and core functionality. A mobile website does not require downloading and setting up user names and passwords. Access is always readily available because logging on to a browser is still the most popular and direct path to content in any online venue.

Ultimately, a business can live without a mobile app, but a properly optimized mobile website is indispensable and the foundation for any organization serious about penetrating the growing mobile Internet population.

I travelled to South East Asia over my spring break, and one thing that I soon became aware of in the region was that Facebook was inaccessible! Image my horror! Well that was the case in Vietnam at least, where the government restricted the Internet access after the elections. Once we find ourselves in Facebook-less situations, we realize how important a part social media plays in our lives, and how perhaps the focus of our social lives has shifted onto the online platforms. Sad, but true.

China is another example of a country where Facebook and Twitter are banned due to government concerns that the social networking system could be a portal for Chinese citizens to see a different way of life and thus disrupt “social harmony”. The social media world without China though is definitely not a connected social media world with 1,6 B people out of it, and the Chinese net economy potential is too huge to be ignored.

That is why the Facebook creator Mark Zuckerberg traveled to China recently. The news is leaked that he has made a deal with Baidu, China’s biggest search engine (Google is not present in China either because they were not willing to agree to censorship enforced there) to create a new social network not connected to Facebook. So what happened to one world, connected? Chinese already have social networks, Renren and  Kaixin001 (95 million users)  being the most popular ones. They started as Facebook copycats, like dozen others in China, where even the visuals, the colors, the toolbars are literally copied from Facebook, but they are now driving innovation and gaming. Renren, a social network leader with 165 million users, is also a site where people can find love, post their requests, thing they need, which is the first site of its kind in China. These social network sites are the best mirror of China today. Chinese are much more interested in posting online, chatting in chat rooms, blogging, and much more susceptible to ads and marketing. That is why all the luxury fashion brands have flocked to Chinese social networks. The explanation why social networks are so popular among the Chinese, may be in the fact that many of them have for the first time gotten a chance to express themselves personally in a society where the collective has been emphasized over the individual. Social networks are especially popular among young people born between 1980 and 1990, who have gotten a new platform for self expression.

Baidu’s goal here is clear-to use Facebook’s technical and branding expertise in order to create a social network that would topple the current social media leaders in China. Facebook on the other hand, has a lot at stake here. If they want to operate in China they have to abide by the Chinese laws that impose self censorship and spying on user activity. Operating publicly in a country with a horrid human rights situation, will definitely tarnish the Facebook reputation, and providing the country with an addictive network could be seen as providing them with another tool to control its people.  So one world, connected is not in the cards any time soon-more money for Zuckerberg-most likely. How much is enough?

This was a great article and study published by Forbes on April 5, 2011, that I wanted to share here on the blog.  Their study focused on America’s most and least reputable big companies and was compiled in the first quarter of 2011 by Reputation Institute, a private consulting firm. Their method consisted of conducting an online study among 32,946 consumers which measured their perceptions of those companies among the 150 largest in the U.S. that they were “somewhat” or “very” familiar with. Each company earned a “RepTrak Puls” score of 0 to 100, representing an average measure of people’s feelings–or reputation–for a company. The scores were statistically derived from four emotional indicators: trust, esteem, admiration, and good feeling.

Reputation Institute then analyzed what it calls the seven dimensions of corporate reputation. That’s where it found that perceptions of the enterprise (workplace, governance, citizenship, financial performance and leadership) trumped product perceptions (products and services plus innovation) in driving behaviors.

The big winner was Amazon, the big loser was Freddie Mac.  To read the complete article click here.  The Top Ten Reputable Companies can be found in the list below:

2011 Rank	Company	Stock Ticker	RepTrak Pulse 2011	RepTrak Pulse 2010	Change vs. 2010	Industry
1	Amazon.com	AMZN	82.7	76.94	5.76	Retail – General
2	Kraft Foods	KFT	81.4	84.84	-3.45	Food – Manufacturing
3	Johnson & Johnson	JNJ	81.32	85.82	-4.49	Consumer Products
4	3M	MMM	81	77.15	3.85	Industrial Products
5	Kellogg’s	K	80.87	82.78	-1.91	Food – Manufacturing
6	UPS	UPS	80.46	78.93	1.53	Transport & Logistics
7	FedEx	FDX	79.63	77.59	2.04	Transport & Logistics
8	Sara Lee	SLE	79.53	80.04	-0.51	Food – Manufacturing
9	Google	GOOG	79.25	79.31	-0.06	Information & Media
10	Walt Disney Company	DIS	79.02	82.11	-3.09	Information & Media

With global markets being saturated with a variety of different companies producing the same products, companies are finding solutions to make themselves stand out, with extra features, creative marketing strategies, and funky designs.  Are they just gimmicks, or are these features essential to our “entertainment experience?

What is a gimmick?  Wikipedia defines this terminology as “an unique or quirky special feature that makes something “stand out” from its contemporaries”. From smart phones to 3D TV, current technology and science allows companies to create extremely innovative ideas and “gimmicks” to add onto their existing products.

Batman: Arkham Asylum re-released in 3D

Obviously, the practice of re-releasing an existing product with added features has been around for years.  Companies do it all the time.  And the idea of adding 3D to EVERYTHING is definitely the current “trend” in marketing at the moment.

So, when companies re-release products, who are they targeting?  Hardcore fans that are willing to shell out cash for products that they loved the first time around with added bonus features?  Or are they trying to seduce those who didn’t buy the product the first time around?

It’s no secret that when the iTunes store sells you songs at 0.99$ /song, the Music companies in fact make more profit per song than on sales of entire CDs.

The way this model works is focusing on volume capitalizing on the fact that smaller quantities make up greater profit margins.

In my country (India), this very same model goes into consumer products and has made huge changes in the entire market.

In a country with a population of more than a Billion, where 70% of the population lives in Rural India, the focus for the Indian market has always been value-for-money.

Shampoos, washing powders, liquid soaps, shaving creams and even tea are sold in small sachets, which research has shown ,makes up for upto 70-80% of their total sales (this is consistent across all companies, right from Dabur, the Lever Brothers, to P&G).

It’s unbelievable how successful this model is. Let’s try to analyze the reasons for its success.

Reason 1: Saving is a part of the Indian Population’s culture. Right from an early age, kids are taught to save and spend wisely.(not in a miserly fashion, but wisely) . As a result of this, when there is a perceived value-for-money opportunity in the purchase of a certain product, it becomes a hit.

Reason 2: Companies in reality, tend to make more profits in the long run

200 ml = 120 Rs

6 ml sachet = 3 Rs

So, if one does the math, the companies tend to make greater profits in the sales of sachets.

Reason 3: Low-income groups too have a desire to try out premium products. Since affordability is an issue, they earlier wouldn’t have even considered trying out these premium products. However, the sachet gives them an opportunity to get to know about quality products as well.

Reason 4: Since Indian consumers have a value-for-money mindset, they always like to try out premium products in order to see if it’s really worth the price. The sachet lets them try out these products.

This model is now going beyond sachets too.

Even cell-phone providers such as TATA docomo are providing micro-plans and charging on a per-second basis instead of a per-minute basis. And some other cellphone providers are charging on a per-day basis.

Micro-finance has transformed the world in more ways than one could ever expect.

So this decade has been the decade of the micro and it wouldn’t be wrong to say that the more we try to introduce micro-concepts into different areas of marketing, the higher the chances of success.

Time Warner Cable is under attack for their new iPad App that allows users with iPad’s to watch their subscription cable TV anywhere in their home on their iPad.  This new App that Time Warner released on March 15, 2011 has already been downloaded by 300,000 customers, but has received a surprisingly negative backlash from programmers that has included at least one or more documented cease and desist letters sent to Time Warner.  Time Warner’s Chief programming officer Melinda Witmar said, “We certainly did not anticipate that programmers would be unhappy about this in any way. TWC has received a number of inquiries and there are definitely some programmers who said they don’t agree… (we) have been sent “one or more” cease-and-desist letters but so far there has been no formal lawsuit lodged over the TWCable TV app.”

I can’t understand why programmers would be against this?  I mean it just allows the subscriber to get the cable content they are paying for anywhere in their home and increases the chance that they are watching the programmers’ programs and seeing their advertisements, right?  Can anyone explain to me why this would be a bad thing for the programmers? Do you think this is an issue of the programmers not fully understanding the technology here?

The second thing I found interesting about this story is that Time Warner has now responded by creating a website entitled, “http://iwantmytwcabletvapp.com/”

This site is for customers and other interested parties to weigh in on the issue and provide feedback.  The four links featured are Home, Behind the Scenes, Join the Discussion and What You’re Saying.  It also has a live Twitter News Feed from Time Warner Cable embedded on the page.  This approach to “fixing” the problem is fantastic and something I think we will see more and more of in the years ahead, companies turning over the issue to the masses through social media and discussion platforms.

Questions:

Do you think the backlash from the programmers in response to the App is an issue of simply not understanding the technology or something more?

What risk does a company run when they turn over an issue to the masses through social media?  How do they moderate/keep it in control without being too restrictive?

Sources:

http://blogs.forbes.com/dorothypomerantz/2011/03/30/time-warner-cable-under-attack-over-ipad-app/

http://www.multichannel.com/article/465946-TWC_s_Witmer_We_Didn_t_Anticipate_iPad_App_Backlash.php