22.7.09
Harvard's John Quelch: How to Market Luxury in a Downturn
One of the best-known academic minds in marketing talks about the two types of luxury consumers, and how to hang onto them in a recession.
Two types of luxury consumers
I divide the luxury market into “must-haves” and “wannabes.” Members of the first group have incorporated luxury into their lives and seek to retain that lifestyle in the face of recession. Very high net worth individuals occupy the top rung of the must-haves. They are largely inoculated from the downturn. Even if they’ve lost a lot of money in the recession, they are still ultrarich. On the other hand, those must-haves who have become financially strapped are now buying luxury items at lower price points or buying them less often, but never compromising on quality.
The luxury wannabes view luxury aspirationally, occasionally investing in luxury purchases in order to touch luxury without immersing themselves in it. They would never buy (or probably would never be able to buy) a Ralph Lauren suit. But they can afford a few lower-cost accessories such as a polo shirt with the logo.
Hold on to these customers in this economy?
You have to figure out how your customers’ behavior has shifted. Can you enable your more price-sensitive customers to continue to patronize you? It’s a balancing act, because you don’t want to taint the image of the brand.
This is more challenging at a time when cash-strapped companies are reducing spending on market research that could help them learn just how to reach those customers. Most large companies in the U.S. are cutting their research budgets by 10 percent to 20 percent. To adjust to this shift, I urge marketers to focus their research on the products, brand, and markets that are key to their strategy. Don’t waste resources on peripheral or potential consumers.
Discounting? is that always a bad idea for luxury brands?
Of course, discounts, if overdone, can detract from brand quality and the credibility of retail list prices. But modest, often unadvertised discounts on selected or discontinued items need not dilute brand quality. In fact, during a recession, even some luxury must-haves are hurting and need a helping hand in the form of a price cut from their favored brands.
“Simplifier.”a new kind of consumer
Simplifiers predated the recession, but the recession has accelerated the trend. These are people who trade down to a simpler lifestyle than they are able to afford. In particular, they seek to reduce the scope and scale of the stuff they own, because they simply find it too aggravating to maintain and less emotionally satisfying than they expected. Often, as they grow older, they place more value on — and invest more money in — experiences instead of possessions.
Savvy marketers will keep this new Simplifier in mind when creating an argument for their product or service.
21.7.09
Tampon “drop” stunt
Libresse Tampons shower Dutch beaches in little pink parachutes
Brand: Libresse Tampons
Geography: Holland , June 2009
Objective: to remind all females on the beach that their best bikini friend is the good old fashioned tampon
Insight: The idea came from recent research that showed only one in seven women actually go to the beach when aunt Flo is visiting. Libresse wanted to remind girls of the practical side effects of tampon wearing, like the ability to take a swim. Dear Libresse, that's not actually why we avoid the beach during the moon-phase, but I'll give you ten points for effort
Action: Over 3,000 little pink parachutes with "emergency supplies" were air dropped down on the beaches, and women scrambled to get their cute free samples
Results: all targets were reported “Direct Hit”
2009 brands failed report
2009 is 50% over, In May alone, 376 companies per day sought protection from creditors in bankruptcy court, according toAacer’s court records.Everyone was affected, from small, family-run outfits to major corporations.
It’s worth noting that when a brand dies, it doesn’t necessarily get buried, the way humans do. Some brands, like Circuit City, are resurrected in a different form. Others, like Saab, go dormant, then reemerge in a new form. Still others find themselves gobbled up by bigger fish.
Sterling trucks
Sterling Trucks, originally Ford’s heavy truck division, was declared a goner by Daimler Trucks North America (DTNA) in March 2009. The brand encompassed a range of heavy trucks and tractors, including snow plows, garbage trucks, landscaping, and other vocational vehicles. With Sterling gone, DTNA will focus its strategy on its other two heavy truck brands, Western Star and Freightliner.
Circuit City
Circuit City liquidated in 2009, after 50 years of operation. According to the company’s now-defunct investors page, more than 30,000 employees were laid off. Hardware company Systemax purchased the Circuit City brand in May, which it now uses at circuitcity.com, an online version of the old retailer.
Home Depot Expo
Home Depot’s yupperific counterpart closed its doors in April 2009, shedding 34 stores and 7,000 employees. Home Depot admitted in a statement that Expo hadn’t even performed well during the housing boom. Now home flippers will have to settle for plain old Home Depot, the way they always did.
Max Factor
Proctor & Gamble announced in June that Max Factor will be pulled from American shelves by early 2010, according to TradingMarkets. The company will put its resources into the Cover Girl brand. Max Factor will continue to be sold abroad, where it continues to be a fast-growing brand.
White Cloud Diapers
This cheaper alternative to Huggies, Luvs and Pampers, was discontinued in spring 2009. Many mothers grieved the loss of the brand, which was sold exclusively at Wal-Mart.
MSN Encarta
When Microsoft launched Encarta in 1993, the multimedia encyclopedia was a revolutionary concept. Encarta integrated Funk & Wagnall’s, Collier’s, and the New Merit Scholar’s encyclopedias into its 62,000+ article collection. As of October 31, 2009, Encarta will cease to exist. Wikimedia’s Jimmy Wales has approached Microsoft about picking up some of Encarta’sinformation for free.
Monson Trucking
Duluth, MN-based Monson Trucking will be closing its doors on August 31. The family-owned business had been in operation for 94 years before two of its biggest customers declared bankruptcy, forcing Monson out of business, too. The company was run by four generations of the Monson family. (From the Journal of Commerce.)
Mac Homepage, Groups
Apple launched HomePage with iTools in 2001. July 7 marked the date when you could no longer edit or create new pages. iWeb, which publishes websites and blogs, will replace Homepage. .Mac Groups, on the other hand, will be taken offline on July 7. MobileMe members will have access to their archives, but all group HomePages, message boards, group email addresses, and iDisk Groups will be removed.
Pontiac
Pontiac, creator of the fabled Bonneville and GTO, will be phased out forever in 2010. GM announced the sad news on April 27, 2009, burying Pontiac on a plot in its ever-expanding brand graveyard.
iPhone bluetooth headset
In April 2009, Apple removed its iPhone Bluetooth Headset from the Apple Store for undisclosed reasons. The Apple Insider speculates that the company will either release an improved,iPhone 3.0-compatible version sometime in the future, or it is backing out from the accessory business entirely. Time will tell.
Kodachrome
Kodak retired Kodachrome one year before the product’s 75th anniversary. 70% of Kodak’s business revolves around digital products, according to a company statement referenced in the LA Times. This leaves no place for Kodachrome, which is nonetheless forever immortalized in the Paul Simon song.
Rocky Mountain News
The Rocky Mountain News was one of many newspapers whose future was shredded in 2009. Its story represents a universal newspaper story. In February 2009, one of Denver’s two newspapers published its last edition. Owner Scripps Howard News Service said that even if the newspaper went online-only and revenues grew at 40% per year for five years, “they would still be equal to the cost of one newsroom today,” according to a RMN article. The paper was 150 years old. Scripps owned the paper since 1926. It lost $16 million in 2008 alone.
Hummer
Chengdu’s Sichuan Tengzhong Heavy Industrial Machinery Company scooped up GM’s Hummer brand for less than $500 million (estimated) this June, according to the New York Times. The Chinese company plans to sell more fuel-efficient versions of the trucks, says the Times.
Goody’s
Tennessee-based Goody’s closed 287 stores in April 2009, The company had managed to reorganize after filing for bankruptcy last June, closing underperforming stores, cutting operating costs, and terminating its e-commerce business. But a poor holiday season and slow retail environment killed the company, which had been around since 1950.
Factor 5
22-year-old video game developer Factor 5 shuttered after Brash Entertainment, its main customer, closed its doors in spring 2009. Factor 5 was behind the Commodore 64’s Turrican, if you can remember that far back. Other games include Lair for PS3, Star Wars: Rogue Squadron I/II/III for Nintendo 64/GameCube, and a series of Atari, Amiga, GameBoy, and Super Nintendo games.
BearingPoint
In 2006, BearingPoint was one of Fortune’s “Most Admired” ITservice companies. Just three years later, the company sold off its North American Public Businesses unit to Deloitte and its Global Practices and Commercial Services businesses to PriceWaterhouseCoopers. Predictably,you won’t be seeing the BearingPoint name on the PGA tour anymore, either.
Hard Rock Boulevard
This is the story of rebranding a street. When Myrtle Beach, SC-based Hard Rock Park, a Hard Rock café-themed park featuring six “rock environs” with names like British Invasion and Lost in the ‘70s, folded in mid-2008, its new owners figured a little rebranding might keep it alive. In mid-2009, the park was reborn as Freestyle Music Park. Unfortunately, the new name did nothing to boost the flopped park’s reputation, reports the Wall Street Journal. Now, the owners want to rename the road it’s located on—Hard Rock Boulevard–as Fantasy Harbour Boulevard. Only time will tell if the new street name removes the music park’s scourge of failure.
Agape World
Ponzi schemes have brands, too. Agape World, listed as #73 on last year’sEntrepreneur Hot 100 Fastest-Growing Businesses in America, cheated investors out of $380 million through acommercial bridge lending scheme, writes the Wall Street Journal. Founder Nicholas Cosmo now sits in jail on fraud charges, while investors are agape at Entrepreneur for unwittingly promoting a Ponzi scheme.
Gottschalks
Founded in 1904 as a dry goods store, Gottschalks expanded to become one of the largest department store chains in the country. The store filed for Chapter 11 bankruptcy in January, then starting liquidating at the end of March 2009.
Linux Smartphone
The Openmoko Neo FreeRunner, the firstLinux smartphone, lasted a mere 10 months before being discontinued. The device was supposed to be the world’s first open-source hardware and software smartphone, according to Heise. Creator Openmoko pulled the phone amidst heavy staff cuts. They are now working on a new device; however, it’s not a smartphone.
I Like My Sprite In You,Sprite Oral Sex Ad Banned In Germany
Sprite has removed the video from Youtube...why? white chick blowing black’s man thingy? Maby??
and this ad reminds me with another evocative ad by Perrier
Credits:
Agency: Langelaan & Cerf
I love my acne...
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Traffic Light Dance Off.
Streets attacked by Red, Green, Yellow dancers to promote a dance festival.
The festival is Woking Contemporary Dance Festival and the dance is called Traffic Light Dance Off.
Client:http://www.wokingdancefestival.co.uk
Agency:Lethal Design + Branding
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Stretching 60 metres across and featuring blue halo lighting, sculptured front-lit lettering 2.5 metres tall and a variety of 2D cut-out cha... -
Creating online content is easy. However, creating actionable online content without using the right tools can be quite challenging. The g...
