Sunday, October 24, 2010

Marketing in a Minute + 200th Posting

It's been a long time coming but the Bright Ideas Blog has now reached 200 postings; a small feat for a consultancy with over 10 years of experience. A digital cake is in order.

Rather than a long-winded insight, I wanted to share a few real-life initiatives that I've come across over the last few days.

As I discussed in a separate posting, one of the best ways to grow a business in a recession is through product extensions. The above is another way; to increase the frequency of purchase, especially for consumables. This may be excessive for a burger advertisement, although Burger King does actually serve breakfast. Does an ad like that work? It all depends whether consumers find that Burger King is in their decision matrix for breakfast. Marketing research and product development to the rescue.

Spotted at the GO Bus Station at Union Station

The next is a take from Japan's preference and saturation of vending machines to sell everything and everything. Need that last minute scarf or tie? Mark's Work Warehouse has got you covered. Apart from clever positioning for the downtown business unit and seasonal product placements, it acts as an active advertisement for their brand as a whole. The company was founded on clothing friendly to trade workers; overalls and spill-resistant clothing. Only within the last few years have they taken a functional as opposed to fashion approach to designing professional clothing. Their benefits include shirts that repel stains and never need to be ironing. I believe that the vending machine serves more of a purpose to expand this helpfulness of the brand than counting on the volume of scarves it can sell at a high mark-up.

Spotted at the Union TTC Station

The last one for now is our good 'ol friend Uncle Ben. A new set of ads has blanketed the downtown core, hoping that everyone gets back in touch with him. Another ad read: "Why yes, I'd be honored to join you for dinner. I can be ready in 2 minutes.". A third? "The faster our lives get, the more sense BISTRO EXPRESS rice makes." It was really strange that I personally felt a draw to the ads. Growing up with the iconic orange boxes was a throwback to Uncle Ben himself. It might be tempting to imagine it targeting the baby boomer generation, but it is likely slightly younger; 25-35 not unlike me that grew up with the brand but have long neglected it for fast food or other prepared food options. Authentic and nostalgic is challenging to achieve without being cheesy or patronizing. Uncle Ben making a comeback is very much the former.

Wednesday, October 13, 2010

Mobile Wars: PublicWiMob vs. Robellus

It seems that everywhere you go that there's a new mobile carrier popping up, and its turning Canada into a veritable battleground. The prize for winning the war on attention? The Canadian mobile market, consisting of millions of people and businesses. Personally I love the mobile industry. What could be better than having low variable costs, high customer switching costs and guaranteed revenue for the life of a two or three year agreement (assuming you have already invested millions in cell sites)? Up to about a year ago, all the mobile carriers provided the ssame basic service (cell phone service), very similar phone options at almost identical price points. The only real differentiator amongst the industry was brand, and even then it was controlled by three major carriers with numerous sub-brands. It unfolded similarly to how a large CPG company works; introducing "flanker" brands to their "anchors" in order to squeeze out other potential competitors based on positioning.

This is actually a fantastic deal.

New entrants in the mobile industry are nothing new. However, previous to the Canadian government selling off new cell phone bands new entrants were forced to enter in shared use agreements with previous mobile networks to piggy-back off of their network. This really crippled their ability to be a major player in the Canadian mobile landscape. The large operators could simply raise their fees or terminate agreements altogether should they become too popular. Virgin Mobile (who operates off of Bell's network) has been highly successful in replicating their mobile brand model to Canada, although it remains a minor player within the industry. Until mobile operators could invest in their own cell cites and completely control their value chain, it would be impossible to drastically shift the industry.

Now let's welcome Wind Mobile, Mobilicity and Public Mobile to the stage. Tens of millions in investments later, they have a (relatively) strong network within some major metropolis areas (quasi-Nationally in the case of Wind) and they opened retail locations amidst a struggling industry. Its now become a revenue game for them; how many current mobile subscribers could they entice to a new and unproven mobile network? And almost more importantly; how?


There are a few sore touch-points when it comes to mobile providers. These include: price, contracts and customer service. And it's not surprising then that all the marketing communications of the mobile entrants touched on at least one of these three points. Not surprisingly, I would suggest that 90% of the ads had something to with respect to price. Either it's a $150 porting credit, 20$ off a plan for a year or student rates. There always seems to be some sort of significant concession to get people to pay attention to the new entrants. Generally this wouldn't be a cause for concern, however unlike the current large operators, the new entrants don't have a contractual agreement. This means that once the price promotions over; there's nothing to stop consumers from switching carriers, especially if a competing network is also willing to make price concessions.

Someone's working in the humour department. Spotted @ Yorkdale.

This can be a huge concern if the only differentiator between competitors is price. But it isn't. Behind these new entrants is more than just trendy logos and low prices but brands that are designed to be the most drastic change to the mobile industry. Their contract is an implicit one. By listening to the customer they're hoping to create a new generation of brand-loyal consumers. I recently had the opportunity to attend a fantastic American Marketing Association (Toronto Chapter) event on gen Y; 17-29 year olds in today's environment. Two of the most important touch points for the group as it pertains to marketing communications is to be authentic and genuine. It's something that is whole-heartily adopted by the new entrants, yet evidently overlooked by the previous players. The latter group is therefore left scrambling to re-position and introduce new sub-brands in order to give an appearance of new. It would've been much simpler to start a movement as opposed to initiating a shift.

Wind Mobile has arguably been the most successful of these new entrants, with official subscribers of at least 100,000 although current numbers are almost certainly higher. They're also relatively national in their presence when it comes to major Canadian metropolises. Their communication platform is based on having a "conversation" with consumers: activelty listening to their needs and being transparent in their operations. It's the service that the largest players outsource, which is hugely detrimental in a mobile marketplace no longer represented by an oligopoly. When it comes to selling the same service with new competition (and no contracts to enforce high switching costs), brands are all that's left to sway customers. Communication therefore becomes hugely important; and outsourcing your UVP is a certain way to infuriate customers.

My main concern however is with respect to the long-term strategy of the new entrants. Once the price concessions die off (they can't last forever), and the network is more robust, will consumers still stand by them or simply be enticed by the phone subsidies and stability of the large operators? It's been predicted that all the new entrants will eventually consolidate and become a single new entrant. But doesn't that mean we're right back to where we're started? It also implies a huge risk for Wind (likely the largest operator in the future and therefore most likely to pursue M&A fueled growth). Assuming they acquire all the customers how will they keep them without forcing them into contracts? Either customers will choose that Wind's way of operating is what they want and they force the rest of the industry to stabilize competition, or as previously mentioned, Wind gets forced into a situation where contracts become the norm (much the same way Virgin Mobile started and then subsequently ended up).

Personally I'm a huge fan of the new entrants. There's a veritable David & Goliath struggle right now, and as a victim of Robellus, I'll fight tooth and limb for no other reason than they're the little guy. Anytime people start discussing their frustrations with their mobile providers I become their salesman. Another outcome of their paradigm-shattering culture is that I find myself always paying my bills on time, preferrably in cash. Sure it takes longer to line up in person, but I feel better that they don't have to pay the 1-2% merchant fee. The old idiom of voting with your wallet definitely holds true here. I just hope that others choose to do the same.