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Why do Free?
Free engenders a sense of surprise, delight & excitement to your customers
Free is a welcomed invitation to generations of shoppers weary of price promotions
Free is the most powerful strategy to help your customers feel better during difficult times
Free also triggers powerful cultural norms regarding reciprocity
• At minimum, your customer will feel they owe you the favor of returning
Activation
Deploy free as an alternative to traditional price and promotion programs
• Free is always unilateral
• Free should never be tied to any other promotion (e.g. Purchase $10 worth of X and get a free Y)
Google recently announced a plan to sponsor free Wi-Fi to holiday travelers in 47 airports
across America until January 15th. This is the best kind of FREE - something unexpected,
very useful, and entirely unilateral.
+ Source:
Explore. Listen. Reflect.
Hartman Group New Value Paradigm report: September 2009
2 The New Frugality is a Myth
―Even after the worst recession of the past seventy years, retail
sales this year will be about where they were in 2005‖
Bottom Line…
We are not observing any long-term shifts in consumer spending habits in CPG
Current frugality habits (i.e. channel shifting) are near-term responses to a climate of anxiety
CPG manufacturer median sales increased 10 percent last year, down just slightly from 2007
median sales figures*
Compared to a year ago, sales over the Internet rose 15.5%**
*Source: “The 2009 Financial Performance Report: Focusing on Today, Envisioning Tomorrow”
by GMA & PwC Explore. Listen. Reflect.
**Source: MasterCardAdvisors SpendingPulse
3 Who, Precisely is a Value Shopper?
Despite the fact that I prefer lower prices, quality still matters w/r to value 66%
Assurance of hassle-free returns if I'm not satisfied with the product 64%
+Source: Hartman Group New Value Paradigm report, September 2009 (n=1000) Explore. Listen. Reflect.
3 There is No Value Shopper…
―For the better part of the past fifty years, the only lever most food and
mass retailers have ever seemed capable of pulling was price‖
— Harvey Hartman
―The largest study ever to ask whether a low-fat diet reduces the risk of
getting cancer or heart disease has found that the diet has no effect.‖
— The New York Times
The emerging pattern of scientific evidence suggests that most of what we have
assumed as common sense is, in fact, dead wrong
Exercise doesn’t appear to help with weight loss
Diet (especially a low-fat diet) doesn’t appear to be an effective treatment for coronary
disease, high cholesterol or hypertension
Vitamins and antioxidants—especially in supplement form—appear to potentially do
more harm than good
Implications
This knowledge may take considerable time to filter into the consumer community
The role of food in illness prevention and treatment will face increasing scrutiny
Health-based diets could become increasingly irrelevant
We expect supplements to encounter the biggest challenges over the long term
Bottom Line
When marketing to stay-at-home moms, think carefully about who you are talking to
The idealized portrait of the upper middle class family with a stay-at-home mom is just that
(5) The iPhone bridged the gap between consumer need, the reimagination
of cultural communication practices, and well executed design
— Malcolm Gladwell
Increasingly, analysts and trendsetters have made names for themselves by adopting the
role of the counterintuitive contrarian (CC)
Seen through the eyes of the CC, everything we thought we knew is wrong, and the correct
answer is always a simplistic, common sense truth that only the CC shaman can see
―Clever snark like this can get you a long way in career terms — but the trick is knowing
when to stop. It’s one thing to do this on relatively inconsequential media or cultural issues.
But if you’re going to get into issues that are both important and the subject of serious study,
like the fate of the planet, you’d better be very careful not to stray over the line between
being counterintuitive and being just plain, unforgivably wrong.‖
— Paul Krugman
―Since nearly every store has one, it seems like a hoop you have to
jump through just to get the normal prices‖
— Janine, 38, Atlanta
How important are each of the following with regard to store loyalty programs? Top Two %+
Retailers need new and better ways of rewarding loyal customers 74%
Most grocery loyalty programs make it seem like you are getting a better deal than you really are 57%
I get good deals at my local grocery store with their loyalty card 54%
I try to take advantage of store loyalty programs more than ever 53%
When you join a loyalty program you receive too much marketing offers & junk-mail 44%
Many benefits of loyalty programs do not relate to me or have value to me personally 40%
+ Source: Hartman Group New Value Paradigm report, September 2009 (n=1000)
Explore. Listen. Reflect.
11 Enough with the Pantry to Pantry!
Italian scientists working with computer simulations recently found that firms which promoted
people at random functioned more efficiently than those that promoted based on merit **
* * Source: New York Times 9th Annual Year in Ideas Explore. Listen. Reflect.
13 Don’t Take the Plunge into Social Media Yet
Remember AOL?
The answers to these questions represent a base level fluency in social media…
If you cannot answer at least 3 of the following, you shouldn’t be doing social media...
Are you familiar with 4chan, one of the internet’s most trafficked websites which has been characterized as “at
once, lunatic, juvenile, brilliant, ridiculous, alarming and dangerous”?
Did you know 4chan managed to deliver a pizza to balloon guy on live television?
Did you know that 4chan members have been responsible for several national security threats
Did you know its founder, Christopher Poole, will be speaking at the TED conference alongside Bill Gates?
Can you explain the differences between Twitter, Mashable, Vimeo, YouTube and Facebook?
Are you reasonably well acquainted with the Electronic Frontier Foundation?
Are you fluent in the nuances of DRM, Intellectual Property and the Public Domain?
Were you watching closely as the Mommy blog invasion decimated Motrin’s MotrinMom campaign?
Are you familiar with arguably the biggest viral sensation of 2009, the Three Moon Wolf T-shirt?
How did this viral sensation begin?
2) Culture also reminds us to serve (and eat!) cake on the occasion of a birthday
So why in the heck would marketers want to include culture in their toolkit?
Like many other analysts and clients alike, we have been charting consumers’ individual
preferences for a very, very long time
Most CPG companies and retailers know everything about their consumer—their likes
and dislikes, their demographics, as well as their attitudes and beliefs
―We believe culture is the most potent tool in the marketer’s arsenal‖
—Harvey Hartman
The net effect of these losses will surely be felt by consumers for many years to come…
―Still, there will come a time, here in Brooklyn, and all over America, when
nothing will be of more interest than authentic reminiscences of the past.‖
— Walt Whitman, 1865
… These executives are frequently numb to the sorts of innovations that enable high-
quality production at low cost. ―That’s how you end up with the likes of GM...‖ **
Deploy a model which anchors eating and shopping occasions into the broader cultural
context of the world of food, for example:
By grounding eating and shopping occasions into the culture of food—rather than the
consumer’s preferences, dayparts, or trip types—we arrive at deeper, more actionable insights
Armed with these insights, companies can take action that will increase both
shopping trips as well as consumer interest in higher growth categories
Butchery skills began to recede in the 1960s, when beef and pork, already
cut and boxed, started arriving at supermarkets
The neighborhood butcher, the one who could be relied upon to save
the best cuts for preferred customers, began to evaporate
As The New York Times observes: With their swinging scabbards, muscled forearms
and constant proximity to flesh, butchers have the raw, emotional appeal of an indie
band. They turn death into life, in the form of a really good skirt steak…
Quit worrying about plastic vs. paper bags, the vast, vast
majority of consumers have no interest regarding this issue
A study published in the New York Times found that adding calorie
counts to menus has no affect on diner’s food decisions
**Plus Bacon
“If you do things well, do them better. Be daring,
be first, be different, be just.”
— Anita Roddick
one Happy Pills | A Candy Store
What
Candy Store in Barcelona relies on clever design and branding imagery to reimagine a tired
concept
Riffs on the longstanding cultural truth that laughter and sweets can often be the best medicine
Ostensibly should make children less frightened of visiting their doctor’s office
Aha
Reworking a tired concept often requires mashing together two seemingly disparate products,
ideas or institutions
Candy vs. Medicine, Store vs. Hospital
What
Snack chips made from real food—parsnips, beets and potatoes—and flavored with on trend
ingredients
How can you not want to crunch away on “almond potato & sea salt”?
Innovative package choices drive freshness cues (i.e. see in) while still allowing for striking
packaging (cues quality)
Aha
Snacks made from real food, named after the food’s indigenous category (roots), flavored with
trend forward ingredients and cleverly packaged and presented—a clear winner.
What
Luxury quality, portable hot chocolate on a stick—stir into hot milk and away you go…
Available in a dizzying array of flavors (46!) including strawberry & pink pepper, sea salt & honey
and praline & nougat.
Are you sure you’ve reached the point in your life where you can taste the difference between
nougat and filler?
Some are even available with small amounts of liqueur thrown in for good measure
Aha
What else is there to say. If you don’t get it by the words and descriptions alone, there’s not much
that can be done.
What
Dr. Perricone, a name familiar to many in the Health & Wellness community, recently
freshened it’s product line
Note the clean, understated look of a modern apothecary, a design cue that is bolstered by
the iconic apothecary image
We are also smitten with the decision to visually depict as many of the natural ingredients as
possible
Aha
Even in a visually flat category such as supplements, where very little has changed or evolved
in the past 30 years, it just isn't that difficult to rewrite the rules from the bottom up
Now many are left wondering, ”how we could have ever settled for brown plastic bottles with
lame wrappers for so long?”
Explore. Listen. Reflect.
eight Happy Bites Macaroni and Cheese
Jury is still out as to whether or not the flavor profiles win with
the tykes…our resident 16 month-old taster, Mo, isn’t yet sold.
What
A trio of creative locals have been reimagining popsicles with local, seasonal ingredients for the
Brooklyn Flea Market
Unusual fruits—and an occasional vegetable—are combined to craft innovative flavors such as peach,
chamomile and honey; watermelon, cucumber and hyssop; tri-star strawberries and cream;
blackberry, yogurt and honey; and sugar plum and mint.
They are currently planning for something called “Popsicle World Domination 2010”
Aha
Further proof that no category is an exception to creative forces of reimagination
We remain flummoxed that as of yet nobody has snapped them up
Explore. Listen. Reflect.
ten Q Tonic | A Different Breed
As dedicated vegetarian
fans we can attest that
The product is described veggie patties for grilling
as Chardonnay hydration are a great idea …but
for the daytime... Women vegi scallops in a can?
take their skin care very This is so ghastly on so
seriously—just like their many levels that mere
chardonnay—but not at words cannot do this
the same time, or on the justice
same occasion…
! Competitor's 2010 Trends for Which we Offer a Few Comments
“Beer’s star is still rising at restaurants, with operators sourcing craft and seasonal labels,
promoting menu pairings and themed dinners, and opening beer-centric pubs and eateries. ”
We thought that whole craft beer revolution deal has been going strong ever since the mid
1990s—last century and what not
“Grocery stores will grow, particularly as private label assumes prominence. Grocery stores are
also doing things such as upgrading delis and fresh take-out sections. ”
―In-store delis and fresh meat sections are stocking chilled prepared meals as a more-
convenient and better-quality solution to frozen meals.‖ – Mintel, 2004
!
“Call it what you will—nutritional, healthful, good-for-you—but this trend toward beneficial foods
is growing at a pretty big rate. ”
―Marketing to the New Natural Consumer: Consumer Trends Forming the Wellness Category‖ –
Harvey Hartman, 1999
!
Explore. Listen. Reflect.
Doing Culture Can Also be Fun!
More Fun
! Finally, The Long Awaited, Much Appreciated, Bacon
We thank Flikr for the sourcing of fabulous imagery throughout this deck.