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Point of View: Hook 'em while they're young
Byron Sharp, Admap, May 2013, pp. 13-13
In this point of view, Byron Sharp questions why marketers continue to pursue the youth market when the ageing of the population has been well publicised.
In this point of view, Byron Sharp questions why marketers continue to pursue the youth market when the ageing of the population has been well publicised. While marketers may believe that youth are more fickle and so must be caught before they are older and more brand loyal, research shows that the repeat-buying of older consumers is no different from that of young consumers. Both groups tend to buy from fairly fixed repertoires of brands and this repertoire is no smaller among older consumers. However, targeting young consumers can be beneficial as buyers maintain the composition of their repertoires for quite long periods and so gaining these new customers may mean they are likely to remain with a brand for a long time.
The myth of the brand in Asia
James Parsons, ESOMAR, Asia Pacific, Ho Chi Minh City, April 2013
This paper argues for a careful consideration of how the notion of brand works in Asia and what is distinctive about these Asian contexts.
This paper argues for a careful consideration of how the notion of brand works in Asia and what is distinctive about these Asian contexts. It discusses what brands are and what their purpose is and questions several received wisdoms that have been inherited from a Western perspective, where even the word "brand" conveys a different meaning to those used in Asia. A brand's "personality" and abstract values are of less relevance and interest than its functional benefits and concrete impressions in Asia, while the context in which it is seen and experienced has greater importance than in the West. In China and Japan, TV advertising spots are much shorter than in the West, so reach and awareness is more highly valued and without the time to tell complex brand stories, innovation has come to be the focus of investment. Western marketers are warned that to focus on brand love in Asia is to risk being overtaken by organisations who concentrate on penetration. Also, energy put into fixing the personality and philosophy of the brand may be better spent elsewhere when Asian consumers are innately less susceptible to abstract values and Asian media vehicles are ill-equipped to develop them.
The Word of Mouth Dynamic: How Positive (and Negative) WOM Drives Purchase Probability: An Analysis of Interpersonal and Non-Interpersonal Factors
Rodolfo Vázquez-Casielles, Leticia Suárez-Álvarez and Ana-Belén del Río-Lanza, Journal of Advertising Research, Vol. 53, No. 1, 2013, pp. 43-60
This study has two main objectives: (a) to examine the relative impacts of positive and negative word of mouth (PWOM and NWOM) on the shift in the receiver’s brand purchase probability; and (b) to analyze the effect, direct or indirect, of a number of interpersonal and non-interpersonal factors on the relation between PWOM or NWOM and the shift in the receiver’s purchase probability.
This study has two main objectives: (a) to examine the relative impacts of positive and negative word of mouth (PWOM and NWOM) on the shift in the receiver’s brand purchase probability; and (b) to analyze the effect, direct or indirect, of a number of interpersonal and non-interpersonal factors on the relation between PWOM or NWOM and the shift in the receiver’s purchase probability. The data were collected from a sample of 1,035 consumers in four product/service categories. The results suggest that firms should develop a proactive management of WOM communications that takes into account aspects of both the sender and receiver.
Is customer loyalty irrational?
Rory Sutherland, Market Leader, Quarter 2, 2013, pp. 58-58
Customer loyalty to particular brands is often viewed as irrational, but Rory Sutherland sees this as a dangerous view in marketing, as it seems to suggest that to make decisions based on emotional reasons are 'wrong'.
Customer loyalty to particular brands is often viewed as irrational, but Rory Sutherland sees this as a dangerous view in marketing, as it seems to suggest that to make decisions based on emotional reasons are 'wrong'. But economic rationality is not the only reason to make decisions and emotions have in fact contributed to our success as an economic, social species. By paying more to buy from people with known identities and reputations (and by buying repeatedly when satisfied) and by defecting and punishing (through reputational damage) when not satisfied, we have created a feedback mechanism without which markets cannot work over time. For this feedback mechanism to work, you need suppliers with known, stable identities, whose reputations are disproportionately rewarded or punished over time, depending on how their promises are kept.
Marketing solutions services
Lynette Ryals, Warc Best Practice, February 2013, pp. 42-43
Companies that were once product-driven are finding themselves offering solutions or services to customers.
Companies that were once product-driven are finding themselves offering solutions or services to customers. The increasing cost and difficulty of obtaining new customers and retaining them has led to greater investment in building long-term relationships. This article looks at some examples of companies, such as Apple with its Genius Bar or Ikea, with its flatpack furniture assembly service, who are developing interesting solutions or added-value service offerings to build customer loyalty. It also examines how marketers can develop and promote their own solutions based on a better understanding of their customers' decision-making processes.
Chinese shopping behaviour: China's repertoire shopping
Jason Yu and Bruno Lannes, Admap, January 2013, pp. 36-38
This article uses the 2012 China FMCG Shopper report by Kantar Worldpanel China and Bain & Company to highlight the country's shopping behaviour.
This article uses the 2012 China FMCG Shopper report by Kantar Worldpanel China and Bain & Company to highlight the country's shopping behaviour. The report studied 26 of the top consumer goods categories across food, drink, personal care and homecare, covering more than 80% of the country's FMCG market. Although around 60% of Chinese shoppers said, in previous research, that brands were their top consideration when purchasing, in reality, they rarely acted on it at point of purchase, resulting in little brand loyalty. As they bought more frequently in a category, they also bought more brands for the same specific need or purpose, known as repertoire behaviour. Using Oreo cookies as an example, this article explains how brands can use repertoire behaviour to their advantage and points out the correct approaches to take when tackling repertoire behaviour over loyalist behaviour in China.
How Shangri-La relaunched its loyalty scheme around 'family'
Low Lai Chow, Event Reports, Loyalty World Asia, December 2012
When luxury hotel brand Shangri-La relaunched its Golden Circle loyalty scheme it decided it wanted its guests to be welcomed 'as part of the family'.
When luxury hotel brand Shangri-La relaunched its Golden Circle loyalty scheme it decided it wanted its guests to be welcomed 'as part of the family'. This article explains how rewards were introduced alongside previously existing recognition and exclusive benefits. The scheme's CRM capabilities were also enhanced to allow for more data mining and improved marketing, while promotions encouraged members to upgrade to more elite membership tiers. Golden Circle numbers have increased by 1.5 million, with members staying longer and spending more
InterContinental Hotels Group: How personalization is driving growth
Low Lai Chow, Event Reports, Loyalty World Asia, December 2012
This article outlines how InterContinental Hotels Group adapted to changing consumer lifestyles and a demand for more personalised messaging.
This article outlines how InterContinental Hotels Group adapted to changing consumer lifestyles and a demand for more personalised messaging. A new loyalty platform, LoyaltyConnect, was established to serve as a 'centralised repository' for transactions, CRM and to allow the hotel group to segment its members. Personas were then created for the most valuable segments, so hotel staff could quickly identify those guests who should be enrolled. IHG reports that personalising messages based on segment analysis has delivered strong results.
Net Promoter Score: Loyalty is the big enchilada
Michael Lieberman and Dave Leonard, Admap, December 2012, pp. 36-37
Just as word-of-mouth can be beneficial, it can also cause damage to a brand. The Net Promoter Score is an indicator of how likely someone is to recommend a certain product to a friend or family member.
Just as word-of-mouth can be beneficial, it can also cause damage to a brand. The Net Promoter Score is an indicator of how likely someone is to recommend a certain product to a friend or family member. Only NPS scores of 9 or 10 will promote the brand. In a competitive market, average recommendations do not count for anything. This article uses NPS to discover the best way to drive growth in the casual dining sector and the best way to achieve higher NPS among likely customers. It found that specials and promotions never result in a positive guest experience and the brief upturn in sales can hurt the NPS. Therefore, instead of searching for ways to bring in new customers, restaurants would be better served looking to improve the experience of its existing customers.
It's a Dirichlet World: Modeling Individuals' Loyalties Reveals How Brands Compete, Grow, and Decline
Byron Sharp, Malcolm Wright, John Dawes, Carl Driesener, Lars Meyer-Waarden, Lara Stocci and Philip Stern, Journal of Advertising Research, Vol. 52, No. 2, 2012, pp. 203-213
The Dirichlet is one of the most important theoretical achievements of marketing science. It provides insights into the distribution of consumer loyalties and is used widely in industry for benchmarking and interpreting brand performance.
The Dirichlet is one of the most important theoretical achievements of marketing science. It provides insights into the distribution of consumer loyalties and is used widely in industry for benchmarking and interpreting brand performance. The Dirichlet’s implications run counter to some well-entrenched marketing pedagogy and so, unsurprisingly, it has attracted criticism arguing that it cannot adequately reflect the dynamic nature of consumer choice. The authors address these criticisms by discussing how consumer loyalties are manifested and examining whether changes in consumer loyalties do, in fact, disrupt Dirichlet buying patterns. To the best of our discipline’s knowledge, based on extensive empirical and theoretical work, brands compete in a Dirichlet world.
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