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Archives for July 2009

Private Label Brands Show Impressive Growth

equateAccording to a U.S. study by Mintel, private label food product introductions in 2009 made up 25% of all food product launches.  In 2005, they only comprised 13% of all food product introductions on retail shelves.

In 2008, private label food sales grew by 9.3% versus 4.5% for branded food product sales.  Mintel reports that private label food sales are expected to grow another 8.1% in 2009.  Should branded food products be worried?  Is this a trend that could (or already is) spilling over into other categories?

Certainly, the recession drove some of the shift from branded to private label food products among U.S. consumers.  The question is whether or not consumers will be satisfied enough with private label brands to stay loyal to them when the economy recovers.

The other factor to consider is the amount of information consumers have access to in the 21st century.  There is less risk associated with purchasing a private label brand for the first time because consumers have learned that often the difference between private label and branded products is negligible or doesn’t exist at all.  For branded products that are competing directly with private label for the same consumer dollars and retail shelf space, this is a problem area.  Suddenly, branded products must find ways to differentiate themselves as truly better than private label products or as offering a distinctly superior value than similar private label products.  It’s a competitive factor that most branded product managers could ignore ten years ago.  Branded products still held a perception of superiority in quality a decade ago.  That perception has all but disappeared in 2009.

A third factor to consider is the variety of private label products that are available in the 21st century.  As CSNews.com explains, private label products are being introduced as more than just copycats of existing branded products.  Today, consumers can find a wide variety of private label products to choose from that often meet perceived needs that branded products don’t cater to.

Finally, private label products today are not quite as “private” as they once were.  Brands like Sam’s Club and Equate are accepted as viable competitors to consumer brands that have been around for generations.  A private label brand that has a direct association with a well-known brand (e.g., Walmart or Target) can offer the same sense of trust and security to consumers making purchase decisions without the advertising dollars backing them.  It’s an interesting challenge for branded products, and it’s one they’ve never really faced before.

When the recession fades, will consumers remain loyal to private label products?  My guess is yes.  What’s your prediction?

Image: Flickr

Is China’s Tuangou or “Team Buying” Concept the New Social Networking Hub?

So… you see a new car that you want, but it’s a little out of your price range. Of course, you’d be willing to negotiate if you knew the dealer would give you a fair but reasonable price. Do you go for it, haggling him down to a number that you can comfortably afford? If you decide to pursue it, you might well get it – – and a few hundred of your friends might decide to join you.

Some of  China’s consumers actively participate in huge team buying clubs called “tuangou’s” where they negotiate, haggle and convince retailers to lower their merchandise to a more affordable price. In the process, the consumer’s success means success for the entire group. The team buying concept that they practice demands that the retailer honors ALL participants of the group by giving them all the same fair price. For example, that means if you negotiate a couch from $1500.00 down to $500.00, the retailer will sell the couch to all members of the team for $500.00. It’s a win-win situation for both parties and a huge boost in confidence for the consumer!

China’s bartering teams or “tuangou” emerged in force over five years ago. The concept has taken off well, becoming quite popular and more preferred by Chinese consumers than going it alone with retailers. Also growing are the numbers of forums and web sites where these consumers meet, talk and strategize about their next planned purchase and buying power, where they also select a leader and determine what amount they are willing to pay – or not pay – for the item they all want.

Retailers closely monitor sites like Qeeka.com, and other consumer forums and chat rooms to see what people are buzzing about. They plan their own sales and marketing strategies based on the information they get from these sites. They prepare to do negotiation battles with the tuangou.

Social networks are quickly cropping up on Facebook with friends clusters who are banding together with their efforts. The largest Facebook friends network, Twangu, currently has over 1,000 users in its network. Almost in an eBay fashion, the portal is set up so that retailers have the opportunity to find customers and vice-versa.

(From Twangu’s Facebook page:)

Get volume discounts for the stuff you want by shopping as a team! Build your shopping team and watch thousands of vendors bid on our team’s business.

How does it work?

1. User A sets up a group buy and the terms of the buy

2. User B-Z joins the team

3. Twangu makes the team official and sends it out to vendors

4. Thousands of vendors freak out and bid on the business

5. Low vendor bid wins!

The bigger the shopping teams, the bigger the savings. Forget the other auction sites, and start Twangu’ing!

The potential for the group to grow is exponential on a social networking site like Facebook, but add to that the inviting addenda of bargain hunting, saving money and deal finding and the potential becomes even greater. The power of social networking with this type of audience can be quite influential. What retailer would NOT want to be invited in or pitched against in pursuit of the best (or fairest) price?

Do you think the social networking platform in this concept is going to only be successful in China? Do you think it could thrive and do well in any other country?

Several companies have tried to start group buying sites in America and Europe yet most of them failed due to a sheer lack of interest from consumers. The owner of StoreMob.com didn’t think so, after the idea didn’t go over well with the Americans or the Europeans.

“I had read about it in China and thought maybe it would work over here, but it didn’t work out too well,” said Eliot Sykes, founder of UK-based StoreMob.com, which is now inactive. “I am not sure people’s attitudes over here are right for it.” (CNN news article)

Why is that, do you think? A lack of interest? Too much (or not enough) competition? Perhaps not enough social media exposure?

I think that social media and social networking is the perfect platform to bring attention to a concept that sounds phenomenal. After all, social networking is based on the premise of establishing relationships, sharing information, giving advice, learning from mistakes, celebrating, sharing and creating. That’s what we all do on Facebook and Twitter, isn’t it? Share information, give warnings, advice, etc. Wouldn’t it then be befitting that a place where social networkers join forces and participate in an action that benefits them all, that it would almost guarantee success?

What do you think? Can it, would it actually work?

Just Means – why should you care?

Responsibility is important. Not just because it makes for a good story, but important in itself. And there is much suspicion of ‘greenwashing’ – even the EDF Green Britain adverts in the paper recently started with the cynical assumption that companies try to paint all their actions green. So how can you communicate your actions and be believed?

Just Means

Responsibility is one of the many areas in which people want to turn over the stones in the corporate estate to see what lies underneath. How better to do this than by conversing directly, visibly, with interested parties?

Not every company wants to host a conversation on its own site, although all want to demonstrate ‘engagement’ with their stakeholders. Increasingly, companies are using social media outposts to converse with stakeholders, perhaps via a blog, Twitter or Facebook, each of which have different ‘styles’ of communication.

There’s a very interesting site dedicated to providing a platform for conversation between people – and companies – interested in responsibility. Just Means provides tools for companies to engage an audience on the Just Means site, but also as a base on which to run campaigns, syndicate content to those other social media platforms, and to measure engagement. Individuals can ask questions; companies can explain their actions.

Dave Stangis from Campbell Soup

No, better than that: named individuals from companies can explain the actions of their companies, and get involved in conversation.

Here’s Dave Stangis’ page, for instance (right – click to see a bigger version).

Dave Stangis is VP CSR/Sustainability at Campbell Soup Company (chosen at random), and his page reveals several of his updates about his work (going to talk to an Investor Day to talk about Sustainability) and who he is talking to (people from Hershey). We can also read his blog posts, and find out what events he’s going to, and what he’s hoping to get out of them.

This is really good stuff: we can see that he is chatting with individuals on a personal level but also about what concerns them professionally with respect to sustainability. And he, one hopes, is getting ideas and feedback from this dedicated community.

Yes, I could follow Dave Stangis on Twitter (and maybe Campbell Soup, too), and his Just Means updates are pulled through to Twitter – but here a lot of his ‘good work’ social media activity is collated.

The value in this type of activity is that companies that do engage in online communities say that word of mouth, brand awareness and customer loyalty increase. And the added value that Just Means provide seems to be in making it a one-stop-shop for companies (at least for the sustainability stakeholders) with measurement and tracking available. I’d like to see a bit more detail of how the measurement and tracking works in the help and support area, but no doubt this would be fully available to any interested company.

And I think there are lots of those; the client list is impressive, and seems to be growing every week.

But here’s a question: how do visitors to the corporate site know of the activity off-site? Do these big companies link back to Just Means from the corporate site, or is this activity completely separate from the corporate site?

I picked two of the biggest names on the (long) Just Means client list, to see if there was any synchronisation between the corporate site and the Just Means site:

  • HP has a press release on the Just Means site announcing a competition for the most innovative re-use idea; but I haven’t been able to find this release on the corporate site at the time of writing. HP has an astonishing array of informative pages about recycling, but no mention of this competition on these pages, which seems a shame.
  • And Intel have a well-developed page on the Just Means site, which pulls in posts from their CSR blog, and includes multiple sections explaining what they do, news releases, videos and links to their company reports. (Other companies include events, contests and articles, so there are many options). Again, though, there doesn’t appear to be a link on the main corporate site, though there is a link from one of the Intel blogs.

I wonder why this is? Perhaps it is that the corporate site is slower to update, because of the greater momentum involved; perhaps it is because those companies who prefer to place this social activity on an outpost rather than on the main corporate site are more likely to be Just Means’ clients.

What do you think? Should this activity be clearly signposted from the corporate site?

Is Being Green an Option for Brands?

packaging_wasteA recent study by RSR Research analyzed the strategies companies are employing for brands in terms of ensuring those brands are eco-friendly, but I wonder not what brands are doing but whether or not being green is even an option for brands anymore.  Or is it a strategic imperative?  My vote is for strategic imperative.

In other words, green strategies should be at the core of product development and positioning strategies.  It shouldn’t just be an ancillary element or tactic of differentiation.  It should be a key component to the brand’s overall promise.

I think of toy brands and consider all the wasted plastic and materials used in the packaging of toys (I have triplets who just turned 5-years old, so I see a lot of toy packaging but there are many examples — check out the wasteful packaging in the image above), which so clearly demonstrates the need for “green” to be at the heart of brand and product development.

There is that old saying, “waste not, want not”, which is very appropriate here.  The same thing applies to being a green brand.  Many consumers simply expect companies and brands to be making an effort to be environmentally-friendly.  If brands are deemed to be wasteful and environmentally harmful, it’s likely that a certain amount of consumers will lose trust in those brands.  They may even move on from those brands to find replacements that do meet their expectations for brands and companies to live up to their environmental responsibilities.

Sure, the abandonment rate might not be that high today, but what about in 5-years?  10-years?  Will “green” still be the cool thing, or will it be the essential thing for brand survival.  While I don’t think I’d go so far as to say it will be the only thing that matters to consumers when they make brand choices, I do think it will have a greater impact than it does today.  Bottom-line, green is no longer an option.  It’s a must.

Your thoughts?

Image: Packaging Waste via Flickr

Posts, Links and Photos: What Your Social Networks Say About YOU!

Right now, think:  What’s your latest Twitter entry? What was the last photo you uploaded on your Facebook page? Can you remember or do you have to go and check really quick? Are you nervous or confident about the things you said there?

Social networking is wonderful (in my opinion), but I also notice that it is not without its set of problems in misconceptions. For instance, a lot of people think that social networking platforms are a free-for-all. They think that they can write anything, post anything and even link to anything, even inappropriate or offensive material. Now while there are certain circles that have their own culture and personalities, what should you as a corporation or a business owner do to ensure that your platforms are professional but approachable?

What’s the Purpose?

I personally tend to use the Facebook platform as a socially-connected forum to keep up with the latest events in my locale, upload photos and keep tabs on my tween-ager! That’s about 30% of what I use it for. The remaining percentage, I use for networking with other writing professionals on leads and talking with my editors and contacts that are my other writing/consulting clients.

I use Twitter for the full 140-character networking that it was intended for, but not as much as I do Facebook. I love to read my following/followers links and find information on business topics of interest and more leads. For both platforms though, I’m careful about what I post, when I post it, what I say on the post and consider who’s reading the post. No, I won’t post details about my children, i.e., what schools they attend, their birth dates, ages, etc., nor would I post details about my married life or my husband. Who really wants to know about those things anyway?

But, do all users give the same consideration to this?

Game Rules

There are some ground rules to practicing etiquette in social networking that are both spoken and non-spoken, but many businesses and individuals often do not practice these rules when they are on these social sites. Not only can this be embarrassing and damaging to your online image, but could also be a deterrent in your business goals, or any potential business and any future business dealings with other company’s and clients.

If your corporation wants to utilize and maximize the use of social networking, they should carefully choose the representative who will speak on their site, their blogs and any social networking platforms where they may be. And, not only the company’s representatives, but also employees and freelancers that are associated with the company. In other words, be careful of the way your corporation is portrayed on the social platforms.

Your Company’s Image

What people do on their personal time is definitely their business, without a doubt. Where they go, who they’re with and what they do is their business. But it becomes a company’s business when that individual/employee/representative affect the company’s reputation by posting innappropriate posts, uploading compromising photos or even linking to questionable or irrelevant sites. What does that say about your company?

The point of social networking for businesses is to drive traffic, make connections and gain a following for your company. Social networking is driven by the individuals who are a part of the company and who represent the company online. Make sure that your followers are getting quality and appropriate material.

What can you do to ensure that your company is represented accurately in the social circles?

The Scary Thing about Social Media

scary-faces

CIOZone just published a smart article by Michael Neubarth called Social Media:  How We Got Here, Where We’re Going.  It’s fairly long, and worth reading, so I won’t try to summarize all the content-which includes a backward look at a decade of predictions about the fate of mass marketing.

I just want to focus on this statement:  “Like the fall of the Berlin Wall, many observers say we are witnessing the collapse of the command-and-control power of corporate mass marketing.”

That’s a much bigger message than “you can’t afford to ignore Twitter.”  That’s the end of the world as we know it.

And fall of the wall requires a huge adjustment in strategy, not just some revision of tactics.  The story goes on to quote Tim Walker’s piece Social media: Control without command (on Hoover’s Business Insight Zone):

What’s required on the part of companies is to let go of the fantasy of command: You will not “command” the airwaves. You will not “command” the conversations around your offerings in the marketplace. Also, you will not “command” your employees, who can access all sorts of scary hiring-market information via LinkedIn and Jobster and Monster and Craigslist and the rest.

I added the italics, to focus attention on the effects this shift will have-and is having-on HR.  Just take it one step further, adding the caution that “you will not ‘command’ your candidates.”  The best prospects are already looking for something much more than one-way messaging and a one-size-fits-all application process.

Neubarth’s article is blunt about the stiff mental challenge this evolution presents for many corporations and executives.  Walker’s suggestion:

The antidote for this loss of command: just get over it. Historical and technological forces are against you, and those corporations and executives who insist on retaining command are destined to failure.

But you can exert a modicum of control. You can shape a conversation. You can rebut erroneous information about your company or your product. You can harness transparency so that it works for you. You can grow into the language of the social media so that you fall naturally into the mode of persuasion-and-recruitment rather than command-and-control.

Elsewhere in Neubarth’s article, there’s a discussion of Seth Godin’s concept of the “meatball sundae” (check out this podcast introduction), in which companies try to dress up old attitudes and ideas (the meatball) with some whipped cream and sprinkles.  Not an appetizing thought–even if the meatball might be tasty in itself!

Relevant question:   Has your company’s online recruiting strategy really shifted away from old models?  Or is it just dressed up with some creamy videos and a sprinkle of tweets?


(Thanks to Chris Breeze for the Very Scary Faces.)