Subject: Marketing's Five Basic Plays

From: Chief Marketer <[email-masked]>
Date: Tue, 12 Apr 2005 09:00:17 -0500

April 12, 2005 | A PRIMEDIA Property |

Table of Contents
Strategies: The Five Basic Plays of Marketing
Branding: Using Retail to Rev Up an Image
B-to-B: The Marriage of Sales and Marketing
Promotions: Encouraging Kids to Collect 'Em All
Sampling: Teaching Tools
CRM: Making Dollars out of Change

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This Week's Stories
Strategies: The Five Basic Plays of Marketing
By Sherry Chiger
"Marketing is first and foremost about strategy," John Zagula, coauthor of "The Marketing Playbook," told attendees of last week's DMA World Seattle. "Way too often people put the tactic cart before the strategy horse."

Before you decide on your marketing tactics, you've got to select strategy -- or as Zagula, a Microsoft veteran, put it, your play and your playing field. Given that, according to Zagula, there are only five basic plays, homing in on a strategy is less daunting than one might think.

The five core plays:

1) The drag race. "Beat the other guy across the finish line" is how Zagula summed up this strategy. It's a matter of focusing on one key competitor and doing whatever it takes to steal away its market share.

Microsoft Word's battle against WordPerfect in 1990 was a case in point. At that time, WordPerfect had 30% market share, making it the number-one word processing program; Microsoft Word had 15%, and several other brands, such as XyWrite, accounted for the rest. Microsoft set its sights on WordPerfect, promoting Word's strengths over WordPerfect and offering a discount to WordPerfect users who switched to Word. The media also ignored the other brands, focusing on the race for market dominance between Word and WordPerfect. As a result, the other players for the most part faded away; today Microsoft has 85% market share.

With its all-or-nothing approach, the drag race is risky. And bluffing won't lead to a win. As Zagula said, "You need to have a better car and enough gas to get through the end of the race."

2) The platform play. You try to build as many alliances, partnerships, and affiliations as possible. This is best used by companies that are already market leaders.

3) The stealth play. This is a matter of "finding the opportunities where the big folk ain't," Zagula said. For instance, Enterprise Car Rental in the 1970s tried to muscle into airport rental markets, but it couldn't outspend Hertz and Avis. So it focused on offering replacement cars for car dealerships, auto shops, and insurers that needed to provide rentals for customers whose own cars were being repaired -- a portion of the market all but ignored by Hertz and Avis.

4) The best-of-both play. Budweiser's "tastes great, less filling" strategy is an example. So is the Lexus strategy, which Zagula said proved that "Japanese luxury car" was not an oxymoron.

5) The high-low play. If the best-of-both play can be summed up as "why choose?", the tagline for the high-low play is "why compromise?" In this case, you select one attribute -- exceptional quality, for instance, or fulfillment speed -- on which to focus. According to Zagula, it's "the most difficult play to manage."

Once you've decided which play is most likely to work for you, it's time to choose the playing field: "What is the situation, where do you want to be, and what do you have to cross to get there," Zagula said. To ascertain how to bridge the gap between where your company or product is and where you want it to be, you need to look at the industry as a whole; your customers (to best determine your offering); and your competition (to determine your positioning). Then you can formulate the tactics that will make up your action plan.

As for the marketing messages themselves, Zagula said that "proof is more important than benefits, which are more important than features." And regardless of whether your campaign is built around proving your product's worth or explaining its benefits or features, you should heed what he called the Rule of 3: Highlight only three proofs, benefits, or features, which should ideally be "awesome, awesome, not screwed up." For example, an auto maker might tout its fabulous handling, exceptional pick-up, and low maintenance.

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Branding: Using Retail to Rev Up an Image
By Vilma Barr
RETAIL TRAFFIC
Electronics manufacturers are getting into the retail game, using small, stylish stores to add an extra dimension to their sales appeals. The operative terms are "connecting" and "experiencing." The strategy has spawned minis and microminis -- smaller facilities located in street-front settings as well as in urban and suburban shopping centers.

Major electronics companies are counting on super-sleek interiors and a cadre of friendly, "I'm here to answer your questions" helpers as important components to branding. They fall into two camps: stores (places that sell merchandise) and "unstores" (those that do not) and are designed to appeal to both women and men. This recognition of the buying clout of females, long neglected by the gizmo- and gadget-maker community, is one of the reasons for the rapid growth in the number of high-concept electronic product destinations.

"It's all about building the brand," says James Rosenfield, national director of retail services for Cushman & Wakefield. Showcase stores being built by Apple, Sony, Nokia, Nextel, and Sprint get people excited about the product and how it relates to their particular lifestyle, he says.

Samsung, for example, has opened a 10,000-sq.-ft,. demo-only "Experience" store on the third floor of The Shops at Columbus Circle in the new Time Warner complex in Manhattan. It's a permanent "unstore" that allows consumers to test, try, and even borrow the latest products, with no pressure to buy.

To read more, visit RETAIL TRAFFIC.

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B-to-B: The Marriage of Sales and Marketing
By Ray Schultz
DIRECT NEWSLINE
What is a lead?

The only people in b-to-b marketing who know that answer may be salespeople. At least that's the way it seems to John Coe of the Sales & Marketing Institute.

"We focus on sales cycle but don't necessarily understand buying process of customer by segment, and we don't align them, which is reason for low response rates," he said, speaking at last week's Chicago DM Days & Expo.

Take the case of the northwestern software company that was facing flat sales. The firm was producing a high number of leads, offering a book as a premium. but 55% of the inquiries received in a single year were never touched by the sales force, and the conversion was less than 1%. Moreover, the cost of customer was $26,900, exceeding the two-year revenue potential.

There were many reasons for this, but the main one was that the company had not separated leads from inquiries and sales opportunities from leads.

The solution: The company redefined what a lead was, then redirected its list and hardened its offer. It offered a technical white paper. The result: Conversion to sales is now over 15%.

To read more, visit DIRECT.

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Promotions: Encouraging Kids to Collect 'Em All
By Andrew Grossman
The company that produces "Pokemon" and "Yu-Gi-Oh!" is betting that kids will be just as eager as teens and young adults to collect DVD boxed sets of their favorite shows. Target and Best Buy apparently believe so as well: They have partnered with 4Kids Entertainment as exclusive retailers of so-called starter boxes for the third season of "Yu-Gi-Oh," the popular animated series in its fifth year on U.S. television.

Starter boxes are aimed at encouraging fans to buy a series of DVDs as collectibles by selling them the first volume of the set, including a "free" gift, inside an attractive box that will eventually house the entire season.

4Kids introduced the boxes on April 5 with plans to roll out the remaining four volumes of the Japanese action cartoon -- each with a handful of episodes -- by September. Major outlets such as Wal-Mart and Amazon.com are selling the "Yu-Gi-Oh!" DVDs for the third season but not the starter boxes, which at a $19.98 list price sell for about $5 more than the DVDs alone.

Joe Lyons, director of home entertainment for 4Kids, said he believes this is the first release of a starter box for a broad-based animated show aimed at kids. "Most of this stuff was strictly for the older demo -- anime fans. We believe this is the first starter box for a commercial, mass-marketed property," he says.

4Kids was looking for a way to grab some additional shelf space at Target. Best Buy jumped in when it got wind of the promotion, partly because it has been substantially ramping up its kidvid DVD inventory.
The retailers were eager to participate largely because of the boom in the kidvid DVD market.

"Kids like to collect," Lyons says. With the starter boxes, fans do not have to buy the entire year's worth of episodes in one fell swoop, and "here you have a great thing on your shelf and it looks really cool."

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Sampling: Teaching Tools
By Tim Parry
PROMO
Who doesn't love those freebies picked up at the grocery store or received in the mail? But if marketers don't properly educate consumers about such samples, those items aren't free -- they're worthless.

According to Schaumburg, IL-based PromoWorks, spending by marketers on sampling programs increased more than 20% in 2004. But not all such programs yield positive ROI for their brands. The key is using samples to convey the benefits, attributes, and value of the product, says PromoWorks president Mike Kent.

"Sampling programs are turning more into sales programs," Kent says. "The handouts, samples, and coupons create a consumer excitement from the brand standpoint. But retailers and manufacturers are looking at the ROI." Kent says the new trend in sampling is to use spokesmodels and demonstrators as salespeople, not just distributors.

To read more about successful sampling, visit PROMO.

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CRM: Making Dollars out of Change
By Sherry Chiger
CATALOG AGE
It's human nature to be wary of change. But according to Ted Wham, chief privacy officer/general manager of online travel marketer Expedia.com, "change is your friend as a direct marketer. It gives you the subtext and context to communicate with your customers."

During his luncheon keynote address at DMA World Seattle on April 6, Wham outlined a five-step plan for making dollars out of change. To find out what they are, visit CATALOG AGE.

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