online marketing psychology

February 26, 2010

Putting more France into the Citroën brand

The new Citroën C3 is being launched in Brazil. It is the only car of the French car maker that is manufactured in Brazil. One thing I found interesting the role the origin of the brand plays in this campaign.

Germany is associated with quality and innovation, Sweden with safety and France can count on refined and cultured.

The advertisements include the car standing in a Parisian surrounding, with the Eiffel tower on the background. To commemorate the 90th anniversary of the company it also has a promotion  that with any sold car, a free trip to Paris is included.

Photo by lyramids-post on Flickr

February 23, 2010

Brands of Brazil: Brasil Foods

Brasil Foods logo after merger Sadia Perdigão brand-architecture

Brasil Foods is a new brand, it was created in 2009 after a merger between two food giants: Sadia and Perdigão. When approved by the Brazilian authorities, it will be the third biggest food exporter of Brazil.

It's main business is the production of meat related products, pizzas, pasta, margarines, soups, deserts and microwave meals. Separately the two companies had a large market share in certain categories. Sadia for example claims to be a market leader in all segments in which it is present. The two companies together will be very dominant in certain categories on the Brazilian market:
  • Pasta meals (micro wave meals): 88%
  • Frozen meats: 70%
  • Refrigerated meat: 59%
  • Margarine: 65%
The company is active in 110 countries in regions such as the Americas, East-Europa, Russia, Middle-East, Japan, South-East Asia and Islamic countries such as Saudi Arabia, Iran and Kuwait were they are one of the main halal meat manufacturers.

Sadia and Perdigão logos before the merge

Brand architecture

Brasil Foods has 22 brands and about 3000 different products worldwide. Both Sadia and Pedigrão have complex product lines. Streamlining all the brands into one clear brand architecture is one of the challenges the company faces.

Brasil Foods works as the corporate brand.  Until the merger is complete, all the products on the market will stay under their current brand name. In Brazil this means that the brands Sadia and Pedigrão will continue to exist next to each other in several categories. Later it will be interesting to see some changes. A few possibilities come to mind:
  • Brasil Foods keeps the two brands operating next to each other.  Owning two seemingly different brands in a category might be an effective strategy to cover a large part of the market.
  • The individual positioning of each brand is reviewed and instead of competing with each other, each brand is positioned to serve a different segment. One brand could be the premium while the other would be the "normal" product.
  • An overhaul of the whole brand architecture were brands that are double or don't fit are cut.
Although the main focus has been one the Sadia and Pedigrão brands, there are more brands in the portfolio such as Batavo (dairy products) and  Elegê (juices and dairy products) and the international meat brand Perdix.

One product category that will definitely be reviewed is margarines. Brasil Foods has eight brands available for the consumer: Qualy and Deline by Sadia; Claybom, Delicata, Doriana and Becel by Perdigão; Borella and Turma da Mônica through a joint-venture.

Executives from the company and industry experts have mentioned the similarities which Inbev faced after the merger between Ambev and Interbrew. No doubt it will be very interesting to follow up to see what steps were taken and how effective they were.

Follow this link to discover more Brands of Brazil.

February 22, 2010

Does with bathing liquid soap lead to better results?

The first time I went for groceries in Brazil, I had a hard time finding a certain item on my list. When I asked my friends who were out shopping with me I got some strange looks. The thing I was looking for was liquid soap (also called body wash).

And although I found a couple of liquid soaps in the store, for most Brazilians it is mainly female product.

Although these soaps are very common in Europe (where 70% percent of the people daily use them), the rest of the world is just catching up with this trend. According to the Brazilian association for personal hygiene and cosmetics bar soaps outsold liquid ones 10 to 1 in 2006.

But trends are changing. In the US, where bar soap are also more popular, men personal care products are starting to take off. And brands such as Axe, and more recently Dove are addressing, or maybe even driving these needs. Most recently with one of the better commercial at the Superbowl:

It is also interesting to see that this is a trend that is not stopped by the recession. Liquid prices are higher than bar ones, their growth has continued. With higher margins for the manufacturers liquid soap leads indeed to better results.

February 19, 2010

Ads in the sky: how effective is aerial adverising?

On the occasion of Carnival, I was enjoying a break in Guarujá, one of the most popular beaches of Brazil. And while I was sitting there, trying to ignore most of the people and brands screaming at me from umbrellas and chairs, another thing grabbed my attention: overflying planes with a banners from big brands and local restaurants.

Now I wondered, does this way of advertising work?

The main difference with traditional and online advertising is that people are not familiar with this type of communication yet (not everywhere of course). This increases the attention they pay to the flying ads. Add to this the very big reach that this type of advertising achieves at places like packed highways, festivals, sport stadiums or the beach. The city where I was staying for example is a collection of beaches with a population of 300 000 that  grows to a million on busy periods such as New Year or Carnival. That is a lot of people together. Reaching the same amount on TV costs a lot more.

But how effective is this type of advertising? It is hard to come across numbers but I came across two studies that help to make the case.

One survey had 2000 respondents at Miami Beach after a plane with banner flew over 30 minutes before:
  • 88% of them could remember the banner passing by
  • 79% could remember what was advertised
  • 67% could remember at least half of the message

When the State of Maine in the US launched its new lottery with a budget of $100,000,  $8,000 was spent on aerial advertising. Afterwards a study showed that 70 percent of the respondents were aware of the lottery and that 18 percent of them had found out via aerial advertising. This means that 8% of the marketing budget resulted in an 12,6% (70%*18%) awareness rate.

Both studies show very good results in terms of awareness and cost effectiveness so it would seem that this indeed is a good way for certain brands to advertise.

I have some thoughts on the side to make though:
  • A whole bunch of different target groups are on the beach, the very big reach of this practice might be a disadvantage.
  • The design of the banner is very important, some of them have small text that is hard to read from a distance.
  • Additional to the previous point, some designs include URLs. How many people have access to the internet on the beach or how long can an URL be remembered?
I will finish with this idea I had: 
How about a very light weight banner with LEDS to send some messages at night? A lot of beaches are also known for their busy nightlife in summertime. Unlike the day crowd, these people can be more easily defined (demographic wise) which allows for better targeting.

February 10, 2010

Are retailers the real target of consumer advertising?

Advertising tries to get you to buy things. But it can play a more subtle role too. After the article I wrote on powerplay during negotiations, I found two examples that illustrate this.

Advertising to convince the retailer that sales are going well

Walmart in the U.S. was carrying four brands of plastic food bags: Glad, Hefty, Ziploc and Great Value, the latter is the private label brand from Walmart. After store tests they decided that some brands needed to be cut (this is called brand consolidation). These brands found out about the possible removal from the shelves and started spending on advertising. Walmart's size makes up a third of its revenue so being on the shelves is essential for certain brands. The collective ad spending of the brands increased 78% in one year to US$112 million. But this kind of spending is a self fulfilling goal.
The producer needs to convince the retailer that the sales are going well so they raise advertising spending. But the competition is doing the same so getting through to the customer gets harder. This results in a lot of ads from all players to convince more people that they need extra plastic food bags. Overall sales will increase. (Brand ad spending/sales would be a nice relationship to explore in this case)

The result was that two brands were cut. Walmart has now only one national  brand competing with its private label.

Advertising to convince the retailer that your product is worth it

On the occasion of their ad in the Superbowl, Diamond Foods CEO Michael Mendes had this to say:
Retailers pay more attention to your products when they know there’s a guarantee they will be promoted aggressively. And if retailers grant your product better positioning in the aisles because a promotion is coming, sales generally see a lift.
This makes me wonder, do producers have contract obligations to provide a certain budget for advertising and promotion? No doubt stuff for a future article! If you have any idea, please feel free to share them in the comments.

February 7, 2010

iPad leads to tense negotiations at Amazon

Negotiations with between big companies have always fascinated me, probably it has something to do with the world of secrecy and NDAs that surrounds them. So when details of certain agreements get public, I get excited (sort of). The story in which Amazon is entangled these last few days is very interesting.

Amazon, the world's largest online retailer, has a big piece of the book market. With its recent launch of the Kindle, an ebook reader, they started selling next to paper books also the electronic version of them. They asked a fixed price of $9.99 for all titles, which is logically lower than the price for hardcover editions of the same books. Publishers were not very happy with this deal. Not because of the fact that they get less money, Amazon pays the difference with the paper version, making a loss on every ebook to promote its device. (So if the publisher charges $15 for the normal book and the ebook costs $9.99, Amazon will pay the publisher $5) The main argument of the publishers is that cheap ebooks cannibalize the sale of paper books. But Amazon's size allowed it to get these kind of deals, as they are too big for the publishing companies to ignore. They basically told the publishers to take their offer or leave it.

Then came the iPad, also an e-reader. Apple agreed with the big publishers on a model where they would let the publisher set the price, and take 30 percent of the revenues. While Amazon mainly focuses on sales of its reader, more money might be made by taking the percentages on the content.

Seeing what Apple has done to the music industry, there is a lot of potential in this new device. And it is exactly this potential that allowed publishers to relieve some of the pressure in their contract with Amazon. Publisher MacMillian was the first to demand higher prices. Amazon tried to use its biggest asset, its online store to show their power, and in a nervous move they pulled all MacMillian titles from the store. After continued negotiations Amazon gave in  and they agreed on a model similar to the iBook store of Apple.

This showed other publishers that probably they too could get a better deal. HarperCollins and Hachette already spoke up and the others will undoubtedly follow. Amazon will have to reevaluate its pricing strategy.
One rather ironic outcome of this increased competition are higher prices of ebooks.

Another outcome for Amazon might be the damage to its brand. Pulling certain books out of its store might leave some marks.

Over at Yahoo finance there was short story about a customer:

Doug Miller, a 45-year-old information-technology consultant in Indianapolis, owns two Kindles and dozens of Amazon e-books, but was so frustrated by the removal of Macmillan books that he has put his e-book purchases on hold indefinitely. "It was Amazon that was acting monopolistic. That seriously damages my trust in them," he said. "I'm very leery of further investing in any e-book platform until I see some sort of standardization. In the meantime I'll buy paper books -- but probably not from Amazon.
The ebook market is still developing and many customers are getting introduced to the technology. While Amazon mainly focuses on sales of its reader, more money might be made by taking the percentages on the content. Although some people have lost trust in Amazon, these might only be the early adopters. So if Amazon can get them back in the Kindle camp, real damage might be avoided.

Do you think there really is some damage for to the brand?

Foto from Flickr/Brian Lane Winfield Moore

February 4, 2010

Brands of Brazil: Natura

logo Natura Brasil

Natura is an interesting company because it manages to operate in a transparent and  sustainable way despite its size . Its core business is the production and manufacturing of cosmetics, perfumes and personal hygiene products. Think make-up, suncream, skin cream, shampoo,..

Their main brand is Natura with slogan bem estar bem (good to be good). They sell different product lines such as Sève, Ekos or Amor América,  but the main brand building (on the products, billboards outside reseller points)  activities are focused on the natura brand.

The company tries to balance between the economic, environmental and social parts of its operations.  

Financially it is doing well. In one year the company's turnover increased 17,7% reaching US$2 billion and becoming one of the most valuable brands in Brazil. It is a publicly traded company and in 2008 it performed 61% better performance than the index of the São Paulo stock exchange, the Bovespa.
Natura is the  market leader in Brazil with Brazilian O Boticário and American Avon as number two and three.  Other markets of the company are Argentina, Chile, Colombia, Bolivia, Mexico, Peru, Venezuela and France. With plans for expansion to the United States.

The environmental attention of the company is what makes the company different from its competitors. They use natural ingredients for their products with respect the biodiversity of Brazil. This includes no product testing on animals.
Yearly they release 198 000 tons of CO2 into the atmosphere and their aim is to be a carbon neutral company. They achieve this through all sorts of compensation programs such replanting trees, investments in biomass research, providing energy efficient stoves for people in remote areas. A more detailed list can be found on their website (Portuguese).
It further tries to reduce waste. It monitors closely and reports water and energy usage in its annual report. Also, they were also the first company in its industry in 1983 in Brazil to try and limit the waste on the consumer side by encouraging product refills. The package also functions as a way to inform the consumer by featuring an environmental table on it. This lists all the ingredients used in a certain product, similar to a nutritional table on food items.
Ekos line from Natura Brasil

The third part of the balancing exercise is the social aspect. Natura is selling its products via direct selling. For this the company counts on its reseller network that consists of 850 000 resellers at home parties, in beauty saloons or hair dressers. Making sure these people are well trained and taking care of them is important as they represent the company to the consumers. The quality of the sale is important to them, making sure the personal touch is involved. Further they can use this network to find out about new customer preferences or test the reaction on new products.

Natura uses social networks as an R&D tool, to monitor and test out new ideas. They have Brazilian and a French blog, a Portuguese Twitter profile an dozens of inactive profiles on the network site. On Orkut, a social media network popular in Brazil, they have a page with 54000 members. Facebook, more popular in the rest of South America, has a popular page for their presence in Spanish countries.

Follow this link to discover more Brands of Brazil.

February 2, 2010

Early World Cup advertising

There are stil many months to go until the World Cup football in South Africa, but since this is football crazy Brazil, it is already close in their hearts. That is why advertisers use it already. Two different examples,a good one and a poor one. The first one, for the Brahma beer brand, focuses on the warrior inside that comes out when the national team plays. The second one for Itaú bank focuses on peace and has the idea that football, and more specifically Brazil, can bring Israelis and Palestinians closer together.