Tài liệu The ABC''''s of Marketing & Advertising doc

The purpose of this book is to provide you with agood basic knowledge of sound marketing principles as well as sufficient information to makeinformed advertising decisions.The handbook i

This handbook has been prepared by the Oklahoma Small Business Development Center(OSBDC) and the Service Corps of Retired Executives (SCORE) in a partnership program withthe U.S Small Business Administration The purpose of this book is to provide you with agood basic knowledge of sound marketing principles as well as sufficient information to makeinformed advertising decisions.

The handbook is specifically designed to help you understand:

o What your business product or service has to offer potential customers;

o Who your customer is;

o How to make customers want to buy what you have to offer; and

o Why they will want to buy from you rather than your competition.

No handbook, used in isolation, is likely to answer all of your marketing and advertisingquestions We have, therefore, included an additional list of valuable resources in the appendix.Also, keep in mind that your Oklahoma Small Business Development Center (OSBDC) andService Corps of Retired Executives (SCORE) provide "FREE" one-on-one counseling in these

- - and a myriad of other - - subjects Additionally, we will periodically sponsor workshops inboth basic and advanced marketing and advertising For additional information on any of theservices provided by OSBDC and SCORE, contact:

OSBDC/SCORE

c/o Northwestern Oklahoma State University

2929 E RandolphEnid, Oklahoma 73701

Phone: (580) 213-3197 - Fax: (580) 213-3196 - E-Mail: cakuchinsky@nwosu.edu

Table of Contents

M a r k e t i n g

Marketing 1

What Is Marketing? 2

Why Market? 2

Factoids 4

The 5 P's 5

Consumer Beliefs 6

Who Is Your Market? 8

How Do You Market? .10

Pricing 10

Packaging .12

Promotions .13

How Will You Know If You're Marketing Correctly? .16

How Do I Do A Marketing Plan .17

Product/Service Worksheet 23

Competitive Analysis 25

Customer Analysis .26

Wizards of Marketing: How Companies Can Look Insider the Consumer's Head 27

Case Study: Whirpool Corporation 29

Sample Publications .30

Instant Insight In The Coffee Caper 31

The ABC's of Marketing To Kids 32

Teen Impact on the U.S Economy .34

Price 35

Pricing Systems: Products & Services 36

Color Insights .38

Shape Up Your Firm's Image 40

Advertising Advertising .43

Advertising and You! 44

Advertising Planning 49

Print Media 50

Classified Advertising 51

Newspaper Display Advertising 52

Magazine Advertising 54

Trade Journal/Business Directory Listing Advertising 55

Yellow Pages 55

Trade/Business Journals 56

Processed Media .57

Radio Advertising .57

Television Advertising 59

Outdoor Advertising .61

Billboards 61

Transit Advertising 61

Word-of-Mouth Advertising 62

Networking 65

Booths and Trade Shows 66

Direct Response Mail .68

Electronic Media Advertising .68

Promotional Advertising .70

Public Relations 72

Press Releases 73

Public Service Announcements (PSAs) 74

Press Kits .74

Miscellaneous Forms of Advertising 75

Advertising Budgeting .69

Tying It All Together! .77

100 Guerilla Marketing Weapons .79

Advertising Pre-Checklist .82

Advertising Plan 83

Essentials of a Good Ad .84

How To Check Ads for More Sale 86

Advertising Styles 87

The Bald Truth About Ads 88

Affordable Designing .89

Guidelines for Creating Successful Marketing Materials 90

Copywriting Errors to Avoid 91

Networking Pointers 92

Making Trade Shows Pay Off 93

Tips for Good Direct Mail Pieces 95

Get More Mailing List Mileage .96

What Makes A Good Specialty Gift? .97

Press Release Example 98

Fact Sheet Example .99

PSA Example 100

Press Kit Cover Letter 101

Press Kit Checksheet 102

Common Advertising Mistakes 103

Advertising and Sales .104

Creative Techniques to Boost Sales 108

Advertising Post-Checklist 109

APPENDIX Product/Service Worksheet (Sample) 113

Competitive Analysis (Sample) 115

Customer Analysis (Sample) .116

Advertising Pre-Checklist (Sample) .117

To some businesses - - small businesses, in particular, - - marketing and advertisingseems like a lot of senseless hocus pocus In reality, however, there is nothing at all magicalabout either one Both marketing and advertising are, in fact, based on a very logical premises:

Before a consumer can buy a product or service - - no matter how well designed or

efficiently produced it is - - he or she must first know that it exists That, in a nut shell, is

the purpose of marketing Advertising, on the other hand, is simply one of several differentmethods used to "get the message out."

CEOs of Fortune 500 companies all have at least one thing in common They agreethat marketing is one of the most important functions in any business For that reason, nearly

50 cents of every consumer dollar made goes toward marketing and advertising On the flipside, surveys of failing businesses reveal that little, and in some instances no, marketing andadvertising ever took place Notice any interesting correlations?

The truth of the matter is this Businesses that operate without using good marketingprincipals in conjunction with solid advertising standards, had better find a reliable crystal ball,

a Genie's lamp, or a very powerful magic wand Without the use of marketing and advertising

- - or a great deal of magic - - the business is doomed to fail!

1

Marketing

Contrary to popular belief, marketing is NOT aglorified name for selling In fact, selling is just one ofthe components of marketing For this reason, successfulbusiness owners think "marketing," not "selling." Theyunderstand that it is infinitely more important to know thewants, needs, and preferences of their customers than it is

to focus on how to sell their product or service After all,

it is the customer who has ultimate control over the life ofany product or service

Sales people who pride themselves on being able tosell anything to anyone, even ice to Eskimos, are foolingthemselves The biggest markets, and the best profits,come from discovering and supplying customer wants andneeds If done correctly, marketing actually makes sellingalmost incidental When customer's needs are answered,and the product or service properly exposed, then what isbeing offered will sell

Why market is a common question, particularly

among small businesses It is, however, a question that

is easy to answer if you remember that there are many

products and services competing for the consumer

dollar Even before a customer chooses a specific brand

or selects a particular style over another, he or she must

first decide whether or not to buy at all "Instead of

buying a new coat, should I save for a vacation?

Should I buy a new car or invest in a retirement plan?"

Of course, in reality, vacations and retirement plans are

also forms of purchases, but those who are in the business

of selling coats or cars, rarely think of the competitive

power of these alternative options Nevertheless, they are

competing items

Suppose a consumer decides to spend a portion of his or her disposable income onentertainment He or she must then decide whether to buy a stereo, theater tickets, or a VCR.These "generic competitors" vie for the same entertainment dollar Only once the consumerhas decided to buy a stereo, will (s)he choose the product form (phonograph, tape deck, CDplayer) and the specific product

What Is

Marketing?

Why Market?

Marketing is the activity intended

to create an interest in and a need to

purchase a product or service.

Marketing is critical to the life of any business; but that is particularly true of smallbusiness To be successful, small businesses must focus on identifying their customer's wantsand needs and then meet them while still making a profit But to do that, business must beginwith a basic analysis of what it has to offer potential consumers Whatever the product orservice, there must be something unique about it; something that will make the customerwilling to pay the asking price.

To succeed in business - - and to

make a living at it - - businesses must carve

out a market niche Within that niche, they

must develop as good a reputation for "making

widgets" as Coke does for making sodas or as

Gillette does for cutting off stubborn whiskers

To determine the uniqueness of a product or service, several questions need to beexplored:

o Is it offered by anyone else?

o Does it satisfy an unfulfilled need?

o Will it create a trend?

o Is it environmentally sensitive?

o Does it play to the customers' sense of value?

o Does it occupy a special niche?

o Is a moral issue involved?

o Is it patentable?

o Is the marketing technique different?

o Is customer service different?

o Does it use my special talents?

Marketing includes foresight and planning It begins by determining several things

On pages 23 through 25 of this handbook, you will find a "Product/Services Worksheet" and a "Competitive Analysis These questionnaires, once answered, will help business

focus on its potential by clarifying the products and services offered, establishing who thecompetition is, identifying the customer base, and determining the proper market "niche."

Once a business has a clear picture of its place in the market, it is time to decide upon

a marketing approach There are two basic marketing approaches The first is company

centered In this approach business essentially claims: We (business) have ALL the answers!

An example of this approach would be Ford Motor Company Their boast was that they wouldmake Model T's in any color the customer wanted; as long as it was black This philosophyworked for them because demand for their product far exceeded supply Only a handful ofcompanies still operate by this standard

3

The second - - and more recommended

approach - - is customer centered This approach

essentially claims: The customer is ALWAYS

right! In using this approach, companies respond

directly to the wants and needs of the customer

For that reason this is the approach that most

successful businesses follow However, it is

important to keep in mind that this approach

requires both focus and consistency Remember

Detroit in the 70's when they ignored the wants and

needs of their customers for more fuel efficient cars?

They lost big business to foreign competitors who were

more than willing to respond to those wants and needs

The lesson to be learned is this: Businesses that intend to "customer center" their company,must do it all of the time; not just when they feel like it

Whichever marketing approach is chosen, it is important to keep a few facts in mind:

- 90% of customers surveyed in 1992, listed "customer service" as one of the top three things that influence their buying habits Of that 90%, 68% listed customer service as the most important thing; above the reliability of the product or service.

- Even in purchases of the most functional products, consumers tend to be swayed more

by how a product appeals to their emotion and cultural values than its rational virtues such as durability or ease of use.

- Only 11 out of 100 dissatisfied customers will place a formal complaint with business, but 42% of all dissatisfied customers will tell 20 to 25 people about their dissatisfaction.

- For every complainer, there are 31 with the same complaint that never say anything.

- 93% of all unsatisfied customers do not repurchase from the offending business,

compared to the 70% who remain loyal when their complaints are satisfactorily handled.

Also keep in mind that there are certain variables commonly used by customers indetermining their perception of a company's customer service quality Failure to provide atleast two or more of these variables will most likely result in significant customer loss

Factoids

Variables are listed below in order of customer significance.

- Reliability gages the consistency of employee performance and dependability.

- Responsiveness relates to the employees' apparent willingness or readiness to provide good customer service.

- Competence refers to the service provider's possession of required skills and knowledge about the product or service.

- Access measures a business's approachability and ease of contact.

- Courtesy refers to the politeness, respect, and friendliness exhibited by personnel.

- Communication refers to a company's ability to keep customers informed about their

product or service, in a language that the customer can understand.

- Credibility gages the trustworthiness, believability, and honesty of the business in the customer's eyes: Does the business truly appear to have the customer's best interest

- Tangibles refers to physical evidence of the above in terms of:

- buildings, appearance of personnel

- tools used to provide service

- other customers

Once a business has chosen its marketing approach, it must then decide how that

approach will correlate with respect to the five P's:

1) PRODUCT: the goods, services, and ideas that embody the benefits that consumers seek This includes packaging, name, logo, and the product itself.

2) PRICING: the value placed on a product or service This is often affected by competitors' pricing; but also includes the psychological issue of pricing and considers the segment being solicited.

3) PROMOTION: getting the story out.

4) PLACEMENT: how the product will be delivered.

5) PROBE: consumer research

5

This correlation is important since, on the whole, the American public doesn't believethat businesses operate with any kind of scruples In fact, recent surveys indicate that 65% ofthe buying public believe that business will do everything it can to make a profit; even at theexpense of the consumer These surveys also indicate that the public believes the following:

CONSUMER BELIEFS

1) The quality of goods and services provided continues to get worse with every year 2) Products don't last as long as they did a decade ago.

3) It is more difficult to get products repaired today.

4) Products used regularly do not live up to their advertising.

Because of this environment of public distrust, thorough market planning becomes vital.This planning includes two major parts The first is scanning the business environment todetermine the business climate - - both economic and competitive Second, is the selection

of target markets This can be done through one of the following:

1) Concentrated Marketing which focuses efforts on one segment of the market with

a single mix Playschool, for example, concentrates its marketing efforts on pre-schoolers.

The advantage of this form of marketing is that it allows a business to both know and understand its chosen market For this reason, it may be the best tactic for companies with limited resources The disadvantage is that business may become vulnerable

if marketing conditions change and it has nothing to fall back on A company's strength

in a single market may be a deterrent should it seek to expand its base For example, Disney had trouble breaking into the market for young adult films because the company was so heavily identified with children's movies.

2) Differential Marketing which involves marketing to multiple segments Pepsi is a

good example in that it has five different types of cola

The advantage to this type of marketing is that it allows a company to drop a segment that is unprofitable The disadvantage is that marketing costs are much higher.

Whether concentrated or differential marketing is chosen will likely depend uponexactly what the business is marketing and the marketing strategies chosen However, forthe most part, only extremely specialized businesses can afford to use concentrated marketing.Most businesses will have multiple market segments

There are differing views on how many market segments a company should pursue atany given time However, most experts agree that the following things must be taken intoconsideration when segmenting markets:

1) Business's financial condition Small businesses may need to restrict marketing

efforts in order to survive.

2) What the competition is doing Companies have to decide whether to compete or

cover a segment that isn't currently being covered.

3) Experience level Is the market new to the business or the business new to the

market? If so, it may be best to begin with one segment, perfect it, and then move on

to another market.

Whatever target markets are ultimately chosen, they must be:

that population will provide a sufficient customer base for them to be successful.

2) Reachable If customers are hard to reach, more advertising may be required This may effect product/service price.

then it's not a market to enter.

4) Have purchasing ability Economic conditions can influence markets.

5) Have future potential Markets change If a can't keep up with a particular market, then it should be avoided.

determined, then a business choosing that market may be headed in the wrong direction.

Ultimately, target market selection may rest with availability of market share To

calculate market share, business must begin by estimating its total sales in the current market.The next step is to estimate the number of customers within that identified market Finally,

estimate how many times the average customer purchases the product or service (for example, six tubes of toothpaste per year) By multiplying the number of customers in the market with

the number of purchases made, business can identify the total size of the annual market Then,

by dividing their sales into that figure, a company can determine its market share

Market share gives business a way of seeing how it is doing relative to its competition

If the share drops, it is an indicator of a

real marketing problem If the share

increases, it proves that the business

is doing something right If the share

stays the same, it is indicator that it

might be time to try something new

7

Customer identification is a primary goal of market planning People's needs and desires change over a life- time as economic circumstances like disposable income and borrowing habits shift Attitudes toward money also change For example, young singles tend to buy more clothes and eat out in restaurants, while couples with children spend their money on things like carpeting and washing machines.

As family incomes increase, the percentage spent on clothing, recreation, transportation, health, and savings also increase Consumer research, done in an attempt to define categories for market segmentation, generally includes both demographic and psychographic profiles

Demographic Profiles include information on:

- marital status, - education, and

- family status, - occupation

For example, "Bassin" magazine's media kit reports that their average reader:

- Has an annual income of $33,000;

- Fishes 32 days each year;

- Spends $250 annually on tackle;

Who Is

Y

Your our

Market?

- Owns 10 rods and reels;

- Purchases 21 lures per year;

- Buys most fishing gear by mail; and

- Reads each issue for 1.65 hours.

Psychographic information is particularly

valuable in helping to select advertising media and

in designing ads because it can help identify the

buying behavior of potential consumers For

example, if a person is ambitious, (s)he will tend to buy "status-support" products If the personenjoys social activities, (s)he will be good customers for liquor, wine glasses, and cookeryitems If the person is a loner, (s)he will gravitate toward private entertainment forms likepersonal computers, model building, and the like

It is also important, in considering potential customers, to keep in mind that there aregeographic differences within regional markets Snow shovels may sell well in Boston, but not

in Miami Food preferences differ not only from one part of the country to another, but evenwithin a city Bagels may be a big seller in one neighborhood, while tacos well well in another.Some regional or metropolitan markets are considered so representatives of the nation as awhole that they are often used as test areas for new products and services Some states likeCalifornia, on the other hand, have so many people pursuing unusual life-styles that somemarket researches don't use those areas to test market mainstream products For this reason, aknowledge of regional preferences is necessary On page 26 is a "Customer Analysis," which can be helpful in identifying a potential customer base On pages 27 and 28 is an article entitled

"Wizards of Marketing ." It contains good information on methods for defining customers.

Market research can also be used to determine the cause of specific business problems,

or to explore new opportunities in the marketplace An example of how market research can beused this way is as follows:

9

After four years of fairly flat sales in the mid-1970's, General Foods became concerned as sales for Jell-O declined by more than 4% yearly as the

decade came to a close Rather than scrap the 80 year-old product, the company's

advertising agency interviewed hundreds of consumers and found that Jell-O

reminded them of pleasant family gatherings Based on their research, advertising

for Jell-O was changed from a theme that stressed economy and versatility to a

more upbeat, family-oriented approach Many of the techniques developed by

producers of soft-drink commercials were used Fast-paced shots showed Jell-O

fans of all ages shaking and eating their dessert as a chorus sang a snappy jingle

"Watch that wobble, see that wiggle, taste that jiggle ." Following the campaign,

Jell-O's share of the market improved to 71.4% from 70% - - a rise worth more

than one million dollars to the company.

Market Research can be done a myriad of different ways It can be done through:

- Interviews; (See page 29 of the handbook for an interview example.)

- Focus Groups - groups of 8-10 similar people who gather to discuss the product;

(NOTE: Mattel offers a successful Focus Group example A group of young girls reported

that, when playing, they had Barbie kiss Ken The result was "Kissing Barbie.")

- Literature reviews; (See page 30 of the handbook for a listing of such publications.)

- Magazines;

- Commercial market research;

- Computer generated data bases;

- Consumer attitude & public opinion polls such as Nielson;

- Observation - like an actual traffic count at a specifically identified location;

- Experimentation; (NOTE: It is recommended that businesses let experts do the experiment and use their available data See page 31 of the handbook for an example.)

- Surveys.

One of the markets that is often forgotten in the marketing process is that of childrenand teenagers This market has a profound impact on the buying habits of their parents On pages 32 through 34 of this handbook there are some interesting facts and figures

regarding children and teen impact \on the U.S economy Business is likely to quickly discover that, in many instances, these are not audiences to ignore.

There are several key marketing tools that are oftennot considered as pieces of marketing These include:

- Pricing,

- Packaging, and

- Promotion

Pricing is a marketing decision that combines

market research with financial analysis to be successful,business must price products and services to allow a profitmargin, be competitive with other businesses, and suit thecustomer's budget Price can make or break a business Ifthe price is wrong, it won't matter if everything else is right

How Do

Y

Market?

But how does one go about deciding upon a price? There are two important factors tokeep in mind when establishing a pricing structure.

1) Price Ceiling This represents the price that the market determines the product or

service will successfully sell for This identifies the top price customers will typically pay for particular goods or services Market research and competitive analysis should

be used to determine pricing trends and strategies of similar businesses.

2) Price Floor This represents all of the costs associated with running the business.

this is the price below which business cannot sell and make the necessary profit.

Successful businesses traditionally operate somewhere between the price ceiling and theprice floor; allowing a margin for returns, damage, sales, and discounts

There are also psychological factors involved in pricing Increasing the cost ofdesigner jeans has little to do with the product's performance; but it has a lot to do withconsumer psychology Likewise, retailers use "odd number" pricing ($499 rather than $500)because the difference between the prices is perceived as being greater than one dollar.Psychologists even suggest that every number has psychological qualities that affect priceperception For example, the number 8 is round and symmetrical; soothing and calm, whilethe number 7 is angular and calls attention to itself Consequently, in psychological terms,8.8% financing may be more appealing than 7.7%

Perceived value is another pricing factor With manufactured goods, perceived valuemight be measured in terms of greater durability or longer warranty Perceived value caneasily be enhanced by packaging, advertising, and promotion Determining perceived valuewill almost certainly require the use of market research

An example of how "perceived value" works follows:

Price can play a major role in product or service promotion Discounts and rebatescan help increase sales volume There are even instances where a rise in price has actuallyincreased market share For example, when Fleishmann's gin raised its price a $1 per bottle,sales improved dramatically Perception of the quality of the gin rose with the price

11

A man decides to start a chimney sweeping service There is already one competitor in the area, but the new comer wants to enter the market with the top

price After asking a few questions of potential customers, he decides he could

charge a higher price if he appeared in a top hat and frock coat - - the traditional apparel of the London "sweeps." Although he is no better at the job than his

competitors, he is "perceived" as being more authentic and therefore better

-because of this attire.

Promotional pricing is somewhat limited by government regulation If a businessadvertises fantastic discounts, the customer's savings must be real "Rain checks" must beoffered for specially priced items that quickly sell out Promotional pricing is also importantwhen introducing a new product or service However, remember that it is easier to lower aprice than raise it Selling below the competition may initially improve sales volume, butcould cost a lot of customers when prices are raised after the promotional period ends.

Price changes can respond to shifts in the market, cost increases, or need for moreprofit However, it is important to anticipate the impact of a price change

- How will the sales force react?

- Will the change have a noticeable effect on competition?

- How will if affect distributors or dealers?

- Will suppliers charge more if prices are increased?

- Are there special government regulations to be considered?

- How will customers react to a price change?

Ultimately there is not a magic formula for establishing a pricing structure A lot ofthings have to be taken into consideration However, on pages 35 through 37 of this hand- book is information that may be helpful in determining pricing for products and services.

Packaging not only serves as a means for protecting a product, but also as a valuablemarketing tool In many instances the product's packaging makes the first initial impression

on the consumer (NOTE: Services can also be packaged by placing a description in a

well-designed folder or binder This becomes the service's physical representation.)

Consumers often decide to purchase based upon the appeal of the package that encloses it

To keep costs down, some companies use stock packaging rather than having it customdesigned Selection of stock packaging has greatly improved over the past few years Lookthrough industry trade magazines for supply listings and advertisements on stock packaging

When developing product packaging, consider product liability,

bar codes, shape, size, and materials Many retail stores will not

handle products without bar coding To still others, shape is important

because storage and shelf space is typically designed or square or

rectangular packaging Therefore, materials should be chosen

carefully Some types of plastic deteriorate and become yellow

and brittle without proper storage

The package itself can be used as an advertising medium

Packaging and labeling are forms of direct communication with the

consumer The expansion of self-serve and warehouse shopping has

placed increased emphasis on packaging The package must convince

the shopper to buy a particular product over that of the competition

Promotion: Two elements are involved in deciding the impression the customer

will make about a business and its products or services Identity refers to how the customercompares a business to its competition while image refers to the emotional or psychologicalfeeling that a customer has about the business product, or service

Names - - of companies and products or services, can be a very important part of abusiness's identity For that reason, many companies register their business and/or productnames However, it is important to remember that, if the name of a product is a key part

of the overall marketing strategy, then it should be registered before the product is fullydeveloped This helps prevent the competition from capitalizing on the use of the name

Product names - - often referred to as brand names - - should be strong, easy to

pronounce and spell, distinctive, and descriptive These names provide a method of

identifying the specific goods or services of a particular seller The rights to sell brandnames are protected by common law, but it is still a good idea to obtain further protection

by registering the name with the Patent and Trademark Office Keep in mind, however,

that the legal registration process is complex The rules include that a brand name must

be used in interstate commerce before it can be protected

Some brand names become so familiar that they become generic "Aspirin" was

once simply a brand name, as was "nylon" and "cellophane." "Kleenex," which is an inventedword, is almost as generic as "Xerox" which has become both a

verb and a noun

Trademarks, like brand names, help make a product

or service more noticeable and distinctive in the marketplace

A trademark is defined as "any word, name, symbol, device or

combination thereof, adopted and used by a manufacturer

or merchant to identify his goods and distinguish them from

those manufactured or sold by others "A good trademark,

will be easily recognizable for its visual representation of a

company or product

However, the real identity of a company actually stems from the image that it createswith its customers by listening to their wants and needs and then meeting them once they havebeen identified Failure to achieve that single goal - - no matter how good the company'sproposed image may be - - will leave the business with a negative identity in the eyes of theconsumer

If image is an important factor in a company's marketing strategy, the services of aprofessional artist, computer graphics specialist, or ad agency to design the packaging,

trademark, logo, and various promotional materials will likely yield high dividends

13

Crayola

Crayons

A business's image which will eventually become an integral part of its overall identity

-is reflected in its chosen logo, business signage, employee uniforms, style of promotionalmaterials, and packaging These things, when tied together, are often referred to as an "imagepackage." The combinations chosen for this package creates an image for the business andmakes promotional and packaging materials more easily recognizable In today's competitiveworld, it is important to be recognized, remembered, and viewed as an established business

A Logo is a symbol that represents the business It provides

a quick way of getting people to notice and remember a business

In choosing a logo, it is important to make sure that thedesign is appropriate to the business and that the artwork is timely.Most printers have a book of current, standard logos on file Formore specialized designs, consider hiring a professional artist,working with a high school or college student, or working with acomputer graphics specialist But keep in mind, if a logo design

is original, it might be advisable to consider registering it with theCopyright Office or the Patent and Trademark Office in D.C

Logotype refers to the type style used in the writing of the business name The typesize, placement, and style can communicate a great deal about a company For example, acapitalized bold typeface projects the image of an aggressive company with a foothold in themarketplace It will likely inspire confidence Modern, bold type will project a high-techimage of efficiency Antique lettering will project an old-fashioned, more casual feeling, etc

Adopting Company Colors is another way of influencing graphic identity The colorschosen can set the tone of marketing materials The use of color in marketing can be powerful;however, be certain that the colors chosen reflect the image the company wants to project On pages 38 and 39 of the handbook is additional information on color analysis.

Signs are yet another way of promoting a graphic identity They should include thecompany logo, logotype, and colors Because signs are a written invitation to the public, theyshould be colorful, easily recognizable, and easy to remember McDonald's "golden arches,"for an example, began as a part of the building design Later they became giant neon signs.Today, they form the big "M" that appears on all McDonald's products The "sign of the goldenarches" has changed over the years, but it remains the symbol of the McDonald's legend

Promotional materials should also reflect the company's image Since a business'sidentity is most often based upon its paper correspondence, materials such as stationery,

business cards, and envelopes are second only to annual sales in a list of items that convey acompany's image

Helping Hands

Nursery

a mini-billboard It should tell:

1) What the business is;

2) Who to contact;

3) When the products and services are available;

4) Where the is business located;

5) Why they need that product or service; and 6) How to get the products or services.

In developing a business card:

1) The logo must be descriptive.

2) The company name must be legible and in the correct logotype.

3) A contact person's name and phone number must be given.

4) Include a statement about the product or service offered (if it's not obvious).

5) The overall appearance of the card must be pleasing.

6) The card should be one the customer will remember

- Stationery Most companies generate sufficient correspondence to warrant the

development of company stationery Stationery, like business cards, lends credibility

to a company's image Stationery should include the company name, address,

telephone and fax numbers (except on the envelope), and if desired, the owner's name and title.

Other invaluable promotional materials are listed below in the order of importanceranked by a survey of 1,500 small businesses throughout the country:

- Signage (building, window, and/or vehicle)

- Mailing Labels (for materials sent other than company stationery)

- Brochures/Flyers

- Business Forms (invoices, statements, purchase order, checks, contracts, etc.)

- Give Aways (promotional "gimmicks" like key chains, pens/pencils, cups, etc.)

- Presentation Materials (folders, binders, name badges, etc.)

- Displays

If the importance of a graphic image for business is still unclear, on pages 40 through

41 of this handbook is an article entitled, "Shape Up Your Firm's Image " It should help put everything in perspective.

There are warning signs when a marketing strategy is off mark A sick marketingcampaign can be cured by isolating its symptoms and identifying the underlying problem(s)

- Shooting From the Hip This approach involves spot

mailing, periodic ads, and a brochure once or twice a year.

It lacks planning, organization, and purpose It won't work!

- Taking Action Just to Beef Up Sales Business is often

guilty of budgeting little, or no, money for marketing Money allocated, is used only when a crisis occurs Once sales begin to climb again, they cease marketing This is risky business Only by marketing consistently can business make sure that sales remain on track Marketing should be proactive to maintain sales; not reactive to boost them.

- Making a Secretary the Marketing Director Small

businesses have the habit of making secretaries perform functions usually assigned to a marketing Director Since these individuals generally have little or no marketing training, activities are often limited

to ordering pamphlets and stationery based on existing material or commissioning (from

a friend with "some" design ability) a brochure or flyer What a waste of time and money!

should be spent scoping out the competition's marketing efforts in order to develop new ones for the business It will be far more productive After all, who says the competition

is on track with their marketing efforts?

- Expecting Huge Results From a Tiny Budget If you place priority in minimizing

your cash investment, you can't realistically expect good results.

- Failing to Do Market Research Disregarding the market research component, even

with the most expensive brochures, flyers, etc., won't do any good Business must know who their audience is in order to influence them properly.

- Minimizing the Value of Good Advertising Continuously running a poor ad is a

waste of money Running a really good ad a few times is much more cost effective.

- Advertising in Publications With the Lowest Rates This is another money-saving

technique that often backfires Publications with lower rates have low rates for a reason:

No one reads them Plus, just because the rate is cheap doesn't guarantee that business will reach its projected target An ad seen by the wrong audience represents lost money.

it is noticed So, if you run an add only once, you're throwing away advertising dollars.

- Publishing a Newsletter Once or Twice a Year A newsletter can be a very cost

effective way of marketing But, producing the letter only once or twice a year is more likely to impede communication between the business and customers.

Ineffective, or bad, marketing efforts most often stem from the lack of any kind of solidmarketing plan Without a marketing plan, a business is reduced to "guessing" about its future,much like a side show gypsy looking in a crystal ball But, with a marketing plan, the future isset with business in control In this day and age, the more scientific approach is the most costeffective way to go!

A marketing plan should not be long If it becomes

much longer than twenty pages, it will not be used The

plan should be succinct; summarizing a business's research

analyses and developed strategies by putting them down in

writing This formal, written plan gives business another

opportunity to review ideas, goals, objectives, and strategies

The key section of the market plan is in the identification

of how goals and objectives will be met All plans should have,

as a minimum, four strategic variables:

Mission Statement: _

The next step is to establish specific goals These should be broad in nature;

identifying what the company wants to do within a given time frame (one, three, five, orten years, etc.) What goals do you want your company to meet within its first year of business?

Goals (first year):

How Do Y

You Do A ou Do A Marketing

P l a n ?

17

The next step is to translate those established goals into terms of "sales" and "profit." Inother words, how much money does the business need to make?

Sales & Profit Goals (first year): _

Now, describe your company's products and services Be sure to note any recent changes, proposed changes, or possible additions to the line.

Products/Services: _

Next, identify target markets Include each market's size and any demographic/ psychographic information available.

Target Markets:

Describe each segment identified above in terms of its market potential Be sure to

identify any specific advantages that a particular segment has.

Market Potential:

Describe the competition in terms of their strengths and weaknesses and how yourbusiness measures up with regard to competitive threats and opportunities Do a SWOT

(strengths, weaknesses, opportunities, and threats) analysis on each competitor and

on your business.

Competition: _

Identify your niche Describe what makes your business, product, and/or service unique:

Niche: _

Identify the promotional, pricing, and sales strategies your business will use Be sure to

explain how these strategies will help you either maintain or increase sales.

Promotional, Pricing, & Sales Strategies: _

19

Identify potential problems your business might encounter AND possible tions for overcoming those problems.

solu-Potential Problems:

Establish a timetable and periodic benchmarks to measure the effectiveness of your marketing efforts.

Timetable & Benchmarks:

Decide how often you will review your established marketing plan Identify how you will evaluate the effectiveness of the plan and the actions you will take to improve the plan.

Review & Evaluation: _

Once a marketing plan is in place, business can begin considering methods for achievingtheir established goals and objectives In almost every instance, this will require some form ofpublic relations, publicity, promotion, or advertising For the purposes of this handbook, each

of these subjects will be handled under the broad category of "advertising;" even though theycould, and should, stand alone

Please review the appendices of this section for additional valuable information If youhave not taken the time to do so, please complete the questionnaires within these appendices.They will help greatly as you begin to write and/or review your marketing plan

Now, let's move on to advertising

21

1 What does the product/service do?

2 Why was it developed, invented, or produced?

3 Is it of high or low interest?

4 What does it do for the customer?

5 What problem does it solve?

6 How will it hurt if the customer doesn't use it?

7 How often is it used and where?

8 Does it fill a personal, pragmatic, emotional, or other need?

9 How is it made/done?

10 Where does it come from?

11 What are its ingredients, components, etc.?

12 What does every feature of it do?

13 Are any of these features new?

14 What features are truly distinctive?

15 How is it designed?

16 What is its shape?

18 What's its size?

19 How many models, styles, colors, etc exist?

20 Are there any options, decisions, choices among products/services?

21 How is it packaged?

25 Has it won any awards or recognition?

28 Is it a major purchase?

29 Where is it bought?

30 What is its distribution system?

31 Is there a problem with it being fresh, current, in style? Which?

32 What life cycle stage is the product/service in? (Introduction, growth, maturity, decline)

33 Who developed it?

34 When?

36 In past advertising, what features have been emphasized?

37 Has there been any change in the product/service image? What?

38 What's the product/service slogan or campaign theme?

39 Has there been a change in slogan/theme? Why?

What was the change?

40 Has there been any change in the competitive situation? What?

41 In what category does it fit?

42 What's the company's name?

43 Is the product/service a market leader or a follower?

44 What's its share of the market?

45 What's the state of the industry?

46 Are there any outside economic influences? What?

48 Do they compete directly or with a product/service substitute?

49 How much does the it cost?

50 Is the price competitive?

51 How does our product differ from its competitors?

52 In what ways is it alike?

53 How does our product/service compare with the competition?

54 What is the product/service's most distinctive feature?

55 What is its most important feature?

56 What is new about our product/service?

57 What is bad about our product/service?

58 What is being planned for the development of new products/services?

59 Why should customers come to us?

60 What other information is relevant about our product/service?

COMPETITIVE ANALYSIS

Fill in as much information as you can:

My competitors are: Standing (in sales dollars or market share)

Competitor Product/ Yrs Business Pricing Quality Service Location Advertising Other Info

Describe any outstanding or poor advertising themes and/or sales promotions used by your competitors:

What are your competitors major strengths?

What are their major weaknesses?

What do they do better than you?

What do you do better than them?

How is your product or service unique from those of your competitors?

A sample of this form completed is included in the appendix of this handbook.

25

Customer Demographics:

What other characteristics do they possess? (i.e., brand loyalty, cautious, conformist, impulsive, planner, etc.)

Where do they live?

Where do they work?

Where do they shop?

What distance will they travel to buy your product/service?

What distance are you willing to travel to sell to your customers?

How many customers live within geographical limits established?

How many customers are likely to buy the products/services offered by either you or your competitors? What percentage of that number will likely purchase your product/service?

Multiply the number of customers you believe will purchase the products/ services you offer from either you or your competitors with the percentage you believe will purchase those products /services from you This number represents your potential customer base.

How many purchases will the average customer make during a year?

How much will the average customer be willing to spend on each purchase?

Multiply the number of purchases the average customer will make with the amount the customer will be willing to spend This number represents the amount the average customer will spend each year.

Multiply the number you determined will be your customers each year with the amount each customer will

be willing to spend each year This number represents your expected annual sales volume.

CUSTOMER ANALYSIS

A sample of this form completed is included in the appendix of this handbook.

Wizards Of Marketing:

How Companies Can Look Inside The Consumer's Head

Newsweek (July 22, 1988)

There are more conventional ways

to find out what kind of message is important Prizm, developed by Wash- ington-based Claritas Corporation is one of the more sophisticated; it tests products by surveying consumers who have been classified into 40 target- neighborhood life-style clusters, based

on buying habits The clusters have names like "Money & Brains," for afflu- ent urbanites living in places like Washington's Georgetown Helene Curtis recently used Prizm for its Suave brand shampoo, surveying neighbor- hoods with high concentrations of young working women It found that they re- sponded best to ad messages promis- ing that the inexpensive shampoo should make their hair look like a mil- lion.

One of the biggest marketing vances is the ability of sophisticated programs to dramatically reduce the failure rate for new products; in some cases, by as much as 30 to 50 percent, says MIT marketing professor Glen Urban Traditionally, companies sim- ply showered a test market with ads and other promotions and then took inventory at local stores without know- ing who was buying or why.

ad-But with BehaviorScan, a ket-research system operated by Infor- mation Resources, Incorporated a com- pany can closely monitor the buying patterns and TV-viewing of 30,000 households in 12 communities across the country Whenever a BehaviorScan family shops at the grocery or drug- store, its purchases are recorded by scanners installed by IRI, a microcom- puter attached to the TV set keeps tabs

mar-on what the family watches This mation is used by companies to track how well products and ads are doing Special TV ads, for example, are shown

infor-on cable TV in BehaviorScan homes to see how they will affect buying patterns The test group is also polled to find out what it likes and dislikes about a prod- uct or its ads This way a company can make adjustments in price, ads, or prod- uct itself before a larger rollout.

That's just the kind of realistic trait needed as the market place be- comes increasingly competitive and complex Nowadays, 60 percent of all new products fail within the first year;

por-consumers are demanding higher ity products that more precisely fit their needs Buyers are also harder to reach:

qual-the ratings for prime-time TV, qual-the major selling place for many advertisers, are steadily eroding as viewers switch to syndicated stations, cable TV, and video cassettes "Mass marketing is

no longer the most tive or cost-efficient way

effec-to sell," says Mark S Albion, an assistant professor of marketing at the Harvard Business School "Most companies have to aim their products at more discrete segments of the population.

To do that right, you can't know too much about the

c o n s u m e r "

That challenge is being quickly met.

Researchers at several universities, for example, are monitoring brain waves

in an attempt to find out how and why people respond to ads Some ad agen- cies are conducting more practical tests.

At Foote, Cone, & Belding in San cisco, experimental marketing tools such as Vopan (voice pitch analysis) are being used to get consumers' true emotional response to ads With Vopan, consumers are asked their reactions to ads, and their recorded responses are analyzed by a computer that measures the rate at which the vocal cords are vibrating The faster the vibrations, ap- parently, the more likely it is that people mean what they say Vopan has helped Foote Cone target ads more sharply to the desired audience For Levi Strauss's 501 jeans, for example, the agency found that a Vopan panel of teenagers responded to TV spots stressing such qualities as the jeans' button-fly feature and the fact that they

Fran-"shrink to fit" each person The agency reedited the ads and even dropped one that turned the kids off.

Okay, Coke, here's a strategy that

might have worked Using

state-of-the-art market research like

psychographics, which measure

con-sumer attitudes and emotional

re-sponses to products, you could have

found out how consumers felt about the

new formula before the change Here's

what you would have discovered: Coke's

largest and most loyal block of

custom-ers, mostly Middle Americans, are

dis-turbed by change And the image of

Coke as an American institution is just

as special to them as its taste Knowing

this, a much more subtle approach was

in order The old brand should have

reassuringly remained on the shelves

far longer And the ads were wrong:

better to tell consumers that new Coke

is the same as the old, except for a

couple of improvements to make it

bet-ter Finally, Bill Cosby was the wrong

person to convince consumers that it's

all right to tamper with an institution.

That kind of pitch is more believable

coming from someone like Walter

Cronkite.

These days many American

com-panies take enormous pains to avoid

such blunders Madison Avenue ad

agencies and corporations like IBM,

Procter & Gamble, and Citicorp are

in-creasingly depending upon a handful

of snazzy new marketing techniques

and computer models with names like

Defender, Prizm, BehaviorScan, Vopan,

and VALS With them, they hope to

develop failure proof new products, ward

off market raids by competitors, and

custom-tailor their advertising Modern

market research can, in fact, draw a

startlingly detailed picture of

consum-ers "With demographics such as age,

income, and sex we were only able to

sketch an outline of consumers,"says

Jerry Hamilton, director of marketing

Hamilton, director of marketing

re-search for Ketchum Advertising in San

Francisco "Now we've filled in the

sketch We know who consumers are,

how they live, what they buy, and more

important, why they buy it."

27

Recently, the Andrew Jergens Co.

used BehaviorScan's FASTRAC to test

a new lip balm The technique is to

make clear to families what the product

will be like, showing them dummy

pack-ages and even ads FASTRAC quickly

pointed out a major flaw in the ads for

the new lip balm; consumers felt

Jergens was making inflated

prom-ises about the product's effectiveness.

There are also systems that help

companies protect against competitor's

new products One of the newest is

Defender, a computer model that

simu-lates test marketing, developed by

Management Decision Systems

Us-ing it, a company can see the effect an

interloper will have on its market and

how to ward off the threat Defender can

predict how changes in advertising,

pricing, or promotion will alter

prefer-ences for its products over new entries.

When G D Searle's natural-fiber

laxa-tive, Metamucil, was faced with a new

competitor, Defender advised that the

way to protect market share would be to

launch a less expensive line of

Metamucil; which they did with

suc-cess The advice cost Searle $100,000,

but it probably saved them millions that

would have been lost if a competitor

had stolen a chunk of the market.

No marketing tool promises as

much as Stanford Research Institute's

Values and Life-styles marketing

sys-tems VALS measures consumers'

attitudes about products, politics, work,

education, etc., and divides Americans

into nine types, based on their

self-images, aspirations, and the products

they use "Belongers," for example, as

a key VALS type group; they are

essen-tially blue-collar middle Americans who

value family and country above all else.

They stick to national brand names and they are the last to switch to new prod- ucts "VALS provides such a vivid picture of the consumer," says John Mather, director of marketing for Ketchum Advertising, "it's like inviting them into your office to help write ads or design products."

Some companies are virtually ing just that Ray Ellison Homes, a San Antonio home builder, is designing all

do-of its new homes based on what VALS says the company's prime customers want By surveying the home-buying market, the company discovered that the vast majority of its potential custom- ers were "achievers," who according to Brooke Warrick, the director of market- ing for VALS, are very status-conscious.

Ellison quickly scrapped its old design concepts "We built our new models with all of the bells and whistles that we knew would attract achievers," says company vice president Jim Tilton.

Ellison's old houses were the dard-looking three-bedroom two-bath models In contrast, the new line sports important looking facades, luxury car- peting, and electronic security systems.

Achievers bit The first tract of homes that Ellison put on the market last year sold brilliantly "We thought we'd see 300 at the most in the first year," says Tilton Ellison ended up selling over 2,000 - - more than five times more houses than it used to sell.

Now Ellison is the leading home builder in San Antonio, commanding

40 percent of the market.

VALS is equally effective when it comes to custom-tailoring ads When Ketchum Advertising in San Francisco

was making a group of Bank of America ads aimed at business, they knew that the businessmen they want to reach were primarily "achievers," who tend to

be competitive and individualist ing to this, Ketchum designed ads showing men engaged in such solo sports as water skiing and jogging Bank of America easily scored a hit.

To some, all this marketing ardry is more than a bit worrisome Consumer advocates worry that too much information about too many con- sumers is too readily available They fear that somewhere along the line this kind of data about people's private lives could be abused, "They're not just finding out whether people use Aim or Gleem toothpaste," says Norma Rollins, director of the privacy project for the New York Civil Liberties Union.

wiz-"They're also keeping records on who's buying birth control pills, liquor, ciga- rettes, and who is watching X-rated cable shows; the kind of information that can hurt people."

Market research companies sist that the danger is minimal: they say that they do business only with respon- sible corporations and that the people being surveyed are not identified Some are taking special precautions SRI, for example won't sell VALS to govern- ment agencies or politicians Ad agen- cies are finding VALS an especially powerful took in tailoring commercials

in-to appeal in-to specific groups and that's the kind of persuasive edge SRI wants

to keep out of politics But maybe it doesn't make that much different who has access to these marketing tools; the American consumer is full of sur- prises Just ask Coke.

OVERVIEW OF RESEARCH

As more than a generation of marketing research

has demonstrated, different perspectives on the American

consumer are much like the proverbial blind men touching

different parts of one elephant and coming to radically

different conclusions about the animal The Whirlpool

Report, however, deals with the broad topic of quality and

the American consumer Rather than detailing specific

profiles of markets for particular products or services, it

outlines for the "post consumerist" era what it means today

to be a quality consumer Some of the key questions

explored in the research include:

o Do Americans feel surrounded by junk and poor quality

goods and services or are they satisfied?

o Do Americans think quality is getting scarce, or do they think

quality of goods and services has improved in recent years?

o Do consumers feel they have an adversary relationship with

manufacturers/service providers?

o Are they more or less demanding about quality than they

have been in the past?

RESEARCH METHODOLOGY

A multistage research design was used in

con-ducting this study of American attitudes toward quality in

goods and services.

Phase One - The first phase consisted of qualitative and

back-ground research undertaken to generate hypotheses and develop

topic areas for the general public survey stage of the project.

Phase Two - The second phase consisted of a series of interviews

with 50 representatives of the print and broadcast media from

throughout the nation These media representatives were

specialists in the areas of consumer interest, business, finance,

and home/life-style reporting In interviews, these topic areas were discussed at length in an open-ended interview format, and sugges- tions as to issues of consumer concern were solicited.

During the first two phases of the project, advice from experts in consumer relations and consumer research fields was solicited through telephone and face-to-face interviews The research staff invited a number of experts to act as an advisory panel for the general public survey stage of the project.

Phase Three - The third phase of the project was a general public

survey Twenty trained interviewers conducted phone interviews for a period of five weeks The interviews were conducted on weeknights, between the hours of 6:00 and 10:00 p.m and on weekends, between the hours of 10:00 a.m and 11:30 p.m The interviews took an average of 34 minutes to complete In order to ensure that the respondents interviewed represented a random sample of the total U.S population, at least four callbacks were made to each telephone that had neither yielded a complete interview nor had been disqualified A final response rate of 63 percent was obtained.

Phase Four - Weighting - To make valid projections to the entire

population of the U.S., the sample should match the total U.S population on key demographic variables Due to sampling fluctuations, it was necessary to weight the data to match census figures on four characteristics: age, race, gender, and education The final weighted sample matches census figures very closely The weighting produced a total weighted sample size of 1,002.

The bulk of analyses reported in the text are illustrated with cross-tabulation data Relationships between variables were confirmed by reference to the chi square and Pearson's R statistics where applicable Several three-way cross tabs were computer tested further for relationships among variables The accompany- ing exhibit shows a few of the research results.

How satisfied are you with the goods

you can purchase in your area?

How satisfied are you with the services

you can get in your area?

Has the quality of goods deteriorated

or improved over the last ten years?

Has the quality of services

deterio-rated or improved over the

Very Satisfied Somewhat Sat Barely Satisfied Unsatisfied Very Unsat.

Sig Improved Somewhat Improved About the Same Deteriorating Sig Deter.

Whirlpool Corporation, a leading manufacturer of major home appliances, has corporate roots that go back to

1911 During the more than 70 years that the firm has been making appliances, the variety of consumer products and services has grown dramatically At the same time, competition for the consumer's dollar has become fierce Whirlpool has always placed quality first in its products and services In an attempt to understand more about consumers today, Whirlpool commissioned research and forecasts to conceive and execute a study that would uncover new information about the desires, expectations, and judgments of the consuming public, with emphasis on - - but not limited to - - an exploration

of quality-related issues The following material relates to that study:

29

SAMPLE PUBLICATIONS

Government Publications:

Statistical Abstract of the United States A summary of business, economic, social, and demographic

statistics - published yearly by the U.S government.

Historical Statistics of the United States A collection of government statistics from colonial times to the

present - updated periodically.

County and City Data Book Breakdown of government statistics (on population, manufacturing, sales, etc.)

by city and country - published every three years.

Survey of Current Business An update of important economic statistics (income, employment, construction,

etc.) - published monthly.

Catalogue of U.S Government Publications An update on books and pamphlets (some which are free)

issued by government departments and agencies - published monthly.

- Business Periodical Index

- Wall Street Journal Index

Private Marketing Guides:

Consumer Market and Magazine Report An annual report of U.S consumer ownership and purchase of

goods and services as well as readership of magazines.

A Guide To Consumer Markets Annual report on U.S population, employment, income, and expenditures Market Guide An annual report of statistics (on population, industries, retail sales, and outlets, etc.) for 1,500

major American and Canadian cities.

Marketing Information Guide A monthly bibliography of studies of interest to marketers.

Sales Management Survey of Buying Power Annual market data (on population, income, retail sales, etc.)

for counties, cities, and other statistical areas.

Rand McNally Commercial Atlas and Marketing Guide Annual population breakdowns and maps for

100,000 American cities and towns.

Instant Insight In The Coffee Caper

Marketing Today, Part Two - Markets And Segmentation

One of the classic pieces of experimental marketing research was done by MasonHaire more than 30 years ago At the time, instant coffee had just been introduced, and Hairewanted to investigate why consumers resisted buying it

When questioned directly, homemakers said they did not like the flavor; however, whenblindfold tests were conducted, they could not tell the difference Clearly, something else wasafoot

To probe the hidden psychological issues behind this response, Haire prepared twoidentical shopping lists except for the brand of coffee specified On one list the requestedNescafe Instant Coffee; on the other Maxwell House Coffee Drip Grind

He then asked the housewives to describe the kind of women who would compile suchlists Their responses were interesting A high percentage of the women characterized the

poor wife." The Maxwell House buyer was thought to be "a good wife."

Clearly the women were projecting their own fears and anxieties about using instantcoffee onto the fictional Nescafe buyer While they would not respond to the question, "Why don't you buy Nescafe?" with the answer, "Because people will think I am lazy and shiftless," that fear was the key to much of their resistance

When the study was replicated in 1968, no significant differences were found betweenNescafe and Maxwell House shoppers The use of convenience foods no longer seemed to

be an indication of a woman's character or ability as a wife But to this day, instant coffeeadvertising may stress flavor, or romance, or adventure, but convenience is rarely - - if ever - -mentioned

Sources: Mason Haire, "Projective Techniques in Marketing Research," Journal of Marketing, Volume 14 (April, 1950), pp 649-656; and Frederick E Webster, Jr., andFrederick Von Pechmann, "A Replication of the "Shopping List Study." Journal of Mar- keting, Volume 34 (April 1970), pp 61-77

31

The ABC's of Marketing To Kids

by Patricia Sellers, Fortune Magazine (May 8, 1989)

"You don't need that!" says Kathy Buonincontri to

her daughter, Monica, as they stand in the makeup section

of the Shop Rite "You just bought all that stuff at the mall."

Pretty, blond, and dressed to kill in miniskirt, denim jacket,

and Reebock sneakers, 12 year-old Monica insists that the

one item she must have is a bottle of Maybelline primer to coat

her fingernails before she paints them with pearly-pink

polish "Are you going to buy that?" asks the mother "No,

YOU are," Monica proclaims Mom gives in, of course, then

asks, "Well, can I borrow it?"

Like many mothers today, Buonincontri, 40, will buy

her daughter and son just about anything they want

"Any-thing in moderation," she says That gets

expen-sive because the kids, tuned in to the media and aware of the

latest trends, demand a lot Monica, for example, uses her

own shampoo - - Revlon's Clean & Clear - - because she

says ads in Teen magazine show how it gives hair bounce

and body "It made my friend's hair bouncy too," she says.

And she insists that the Buonincontris eat Stouffer's French

Bread Pizza, not the Shop Rite brand that Mom suggested

buying Says Monica: "Any store-brand thing is gross."

The most sophisticated U.S marketers

acknowl-edge the clout of kids like Monica which represent 28 million

incredibly conspicuous consumers between the ages of 12

to 19 According to Lester Rand, a New York consultant who

has been observing the trends in teenage wealth for nearly

four decades, the typical adolescent spent $2,331 last year;

more than twice as much as ten years earlier As a result,

even though the teenage population has gradually declined,

total spending of this group has risen from around $32.2

billion in 1978 to an excess of $55 billion in 1989, an amount

that approximates the gross national product of Turkey.

The total impact of teenagers on the U.S economy

is much larger: $248.7 billion by Rand's reckoning In

addition to the $55 billion that came from kids' allowances

and after-tax earnings and $11.2 billion that they saved for

future purchases, there's another $33.5 billion that busy

moms and dads gave their offspring for family grocery

shopping last year Rand calculates that youngsters also

"influence" almost $150 billion in family purchases of such

products as stereos, breakfast cereals, and, as in the

Buonincontri household, frozen pizza This amount is likely

to continue to increase.

The spending power of even younger consumers is radical

too; to borrow a bit of kidspeak For you dweebs out there,

"radical" means great or wonderful The number of children

under 12, approximately 42 million, will keep growing through

at least 1995, and money burns holes in their pockets.

James McNeal, a marketing professor at Texas A&M

Univer-sity, estimates that 4-to-12 year-olds used $6.2 billion of their

own money last year, up from $4.2 billion in 1984, to buy items

such as snacks, candy, and toys.

Says Selina Guber, president of Children's Market Research in New York: "Parents are busier and feeling guiltier So they are softer when it comes to their children's requests." The kids are no dummies at exploiting these emotions One 11-year-old girl told Guber, "I don't ask my parents for something when they're both together because if one says no, then they both say no I ask my dad first If he says yes, then he helps me convince my mother."

Food companies are particularly intrigued by the youth market It turns out that junior is juggling supermarket shopping along with schoolwork because 70% of mothers

of children age 17 and under work outside the home Rand found that 80% of teenagers he interviewed in 1988 said they were "heavily involved in supermarket shopping."

Seven-Up, whose sales were flat with young ences, broke the soft drink industry's tradition of not adver- tising to children on Saturday-morning and after school TV.

audi-In its '88 commercials, a little red dot on the soda can came alive as a mischievous creature wreaking havoc on grown- ups As a result of the ads, kids guzzled 20% more soda.

Marketing to children can be treacherous, however They are tough customers for adults to understand In 1989, for example, in a survey of 1,200 youths between the ages

of 6 and 17, interviewers asked, "Do you wish your family were bigger?" Some kids replied: "No, my family is plenty tall." The researchers reworded the question Ann Clurman, senior vice president of Yankelovich Clancy Shulman, says she frequently asks her clients, which include many large consumer product companies, to guess what kids say they worry about a lot She tells them to rank three choices: death

of a parent, nuclear war, and a bad report card Close to 90%

of those clients answered wrong, choosing nuclear war Kids say a bad report card is a lot scarier.

American Home Products learned in an rassing way last year that children are smarter than realized About 20 tykes complained when the company introduced Chef Boyardee's Dinosaurs Pasta with a label identifying a reptile with three claws on each arm as a tyrannosaurus Alas, the beast was an allosaurus: a tyrannosaurus has only two claws American Home amputated the extra digit and sent apology letters and coupons to young objectors.

embar-Like adults, kids don't respond to marketers who talk down to them Marvin Schoenwald, president of Manhat- tan-based M/E Marketing & Research, tells clients to popu- late their commercials with children who are about two years older than the ones they are trying to reach "Anything babyish is the kiss of death." he says The sure-fire way to capture young customers is to create a "cool" image for your product Says Carol Hill, an accountant supervisor at Leo Burnett, the Chicago-based ad agency: "Kids run their lives

by wanting to be cool Cool means confident, respected, and

To endow their products with the requisite

cool-ness, marketers are beginning to employ some precocious

consultants Take Polaroid, for example The company's

first product for children, the $69 Cool Cam instant camera,

was introduced in 1988 and had sales the following year of

$15 million, some 30% higher than Polaroid expected The

reason for the camera's success? Says Kathy D McCoy, the

marketing manager: "We let the kids design their own

camera." Polaroid tried out different colors and names on

more than 600 young shutterbugs, and the kids selected the

camera's two color schemes - - pink and grey and red and

black The youngsters told Polaroid to package

sun-glasses with the camera for an ever cooler look.

The kids had their say in the advertising Polaroid

held a commercial-making contest for children in ten cities

in 1988 and televised the winning spots in each local

market Kids' recall of the homemade commercials - - how

well they understood and remembered the message that

the company wanted to deliver - - far exceeded adults' recall

of most TV ads Says McCoy: "Kids understand kids They

were drawing the right inferences because a kid was

com-municating." The grand prize winner, the creation of

14-year-old Kristin Schorr of Manassas, Virginia, aired

nation-wide on cable TV in 1989 Called "Fish" the ad featured a

distorted view from inside a fishbowl of two geeky-looking

kids One fish gurgles disdainfully to another, "The only

thing cool about these nerds is that they have a Cool Cam."

Carol Hill of Leo Burnett helped HJ Heinz make its

ketchup ads cool after Heinz discovered that children 17 and

younger eat one-third more ketchup than adults do and that

kids often choose the family brand In one commercial, a

dark-haired, self-confident high-schooler impresses a pretty

girl when he sets a Heinz ketchup bottle on its side on the

edge of a rooftop, then bounds down several flights of stairs,

buys a hot dog from a street vendor, and holds out his frank

to catch the first descending drop of sauce To make

ketchup even cooler, the company sponsored a fiery

red-and-white Heinz Ketchup Pontiac that competed in more

than 50 Winston Cup stock-car races.

"The pitch is working," says Jeffery Connor, Heinz's

product manager: "Research shows that kids like the

commercials because they want to be teenagers; adults like

them because they bring back memories of their youth."

Heinz's $250 million U.S ketchup business grew about 2%

in volume in just one year; after five years of no growth.

Hot soup can be cool too Campbell interviewed

groups of school children and found that youngsters like

soup but were embarrassed to admit it Why? Turns out

kids think only Pee-Wee Herman types slurp soup

Young-sters regard the rather bizarre, campy TV star who wears

rouge and red lipstick as funny but nerdy Boys and girls both

admire athletes, however, so the company presented the

Campbell Kids - - the tubby tykes who have symbolized the

soups since 1904 - - as slimmed-down, shapely sports

figures on the labels of the cans A gymnast went on the

Curly Noodle soup; a weight lifter on the Meatball Alphabet.

With the help of ads directed to kids instead of moms,

In their discovery of kid power, marketers have to be wary of overlooking mom altogether She may work in an office, but she still reigns in most households Procter & Gamble learned this lesson trying to build sales of Crest for Kids - - a sparkle-filled, bubble gum flavored version of Crest Gel - - that was introduced in late 1987 The kids-only toothpaste market has grown more slowly than expected because research shows that Mom is not keen on buying a second tube of toothpaste just for junior if it doesn't clean his teeth better than the adult stuff does Colgate-Polmolive is using these findings to introduce its own kids' toothpaste Colgate Junior Formulated to appeal to parents, Colgate Junior is less abrasive and foamy than adult Colgate, and the tube's star-shaped opening discourages kids from squeez- ing out gigantic globs.

Mary Anne Jackson aims her microwaveable trees for kids - - My Own Meals - - directly at mothers The former strategic planner at Beatrice Co couldn't find nutri- tious, additive free dinners for her daughter, Katie, age 4, so she created her own after sending surveys to 2,000 mothers via her diaper service The surveys showed that other moms also wanted easy-to-prepare foods without artificial ingredi- ents or preservatives for their kids Jackson, 35, complied by offering such meals as My Favorite Pasta - - a mixture of lentils, barley, and ground pork Her TV commercial works

en-on Mom's guilt about not being there to cook for her kids: "As

a busy mother like you, I worry about my children's eating habits." she tells viewers Having beat such competitors as ConAgra and Hormel to the market, My Own Meals sold more than $2.6 million its first year.

An even more alluring and difficult opportunity awaits American companies when they try to reach kids abroad Children age 5 to 14 comprise 13.6% of the European population, and they are spending a growing percentage of Mom's and Dad's disposable income.

European countries, however, restrict marketers' ability to interview children and only about 15% of the kids age

6 to 17 have their own TVs, versus over 40% in the United States Texas A & M's McNeal says European parents shudder at the thought to their kids as wanton consumers.

"They have a fifties attitude about children U.S parents give kids freedom to spend their own money two to three years earlier."

But teens are a different story, thanks to the sal language of music videos Says Tom Freston, president

univer-of MTV Networks, the cable programmer for young people:

"Youth culture in just about every nation revolves around music, fashion, and humor Kids are not the same all over the world, but they resemble each other closely, more than any other generation in history." MTV Broadcasts its English- language programming in 25 countries, permitting marketer like Pepsi-Cola and Coca-Cola to show the same high- decibel ads to viewers everywhere.

Throughout the world, children are changing fast from kids to consumers Savvy marketers are both capital- izing on the trend and speeding it along.

33

KID POWER OVER FAMILY PURCHASES

Parents saying influence by child Children saying influence over parents

TEEN IMPACT ON THE U.S ECONOMY

(Based on $248.7 Billion)