Traditional vs Digital/Social Marketing Part III

As I was reading my daily news I ran into this website about the differences between traditional and social media marketing and I figured since I liked it and it is relevant to our recent class, I will share.

The picture below really summarizes it very nicely. The biggest take away I get from this article is that Social marketing is super fast, readily accessible, doesn’t really require a formal structure, doesn’t really need a  detailed planning and it’s truth. This goes to the fact that the market is driven by what consumers or customers want and not what the company really thinks what people should have. With social media you can ask your audience on what they think of new products or if they like the changes before the project takes off. That is really powerful in the fact that it will save the company millions of dollars.

It will let you know if there is a market for it in a different continent. Something that is not popular in North America might be essential in Asia. A company really does not need to spend lots of money to come up with a campaign or a research group and invest in traveling to different locations. With a simple touch of a button and few hours or days you will learn about your product and where is your market. In some cases it might even make the company’s job easier in terms of design. Some companies might struggle what should be the next big thing on a smart phone but if an idea is out there the company could potentially have an answer a lot sooner that investing months in the research lab.

Overall, social media has made the sharing and gathering of data super easy and reliable.

http://www.cmodigitalforum.com/2016/02/22/10-differences-classic-social-media-marketing/

Traditional vs Digital/Social Marketing Part II

As I promised I wanted to share more info and present some interesting statistics that I found about different types of marketing. Some are mind blowing, at least for me. 🙂

As we discussed in the previous blog, TV commercials are the second most expensive way of marketing after direct mail and on top of that I found out the following info:

1. 86% of people skip their TV commercials
2. 44% of direct mails are never opened

That does not make any sense to me. Maybe that was effective in the past but it doesn’t take much to realize that this is just not the way to go. Good news is that a lot of big companies are paying attention to such alerting information and doing something about it. Companies know that 46% of people determine the creditably of a company by their website and that’s why 71% of companies are planning to increase their digital marketing budget by 27%. These companies are well aware that 25% of the ad market is done on the online digital marketing. In 2015, marketers spent $8.3 billion on digital marketing but as you saw earlier, that’s nothing in comparison to TV commercials and direct mails which is technically saving the big companies billions of dollars.

Within online marketing there are different way of branding your product. You can go through Facebook, LinkedIn, Twitter and many more. So I try to find some interesting data on Facebook vs Twitter, which are the major players in social media.

Facebook:

15.8% of the total time spent on internet is on Facebook while 71% are adults and 63% visit daily. Out of all these adults, 36% only use one social networking unlike younger generation and 83% of that is spent on Facebook. 47% of Americans refer to Facebook as their major influence to purchase a brand and 70% of marketeers use Facebook to attract more new customers.

Twitter:

People spend about 170 minutes monthly on Twitter on average. The interesting fact for Twitter is that Facebook has more than 13 million followers on Twitter. “eBay is the most engaging brand on Twitter. Starbucks is the fourth-most-engaging, and also has the fourth highest number of followers of any major brand.Twitter now has over 550 million registered users, and 215 million active monthly users.”

As shown in the diagram below one can clearly see that Facebook is the dominant when it comes to social media. It has any other competition bit by far. Not just by its cost but also by its result, performance and ROI.

If I was a marketing manager for a company it is very obvious to me that social media is the way to go when it comes to marketing nowadays. There is plenty of data and research done on this topic but I guess my only question is why do companies still do TV commercial or send you direct mail advertising? Social media is so much cheaper while being way more effective. Maybe I can see some info on that topic on my next blog for the differences between digital and tradition marketing. To be continued in part 3. 🙂

http://webbiquity.com/business-blogging/104-fascinating-social-media-and-marketing-statistics-for-2014-and-2015/

TV vs. Digital/Socail Marketing Part 1

I really enjoyed the last topic we discussed in our marketing course this past weekend. It’s very interesting for me to see how much social media has changed not only our daily life but also the business. In my opinion, Facebook is the company that really raised the awareness of social media marketing. There were a lot of other companies that tried to achieve the same goal but what separated Facebook from the rest and really put them on the map is group they were trying to target and how easy/addicting it was to use. They started to target college students who are always interested to see what is going on in their campus and their friend’s lives. The more you use Facebook or any social media, the more addicting it gets. I guess it’s because we are all human and we are always curious to know what’s going on around us. One might say you could get the same info on the newspaper but my argument is how fast? News is only good if it’s within the first couple hours of the event. Same news the next day is not as important. Social media allows anyone with absolute freedom to post anything they want anywhere and anytime of the day and it will accessible to anyone instantaneously. You really can’t put a price on that power.

Fast forward to today, companies know these facts and they know for them to stay competitive and in business they need to get on board and be part of the social media. Lot of companies have presence in Facebook, LinkedIn and many more. Now, it’s super easy put any information about your brand and find out if your new product is going to be a hit or not, if your fans like it or not or even figure out if you could actually start selling your product right away. On top of all of these, it’s super cheap to advertise anything on social media.

Advertising companies use a metric called, cost per thousand impression (CPM), which is how much dollar a company or a person needs to spend to reach 1,000 people. As you can see in the chart shown below, social media is the cheapest (less $3 to reach 1,000 people) while direct mail and tv are the most expensive.

It’s extremely easy to take few pictures and post it on Facebook and talk about your products. However, in the traditional marketing not only the company has to spend big load of money to make the ad, they also have to spend extra money to mail it to your house, put it on TV or post on the billboard. It really doesn’t take much to realize what an efficient, cheap, reliable, super fast and effective medium the social marketing can be for advertising your brand. In part 2 of this blog I will try to present even more data and stats on differences between social and traditional marketing. Stay tune. 🙂

https://www.lyfemarketing.com/traditional-media-versus-social-media/

Branding vs Positioning

For my third blog, I would like to talk about the differences between branding and positioning. The company I chose to use for this discussion is an enterprise that is near and dear to my heart, even though I do not work for them anymore. Procter and Gamble, aka (P&G), is a huge consumer product company with a strong presence all around the world in various industries. This company makes all sorts of basics essentials in your household like paper towels to more complex luxury products such as Gillette that is used by more than 50% of male in US alone.

The company started in 1837 when William Procter and James Gamble met when they both got married to Alexandar Norris’s daughters, Elizabeth and Olivia. William was an immigrant from England with skills in candle making, while James arrived to US from Ireland with specialty in soap industry. They both started their enterprise in Cincinnati, which is still to this day the headquarter for P&G. Back in the day, soap and candle were couple of the major consumer products for any household. People needed candles for cooking and lighting up their houses along with soap to stay clean. From there on, company kept on growing to the size they are today through multiple major and acquisitions. Every brand they added to the company was necessary for the business and a requirement for the growth of their previous products.

Today, P&G is one of the top ten manufacturing companies in the world. The company holds the second spot right after Nestle globally. That is a huge market size that was achieved over 175 years of branding. The P&G brand is known for quality, comfort and reliability. The company has expanded its market size via different brands that are spread out over various industries. The big names that stand out in any retail store in US are Bounty, Charmin, Gillette, Pampers, Tide and many more. Each of those brands are positioned and targeted toward a different market share but together they have allowed P&G to be the second best manufacturing company in the world.

Let’s take their top two brands that have huge market shares with strong presence, Bounty and Gillette.

Bounty: This brand only operates in USA and nowhere else in the world. This brand alone provides around 10% of entire company’s revenue. This product is in one the most competitive industries in the country and competes with companies such as Georgia-Pacific (Brawny & Sparkle) and Kimberly Clark (Scott and Kleenex). As shown in the graph below, one can clearly see how much market share Bounty has. The market share from different Bounty products is almost twice the size of all other products combined.

Gillette: The biggest competition in this industry for P&G are brands like Schick by Energizers and Bic. As shown in the graph below, it is very obvious that Gillette has been in the lead for a while. Gillette has 3 times the market share of Schick and 10 times the market share of Bic.

The trends shown above is followed with all other P&G products. These strong market shares have been achieved through innovation, proficiency and consistency. The way each of these brands are positioned allows the company to gain high market shares, which eventually leads P&G toward a huge market size globally. This practice has been seen by many other Fortune top 100 companies in the world such as General Electric, Unilever, and many more.
http://www.consultancy.uk/news/2453/50-largest-consumer-goods-fmcg-firms-of-the-globe

https://www.quora.com/Which-FMCG-company-is-better-to-work-in-Unilever-Nestle-or-P-G

http://www.statista.com/statistics/188691/top-paper-towel-brands-in-the-united-states/

http://blogs.marketwatch.com/behindthestorefront/2014/04/29/pgs-gillette-promises-guys-no-longer-need-to-twist-their-faces-while-shaving/

Tobasco, Let’s spice it up!!!

For my second blog, I have decided to go with my second most favorite thing in the world after cars, which is food. Not just any food, spicy food. I thin I am at a stage where I don’t taste anything in my mouth anymore unless I have hot sauce mixed with my food. However, not just any hot sauce. It must be Tobasco sauce, otherwise it just doesn’t taste right. In 2013, I went on a trip with my friend to New Orleans for Mardi Grah and on our drive to the city we saw a big sign for the tour of the only Tobasco manufacturing site in the world.

Tobasco only has one manufacturing site in the entire world, which is located in Avery Island, LA. This site has been there since 1868 and was founded by McIlhenny family. During the tour, I found some cool facts about the brand.

1. This site only operates 4 days a week at 8 hours a shift.
2. This site provides different Tobasco sites to over 160 countries around the world.
3. Tobasco owns 20-25% of the market share in hot sauce.
4. Forty percent of its revenuse comes from outside of USA
5. The company is looking to expand its business to Asia and Eastern Europe

The question I asked myself during the whole tour was, how is it a company like Tobasco with over 100 years experience still exist? How is it that when you go to a restaurant and you want hot sauce, you ask do you have Tobasco? Why don’t people just ask for hot sauce, Frank’s or Red Hot?

One of the biggest reason is that Tobasco has used the same formula since the first day till now. They put the sauce from the red peppers into a second-hand oak barrel with some vinegar and let is sit for at least couple years. The consistency and the fact that the sauce will taste the same no matter when or where you get it, is the biggest selling point for this brand. Tobasco has also been compared to Siracha and more people prefer Tobasco solely because of its aging process and how you can taste the smoked wood along with vinegar in their sauce.

Another marketing strategy Tobasco has used was to bring its sauce to England and had Queen Elizabeth to try it. It was served for the first time in 2009 to the Queen and it’s her favorite hot sauce ever since. Also, it’s the only hot sauce allowed on the Air Force One. Those two right there is another reason why everyone uses Tobasco instead of hot sauce when they go to restaurants. Lot of people don’t know it but Tobasco offers other products besides hot sauce. They also have Jalapeno ice cream along with spicy Coca Cola. It’s more popular int they south but they do exist.

 

http://brandchannel.com/2010/03/02/142-year-old-tabasco-brand-keeps-heat-on-competition/

http://www.foodbeast.com/news/why-tabasco-is-and-always-will-be-better-than-sriracha/

http://mentalfloss.com/article/62430/15-things-you-probably-didnt-know-about-tabasco-sauce

Tesla, the future of automobile

Here it goes for my first blog. As you might know by now, I am a huge car enthusiast. It’s been my passion since I was a kid and I like to learn more about it every day. I do appreciate a nice comfortable cruiser  on a highway but what excites me the most is speed, technology and performance in a car. I am a huge fan of German vehicles because they have a slick design, which never seems to get old. They also offer great handling and performance on the road. I am not sure if anyone has cruised on the highway in a German vehicle;  I would totally recommend it (at least just for the experience). This can be done for free at any dealership through a simple test drive.

Anyways, I never considered an electric car as a way of transport for myself in anytime in the future. I have test driven Toyota Prius and Chevrolet Volt which are considered hybrid with different technologies. I have to admit both cars impressed me with the futuristic features but the performance was just not there. However recently, I started to do some research about Tesla. They seem to have a very strong marketing campaign because as soon as you go on the internet and start searching for their name, you will find plenty of articles, videos, events and pictures of their products.

Elon Musk, the co-founder and CEO of the company started his marketing strategy with Exploratory Research, where you do not know the variables and want to identify them. He certainly had a vision for electric cars and the future but he didn’t know how big this market is going to be or who will be his primary customers. He started Tesla with its first product, Tesla Roadster. This product was $100K plus and was going head to head with big names in the industry such as BMW, Mercedes Benz, Porsche and many more. His primary objective at this stage was high price and low volume. This car was delivering 0-60mph in less 4 seconds while emitting zero carbon dioxide with a price tag of $109K at base condition. There were over 2200 units sold between 2008 and 2012. This car was also the first true electric car without any combustion engine, unlike the hybrid technology, that was delivering 200 miles on a single charge. Neither Toyota Prius nor Chevrolet Volt could come close, let alone the fact that this roadster could keep up on the race track with high end luxury cars.

In the next stage, Elon started to focus on his next steps of his master plan which was offering the same features at a much lower cost to more people. He decided to shift his marketing target toward consumers who wanted the cool features but at an affordable price that could be an every day car instead of just a weekend fun ride. He came up with Tesla model S, which is four door sedan that can fit five adults comfortably. Elon used few marketing strategy to create the brand name at this point. He started to hold events to show off the features and core benefits of owning a Tesla to position the brand in such a way that could compete with other big boys in the industry. He clearly defined the features of Tesla as of a vehicle with less maintenance (no spark plugs, no more oil or air filter change, no more tune up or no more worries about high gas prices), while a green and sustainable car as its core benefits. He positioned his product among car enthusiast, that Tesla is the brand of innovation and creativity that will form the future because of its unique battery technology and green energy.

Fast forwarding to today, after successful launch of another product, Tesla model X which is the SUV version of their brand, the company is promising another product with all amazing features mentioned above at a $35k price range with their Model S in 2017. The model S was introduced few weeks ago on a Friday night and by Monday, the company had over 115,000 units ordered. Tesla has came a long way from being an unknown brand with a small roadster to a brand that is well known with a great future. During my research, I ran into a website that explains the top five competitive advantage of Tesla.

1. The battery supply chain: The company has built its own battery manufacturing in California that is called a Gigafactory. The building is the second biggest building in North America after the Boeing 747 nest in Seattle, Washington. Telsa’s partnership with Panasonic and their own chemistry technology has put them at competitive stage with long range and reliable batteries that were impossible in the past.
   
2. Tesla’s wonderful supercharger network: “Another thing that Tesla really “gets” that others haven’t demonstrated to understand is that electric car consumers want ubiquitous fast-charging stations. Not somewhat scattered charging stations. Not slow-charging stations. But ubiquitous fast-charging stations. Other automakers have left this to the market to solve. Tesla has built its own Supercharger network (or networks), and nothing else compares to it/them.”
   
3. Software that is way ahead of the industry: This is probably one of the biggest reason why so many people are interested in the car. The best way to describe the software is like operating system on your smart phone. The car can update itself with the latest version directly from Tesla’s satellite. The Tesla cars can talk and learn from each other about driving dynamics in different weather conditions without actually experiencing it. The car has an autopilot feature which allows the driver to enjoy the ride without touching the gas, brake and steering wheel. There is a  youtube videos where two auto journalist take a nap or play chess while the car is driving on the highway at 70 mph. With the constant updates your car will never get old and it will stays new.
   
4. A reputation for building superb products that wow people: There are numerous youtube videos where people experience the initial launch and the high torque that comes off of the electric motor. Lot of consumers describe the feeling as a “roller coaster” which is impressive for a car that weighs about 4900 lbs.The high end model of Tesla S known as P85D which has two electric motor runs from 0-69 mph in 3.2 seconds which is faster than 2014 Porche 911 GT3, 2014 Shelby GT500, 2014 SRT Dodge Viper, Ferrari 599 GTo and McLaren F1.  The picture below clearly shows the higher range, horsepower and speed compared to any other electric car in the market. One might be thrown off by the price but couple things to keep in mind is that Tesla is the only true electric car without any combustion engine. Also, Tesla is coming out with a new model that will feature the same range, horsepower and speed for around $35k.

5. A reputation for wanting to serve customers in a direct, honest way- not just for their money: Another important intangible is that Tesla has shown repeatedly that it cares more about providing the customer with good service, a good product, and honesty than making a little more money off of them. That kind of reputation for integrity and morality is something long lacking in the automobile world, and there’s no doubt that customers have found it to be very refreshing and desirable. If tesla keeps it up, it’s going to gain more and more brand loyalists, and I haven’t seen any sign that other automakers have figured out how to adjust their business approaches to compete in this “human” side of the equation.

There is no doubt in my mind that Tesla is going to restructure the future of automobile industry. What Steve Jobs did to the telecommunication industry with a simple ipod will be very similar to what Elon Musk is going to do with auto industry with his Tesla products. 

References:

1. http://evobsession.com/tesla-competitive-advantage-5-big-ones/
2. http://www.techinsider.io/tesla-versus-other-electric-cars-2015-9
3. https://www.teslamotors.com/en_HK/support/software-updates
4. http://fortune.com/2015/04/27/gigafactory-obsolete/
5. http://gas2.org/2014/10/10/5-supercars-slower-than-the-tesla-model-s-p85d/