Tag: marketing

What Keeps the Oreo 100 Years Young

The same year the Titanic sank and a second party of explorers reached the South Pole, a grocer in New Jersey spent 30 cents a pound on packages of a new cream-filled chocolate sandwich cookie known as the Oreo.

That first sale, made on March 6, 1912, marked the beginning of what would become a cultural icon — and touched off a century-old debate about the best way to eat them: Whole? Cream center first? Or dunked in a glass of milk? Today, cookie lovers in more than 100 countries can participate in that discussion, including consumers in Poland, Germany and India, where the Oreo was introduced for the first time just last year.

Oreos have managed to outlast any number of food trends — and even bested the product’s closest competitor, the Hydrox, which was actually introduced first, in 1908. So what has helped the Oreo remain popular? “For a product to stay relevant, it should address a basic need that doesn’t change over time,” says Wharton marketing professor Barbara Kahn. “Also, products that are classically styled rather than fashion forward are almost by definition more likely to become iconic. For example, Burberry’s traditional raincoat is a classic style that has reached iconic status; [same for] the VW Bug.”

Although the packaging has been modified, the distinctive design of the Oreo cookie hasn’t changed much since 1912. Over the years, different countries have put their own spin on the product — a green tea ice cream variety is available in China, for example, and blueberry ice cream Oreos are sold in Indonesia. And the product line in the U.S. has expanded more than once, including the introduction of the Double Stuf Oreo in 1974 and a trademarked brand of cookies and cream ice cream in 1983. Product owner Kraft Foods is selling a limited edition “birthday cake” flavor to mark the cookie’s anniversary.

But Wharton marketing professor J. Wesley  Hutchinson wonders if Oreos are part of a dying breed. “There are fewer and fewer ‘cash cow’ multigenerational products,” he notes. “Kellogg’s Corn Flakes, along with Post Grape-Nuts and General Mills’ Cheerios are the archetypes. They satisfied a basic but modern human need and use excellent brand management to maintain their positioning in a competitive market.”

Kahn also acknowledges that successfully introducing a product that appeals to a broad audience is tough in today’s crowded marketplace. “But if a product really hits the right note, it can become a classic overnight — think of Apple’s white earbuds,” she says.

As for the Oreo, Kahn thinks the “consumption traditions” that grew around it have helped the product stick around for so long. (According to Kraft, Oreo eaters are split down the middle on the issue of whether to eat the cookie whole or to pull it apart, although women “twist” more often than men.)

And Hutchinson adds that one part of the Oreo’s winning strategy is pretty simple: “Have you ever had an Oreo and milk?” he asks. “‘Nuff said.”

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Making Social Media ‘One Giant Hangout’

On a recent weekend afternoon, dozens of people showed up at the New York offices of Warby Parker, an online eyeglasses retailer. They were there to participate in a “photo walk” organized by the company. Every participant got a pair of novelty glasses to use in photos taken across the city. The company awarded prizes to images that received the most “likes” after being uploaded to Instagram, an online photo editing and sharing application.

“Up to that point, we had 700 photos on Instagram tagged with Warby Parker,” said Tim Riley, the company’s director of online experience. “Then the day of the photo walk, we had about 750 additional pictures tagged with our name. We also had 120 people in our offices and got to talk to all of them. It was a giant friendly hangout.”

As social media becomes an increasingly important part of retailers’ marketing and customer service efforts, it’s not just a matter of having the largest number of fans on Facebook or Twitter. Retailers also have to know how to engage users and how to turn those online conversations into positive offline interactions.

At a panel discussion on social media held this week as part of a conference organized by Wharton’s Baker Retailing Center, Riley and others from the industry discussed efforts to unlock the value in their online followings.

“‘Why don’t you have as many fans as Starbucks?’ is obviously a metric, but it isn’t the most important metric,” noted Chuck Hansen, vice president for media strategy at Macy’s. “We want to look at engagement level: When we create a post and look at similar posts across our competition, are we seeing a higher engagement level? And is it a positive engagement level?”

A key way to grow engagement is to figure out how consumers want to interact with the brand in question. For example, when Macy’s initially started its Facebook page, the company made the decision to focus on fashion rather than promotions. “But when we asked [our followers] what they wanted to talk about, they said promotions,” Hansen said. The retailer is now testing a beta program that allows coupons to be delivered via customers’ Facebook feeds.

Dennis McEniry, president of online efforts at Estee Lauder, noted that cosmetics brands can spend as much as $1 million to produce “how to” videos for different beauty products. But those videos typically get a fraction of the viewership on YouTube that amateur videos — those uploaded by individual consumers — do. “We’ve tried to switch to thinking about how to move the conversation to consumers doing videos, rather than necessarily having all of our brands make videos.”

Customers also want to feel empowered, panelists said and one way to do that is to get their input at the product level. Estee Lauder, for example, has solicited feedback about names for lipstick shades. Meanwhile, Macy’s ran a promotion asking followers to design a balloon for its annual Thanksgiving Day parade, and is running a different campaign allowing people to vote on songs that will be used for the mixtape that accompanies its July 4 fireworks display.

“Done well, social can be predictive,” noted Dan Clifford, vice president of marketing for Victoria’s Secret. “There’s a fine line between letting the customer drive the product too much, but there are definitely moments where we have sought feedback, whether it’s about names or certain functions built into a product. When done well, [the feedback] has matched the real-time testing we’re doing in stores. But it’s also a matter of getting the merchant comfortable [with] hearing from the world at large.”

In some cases, consumers also have to get comfortable with that kind of mass feedback. Warby Parker allows customers to have a selection of frames sent to their homes so they can try them on and pick the one they like best. The company started encouraging people to post pictures of themselves wearing each pair of glasses so staff from the company could weigh in. “The customer becomes empowered, and when someone else posts a picture and asks, ‘Hey, what do you think about these glasses?’, the person we helped before will start answering on our behalf,” Riley said.

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The Next Big Marketing Frontier: Smartphone Moms

Smartphone-wielding moms are where the action is — a fact not lost on marketers, more and more of whom are targeting this particular segment. And chances are a fair number of these moms prefer an Apple iPhone or a Google Android device. Such trends, along with increasing sales of smartphones, should significantly reshape marketers’ strategies, says Wharton marketing professor Barbara E. Kahn.

Apple’s share of total mobile phone sales grew 117% between the first quarters of 2010 and 2011, according to the NPD Group, a consumer and retail market research services firm in Port Washington, N.Y. But Apple’s share among moms (defined as adult women with children under 18 in the household) grew 132% during the same time period, as reported by NPD’s ongoing Mobile Phone Track consumer tracking service. By comparison, Apple’s share among adult women without children under 18 in the household grew 103%; among adult men, it grew 121%, says NPD spokesperson Lee Graham.

The next big challenge for marketers is to develop appropriate apps that appeal to moms armed with smartphones, says Kahn. Not only are these women adapting quickly to the smartphone and apps technology, but they have “considerable time” during their day to spend “with the various apps and smartphone products,” she adds.

Mobile Commerce a Big Draw

These new trends are particularly interesting to marketers because of the increasing ubiquity of mobile commerce. “Moms, who already [are responsible for] many of the household purchase decisions, now have a new technology to help them make these decisions more effectively and efficiently,” Kahn says. Not surprisingly, many of the iPhone’s 425,000-plus apps that appeal to mobile commerce-friendly mothers cover a wide range of topics. Those include apps for stocks and options price tracking and trading, personal finance and budgeting.

“We have known about the opportunity of online moms for a while now, but then mobile technology came along and blew everything up,” NPD Group’s chief retail analyst Marshal Cohen told the Washington Post. And, notes Facebook’s Ethan Beard in an interview Knowledge@Wharton published this week, new people are coming online all the time, especially in developing countries where mobile phones are how more and more people access the Internet. Also, as mobile technology gets better and bandwidths get wider, it becomes easier for retailers to target consumers, according to another Knowledge@Wharton report on e-commerce.

The iPhone Gathers Speed

In targeting moms, many of those mobile apps developers would likely choose the iPhone platform first. Research services firm Nielsen, which coined the “power moms” phrase a few years ago, said in a May survey that while Android leads the smartphone market, it has of late been losing ground to the iPhone. Android’s share in new smartphones has stayed mostly flat at 27% in the first five months of this year. But Apple’s share has grown from 11% to 17% in the same period, eating into sales of the BlackBerry and Windows Phone 7 devices, Nielsen noted.

Overall, smartphone sales are set to cross the one billion mark by 2016, according to a recent report by IMS Research USA of Austin, Texas. Worldwide, smartphone shipments grew 76% to 110 million units in the latest quarter ending June, reports Bloomberg News, quoting Strategy Analytics of Newton, Mass. Apple led smartphone sales last quarter with iPhone sales of 20.3 million, followed by Samsung and Nokia, the report adds.

Apple’s iPhone has endeared itself to moms in more ways than one might expect. The mother of all apps turned out to be a menstrual calendar that 30-year-old Lena Bryce of Glasgow, U.K., used last year on her iPhone, according to a report in U.K.’s The Sun newspaper. The app tells when a woman is most fertile. Within two months of using it, Bryce was pregnant. When her daughter Lola was born, she was nicknamed Britain’s first iPhone baby.

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Winning in the New ‘Marketing Democracy’

Imagine for a moment that you moved to a new home located right next door to a train station. It’s noisy at first. But after a while, you get used to the noise and barely notice it. That notion captures “exactly how consumers feel about marketing and advertising — as if it’s not even there,” said Tim Suther, chief marketing officer of Acxiom, the world’s largest processor of consumer data, at a recent Wharton Marketing Conference. Such consumer numbness has profound consequences: $112 billion in major brand advertising is wasted every year, while eight out of 10 online ads fail to reach their desired audience. “A truly awful, awful performance,” noted Suther.

With the right strategies, however, Suther said companies can successfully navigate this tumultuous world to reach their target customers. He cited a few of the most well-known strategies. For one, they should personalize their marketing to consumers instead of blasting them with broadly targeted ads. They should also identify those customers who spend the most money on their products and services, and invest more in marketing directly to them. Companies should craft a multidimensional profile of their customers, Suther advised, looking not only at what they are buying, but also what they are thinking and how they are behaving online. Moreover, companies should better coordinate their different sales channels to deliver a seamless experience for the customer wherever he or she chooses to shop.

“Einstein famously said that insanity is doing the same thing over and over while expecting a different result,” Suther said. Likewise, companies need to begin thinking differently about how they do marketing, especially in an increasingly connected world. With the expansion of sales and media channels, consumers can shop online using their computers or phones, or make traditional bricks-and-mortar store purchases. This increased number of options presents marketers with tremendous opportunities to understand and reach the right audience — if they are savvy enough to do it correctly. “Those [consumers] who engage in multiple forms of media or channels are four to five times more valuable” than those who only participate in one, Suther noted — yet two-thirds of senior executives do not have insight into their consumers across all of these channels. For instance, while people spend 42% of their media consumption time online, advertisers shell out only 11% to 12% of their total advertising budgets on the web.

For marketers, the stakes have never been higher, especially in a world where, via the Internet, consumers can instantly judge a company and convey their opinions to fellow shoppers. This “consumer-to-consumer” trend is a “powerful force affecting the business of advertising and marketing,” and has created what Suther refers to as a “marketing democracy.” “Elections, if you will, are being held every day. Consumers are voting … and they are determining winners and losers. You’ve got to pay attention to this, because they will vote you out of office.”

To Read more, visit: Acxiom’s Tim Suther on Winning in the New ‘Marketing Democracy’

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