Famous marketing disasters and how to avoid making the same mistakes

Alistair Stevenson EEA Project Management Sp z o.o. Członek Zarządu

Marketing – Famous disasters and how to avoid them

Alistair Stevenson

MBA

Agenda • • • • • • • •

History of marketing Definition Market segmentation The Marketing Mix Famous marketing disasters Marketing for small businesses More marketing disasters Social media

Babylon 1800 BC

Eqypt 1000 BC

The evolution of marketing Product orientated • 25 years ago in Poland or 100 years ago in Western Europe • Market local • Less choice • Basic necessities only • ...Oh joy, I have found ham... • No market research • Manufacturer only concerned with price and quality and hitting manufacturing quotas

Market orientated • • • • • •

Markets are international Huge choice Most people can afford necessities Higher disposable income Fulfilment of ‘wants’ and ‘desires’ Firms must recognise and satisfy ‘wants’ and ‘desires’ now and in the future... and make a profit

... and that is marketing • The theory is that similar people buy similar products • ‘birds of a feather, flock together’ • Market segmentation • Large family cars – segment • Two seater Dutch sports cars – niche • Segments dictated by • Age, gender, income, lifestyle, socio-economic group, education

Age Segmentation by age, for example • Marketing to the elderly • People are living longer • Increased need for medicine • Growth of old peoples’ homes • Specialist hospital services required • Go-Go • Go-Slow • No-Go

Gender • Women spend more on clothes, cosmetics, jewellery than men • Male grooming a huge growth market • Male facial moisturising – new phenomenon

Income • Social circumstances • A young couple with no children will spend differently than a family with 3 kids • DINKY

William Lever, 1st Viscount Leverhulme "I know half my advertising isn't working, I just don't know which half."

Anybody know what direct marketing is?

Direct Marketing • • • • • • • •

Straight to the consumer Database driven Text messages Emails Web Letters Response generating advertising Call centres

Lester Wunderman : 1-800 number, loyalty marketing, Columbia Record Club, Amex Rewards

Marketing mix

4Ps

Marketing mix • Product – differentiation • Price – low enough to be competitive • Promotion – how customers hear about the product • Place – where to find the product – distribution 4Ps blended to make marketing mix Which is most important?

Scenarios • Reduce price of laptop computers by 30% • Then what? • Research and produce superb new mobile phone and it costs $15,000 • Where is the problem?

McDonalds Big Mac • UK 1990s buy one, get one free • Insufficient numbers of bread rolls • Where was the problem?

• How could it have been prevented?

Know your market • Your current customers are the key to all future customers • Quick and cheap market research • Trade fairs... Info on market trends • Trade magazines • Internet research and forums and LinkedIn • Field research by chatting to clients or producing a questionnaire • Announce your presence at an international trade fair ... Case study

Anecdote

• How to tell them apart...

Product • Easier for SME to create new product to customers’ design briefs • Service companies match offer to the needs of your customers • SMEs can offer specialised goods upon customer request • Offer better advice

Price and Promotion • Many small businesses fail by charging prices that are far too low – injection mould tooling • Promotion through word of mouth, internet • Advertising in trade press • News items and PR opportunities in trade press or local paper • Sponsor local sporting events - Candeo

Place • Distribution provides competitive advantage • Big firms contract delivery to courier companies who have no interest in interacting with the customer • Small firms can tailor delivery times • Agfa Poland – building rapport

Scenario • You have a shop selling running shoes and Decathlon open a mega store 50 metres away • Apart from taking a length of rope and hanging yourself, what do you do?

Product

• Ron Hill Brooks Saucony • Audit Decathlon to see what brands they are selling • Buy a treadmill and a camcorder and offer gait analysis • Charge analysis fee

Product • Analyse gait to find appropriate shoe • Capture name and all contact info along with running type, distance run weekly • Regular newsletter – creating new communication channel • Test feasibility of mail order

Price • Serious runners likely to be less price sensitive • Superior customer service and convenience can command a premium price – sometimes

Promotion • Billboard advertising as close as possible to Decathlon • Leaflet drop outside store • Articles in local press • Sponsor local running events • Benefit from Decathlon advertising to draw in customers

Place • Stay at current location and benefit from Decathlon advertising and reach to draw customers • Explore mail order potential

• • • • • •

Pepsi Philippines 1990s One lucky cap code to win 1 million pesos Pepsi’s sales increased 40% Over 30 million people bought Pepsi Number 349 appeared on 800,000 caps You guessed it...

• • • • •

Whoops! Pepsi gave $20 to each winner not $40,000 $2 million budget quickly became $10 million Number Fever Chile – previous disaster How could you have prevented this?

• Buy a Hoover vacuum cleaner and get 2 return flights to Europe or the US • Hoover thought people would buy their more expensive models • Completely oversubscribed • Cost Hoover £50 million • What should they have done?

• ‘If the US wins, you win’ 1984 • 1976 the US won 94 medals, 34 golds • In 1976, Russia won 125 medals, and East Germany won 90, with 40 gold medals • DDR and USSR boycott • 1984 saw the US win 174 medals and 83 golds

• You do not get sacked for underachieving • Not the first time at least

Saving the best to last.... • • • • • •

1981 Osbourne Computers Computers in 1981 were NOT portable 11.5 kg and cost $1,795 August $10 million sales February $100 million sales Apple and Compaq launched portable computers • Osbourne announced a superior computer to be launched in six months... Bankruptcy • Why? The Osbourne Effect. Steve Jobs paranoia

Social media....

800 guests and 150,000 PLN later

Viral Marketing at its worst

Viral marketing spreads like a virus often to people outside your target group So be careful with Special online discount coupons Invitations to business mixers Presents Free entry to business conferences

4chan.org created Anonymous Tom Cruise first celebrity target 4chan campaign against John Koppenhaver Cyber-terrorism Hacktivism

>RIP Dad, sorry I sucked at CPR and couldn't save you...maybe all these @$$h*le$ are right...see you on the other side..miss you

Motion Picture Association of America Recording Industry Association of America Visa Mastercard Bank of America 150 Australian small businesses

Moralfags

Trolls

Moralfags

Trolls

Social media fails Legitimate companies using social media • Durex – SOS Campaign – Facebook : which city should get Durex condoms – Batman, Turkey • McDonalds Twitter – McDonalds Memories • Give a limited chance of responding • "A photographer is only as good as the equipment he uses, and a good lens is essential to taking good pictures!“ Nikon • Monitor comments – do not rely on programs and do not delegate to a junior

Qantas Twitter Competition 2011 • Describe your ‘’dream luxury in-flight experience’’ • Win toiletries and pyjamas • However the airline was on strike • Thousands of passengers stranded • Australia’s greatest PR disaster

Nestle Facebook 2010

Nestle • 1974 War on Want

Now that is just plain lazy Nike Black and Tan

Reebok Incubus Umbro Zyklon

Dziugas and their cheese cafes

Famous marketing disasters and how to avoid making the same mistakes

Alistair Stevenson EEA Project Management Sp z o.o.

Członek Zarządu