Brand Building and Messaging when Updating Packaging

If you are in a business that sells products, the time will inevitably come when you will want to update the look of your packaging.  Overtime you will learn things about your existing package that need to be changed, you will desire to modernize the feel, you will want to evolve the logo or communication, etc.  Updates to packaging are perfectly natural and healthy as long as the changes do not erode your consumer base.  Frequent changes are unhealthy since it destroys your brand equity.

Brand Equity

What is brand equity?  In the world of accounting, it is considered an intangible asset which is quantified to add value to a companies assets.  In marketing, it can be defined as the awareness or recognition of a brand.  The stronger the equity of a brand, the more recognizable it is.  With that in mind, brand equity is a function of the things that help consumers to recognize the brand.

Let’s look at Goldfish by Pepperidge Farm as an example.  On the packaging examples below, you will see the original Goldfish Cheddar and a line extension – Goldfish Colors.  I’ve circled in red and pointed to in blue the significant points of recognition on this package that contribute to the brand equity.

Goldfish Brand Equity

You will see that whether on the original item or the line extension, Goldfish marketing has kept the following consistent to maintain the brand’s equity in order to help consumers recognize the brand:

  1. Central lock up with brand and product logo
  2. Goldfish illustrated character at the same location and same look and feel
  3. Product imagery to set consumer expectation on the bottom left
  4. The colored swivel shape that wraps around the central lock up (yes, a shape can be an equity!)
  5. The white background (believe it or not, color does contribute to the equity!)

I’m classifying these as the consistent factors that significantly contribute to the brand equity.  If Goldfish were to redesign their packaging, maintaining these 5 characteristics in the above would be a must and changing any of the five would result in severe risk to the equity that the brand has developed.

Communication Hierarchy

Another packaging component that you will want to consider is the ranking of the messaging that you want to communicate.  Typically a consumer makes an impulsive purchase decision within 2-3 seconds of looking at a product.  You may have 5 things that you want to communicate on your product, but in reality, only 1-2 of these will be seen within this 2-3 second window.  Therefore, you need to prioritize the messaging and the placement of the messaging to get your points of difference or product benefits across.  If you attempt to communicate too much, the package will look too busy and the messaging will be lost.

Let’s look at Fruitables for example:

fruitables packaging

I notice the following messages being communicated on this pack:

  1. Standard of Identity: Fruit & Vegetable
  2. Benefit: 1 Combined Serving of Fruits and Vegetables
  3. Flavor: Tropical Orange
  4. Pack Size: 8 Pack

The most prominent messaging is that this is made with Fruits and Vegetables. This is right in the center of the package and arguably communicated twice through the branding and the identity. The second most prominent message is the flavor, since this is second largest and takes up quite a bit of real estate on pack. I’m sure that the brand team did some decision tree mapping to determine how consumers shop. In this case, it appears that consumers first shop by positioning (fruit and vegetable beverage) and then by flavor. Lastly, the product benefit of 1 combined serving of fruits and vegetables is the third thing that pick up on since it is not as large and has more fine print.

What packaging related questions do you have?

Clorox, Price Discrimination, and Line Segmentation

Take a look at the above: Both product lines are within the Clorox family of products – one is branded Clorox and the other is branded Green Works.  Although the image of Green Works does not show it, Green Works also offers disinfectant wipes and detergent.  Essentially, the Green Works line has the same product types as the Clorox line.  This is an example of both price discrimination and line segmentation.  Below I will walk through both price discrimination and line segmentation in action so that you can learn and hopefully develop creative ways to utilize the same strategies in your small business marketing strategy.

Price Discrimination:

  • Clorox Bathroom Spray is $4.49 vs. Green Works Bathroom Spray at $5.79
  • Clorox Toilet Cleaner is $3.79 vs. Green Works Toilet Cleaner at $5.49
  • Clorox Disinfecting Wipes is $2.99 vs. Green Works Disinfecting Wipes at $5.99
  • Clorox Stain Fighter & Color Booster is $5.79 vs. Green Works Detergents at $5.99
Each of the compares in the above is an apples to apples analysis – same oz., similar product.  And as you can see, Clorox clearly marks up the price of its Green Works line vs. its generic brand.  Why is this?  There is a different value proposition behind the Green Works line – it is natural, and because of this, they believe that natural-seeking consumers are willing to pay the premium for better-for-you products.
Through the Green Works line, Clorox reaches a new set of consumers and potentially cannibalizes its own sales on its existing Clorox brand.  However, this cannibalization is positive cannibalization since the consumers are pricing up to a more expensive line.

Line Segmentation:

Clorox manages its cleaning products portfolio by segmenting the market into mainstream and natural and leveraging different brands, that are relevant to each market, within each market.  This benefit of creating two distinct brands is that Clorox has the ability to develop two distinct and targeted marketing plans.  It would be difficult for Clorox to develop a marketing plan to natural consumers without impacting its brand positioning within the mainstream channel (which is Clorox’ bread and butter).  Likewise, it would be difficult for Clorox to maintain its brand positioning in mainstream while also trying to effectively market to natural consumers.  There are also financial reasons for such a segmentation:  For example, since the Green Works line is premium priced, the financials behind a couponing or promotional campaign will look differently than that of the mainstream Clorox line.

Conclusion and Implications:

As a small business owner developing a marketing strategy, if you find a new need within your market that you would like to market against to generate incremental sales, consider a price discrimination and line segmentation strategy if the new need is a different type of consumers.  By following this rule, you will be sure to not impact your existing brand, products, or sales while taking advantage and capturing the new market opportunity.  This rule implies for both product, retail, or service driven companies.

Service Industry: The Job is Not Done Once Complete

A few weeks ago, I wrote about 3 Keys for a Service-Driven Small Business.  These 3 keys are most important before and during a job.  However, today I want to expand upon how to succeed as a service-driven small business by discussing one of the most important thing to do after the job.  Similar to sales or selling, the job is not done and the relationship is not locked-in once contact information is exchanged.  Likewise, your job as a service small business company is not complete once the job is done.  You must continue to follow-up after the job multiple times to check that everything is still good, everything has gone as planned, etc.

Following up on a completed job is one of the most important things that you can do to solidify word-of-mouth referrals by taking your company/brand from ordinary to extraordinary.  Furthermore, aside from checking to make sure that the work you performed is still holding up as transacted, you will also be showing your customers that you are invested and take pride in the work that you do.  This ensures consistency, quality, and a level of satisfaction that one day you might be able to charge a premium for since your brand/company will become known as one of the best in your local market.

Below are three things that you will be guaranteed to see when implementing a plan of following-up:

Positive Brand / Company Perception:  Your customers will begin to view your business as “the step above” within your industry and even so far as among local service companies.  Word-of-mouth referrals is one of the biggest drivers for service driven companies and therefore, positive attitudes toward your company will without a doubt lead to more customers.

Quality Improvement:  Let’s face it, there are always errors, faults, things that go unplanned, etc.  Mitigate your own risk of failure or not fully meeting your customer’s expectations by following-up and addressing any concerns or problems after the fact.  This might wind up taking time away from another site to spend potentially hours fixing the site that was already paid for, however, you will never leave a customer unhappy.

Ability to Increase Price in the Long-term:  As you gain more customers via word-of mouth and as your quality becomes unmatchable, you will then gain leverage to charge a premium for your services since you offer proven outstanding services.

Is there a right number of times you should follow-up with individual customers?  I don’t think so.  Your customers paid a lot for the services that you performed and with that, they expect outstanding service.

Quality Assurance and 3 Small Business Solutions to Improve Quality

Here me out for a second: quality assurance is one of the greatest challenges of small businesses.  I know that some of you might not agree with this statement because small business owners take pride and ownership in their business and are producing their products/services in a much smaller quantity than any large business would therefore, you assume that lower volume equals higher quantity.  However, my argument is that this is not the case.  Although lower volume should equal higher quality, the issue that small businesses have is a limitation of resources, which impacts quality.

Take the example of a bagel shop in New York City – on a few occasions, if you ordered a bagel with egg, cheese, salt, pepper, and ketchup, they might forget the cheese.  For the amount of volume that a small bagel shop does vs. a large scale breakfast egg sandwich manufacturer (a product that you might find in the frozen aisle of your grocery store), the small bagel shop has a much higher % error than the large scale manufacturer.  This is so because a large manufacturer has the capital to invest in labor and systems to provide higher quality and assurance than a small business.

So what can you do as a small business owner to ensure quality assurance if you do not have the money to invest in systems or additional labor?  Below are my solutions for you:

Attention to detail:  This is the most obvious of solutions.  However, one that many small business owners forget as they get entrenched in a busy workday where the goal might be to produce “x” amount of product or finish “z” jobs.  In everything that you do, ensure that your T’s are crossed and I’s are dotted.  Don’t release product or finish a service without properly inspecting your product.  Although you might think that this will slow down your business and make you less efficient, in the long-run, your unprecedented quality assurance is a point of differentiation for your marketing strategy that you can charge a premium for or that you will receive more business for through word-or-mouth and referrals.

Kaizen: Japanese for “improvement”, the moment you or anyone that works for you comes across a problem, stop the service work or production immediately.  This will allow you to track back the source of any problem before you are too far along where you will never be able to find the source!  Finding the source of a problem will enable you to prevent future occurrences of a similar problem.

Check-ins: Enable a staging process in your production or service so that at the completion of each stage, you can review your work to ensure quality assurance (as well as anything else for that matter).  For example, review random samples of every 200 units that you produce.  Or if you are a service company such as gutter installation company, don’t focus on banging out your job and moving on to the next, stage your installation in 2 or 3 stages (old gutter removal = 1, new gutter sizing = 2, gutter installation = 3) to make sure that everything is still good after each stage.

Again, although you might think that the above quality assurance solutions will slow down your efficiency, the long-term benefits will lead to increased positive referrals and word-of-mouth, ability to use the quality assurance as a point of differentiation for your marketing strategy, or the ability to price your product/service at a premium due to the quality that you provide vs. any competitors.

Social Media Conversation Calendar for Better Planning

Have you ever wondered how large brands such as Popchips, Virgin America, Kraft, etc. have maintained a steady conversation flow on their social media accounts?  There is more to social media conversations than posting on the whim.  Although posting on the whim is within the rulebook, there is a deeper strategy to the daily tweets or posts that your favorite brands make.  The best thing about this is that you can take this social media marketing strategy right out of the playbook of these large brands so that you can adopt these for your small business social media strategy.

What is the secret?  A social media calendar of course!  It looks something like the following (this example could be for a local catering company)

The conversation calendar is simple in form: assign a post type (i.e.: Image, Recipe, Trivia, Poll, Fact, etc.) to each day and build a monthly calendar in advance.  By doing so, you will be preventing any lapse in social media conversations because you will no longer need to think of ways to generate engagement on the whim.  Furthermore, by utilizing a conversation calendar, you will now be able to divide your social media week by topic and therefore, always finding something to speak to.  For the days that you might not have a branded message that you would like to share for the daily post topic, you can use an un-branded message to keep your compelling conversations on-going.

Conversation calendars are used by all social media agencies that work with large brands – it is a way for these agencies to stay focused, provide on-going, compelling, and engaging content, and a way to measure and refine the daily post type based on measuring the reactions after making certain types of posts.

Burger King – Marketing Strategy

Food Trucks and Touch Screens?

Burger King is creating a good amount of marketing buzz around their new menu and the experience that consumers will have.  They have redeveloped their menu, which is somewhat reminiscent of McDonald’s to be more health conscious by adding salad and wraps options.  They will somehow be incorporating a touchscreen into their point of sale and using food trucks to get their product out to the masses.

 

What is their marketing strategy here? Here are some takeaways from the whole concept.

Takeaways:

Track your sales. For a big company to shift like this means that their stores aren’t performing as well as they hoped.  John and I are adamant about tracking sales dollars and quantities and as Burger King probably has been losing share to competitors, they hope to get it back with this new product launch. Track your sales so you can make marketing programs to tackle a downturn.

Get people in your door.  Any type of retailer knows that if they can get you in their door and on their grounds, they can probably sell you something you did not want to buy, eat, or have. Give them a reason to come by – like Taco Bell and the Locos taco, Burger King hopes to create a new customer experience.

Test your product.  With the food truck, Burger King plans on sampling the new product to the masses before they actually release to stores. How can you do the same? Test your market before you assume that everyone will love your product or service.  You might be liked be everybody because you smile, but that does not mean you know what everyone likes to smile about.

My List of What Not to do When Launching a New Item

There are many articles, books, writings, etc. that speak to what you are supposed to do when marketing a product – whether a new product or an existing one.  I decided to compile a list of my own for what not to do when launching new products because, frankly, there are too many dos out there and not enough don’ts.

So here it is, my list of do nots:

  1. Do not have inconsistent messaging across your brand
  2. Do not have a bad price/value relationship – evaluate what your competition is offering and at what price point they are selling as a benchmark
  3. Do not launch a product with negative profit, unless it will serve as a loss leader
  4. Do not arbitrarily set your price – evaluate your competition and price gaps to make a good pricing decision
  5. Do not advertise your new product for the sake of advertising.  Make sure that you are communicating your selling points only.  Too many messages makes the advertisement in effective
  6. Do not launch a product that doesn’t fit within your small business marketing strategy
  7. Do not forget about tracking the sales performance of your new item
  8. Do not forget about going after low hanging fruit opportunities.  The low hanging fruit opportunities in aggregate will equal a big win
  9. Do not position your product for any consumer that is willing to purchase your item, like most small businesses do.  Have a targeted marketing strategy to increase the effectiveness of your marketing.  In marketing, a small net will catch more fish.
  10. Do not forget to tell consumers that your product exists.  All new product launches must be supported with small business marketing support
  11. Do not discontinue your item if sales are slow initially.  It takes time to generate sufficient awareness, trial, and repeat purchases
  12. Do not discount your consumers.  If you learn their decision tree for purchasing, you have a high likelihood of selling more if you market to the points on the decision tree
  13. Do not forget to track your sales during promotional offerings.  Tracking will allow you to determine what promotional pricing provides the highest ROI for you
  14. Do not place your item on shelves that do not make sense (such as a child’s product being sold at a height that is above children); do not sell your item in stores where your targeted consumer does not shop
  15. Do not develop packaging without evaluating what you will be shelved with.  You want to differentiate yourself as much as possible on shelf so that consumers will easily spot you or be visually be gravitated toward you
  16. Do not forget to bundle your new item with other complementary items that you might have to sell as a package deal
  17. Do not have an idle social networking account.  Use your social media to run polls and interact with your consumers.  At the very least, when you run a poll you will find out something about your consumer!

Doritos & Taco Bell – Creating Marketing Buzz

Doritos and Taco Bell have teamed up to deliver the Doritos Locos Taco.  Why does this makes sense? I’m not exactly sure but, I can tell you that Taco Bell of Yum Brands has not been as successful as they have been in the past and they definitely needed a marketing program that will make or break them. What was the benefit to partnering with Doritos? Good question.

Aside from the need of a great marketing campaign, I feel that this cross-selling of product is a great way to accomplish a few things: creating awareness, stimulating trial, redefining the brand, and better understanding your consumer.  I would not be surprised if research demonstrated that the consumers of both brands are similar in age, preferences, lifestyles, financial well-being, and most importantly new product adoption.  On a side note, it appears that Taco Bell is doing the marketing aspect very well with a countdown, official day to start the program, and reaching out to many different categories with the Locos Taco options.

 

What can we learn from this example? John and I have trumpeted that understanding your consumer is vital for your success, but in addition to this, understanding your competition as well as other brands in similar industries maybe a token for new markets as this could lead to partnerships, cross-selling, and potentially more brand loyalists who were not aware of your brands and products.  Only time will tell if Taco Bell and Doritos really hit it off well as they both gain awareness around the marketing campaign but a “win” from the campaign that they gain is trial of the product and bringing consumers into their stores – this is harder to do than you think.

Takeaway for a Small Business Owner

The executives at Doritos and Taco Bell both understand their consumer well and with this were able to cross-sell them without cannibalizing their own sales in new markets.  Both created great marketing buzz around their brands.  So what if you are not a big business? Well, here are a couple examples:

If you own a flower shop, you might partner with a local chocolate shop to deliver a combination of products for those I love you, I am sorry, congratulations, or get well moments.  If you have a bicycle shop, think about offering a special to people who shop at the running store with a coupon or special promotional event with the respective shop.  For specialty ice-cream shops, partner with a local elementary school or swimming pool to blast your message. The options are unlimited but creating free marketing buzz should not only be easy and fun but it can also help you grow your market.

Are You More Convenient Than Your Competitors?

Take a look around you.  If there is one thing that marketers do well, it is to make products and services more convenient for their consumers.  Convenience has been on trend for a long-time.  For example, the number of microwavable frozen foods has proliferated in the last 15 years.  Moreover, if you were to do an audit, I would bet that more frozen foods are microwavable than oven-only, although microwavable implies “oven ready”.  Outside of frozen foods, even the marketers at Tide have been challenging themselves to reinvent the way we do laundry to make it more convenient.  Tide has removed multiple steps in the washing process (detergent, stain-remover, and brightener) by combining into one process through the launch of the Tide Pods.  I don’t think there has ever been a trend as clear as this one that is screaming at you – the small business owner – to leverage immediately.

The proliferation of more convenient products and services is seen all around you: Fandango, fast food, at home grocery deliveries, iTunes, TiVo, Ronzoni boil in a bag, EZ Pass, Chase check deposit smart phone app, etc.  Not only has convenience been an on-going trend across multiple consume categories, but it also is a behavioral need that marketers and product developers are constantly trying to improve.  It is also obvious that the need for increased convenience in our lifestyles is becoming more apparent.

In today’s world, you can narrow down all sets of purchasing consumers that are in the labor force (implies the ability to purchase due to income) into 3 cohorts:

  1. Married couples
  2. Cohabitating partners
  3. Those living independently

Among married couples and those that are cohabitating with a partner, most likely both spouses or partners are working unless a child is in the picture.  If a couple has a child, maybe only one member of the relationship is working.  In either case, these relationship types demand products and services that are more convenient.  If both members of the relationship are working, then time for standard household operations is limited.  Even in the scenario where only one member is working and the other is raising a child, time to conduct household operations is still limited since the member that is not working is pre-occupied with the child.  Therefore, cohorts 1 and 2 in the above are living a lifestyle that demands more convenient products and services.

For those living independently and are working, they are in the same situation as if both spouses in a relationship are working – time is limited for household operations since there is no one at home to take on the household operations.  With that said, even cohort 3 is living a lifestyle that demands more convenient products.

My reason for painting the above picture is to facilitate the point that the size of the prize for consumers that demand more convenient products and services is massive.  Unlike other need fulfillment tactics, achieving convenience is never finalized – you can make your products and services more convenient, but there will always be opportunity to improve the convenience through some form of innovation or process improvement.  With that said, the question is not are you convenient but rather, it is are you more convenient than your competitors?

I’ve yet to see the implementation or activation or convenience trickle down from big business (Tide, Apple, Fandango, etc.) to small business (you).  This is your opportunity to make convenience the next small business marketing trend by implementing increased convenience in your marketing strategy.

10 Ways to Analyze Your Business Performance to Increase Sales

If you are looking to increase business sales, you first need to analyze your business performance to determine the right marketing tactics that will help you to achieve your goals.  Below are 10 ideas to help you get started to analyze business performance:

  1. Optimizing the Path to Purchase. If a consumer is standing in front of a shelf that houses your product or is scrolling through an online store to find a product to purchase, what matters most to the consumer?  Build a survey for your consumers to fill out so that you can determine what matters most to them.  As an example, if you are in the ice cream section at a grocery store – what is the first thing that you look for – Flavor? Brand? Price? Size?  Assuming it is size, what is the next point in the consumer’s decision tree: Brand? Flavor? Price?  Keep narrowing down so that you can find out what is most important to a consumer by building a decision tree analysis similar to the above.
  2. Advertising Channels.  Do you know where your competition is advertising and how often they are advertising?  Try to find out what your competition is doing this way you can preempt your competition and reach the same consumers that they are trying to reach.
  3. Product Mix.  Is your product or service line segmented to target a variety of consumers?  For example, Verizon Wireless offers a broad mix of phones, each targeting different consumers – Blackberrys for businesses, iPhones for the tech saavy/innovators, pre-paid for those that don’t need many minutes, phones with great cameras, phones that are waterproof, etc.  By offering a wide product mix, Verizon Wireless is maximizing their revenue by expanding the pool of target consumers.  Secondary, check out what your competition is offering to see if there is opportunity to improve your product mix.
  4. Optimize Price Mix. Similar to number 3 above, determine if there is opportunity to segment your products not by product type, but by price bracket.  Not all consumers are willing to pay $120/month for cable TV, however, cable providers maximize their pool of consumers by offering pricing structures that segments their consumers based on what the consumer is willing to pay.  This is similar to pricing discrimination.
  5. Leverage Surveys.  Different from number one on this list, use surveys to determine the attitudes and usages of your consumers toward your product/service, industry, category, etc.  This might give you some valuable insight that will help you to get an edge on your competition.
  6. Analyze the Competition.  Is your competition launching new product or offering discounted pricing for a similar service?  If so, this might give you valuable insight on new suppliers (which could be helping your competition to drive down their price), industry trends (leverage research that the competitor might have that you don’t), or new product renovations (packaging concepts, product features, additional services, etc.)
  7. Monitor the Price Gaps.  If you haven’t already learned by now, we have taught many times that there is a relationship between product benefits and propensity to purchase which can be quantified through a metric called elasticity.  If the difference in price between you and your competition is not being carefully monitored, you can be losing sales based on the elasticity impact.  Read this article on price gaps for more information.
  8. Distribution Channels.  Is your product distributed in all channels that sell that product type (locally or nationally)?  To give yourself an easy start on where you should at the least be distributed, do some research to determine where your competition is distributed and you are not.  Fill those gaps to increase your sales.
  9. Increase Awareness.  Leverage effective advertising strategies such as coupon marketing to drive trial of your product.  Design the coupon to entice repeat purchases so that your consumers continue to come back.  If you are a service company, design a clever advertising campaign that targets your niche of consumers.
  10. Keep the Consumer Top of Mind.  Who doesn’t love free products or trials – offer these to bring new consumers into your pool.  Reach out to your target consumers via social media to engage with them, drive loyalty, and make them feel special.