Marketing 101: Cultural Factors Affecting Consumer Purchases

In my last post I discussed the basics of Consumer Buyer Behavior, and I explored the Model of Consumer Buyer Behavior.  We are going to continue our discussion by exploring the various characteristics affecting consumer buying behavior.  Recall that consumer purchases are not just simple one-and-done affairs.  They are affected strongly by cultural, social, personal, and psychological factors.  These are all factors that we cannot control, but we have to take them into account or else our marketing is ineffective and money is washed down the drain.  Let's begin by examining Cultural Factors.

Cultural Factors
Cultural Factors are some of the strongest influences of consumer buyer behavior.  Cultural Factors are the set of basic values, perceptions, wants and behaviors that are "learned" by a consumer from their families and other important social institutions.  "Culture" is the most basic source of a consumer's wants and behavior.  It lives at the foundation of a consumer's world view.  Culture is mostly a learned behavior, being constructed by the society a consumer grows up in. That society "teaches" the consumer basic values, perceptions, wants and behaviors.  What a consumer is "taught" can vary greatly in different parts of the world.  For example, in the United States a child will learn such values as liberty, democracy, freedom, American Exceptionalism, working hard, making your own success, and family values. Children in many Asian countries will learn such values as social harmony, concern with social and economic well-being instead civil and human rights, loyalty towards authority and the well being of the family over the well being of self.

Marketers need to remember that every group or society has a culture.  Cultural influences can and will vary greatly from country to country, social group to social group.  If you do not account for these values in your marketing plans, your campaigns could be ineffective, and at worst embarrassing.

Subcultures
Every cultural group has numerous subcultures.  Subcultures are groups of people that have a set of shared values based on common life experiences and situations.  Subcultures can include different nationalities, religions, racial groups, and geographic regions.  Many of these subcultural groups make up important customer segments.  Because of this, marketers are designing products and marketing campaigns that are specifically tailored to their needs and wants.  An example of a growing customer segment and subculture is the "mature" consumer.

The MetLife Mature Market Institute published a report in 2010 summarizing this growing consumer segment.  In 2009 there were over 39 million people over 65 years of age, the majority of which are female.  The majority of these people were reported as healthy and active.  The top three areas of annual spending were in housing, transportation and food/beverage categories.  Armed with basic information such as this, many CMO's are finding opportunities to create new messaging campaigns for existing products to grow sales in this growing customer segment.  

Trends
CMO's and marketers need to always try to notice cultural shifts in order to discover new products that might be desired by consumers in other cultures and subcultures.  Recent trends that have developed over the past decade are the growth of health and fitness over junk and processed food products, and the personal entertainment market which has grown as group and family entertainment in the living room has decreased (think tablets and Netflix).  It is your responsibility to keep an eye on your customer segments, their cultures, subcultures, and any new trends that effect them or may bring new groups of customers to your products.  Are you?

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Marketing 101: Microenvironment - Publics

This week's Marketing 101 is going to continue on in Marketing Microenvironments.  Today we are focusing on Publics.

In simple terms, a Public is any group of people that may have an real or potential interest in ... or an impact on ... your business's ability to achieve its objectives - whatever they may be.  Why should you care about Publics?  It's simple.  Publics can help, or hinder your ability to get your message out to your customers, and collect value from them.

Financial Publics
Your relationships with Financial Publics are extremely important.  These relationships directly influence your ability to obtain funding for your business.  Financial Publics typically include banks, investment houses and stock holders.  How these groups perceive you will directly affect your ability to get loans, favorable payment terms, and whether or not other Publics choose to do business with you.  For example, if a brokerage perceives that you are having issues internally, or your products have deficiencies, then it may give your stock a low rating.  If that happens, people may sell your stock, your market valuation will decrease, and your customers may start to buy less of your products and services.

Media Publics
Media Publics can be extremely valuable, or they can be a thorn in your side.  Media Publics typically carry news, features and editorial opinions, delivering them to your customers and other Publics.  They include newspapers, blogs, magazines (print and digital), radio (broadcast and internet) and television outlets (broadcast and digital).  You can carry out your "relationship" with Media Publics via VNR's, PR media releases, op ed's, interviews, or open invitations to review your products and services.  Do not be afraid to make friends and connect with people in the media.  You can gently influence what they say about you.  Having a good relationship with people in the media can make a bad situation for your company "tolerable" or a PR disaster in the eyes of your customers.

Government Publics
Take note: Management MUST take governmental developments into account.  You should always keep an eye on the current state of any laws and regulations that effect the production of your products, the day-to-day operation of your business, or the methods you can use to sell your products and services.  Marketers must often consult with government officials, their lawyers, and sometimes lobbyists.  Get to know your local government, and keep tabs on what your government officials are doing.

Citizen-Action Publics
The decisions you make will sometimes be questioned by citizens, consumer organizations, environmental groups, minority groups and others.  Your PR department can help you stay in touch with these groups.  It can keep you abreast of any concerns or problems that arise.  Make it your mission to get to know the citizen groups that may affect your business and your marketing practices.  Make it a point to have a friendly relationship with any of their representatives.

Local Publics
Local Publics typically include neighborhood residents and community organizations.  Businesses will usually appoint a community relations officer to meet with the community, answer questions and contribute to worthwhile causes.

General Publics
A business needs to be concerned with the general public's attitude and perception towards its products and activities in the marketplace.  The perception of the business, it's brands, products and services in the public directly effect consumers buying habits.  Keep an eye on Twitter feeds and FaceBook posts.  You will be able to get a very real sense of the general public's perception of you in the marketplace.

Internal Publics
Internal Publics are groups of people inside your own business.  These groups can consist of employees, managers, volunteers, and the board of directors.  Businesses typically use newsletters, memos, company meetings, intranets and other means to motivate and educate their internal publics.  When your employees feel good working for you, when your board of directors are happy with your success, when your internal communications send the right messages to motivate, encourage, train, and edify your staff, this positive attitude spills over to external publics, and helps to communicate your brand message in the marketplace.

A business can construct strategic marketing plans for some or all of these major Publics alongside it's chosen customer markets.  Suppose a business wants to evoke a specific response from a particular Public, such as donations of time or money (Cause Marketing).  The business would have to design an messaging campaign for this Public that is enticing and persuading enough to coax the desired response.

Is it realistic for all businesses to pay attention to all of these Publics at the same time?  No.  Can you effectively market to all Publics.  Yes and No.  You have to make the judgement where to spend your time and resources.  However, at some point in time you will have to deal with each of these Publics in some capacity.  It is in your best interest to at least get to know them, and when appropriate, take action.

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Marketing 101: The Microenvironment - Competitors

I want to start this week's post with a bit of caution: even though there may not be a lot to write, this part of the Micro-environment is by no means small or light.  In fact, it is complex, requires a lot of thought and study, and must be properly evaluated.  It's your Competitors.

The marketing concept states that in order for your marketing to be successful, your business must provide greater customer value and satisfaction that your competitors.  In other words, you must do more than simply adapt to the needs of your target customers.  Let me state this again:  You must do more than just give your customers what you think they need, or they say they need.  You must gain a strategic advantage by positioning your products and services against your competitors in the minds of your customers.

This is all about positioning.  You have to differentiate yourself from your competitors.

You can't do this unless you study your competition.  You have to study them, their products, their marketing messages, and figure out how to stand out above them.

This takes time and a lot of studying.

Remember, no single competitive marketing strategy is best for all companies and situations.  You need to take into account your size and position compared to your competitors.  Large firms with dominant positions in an industry can use certain strategies that smaller firms don't have the ability to from a resource standpoint (money and manpower).  But being large is not enough.  There are winning and losing strategies for all sized businesses.  Small businesses must find the strategies that give them larger rates of return. 

When is the last time you took a hard look at your competition?

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Using Online Communities To Create Brand Awareness - Part 1

We should always endeavor to connect with our customers.  Isn't that one of the great goals and mysteries of marketing and branding?  What is the best way to connect with our customers?  How should we convince them to purchase our products?  How can we spend AS LITTLE MONEY as possible doing this and still make a profit?

It seems that many small businesses, and even large ones, still have not discovered the online community "gold mine".  Being a part of online communities is necessary, because it gives you a direct opportunity to build credibility, build awareness, create SEO-aware content, and address customer service issues.

Online communities give you a direct way to connect with consumers and build credibility.  Online communities allow you to present yourself as a subject manner expert.  By answering consumer's questions and helping them solve their problems in a friendly, non-pressured manner, you present yourself as a credible and knowledgeable, even though you are somewhat biased towards your product as a solution.  With a good attitude, and a friendly, clear writing style, you can present your product and brand as the wise solution to their needs.

As you are helping community members meet their needs, you are constantly building awareness.  Your participation helps to show others their potential need for your product.  Also, your participation helps to inform others of the existence of your product who may not have known about you.  Online communities also provide you with a great opportunity to receive feedback about your product.  If you are an advertiser in that community, you can also build awareness by posting news releases about new models and product updates.

Next time we will discuss using online communities to create more SEO-aware content and help create positive brand experiences via customer service.

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What Are You Doing To Create Awareness Today?

Did you do anything to market yourself today other than think about it?

Marketing doesn't happen by itself.  You have to do it.

People don't find out about you on their own.  They won't bring up Google and search for you unless they have a reason to do so.

So what are you doing today to create awareness?

If you need a jump start, here are some ideas that might be relevant to your customers:

1. Offer A Discount
Sometimes the easiest way to drive traffic to your website, or to retailer locations, is to offer a discount or a coupon.  However, remember that spending money can be an incredibly emotional thing.  The right price, or discount, can drive a person to spend money "easily" without any thought.  5%-10% off might not be the ticket.  Don't be afraid to explore 20%, even 30-40% off.  If you're concerned about your margins, make it a limited or exclusive offer to a select group of customers.  Once they are in the door, they tend to buy more.

2. Hold A Product Demo Event
People love to research products, and price-shop online.  But at the end of the day, a consumer that touches the product, tries it, and likes it, usually ends up buying it.  Consider putting on a demo event in a location that contains your primary customer demographic.

3. Ask For Product Testimonials Via Social Media
Social media makes it very easy to connect with your customers.  It can be a customer service haven and nightmare.  One of my favorite uses of social media is testimonials.  It's as easy as this:  Ask users of your product to submit positive experiences of your product: video is preferred, text and pictures are great as well.  Incentives are a must.  Offer discounts off of new product, or free accessories to those consumers whose testimonial you choose to post.  Post one a week for 13 weeks - the length of a typical television or radio ad buy.

4. Participate In Online Communities
This fourth option can take the most work, but it can reap some of the largest gains for building your brand's credibility.  It's as simple as joining relevant forums and blogs.  Put your name and company in your signature.  Make it clear who you are.  Offer advice and sensible solutions.  However, you cannot blatantly advertise your product in your posts.  It's best to offer sound advice that may or may not include any of your specific products.  Over time you will see a few benefits:
- Community members will see you as an expert
- Community members will begin to explore your website and your product
- All of your posts will be indexed by search engines (like Google) and it will increase the amount of searchable, relevant content about you online.

It's a good idea to put one of your best PR reps or customer service representatives in charge of online community participation.  Your Social Media Director is a great fit as well.  You can take this a step further by becoming an advertiser in that online community.  This allows you to blatantly post about your product and any specials you may be offering.

These four things are simple, yet highly effective ways to increase Brand Awareness for little cost other than labor and time.  If appropriate, and if used in a focused manner, they are a great way to connect with current and future customers, and can provide a great ROI for a little marketing budget expenditure.

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Number 1 2012 Marketing Resolution: Communicate Clearly

In 2012 we want to accomplish many goals:

- Sell millions in product
- Grow our brand awareness exponentially
- Achieve the largest marketing ROI for as little cost as possible
- Get promoted to, or hired as a CMO (I wouldn't mind that)

But before you can do anything above, or anything else, here's what you need to do from the first day of 2012: communicate clearly.

It seems simple, doesn't it?

In reality, communicating clearly involves a little bit of work.  Whether you're writing an email, or putting together a message for marketing, follow these steps, and you will be on your way to communicating more clearly:

1) Slow down.  When we rush, we make mistakes.  We say things that we don't intend.  We mix up our words.  Slowing down gives you the time to...

2) Think.  Think about the message you need to convey.  Ask yourself: Who is it for?  How will it be consumed?  What important information needs to be communicated?  After you slow down, think, answer these questions, and compose your message...

3) Review and edit.  You won't believe how often you will catch a typo here or there.  You may have reversed the order of your words.  You might catch a phrase or two that convey the wrong message, or potentially confuse the consumer of your message.

Using this three step method will help you communicate simple or complex messages more clearly and mistake-free.

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Another Ad Network = More Fragmentation

On Wednesday Yahoo released it's "Living Ad", interactive video ad format for advertisers.  This new ad format works within an ad network, that is centered around Yahoo's Livestand publication app.  Livestand, along with it's ad network, enters an already saturated ad "market" occupied by the likes of Flipboard, Zite, AOL's Editions, and Pulse.  Yahoo is pushing advertisting packages to buyers, some of which are said to run upwards of $500,000.

According to Yahoo, Livestand features a magazine-style layout.  It will launch with some content from third-party publications.  Those publishers will share their ad revenue with Yahoo.  The details of these revenue sharing arrangements are not yet known. These publishers can also re-sell ad packages on the plarform.  I can only deduce that Yahoo get's a cut of that revenue as well. Diane McGarvey at Scientific American, which is offering some content on the Livestand, states Yahoo will keep about 70 percent of revenue on ads sold to appear inline with Scientific American content.
Living Ad, along with Livestand, is one of many initiatives to attempting to make Yahoo a relevant player in mobile advertising.  Mobile advertising is projected to net around $1 billion this year in the U.S. and up to $1.2 billion in 2012, according to eMarketer. Yahoo is positioning itself to receive as large a portion of this pie of revenue as possible.

The mobile ad space is already over-saturated.  Frankly, none of the ad formats and networks bring anything new to the table.  Nothing currently compells a consumer to do anything after viewing these ads compared with any other form of advertising medium.  We don't need another ad network.  We don't need another "method" to get an ad to a consumer.  What we need is a new type of ad, a new way to interact with a product, that might actually compel a consumer to buy.

Advertisers, and content networks, need to bring new ideas to the table.  The internet and mobile phone networks bring whole new possibilities to advertising via interactive ads.  An interactive ad would allow a consumer to configure products, explore them, walk around them, try a focused "demo" of it.  After they have played with it, or configured it to their hearts content, they could be connected with a vendor to purchase that product within a few clicks.  This gives the consumer a quick way to satisfy their emotional desire to buy the product.

However, most online ads don't do anything other than present a picture, an animation, a call to action phrase, and link to a normal website.  There's no point to showing a traditional ad online or on a smart phone if there's nothing new about it's experience.  None.

Yahoo's Living Ad is trying to do this.  However, most advertisers don't seem to know how to create an ad "experience" that really compels consumer interest.  We need to stop telling

If advertisting is going to survive, and make money, the "ad" as we know it needs to evolve along with the technology available to deliver it.  With the growing popularity of mobile devices that are connected to mobile data networks, there is a new opportunity to truly try something new.  Who is going to lead the way?

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Facebook helps advertisers engage their customers

I'm taking a break from my review of basic marketing fundamentals to discuss something key from the recent Facebook F8 event.

On September 23rd, Michael Lazerow published an article on Adage commenting on Facebook's Ad product evolution.  In his post, Michael comments on three key items:

• Facebook now helps you build better connections
• Facebook can be used to let your customers tell your product's story
• Facebook can help you unlock the value of people

I want to comment more on these ideas.

First, the whole "point" for a business using Facebook is to connect with their customer.  Seems like a no-brainer, right?  Maybe ... but what many businesses assume is that once someone "Likes" their business, they are instantly connected, and their "Likes" will pay attention to whatever they post, even if they post nothing.  "Like" DOES NOT equate to "connecting".  Mr. Lazerow is correct when he says, "It's about what you offer them and it's clear that the company's (Facebook) focus has shifted from growth to engagement" (reference to Facebook added).

Facebook isn't about announcing another product.  It isn't about beating your chest.  It's about posting CONTENT that is relevant to your customer.  It's about GIVING them something that matters. If you sell cameras, post tutorials about photography techniques.  Give them tutorials focused on teaching them to use your product.  Post a 50% off coupon for Facebook members for camera accessories.  GIVE them something that is VALUABLE to them.  Remember when we were talking about Brand Equity in my last post?  Facebook is a great place to build brand awareness and brand equity.

Use your customers to build your brand equity.  Have them tell your product's story.  Have them show and tell others about how they have used your product.  Their voice (positive and negative) carries more clout and emotional credibility than yours ever will.  Continuing on the camera example, inviting users to post their photos from vacations with your camera allows them to share their emotional connection with your product.  Awarding prizes for the best photo taken with your camera helps to strengthen the customer's "bond" with your product and brand.  The "community" built, and the quality of photos submitted (hopefully) will build better brand equity than you could do yourself through traditional advertising via any medium.

Advertising doesn't always "reveal" the fact that your customers have value.  They don't just give you money.  They are a very real voice in the marketplace.  Make them a voice for you.  Facebook (and potentially Google+ in the future) allows you to connect and unlock their value in a way that we never had before social networking existed.  It's time for you to take advantage of it and truly engage with your customer to build your brand equity.

Credit: Adage

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Is Anyone Aware?

One of the items I mentioned last week was Brand Awareness.  What is Brand Awareness?  It is the measure of a consumer's knowledge of your very existence.  The "aggregate" level is the proportion of consumers that "know" your brand.  Why is this "level" even important?  It's important, because the creation of brand awareness is the PRIMARY goal of advertising, and it influences the behavior of the buyers of your product.  However, remember that all of your measurements of brand awareness are, at best, approximations.  They are not exact. The more measures used, the more complete your understanding of brand awareness will be.

Brand awareness is measured "simply" by showing a consumer the "brand and asking whether or not they knew of it beforehand.  Many textbooks have conceptualized brand awareness simply as the knowledge that the brand is a member of a particular product category, such as fast-food.  However, common practice says there is more than one recognition and recall measure, all of which test the brand name's association to a product category cue.

However, "knowledge" doesn't give us much data to do anything with.  So, we use three common metrics that can be measured:

• Brand Recall - Either the brand name or both the brand name and category name are presented to survey participants.
• Brand Recognition - The product category name is given to participants, and are then asked to recall as many brands as possible that are members of the category.
• Top of Mind Awareness - Brand Recognition, but more specifically only the first brand recalled is recorded (called "spontaneous brand recall" by some).

These measurements can be used for creating an understanding of Brand Equity.  Brand Equity is the positive effect of the brand on the difference between the prices that the consumer is willing to pay compared to the perceived value of the benefit received by your product.  The more value, the more a consumer will pay for your product.  Brand Equity is built by brand awareness activities such as advertising, PR, and promotion.  Simply put, the more Brand Equity, the more you might be able to charge for your product.  Higher prices can lead to higher profits.  You're in the business to make money right?

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Brand Assessment

Last week I discussed the details of Brand Architecture.  Before I talk about further evaluating a Brand Architecture, I wanted to explore the Brand Assessment.  The data gained from researching and evaluating your brand in an assessment is a key requirement before considering any future change in your Brand Architecture.  If you don't know anything about your brand in the marketplace, you cannot make any intelligent decisions about it's direction in the future.

There are two key parts to a Brand Assessment: the Brand Essence and the Brand Communication.  

When reviewing your Brand Essence it is important to determine:

• Awareness: Are you known in the marketplace?
• Favorability: How do people feel about you?
• Function: What benefits do you provide your customers?
• Key Driver: What prompts consumers to engage with you?
• Support: What "backs up" your key function in the marketplace?
• Differentiation: What distinguishes you in the marketplace from everyone else?
• Personality: What compelling attributes define you?
• Quality: What is the quality of your brand in the marketplace?

When reviewing your Brand Communication, you should review:

• Messaging: What messages are the most compelling to your current and potential customers?
• Name: How effective is your current name in the marketplace?
• Logo: How effective is your current logo in the marketplace?

The amount of detailed, reliable data you can collect on each of these areas will help you determine the direction your brand should go in the future.

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