The Amazing Shrinking Product

March 26, 2008

DISCUSSION TOPIC:  Brands Shrink to Avoid Price Hikes

TOPIC SUMMARY:

Companies faced with higher cost for raw materials often find that a decision needs to be made. Continue production as-is and lose money if the price for the item isn’t increased; keep on manufacturing but raise the price or alter the product itself to reduce the cost of making it.

For many manufacturers, reformulations have been the chosen path to meeting consumer demand while protecting profitability. Of course, when changes are noticed, as in the case of a smaller candy bar or fewer rolls in a pack of paper towels, there is bound to be grumbling. This is especially true at a time when consumers are watching prices rise at a much faster rate than their take-home pay.

Discussion questions:  Do you think most consumers are understanding in the current environment when it comes to manufacturers downsizing and/or raising prices on established brand products? Is there a right or wrong way to go about handling the announcement of a product being reformulated in a smaller size? What role is there for a retailer to play in the current scenario where products are being altered to avoid hefty increases in prices to consumers?

My post:

The process of reducing size or changing ingredients to reduce manufacturing costs is called “incremental degradation.”  This can be a slippery slope.  The effects of tiny reductions in size or quality are not immediately apparent to consumers and certainly fatten the bottom line.  Managers begin to rely on incremental degradations to maintain margins and assume the consumer will continue to not notice.  Eventually, though, these incremental degradations add up and the consumer stops buying either because they notice the difference or because they just don’t like the product like they once did.  When this happens, it is too late to reverse course because the relationship with the customer is damaged.  Particularly if yours is a product known for quality, incremental degradation is a dangerous path.  You either believe in quality or you don’t.  Make a choice.

It is a much better strategy to implement incremental augmentation:  subtly adding value to your products which will tend to increase customer loyalty and keep your customers loyal even when prices eventually need to rise.

Mike Osorio, your Dare to be Contagious! TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12853  

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Social Network Ignorance

March 18, 2008

DISCUSSION TOPIC:  Marketers Don’t Get Social Networks

TOPIC SUMMARY:

Social networks are all about relationship building. Yet marketers are continuing to use mainstream advertising ploys – including hammering home messages – in targeting the medium rather than just having conversations.

“Frequency of message is not the idea here,” Rick Murray, president of Edelman digital, told Advertising Age. “Frequency of contact is.”

Charlene Li, VP and principal analyst at Forrester Research, agreed that marketers haven’t seemed to figure out that this is a channel where consumers actually want to be spoken to.

“[Consumers] are asking questions on these sites that go unanswered,” she said. “You can’t ask for a better environment. And what do marketers do? They say nothing and put up another ad.”

Discussion questions:  What’s the difference between mainstream marketing techniques and efforts targeting MySpace and other social networking sites? How should mainstream advertising be tweaked to work on social networking sites?

My post:

Few retailers or brands have taken the time to research how to best use the social networks for marketing efforts.  Therefore, most efforts have been to slam their regular mainstream marketing onto these sites – a huge mistake.  Retailers and brands would do well to research the many quality “how-to” sites for social networking entrepreneurs. These sites provide excellent lessons on how to write compelling content for blogs, social networks, etc.  Key points:

  • Remember: These are conversations not ads. Talk, engage, but don’t sell.
  • Who will do the postings on blogs, MySpace, etc.? They must speak with an authentic voice, aligned with the company’s voice.
  • Can you commit to regular updates? If not, don’t start.
  • Have you prepared for the inevitable complaints and bad comments about your brand/product?
  • Give stuff away. The way you gain trust with your audience and get them to buy your product eventually is to prove that your stuff is worthwhile. This method is used to great advantage in information marketing and should be utilized in product marketing.
  • Test, test, test, and test some more. This medium is continuously evolving and the best are always looking to tweak their approach.

Mike Osorio, your Dare to be Contagious! TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12828  

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Thank you for visiting my blog!  Please subscribe using the RSS button and comment on my postings.  Comments are the life-blood of any blog and I appreciate yours!


Do you remember what new products came out last year?

March 10, 2008

DISCUSSION TOPIC:  New Product Messages Not Getting Through

TOPIC SUMMARY:

According to new survey, only 23 percent of 1,000 American consumers could recall a new product introduced in 2007. Joan Holleran, editor of New Product magazine, one of the study’s providers, remarked to MediaPost, “It’s like consumers are saying: ‘Could you spend a little more on research and development, instead of just creating line extensions?'”

When presented with a list of new products introduced last year, Apple’s iPhone topped the list with a 37 percent recall rate. Rounding out the top ten (in order) were by Microsoft’s Windows Vista operating system, Febreze-branded candles, Domino’s Oreo Dessert Pizza, the over-the-counter diet aide Alli, Oreo Cakesters, Diet Coke Plus, Subway Fresh Fit Meals, Motorola’s RAZR 2 and Listerine White Strips.

While the research underscored that consumers have short attention spans around new products, the results showed that the top memorable products were line extensions. Researchers also noted that most of the memorable new products experimented with their marketing mix – using blogs, word of mouth and PR-generated media to get the word out.

Discussion questions: Is the fact that consumers can’t recall new products primarily a marketing problem? Or is it more of an R&D problem? How can brands and retailers do a better job coming out with memorable new product launches?

My post:

The wrong question is being asked.  I may not remember what new products were introduced in 2007, but I may still be buying them.  Rather than asking what the consumer remembers, they should be asked what they are buying.  Only what I buy puts money in the cash register.

Consumers are overwhelmed by the overabundance of new products, when in fact most perform only marginally better if at all vs. what they hope to replace.  Marketing and R&D focused on existing products would be far more cost-efficient that developing and marketing ever-new line extensions, etc.

Mike Osorio, your Dare to be Contagious! TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12810  

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Thank you for visiting my blog!  Please subscribe using the RSS button and comment on my postings.  Comments are the life-blood of any blog and I appreciate yours!


Would you lick a magazine ad?

March 7, 2008

 DISCUSSION TOPIC:  Lickable Ads Arrive

TOPIC SUMMARY:

Welch’s has introduced what’s believed to be the first-ever consumer ad in a magazine enabling readers to sample a product by licking the ad. While scent technology — scratch-and-sniff ads or fragrant ink — is commonplace in magazines, lickable ads are still in the experimental stage.

Discussion question: What do you think of the marketing potential around lickable ads in magazines?

My post:

Lickable ads are a bad idea.  Even though a person can tell if the strip has been opened already, this does not stop a child or an adult with poor decision-making skills from “re-licking.”  It is definitely a lawsuit waiting to happen when the first child gets sick after licking an ad that their classmate or sibling with the flu already licked.

Plus, the very idea of licking a magazine is not appealing.  I would not want my brand associated with this practice.  True sampling is the way to get the flavor of a product into a customers’ mouth.

Mike Osorio, your Dare to be Contagious! TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12807

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Thank you for visiting my blog!  Please subscribe using the RSS button and comment on my postings.  Comments are the life-blood of any blog and I appreciate yours!


Dare to be Contagious! ™ blog launches!

December 31, 2007

Happy New Year’s Eve! 

As we transition to 2008, I am launching my blog, “Dare to be Contagious! ™

As you may know, after 25 years as a successful retail executive I recently left my role as SVP/GM for Harry & David Stores to launch my own venture, “Osorio Group.”  If this is your first time “meeting” me, check the “about” page for a bit more on my biography.

Osorio Group will be an umbrella firm covering my public speaking, consulting, and coaching services.  My site, www.osoriogroup.com, launches this coming Saturday, January 5th, 2008.  I invite you to check out the site and let me know what you think!  I look forward to your feedback and hopefully your referrals too!

So what’s this blog all about?  Dare to be Contagious! ™ is the tagline and philosophy for my new venture.  It refers to my belief that knowledge is only powerful when it is shared with others to enrich, enlighten, and enhance their lives.

I am a “lifelong learner”.  I love to devour information gleaned from articles, books, presentations and most importantly, conversations.  The internet has, of course, dramatically increased the resources available to me.  I have always sought to bring new thinking, ideas, tips and techniques to my workplaces.  I believe that the companies I worked for and the bosses, peers, and subordinates I worked with benefitted from this knowledge transfer in terms of increased sales & profits, improved processes, products & services, and the significant and ongoing development of talent.

My new venture will allow me to continue transferring knowledge through speaking engagements, consulting, and coaching.  Plus, I will have two free email products which will allow me to communicate to an opted-in audience on a regular basis.  In the future, I also plan on having teleseminars and other web-based products to reach even more people.

I am certainly following my own advice to “be contagious” with my knowledge.  But even these methods will not completely fulfill my mission to pass on knowledge and passion.  Therefore, I have launched this blog as a means to communicate freely whenever the need strikes me.

The blog will include postings on retail:  trends, branding, consumer behavior, leadership, talent development, and more.  I will also post on other areas I am passionate about:  food, wine, travel, music, art, etc.

I hope you will find the blog interesting and that it provides value among all your sources of information, learning, and entertainment.  Please post your comments (freely and often!) by clicking on the “comments” link below each post. 

 See you in 2008!