Technology and Marketing Music Events

By:  Karen Pelletier

The Coachella Music FesivalOne of the most interesting technological introductions of Coachella, that I didn’t see much about in the tech blogs, was the live streaming on YouTube, 3 channels worth, of the real time concerts!  It enabled people all over the world to experience the festival.  As of today, there were 8.1 million views of various live & recorded videos.  Goldenvoice (the promoter) also had a great app that showed you the schedule, and enabled you to link directly to the YouTube live streaming–it was great!

The week prior to Coachella, YouTube announced the ability to charge for live streaming events. This is a profound new distribution channel for monetizing events, and I believe that Goldenvoice’s live streaming was a preview for what’s to come.   This was an opportunity for them to test the technology and gauge the market for charging to watch the concert in future years. I’ll be sad when they start charging for it because I’ll be less likely to sample artists that I’m not familiar with, but I can see it coming. It’s inevitable.  I can also see music events all over the world selling access to shows, providing a new revenue stream for bands and venues.

Another interesting feature was video interviews that Goldenvoice did with the various musicians and groups.  Almost all of the groups talked about how technology was transforming the music industry.  Many of them mentioned that marketing their music on the web and through social media was trans-formative and democratizing.  You could see the groups taking responsibility for marketing their music and their band in a way they never had to before.  A number of the groups also talked about how seriously they took interacting with fans on social media.  They read and responded to all social media comments to engage their fans on a deeper level.  It was very interesting.

Now, more than ever before, great music can find an audience.

Posted in Inbound Marketing, Marketing, Music, Social Media, Technology | Tagged , , , , , | 1 Comment

Assessing the Viability of a New Product Idea

New Product example

Fresh Take was held out as an example of an innovative new product. I disagree. This article describes what you should think about when evaluating new product ideas.I have

By:  Karen Pelletier

I have recently read a number of articles decrying the dearth of innovative new products.  The articles imply that companies should push more products out the door and not over-analyze them.  I beg to differ.  Someone has to pay to develop and introduce those new products, and that’s usually the stockholder.  I’d rather focus my efforts and my dollars on the ideas that have the best chance of success.

One of those articles was a blog post from Marketing Pilgrim, “Roadblocks to Innovation: How to Keep Moving Forward in Business” by Cynthia Boris.  Marketing Pilgrim normally has pretty good articles, but this one, made my blood boil.

Cynthia touts Fresh Take (a bread crumb-cheese mixture) as an innovation by Kraft Foods and a worthwhile product to introduce.  I think Fresh Take is a sad excuse for a new product;  it’s more a line extension of their shredded cheese and Shake N Bake franchises than a new product, and is not innovative at all.  In fact, I predict that Fresh Take will not be able to sustain distribution and will be gone from the market within 2 years.

First a little background.  I spent 5 years at Kraft, most of them working on new products.  I introduced Miracle Whip™ Light reduced calorie salad dressing, which won the Kraft President’s Award for most successful new product, and worked on many new products as Group Brand Manager in the Venture Division.  Finding a product concept that people seem to like is only the very first step in assessing whether a new product concept should be developed and introduced.

1.  Volume Potential:  Is this idea big enough to justify the massive investment required to introduce a new product?

Fresh Take is an idea that people can do readily with pantry or staples they currently have on hand.  Most people keep bread crumbs and shredded or grated cheese on hand.  Do they really need another product to create the cheese-breaded coating effect?  I doubt it.  It’s like Dijonaise (a combination of mayonnaise and Dijon mustard).  Most people have mayonnaise and Dijon mustard on hand.  Why buy another product and take up valuable real estate in the refrigerator door with another product that they could easily recreate themselves, if and when they wanted it?  No matter what the “packaging innovation” is in the Fresh Take product, I doubt it’s enough to warrant purchasing yet another product that duplicates ingredients you already have on hand.

Secondly, among people who do like the Fresh Take product concept, I question how frequently they would plan to make it.   Companies often over-estimate how often a concept-positive respondent is likely to buy a product—reducing the projected volume even further.

The investment necessary to introduce a new brand in the grocery channel is massive—not only must Kraft spend money on advertising and promotion to generate awareness to get the product moving off the shelf, the grocery trade often requires slotting allowances.  The grocery trade does this because the cost of getting all these new products on the shelf is very high.  According to the USDA, there were 19,047 new food and beverage products introduced in 2009 (down from 24,236 in 2007).  It includes the cost of buying inventory, figuring out where the new item should go in the planogram, and working the new item into the shelf in 30,000 stores.  So many new products fail that the trade, in self-defense, starting charging manufacturers slotting allowances to get onto the shelf.  This raises the cost of entry for a new brand or item, and makes sure that the manufacturer is really serious about its new product.  Even with the payment of slotting allowances the manufacture gets, at best, 6 months to show that the new product generates enough movement and profit for the grocer to warrant being kept on the shelf.

To summarize, I question whether Fresh Take product concept is big enough to justify the time and investment.

2.  Cannibalization:  Will Fresh Take cannibalize sales of Kraft’s existing products? If so, what would that do to profitability?

Kraft has the Shake N Bake brand as well as a significant share of the shredded cheese category.  I would bet that a substantial portion of the Fresh Take volume will come out of the Shake N Bake brand and/or Kraft shredded cheese. The profitability and viability of the Fresh Take brand should be assessed net of cannibalization.

When I introduced Miracle Whip™ Light I assumed a 99% cannibalization rate.  That dictated how much I could spend on marketing support, how I marketed the brand, and ensured that the company and shareholder would benefit from the introduction.

3.  Competition:  Are there enough barriers to entry (for example patents, technical know-how, spending) to give you enough time to establish a large market for your brand before competitors figure out how to duplicate it and get their own version out in the market?  In this case the shredded cheese competitors might try to duplicate Fresh Take, but I don’t think the competitive issue is as important as the limited size of the opportunity and cannibalization in light of what you have to spend to introduce the brand.

Unlike Cynthia Boris, I think that the Fresh Take brand shows so little innovation that I’m amazed it has seen the light of day and made it to the shelf.  I would argue that the introduction of Fresh Take shows just how tough it is to find a meaningful new product opportunity for Kraft.  DiGiorno rising crust pizza was the last major innovative new product, that I can think of, that Kraft introduced.  It had a meaning point of difference—a crust that rose, like bread in the oven and produced a pizza that was far superior to the existing frozen pizza competition.  It had a technical point of difference that took competitors time to duplicate, giving Kraft an opportunity to gain distribution and market share before competitors came out with their own versions.  And finally, it was in a big enough category (around $800M – $1B) that taking a meaningful share of the category was more than worthy of the investment.

Posted in Marketing, New Products | Tagged , , , | 1 Comment

Use Your Marketing Skills to Fight City Hall

By:  Karen Pelletier

Use your marketing skills to fight City HallEarlier this week a committee I served on won an 8 month long battle with City Hall.  City Staff wanted to install “worm medians” on our primary arterial street.  These worm medians would have prevented us from taking a left and most importantly, forced us to take U-turns into 60-70 mph traffic.  It was nuts!

For all of you who are trying to fight City Hall, here are some suggestions based on our experience.

1.  Form a Committee

Form a committee so that your City knows who represents the people on this issue and who they can negotiate with.  In our case we staffed that committee with a lawyer, engineer, HOA representatives and marketers.  Try to get whatever expertise you need to increase your credibility.

2.  Do Your Research

Get your hands on the original source documents.  In our case that was tract maps approved by the City that spelled out what improvements were to be made by the developer and who was to pay for them.   We also needed the traffic studies and to understand the money side of the equation. Quoting the original source documents will give you the knowledge and credibility you need to work the issue.

3.  Analyze the Data

This is a big one.  Often City Government is given a report which makes a recommendation, which the City then acts upon.  Get those reports.  Use your marketing analytical skills to rip it apart and make sure it makes sense.  Poke holes in their argument based on flaws in their analysis.  In our case a traffic engineer was quoting a 20% improvement in safety associated with worm medians, but when you actually looked at the numbers, even if you used his accident rate assumptions, it would have taken 5.8 years to save 1 accident!  All of a sudden the rationale for the engineer’s recommendation was called into question.

4.  Develop an Alternative Recommendation and Cost It Out

Give the City an alternative to the plan you are fighting.  Give them solid reasons why your proposal makes more sense than the one they were considering.  Cost out your plan. If you have a question about costs, ask the City Staff about the cost assumptions they would use for your proposal.  If possible, show how to pay for it.

5.  Build Support for Your Recommendation with Voters

Here’s where you as marketers should shine.

  • Communicate with voters.  Keep them updated on the status and what you are trying to do.  Use email marketing, online petitions, and social media to spread the word and keep people informed.
  • Provide them with a clear recommendation. Use your communication skills to write memos that people understand and get their heads nodding.
  • Ask them to sign a petition backing your recommendation.  The more voter signatures you have, the more likely it is that your City Council will take you seriously.

6.  Do “Marketing Research”

Use your in-depth interviewing skills to understand the objectives and positions of the parties involved.  Once you understand everyone’s objectives it’s a lot easier to find a solution that addresses everyone’s needs.

7.  Lobby Your Councilmen

Meet with them individually.  Present your analysis of the situation, recommendations and rationale.  Find out if/where they disagree with you and address those issues head-on. Don’t forget the CTA (call to action).  Ask them for their support!

8.  Pack the House

On the night of the public hearing of your issue, make sure that you pack the Council Chamber with your supporters.  A large turnout is sure to get their attention!

Good luck!

Have you successfully fought your City?  What’s worked for you?

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Foursqare: What’s Stopping You?

Foursqure logo

By:  Karen Pelletier

As a marketer I’ve always loved the potential and promise of location based marketing.  There’s nothing like targeting a prospect who is nearby and looking for someplace to eat or whatever it is that your business does.  Adding consumer reviews, which according the Google’s ZMOT (Zero Moment of Truth) Study, are critical to consumer decision-making, and the ability to present an offer to sweeten the deal–well it’s enough to make a marketer swoon!

But like many people, I was concerned about using Foursquare because of the personal safety and security issues it might present.   Sometimes it seems like our technology gets ahead of our ability to control it.  Who knows how it could be used?  Burglars in Great Brittan said that they used Facebook and Foursquare to scope out potential targets.  I’m sure they do here as well. Why broadcast that you’re not home?

Early on in Foursquare’s development, 80% of Foursquare users were men–I think in part because of women’s concern for personal safety and anonymity.  The game aspect may also appeal to more men than women.  As long as I can unlock a deal, who cares about the game?

So as a result, I pretty much stayed away from Foursquare, sneaking a peak at the website every now and then, and downloading the app for my phone but not using it very much.

Lately though, I’ve been reading lots articles about how Foursquare has all the benefits of Yelp–access to reviews and tips–plus the benefits location based marketing.  Foursquare is about “discovery” now.  It made me really want to re-visit my decision to not use Foursquare, so I spent some time this morning on the Foursquare site, reading the Settings section and reviewing their Privacy Grid.  I was truly impressed!  The level of control you have over your own visibility was much greater and much more transparent than I expected, and if you are not sure of what Foursquare means by certain terms, just hover your cursor over the question mark and you get the definition.

Overall, I was very impressed and can’t wait to start checking in!  Foursquare ought to start aggressively marketing the control the user has over his/her privacy.  If they did they could dramatically grow their paltry 10 million user base, to something much, much greater.

What’s keeping you from using Foursquare?

Posted in Applications, Marketing, Social Media | Tagged , , | 2 Comments

Case Study: Al Qaida Used Both Outbound and Inbound Marketing Techniques

By:  Karen Pelletier

Anwar Al-Awlaki andInbound Marketing Samir Khan, the two Americans behind al-Qaida in the Arabian Peninsula, were killed in a 9/30/2011 drone strike on their convoy.  The intelligence community considers it an effective blow to al-Qaida because Al-Awlaki & Khan were the inspiration behind some of the most recent terrorist attacks, the underwear bomber (Nigerian) and homegrown terrorists: the Times Square bomber; and the Fort Hood shooter. The reason Al-Awlaki & Khan were so effective was because they used the techniques of Inbound Marketing to generate leads and attract recruits.  They didn’t have to go out and recruit. The recruits came to them.

The principals of Inbound Marketing, espoused by Brian Halligan and Dharmesh Shah in their book Inbound Marketing, include:

  • Creating an online hub where people who are searching for your product or service can find you.
  • Creating content (blog articles, videos, white papers) that provides value to your target audience.  This content enhances your credibility in your field.
  • Promoting your content online by using social media and blogs to promote your content and spread the word.  Making your content easy to share, helps spreads your reputation cost effectively.
  • Using keyword optimization and SEO (search engine optimization) to help get found by people searching for your products/services.

Al-Awlaki & Khan utilized these principals by creating a hub online with lots of content in a variety of forms, including videos and Samir Khan’s Inspire Internet magazine.  That magazine reportedly used bite-sized, easy to consume content articles, including “How to” articles, like “How to Make a Bomb in Your Mom’s Kitchen.”[1]

Unfortunately, al-Qaida was also very effective at traditional outbound marketing, creating massive awareness with the attack on 9-11.  The most effective marketing combines both outbound (awareness generating) and inbound strategies.

1 NPR, Al-Qaida’s Americans Were Link To The West, Dina Temple-Raston, 10/2/2011.

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Fighting City Hall

worm median proposed for Madison

I’ve been busy lately fighting City Hall. The City of La Quinta (see those beautiful mountains above) and KSL, a local developer, were trying to install these worm medians on the street I use to go everywhere. Their proposal was so ridiculous because it would prevent everyone from taking a left onto Madison. Of course anyplace you’d want to go to (town, shopping, the highway) is all to the left!

I created a letter to go out to all residents and a petition to the city. I also put up a Facebook Page, Madison Street Access Committee. If you’re a La Quinta resident, please go “LIKE” the page. Every “like” counts!

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How to Predict the Potential for an App

Mobile Applications

iPhone AppsBy:  Karen Pelletier

By:  Karen Pelletier

Many companies are racing to create their own apps for smartphones.  But does this really make sense for every company?

At one point in my career I studied the sauces and condiments category.  The primary constraint for the purchase of new types of sauces and condiments was refrigerator shelf space.  Using IRI and NPD Diary Panel data I discovered that the size of the product category (like mayonnaise or ketchup) could be predicted by how versatile it was (the number of things you used that sauce or condiment on) and how frequently you made those dishes that the sauce or condiment was used in.

For example, I could predict that Dijonnaise (the combination of mayonnaise and Dijon mustard) would never be a large category because it’s not very versatile (compared to mayonnaise or Dijon mustard), and you are probably not going to use it on a lot of things—low frequency or quantity of use.  Do you want to devote precious refrigerator shelf space to something you are not going to use all that much and that you can make out of products you probably already have on hand?

I would argue that the “app” market is very similar to the sauces and condiments category. In this case, the shelf space constraint is the number of screens/folders you have to scroll through to find the app.  Versatility is how many different things you are going to use that app for, and frequency is how many times you are likely to use it for each of its functions.

In addition to my own experience with apps, Danny Sullivan, Editor and Chief of Search Engine Land, provided his anecdotal substantiation for my theory in one of his blog postings.  Danny observed that he originally used the check-in/gaming features of Foursquare, but now it was becoming his go-to local search tool app because he used it for recommendations on where to eat, what to eat, to find nearby specials, and as a mapping tool.  This versatility, using it for many functions, like where and what to eat, and location mapping, and the fact that these are things that Danny searches for often (frequency) make Foursquare a valuable app for him.

One final predictor is uniqueness.  If you are the 4th or 5th app out there to perform a variety of functions, but there is nothing meaningfully unique that your app does, then don’t expect to succeed.  I used to use Trip Advisor all the time to look for recommendations on where to eat and to check reviews, but Open Table offered the ability to instantly make a reservation at the restaurant I decided upon.  That was their positioning, their unique point of difference, that enabled the Open Table app to make it into my head and onto my phone.

Marketing Takeaway:  If you are planning an app for your business, make sure it’s an app that is versatile (can be used for many things), that those things are likely to be used frequently by your target market, and that you are bringing something unique and meaningful to the party.  If not, you should focus your efforts on creating a mobile site and on being found by your target market when they search for your product or service.

I would love to test this hypothesis quantitatively.  If you have any ideas of where I could find data on the number of times apps have been downloaded, the number of things people use those apps for, and the frequency with which they use them I would be eternally grateful!

Posted in Applications, Marketing, Positioning, Social Media | Tagged , , , , , | Leave a comment