Wednesday, April 13, 2011

Social Media Marketing II: Success Stories from Not-So-Cool CPG Products

There is a thought among branders that only cool brands get traction in social media. In my last post in this series, I mentioned that traction does not depend on a cool brand but on a cool strategy.
In this post, we will see three successful examples of social media campaign from consumer product world. I have excluded the obvious brands, which are typically regarded as “cool”.
The examples are: 1. Marmite, a spread from Unilever, UK, 2. Steaz, a little known organic tea brand and 3. The Being Girl campaign from P&G
Marmite


Marmite is a spread popular in UK. The area over the bread is one of the most competitive spaces in the world. Jams, butter, marmalade, various chutneys, other spreads- there are so many claimants for that space.  To make matters worse, Marmite is a pretty local brand and there is a significant size of consumers who just hate the taste.
First, the brand demonstrated how to leverage polarized opinion on a brand  and piggyback on a national event through their "Love/Hate" campaign during  British election (Here is the website: http://www.marmitenewsnetwork.com/).  
Next came the Marmarati campaign during the launch of a new variant. The Marmarati campaign from Marmite will become a classic case study for “how to use social media  while launching a new product". Here is the detail of the campaign.  Marmite created an exclusive club of social media influencers and proven marmite crazies, who had a chance to be involved at the product development stage. The club was invitation only, and the fans had to show their love for marmite to join the club. These chosen members were treated lavishly and were encouraged to spread the word about the club and the new product in social media. These members created a huge “want” among regular consumers to become part of the exclusive club and  also piqued the curiosity on the new product.
Steaz
Steaz is an almost unknown organic tea brand. The brand doubled their sales within two months by orchestrating a social media campaign by targeting a select group of influential moms at the time of coupon drop. The campaign generated ~250,000 coupon dwonloads and ~6,000 blog mentions.
Steaz's case is all the more interesting because they did not have any traditional media presence, afaik, and the total budget was only ~$100K. The campaign shows that social media can really impact bottomline of brands with very limited budget. Here is the detail of the Steaz campaign.
Being Girl

Being Girl is a cohort site under Tampax and Always, feminine care brands from P&G. Cohort sites are additional websites ( not company websites) targeting a specific consumer segment.  A cohort site does not typically come across as a sales channel for the brand. Homemade Simple  is another example of a cohort sites from utensil cleaning brands of P&G.
P&G launched being Girl way back in 2000, much before social media came to be a hot channel.  The idea was to create a web forum for girls who are turning into women and seeking information on feminine care on a safe and friendly environment.  The first two years of the site was a bit rocky, but then it  got the traction.   Being Girl became a trusted source on feminine care under the guidance of Dr. Iris Prager PhD, who leads a team that writes responses to member questions.
The site went beyond just being n feminine care information provider.  It started leveraging outside partnership to build brand relevance: for example, the site created partnerships with SONY for teen artists, with Cathy’s Books , UNA-USA for sponsoring team of girls performing public service.  Being Girl daily posts became 100% community generated and at its peak the site received more than one million registrants! P&G’s proprietary marketing mix modeling revealed Being Girl to be significantly more effective on sales of Tampax and Always than TV ad![2]
The current challenge for cohort sites is to keep the relationships tied, when increasing number of consumers are reluctant to go beyond one or two prevailing networks to maintain their social activity.  The key is to transfer the relationship from the website to Facebook.  We can see palpable activities at beinggirl.com also to continue the same relationship over Facebook, when there will be less number of visitors in the site[3].

In next post of the series, I will deep dive into social media marketing strategies for different CPG products.


[1] http://marketingchops.blogspot.com/2011/03/social-media-marketing-i-quick.html
[2] http://www.dewittedigital.com/fileadmin/pdfs/strategy/2_1_Forrester_PG_s_Beinggirl__builds_lasting_brand_loyalty.pdf
[3] According to Compete, traffic has dropped by ~40% in Feb’11 alone: http://siteanalytics.compete.com/beinggirl.com/


Friday, April 1, 2011

Free Shipping: Is It Effective


Short answer:

"Free Shipping" works in certain cases and has potential to become gamechanger in online retailing.


Long Answer:

Free shipping is a Marketing Expense . Retailers pass on the money to customers instead of buying billboards/ ad spots with that. So, the real profitability does not just depend on the additional purchases by a customer due to free shipping, but also whether that additional purchases are more than the additional sales the traditional marketing effort would have generated.



A sales promotion can bring most profit only if there is a way to discriminate between high price sensitive and low price sensitive customers (Ref: Farris and Quelch, In Defence of Sales Promotion, Sloan Management Review,1987)[1]. Free shipping to everyone will only bleed money. So, the right thing to do is to find out the right segment of customers who are more sensitive to such offer.



Amazon Prime has managed to create the discrimination wall in two ways. First, the persons who paid money upfront for prime are the ones who really value the money spent on shipping. Now they will make far more purchases than they used to do. Second, they have given Prime free to students. For that students had to register their ".edu" email id. They perfected discrimination between people who are sensitive and people who are not.



Walmart.com followed suite, but they discriminated price through a different filter. They made shipping on several items free to all customers from mid-November to 31st December. In this case, they used the specific items and date to discriminate between Christmas deal seekers and other regular purchasers.



Why Free Shipping Will be a Gamechanger in Online Retail

Now, at retailing and ecommerce industry, what Wal-Mart and Amazon do, does not only affect their own companies but also become an industry expectation. Many of the smaller competitors could not match the free shipping offer. So Amazon and WalMart.com did not really poach each other’s customers, but customers from small no-name ecommerce players. In academic world, this strategy is called limiting competitive encroachment as explained in the paper “Price Promotions: Limiting Competitive Encroachment” by Rajiv Lal[2]. As a result of this free shipping onslaught, we will see death of many small etailers ( similar to the death of many Mom and Pops' stores during the advent of Wal*Mart).


[1] Farris and Quelch: Sloan Management Review: Fall 1987 ( could not find link to the original article online, lots of references in net)


[2] Rajiv Lal: Price Promotions: Limiting Competitive Encroachment: Marketing Science: 1990: http://www.jstor.org/pss/183781