Saturday, September 26, 2009

Economic Darwinism and the Marketing Struggle for Attention

Economic Darwinism manifests itself in a marketing struggle for attention. One of the enemies of attention is the development of immunity to habituated stimuli, and email advertising may be on the verge. This may explain the marketing interest in social media – the hope that people are not yet immune to it as they are to email. This would be consistent with adaptation level theory (see Hawkins, 2007, p 293), “over time we adapt or habituate to it [in our case frequent email from a vendor] and begin to notice it less.”

Poulos (2009, p. 1) contends that the deciding factor in email success or failure is the strategic planning that goes into the entire campaign: segmentation, objectives, tactics and so on. He cites research about the value of a list that is both opt-in and highly targeted. He finally advises us to implement the Sender Policy Framework in our email directory technology (see Sender Policy Framework). This is designed to prevent spam.

For habituated stimuli in other media, look at Rosser Reeves' Minute Maid or Anacin TV campaigns. Minute Maid complained about the deathly repetition in its orange juice campaign, to no good effect. Twitchell (1996, p 29) notes that such repetition "will no longer be tolerated" in TV advertising. Based on our readings this week, repetitious (too frequent email) may not be either.

An Attention Economy model has been presented to explain attention immunity in marketing with the utility theory of neo-classical economics. The unfinished argument in economics over the sui generis of the market now finds new application in the potential of Internet technologies. Is it natural for the market to be governed by a higher authority, the state, or is it a stand-alone, self-regulating entity? Likewise with email and social media. They are connected to brand planning but to what extent should they be governed by it?

The Cluetrain Manifesto sees the old marketing as a procession of charlatans who no longer have an audience. The new technology opens a free conversation to form markets directly between empowered members of a firm and the community they serve.

Most new parades, I think, start out solemnly and with dignity, buttressed by 95 theses or whatever, but end up in turmoil and rancor. Email is an example and so is blogging. Microsoft has employees talking directly to customers on blogs. In fact, Joe Cox reports (see Microsoft Watch) that Microsoft has over 5,000 employee blogs and quite often Microsoft makes major product announcements only on these blogs, not incorporating one or another of its marketing agencies.

John Cass is a marketer and a researcher at Forrester and has made a counterintuitive finding (see his blog ). Dell and Macromedia use a dedicated approach, and control communications that uses email and social media rather than take the wide-open approach of Microsoft. Dell and Macromedia are doing quite well with such an approach.

Cass concludes that anarchy does not work. While the Cluetrain Manifesto helped focus attention on change that is needed for marketing communications because of the Internet, "[it] did not provide a really effective road map for how to open up a company.”

Marketing communications is a discipline. By focusing their email and social media efforts in smaller groups capable of effective marketing communications (i.e. people trained in IMC), and providing them with support, Dell and Macromedia have been effective. More so than Microsoft. I think the lesson this week is that email is governed by a higher authority, the principles of marketing communications and marketing platform of the firm.

Hawkins, Del, David Mothersbaugh and Roger Best (2007). Consumer Behavior. McGraw-Hill/Irwin. Retrieved on September, 25, 2009 from

Poulos, Alex (May 4, 2009). Email Marketing – Still Friend or Foe? (Part I). Retrieved on September 23, 2009 from

Twitchell, James (1996). Adcult USA. Columbia.

Are you jumping off a cliff with that email?

Both Email Marketing and jumping into a rocky canyon have risks. Both disciplines have proven techniques to cope with those risks. Well, at least Email Marketing does. It is manageable if you follow the practices recommended this week. Both experiences have a set of deadly forces at work and a set of life saving forces as well.

Deadly Forces
The erosive power of friction from email frequency can land us in the rocks. Quris (2003, p 10) says that “slow and steady wins the race.” Throughout their article they admonish us to avoid losing customers completely with Email that is too frequent. This is not having customers delete our emails. This is having them terminate the relationship.

Another deadly force is inertial boredom. Its uncomfortable gravity casts a gray pall over our dive or our email, and we will not get full points. Vanides (2009, p. 2) says that this is even truer for B-to-B: messages must be relevant and have substance. Quris (2009, p. 10) observes “Relevant versus boring is of course a subjective judgment.” That is the risk of cliff diving but it’s why people applaud us if our company and we survive and are not paralyzed.

The future for marketers who ignore these warnings is a rocky landing that acts like a meat cleaver, wielded by a client infuriated with the predictable banality of our frequent intrusions.

Life Giving Forces
Things are not completely bleak. Momentum is a force of hope. Quris (p. 10) says that measurement of past behavior lets us gauge email engagement momentum. This gives us the wind direction before we take our leap. They also say that our perspective should be the ocean, the long-term relationship with the customer and not a one-time sales objective.

Vanides (pp 7-8) provides life-giving advice on the form and style of our emails. First make a compelling offer and tell a story that “engages the reader’s imagination.” Stay focused, an email should cover one product or service. Give assurances to the forces of nature with money-back guarantees. Keep the paragraphs short and the tone appropriate to the audience. You may want to have a P.S. Finally, have multiple calls to action.

Quris, Inc. (October 2003). How Email Practices Can Win of Lose Long-Term Business. Retrieved from WVU IMC 626 Week Five Readings on September 13, 2009.

Spiller, L and M Baier, (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall

Vanides, Alexia (2009). Lesson 5: Online and Other Email Marketing Techniques. Retrieved from WVU IMC 626 Week Five Lesson on September 13, 2009.

Tuesday, September 22, 2009

Case Study: Chiquita Brands and Landec Technology

1. Background
1.1 Industry Dynamics
Chiquita Banana International is a major international distributor of fresh and value-added food products. Its operations include a strong marketing element "designed to win the hearts and smiles of the world’s consumers…" (See Vanides, 2009, p 2). The nature of fresh produce favors a vertically integrated industrial organization and that is true with Chiquita.

The value-add is concentrated in specialized shipping and marketing activities (p. 4). This has led to discontent among growers, as their associations have not been able to negotiate favorable returns to the farmers. Grower associations have attempted to end-run the produce conglomerates, mainly Chiquita and Dole, (p. 5) but with mixed results. Dole International is Chiquita Brands’ major competitor in the vertically integrated fresh produce sector.

Customer concentration makes Chiquita vulnerable in North America. The case study (p. 5) reports that banana marketers and distributors are facing "the challenge of the increasing role that is being played by supermarkets and retail chains." The Boston Consulting Group, in their Harvard Business School publication examines the impact new information technology will have on disintermediation, getting rid of the middleman in many industries (Evans and Wurster, 2000, p 72).

1.2 Topic Statement: Don’t Become a Wal-Mart Harlot
The topic of this proposal is to recommend that Chiquita Brands work at 90° with the powerful grocery store channel. Using enabling technology like Landec to enter a new market is a start. We also recommend marketing strategies to broaden your customer base, first with Core-Mark and convenience stores, but longer-term with manufacturing intermediaries such as Gerber and Mrs. Smith’s. Additionally, we review marketing pull strategies to increase ultimate consumer awareness of your unique expertise and long experience in safe handling for the delivery of fresh produce.

1.3 Who are the customers and what do they want?
The customers of Chiquita Banana International are varied but concentrated so that 62% of its North American sales go to its top 20 vendors, a Pareto distribution (see Vanides, 2007, p 5). In Europe this is slightly more balanced with 32% of sales going to the top 20 retailers. The case study mentions the following customers:

  • Convenience store distributors who need smaller delivery quantities of fresh bananas and packaging for individual sales.
  • Supermarket retail chains that need continuous delivery of fresh bananas with high quality as well as integration with their supply-chain systems. They also seek long-term relationships.
  • The ultimate customers, shoppers who buy fresh bananas
According to Spiller and Baier (2005, p. 320), bananas can be used as raw materials in manufacturing processes, in addition to being an end product for retail chains. With this in mind, I would propose the following customer categories:

  • Independent canned goods manufacturers such as Bacardi Banana Daiquiri Mix, Comstock, or Gerber who use bananas and fresh produce in their processed foods
  • Manufacturers of pastries and pies like Mrs. Smith’s Banana Crème Pie.
  • Bars and restaurants such as Chili’s, Ruby Tuesday’s and Appleby’s
  • Soda shops such as Dairy Queen, Baskin Robbins and Ben and Jerry’s.
  • Convenience stores for processed foods such as slurpees or yogurts

2. Market Analysis
2.1 Competitive Actions
Chiquita sells to retailers and there is a growing Wal-Mart Effect in North America. Retail chains, especially in the USA, are leveraging their growing power to better control the wholesale distributors like Chiquita. Vertical coordination by the retail chains is managed through supply-chain software systems.

Dole’s response is to become Wal-Mart’s harlot. Dole concentrated its management attention on the market side of the business, strengthening its supply partnerships with the retail chains (p. 5). Chiquita has done the same so far. This is risky. Wal-Mart does not partner with such companies but instead uses them until they no longer have any life and are therefore not usable anymore.

2.2 Marketing Issues
The first marketing issue is the need to diversify and broaden Chiquita’s customer base to include convenience stores and other outlets independent of the large grocery store chains and Wal-Mart. Another related issue is the need to distinguish Chiquita from commodity bananas. Marketing communications should emphasize both Chiquita’s long experience in distribution that gives it complete understanding of the safety and cleanliness issues in handling fresh produce, as well as knowledge of new technology that can benefit the process. Freshness from Landec is an example of such a technology.

The case study goes on to say that powerful grocers are moving up-channel to exert increasing control over produce. This can torpedo Chiquita profit margins by commoditizing its offerings. To obtain a reasonable rate of return, Chiquita should also expand its reach into more profitable uses of its produce, especially with manufacturing intermediaries. Spiller and Baier (2005, p 320) note that often a manufacturing intermediary has an inelastic demand for the price of a banana in comparison to shoppers at Wal-Mart. This is because the cost of a banana in a Cream Pie is a small part of the total cost of the ware so banana price can be raised more before it is noticeable to the bottom line of the manufacturer.

3. Constraints
Demand for bananas as bananas is constrained by pricing pressures from both Dole International your major fresh produce competitor, and by the ability of large retail chains to negotiate favorable pricing terms in return for access to the market they control. Chiquita Brands is further constrained in its pricing to the extent the buying public assumes bananas are a fungible commodity and is not aware of the sophistication of the handling process managed by Chiquita to ensure cleanliness, safety and freshness.

Finally, Chiquita is constrained by the operational costs for its distribution activities, especially oil costs, which make cost reduction efforts problematic. This limited ability to trim costs also increases the vulnerability of Chiquita to an outfit like Wal-Mart muscling into its distribution and marketing franchise, leveraging Wal-Mart’s control of final retailing. With Chiquita’s retail sales concentrated mainly in twenty chains, there is a real risk that retailers can dictate low prices to Chiquita, basically asking "Where you gonna go?" This will squeeze Chiquita profit margins.

4. Decision Options: Objectives, Strategies and Tactics
4.1 Objectives

My biggest worries for Chiquita Brands is that its product line will be cast as commodities, that its profit margins will be squeezed, and that powerful new competitors will emerge if hefty retail chains like Wal-Mart make deals with grower associations, directly by passing Chiquita. This does not need to happen. Pine and Gilmore (1999, pp 1-3) show that exactly the opposite is possible when management has a more positive outlook and distinguishes the product or service of its company. This is our job as marketing communication consultants. We propose the following marketing objectives:

  • Differentiate Chiquita from commodity bananas: 75% awareness among the retail trade about Chiquita’s sophisticated distribution methods like Landec,
  • Diversify the customer base for Chiquita Bananas: Add 5,000 convenience stores to its retail channel. Both goals accomplished in next fiscal year.

4.2 Strategies
We recommend an immersive mix of push and pull strategies to differentiate Chiquita bananas from commodity bananas and expand its customer base into the convenience store sector. This initial campaign will be the introduction of the new partnership with Landec to provide consumers with a fresh and healthy snack at convenience stores. However, it is also the foundation for follow-up campaigns that must be undertaken.

The motif of this Landec campaign will be the century long experience Chiquita Brands has in safe and efficient distribution that protects consumer health while providing a continuous supply of fresh bananas at a reasonable cost. Chiquita innovates and is expanding the envelope with the introduction of a new technology by Landec. Unlike newcomers to the produce business, Chiquita does not need to experiment with the health of Mr. or Mrs. Consumer to learn the ropes like an upstart would.

Our push strategies are two: 1.) Trade-promotion to motivate trade-support through a mix of allowances; and 2.) Trade-promotion support through a complementing consumer promotion (see Duncan, 2005, p 502). Our pull strategies will use targeted advertising to different customer segments, along with promotional incentives. Additionally, we will use public relations because this advanced new technology is a "news peg" (Duncan, 2005, p 551).

The timing of the push and pull is to first push the Landec wrapped bananas into the channel at the same time as the public relations work is conducted. The consumer advertising and promotion will be presented shortly after the trade promotions to give time for the product to be available in the channel.

4.3 Tactics
Venerable trade promotion tactics form our toolkit for building this campaign. For the convenience store owners, Duncan (2005, p. 489) suggests the use of shipper displays to both highlight a new product and make it easy for customers to take a single banana. He goes on to say that co-operative advertising is an effective incentive, with 1-2% of the store sales in Chiquita bananas going back to the store for joint advertising Chiquita product availability in the store.

We will use direct mail to get a response from stores about the co-op ads. We also send direct mail to the C-stores to educate them on the profitability of this new market sector that is now open to them because of the Landec and Chiquita partnership. This direct mail is economically feasible because there are roughly 5,000 C-stores. Vanides (2009a, p 4) says lead generation is a goal of any campaign, and this will return store interest in co-operative ventures. This is a pull strategy aimed at a downstream channel member, the C-stores, to pull demand from the upstream channel, Core-Mark. Core-Mark can be incented with off-invoice allowances (see Duncan, 2005, p 497).

To forge pull from the ultimate customer, direct response advertising will be used. Spiller and Baier (2007, p. 144) note that special interest magazines have proliferated, so this gives us the ability to target our message to different consumer segments. Omniture (2007, p 1) notes that customers demand relevancy in marketing communications. Segmentation enables this.
Our message to the ultimate consumer will stress the sophisticated expertise that is required to transport fresh produce safely and with cleanliness. We also want to discourage any movement by the aggressive retail channel into your marketing and distribution franchise. There will be a call to action in the direct response ad, namely a discount coupon (see Duncan, 2005, p. 469). Spiller and Baier (2007, p. 145) note that magazine ads are relatively inexpensive. They go on to suggest that using remnant space will lower costs even more.

Internet promotions are a powerful opportunity. An increasingly popular method is Advergaming. An example game is Kellogg’s Froot Loops Treasure Hunt (see Froot Loops Game) The response rate for advergames is between 16% and 45%. Customers spend an average of 25 minutes with absorbing entertainment featuring our message. Blank (2001, ¶ 1) reports that Hershey’s Chocolate experienced a phenomenal response rate with advergaming.

For new products, like your bananas in a fresh-preserving wrapper, Spiller and Baier (2007, p. 90) recommend cross selling, a second opportunity we can exploit. One example is Graceland Cupcakery selling in 7-Eleven stores throughout the southeastern United States. They make banana bread cupcakes. See Graceland Cupcakery. Spiller and Baier (p. 96) go on to suggest new products can benefit from guarantees. We are asserting the new wrapping will preserve freshness. Let’s back it up with a money back guarantee.

Last but not least is a publicity campaign. The joint Core-Mark, Landec, Chiquita venture is a news peg – something new that can be legitimately reported by the news media. This creates awareness from a trusted source. Here is an example Chiquita-Landec News Release.

5. Implications and Recommendation
5.1 Implications
As noted earlier in this report, there are serious long-term threats to the Chiquita bottom-line and we have additional marketing communications plans that will help Chiquita more completely diversify its customer base. We welcome the opportunity to discuss these with you in future. Today, this plan is for convenience stores but tomorrow Chiquita must expand the use of bananas and fresh produce by manufacturers such as Gerber’s and Mrs. Smith’s. They provide markets with price inelasticity, i.e. protection from pricing pressure (see Spiller and Baier, 2007, p 320).

Evans and Wurster (pp126-7) expressly warn that Wal-Mart engages in predatory activity but, of course, monkey-see/monkey-do when it comes to bananas and retail food chains, so we should expect the other powerful grocers to do the same. As already noted, the growers are looking for a better deal than they get from Dole or Chiquita. How long before the two ends of the chain connect without the middlemen?

If Wal-Mart, et al can turn bananas into the ultimate fungible commodity and move up-channel to cannibalize Dole and Chiquita value-add, then they take away the basis for Chiquita revenues. The Chiquita marketing campaign with Landec will lay the foundation to counter any such attempt by alerting the public to the skill necessary for the transport and distribution of fresh produce. Chiquita will not be experimenting with shopper’s health while learning the ropes. Additionally, this campaign is the groundwork for future marketing to expand relationships with manufacturers.

5.2 Recommendations
If you will allow us to conduct follow-up campaigns, after the Landec-wrapped Chiquita bananas, we will begin working immediately to form symbiotic relationships with manufacturers such as Gerber Baby food, Ben & Jerry’s, or Mrs. Smith’s Banana Cream pies. Partnering and co-branding with them can increase supply of Chiquita even in an aggressive retail chain. We strongly recommend this for the following reasons.

Keller (2008, p 289) says that co-branding can both broaden the meaning of a product and increase its access points. Co-Branding can (p. 290) create "compelling points of difference" and create access to a higher profit margin category. Brand alliances can be an effective method for differentiating especially a fungible product, say like bananas, in a commodity war of declining profits and upstart retail chains.

To accomplish this, Chiquita must use customer database marketing to customize messages to its intermediaries. After co-branding agreements are in place with manufacturers such as Gerber, Ben & Jerry’s and Mrs. Smiths, we recommend using direct mail with coupons to enhance the partnering brands and establish pull demand through the retail chains.

6. Update
Levinson (2009, p 63) reports that Chiquita Brands is spoiling, and is unpalatable.
Its stock was downgraded to a sell in March of this year, because its profits margins have been squeezed into losses. The stock dropped 43% after losing 74¢ per share. Still, this is a great brand name, which can be salvaged. The name still has great potential but needs an integrated marketing campaign to escape the powerful chokehold being applied to it.

7. References
Blank, C (August 6, 2001). Hershey's Online Push for Reese's Gets Sweet Response. Direct Marketing News. Retrieved on September 3, 2009 at

Duncan, T (2005). Prinicples of Advertising & IMC. McGraw-Hill/Irwin.

Evans, Phillip and Thomas Wurster (2000). Blown to Bits. The Boston Consulting Group. Harvard Business School Press.

Levisohn, Ben (3/9/2009). Chiquita Bruised. BusinessWeek. Retrieved from EBSCOHOST on September 5, 2009.

Omniture (February 2007). Online Marketer‘s Segmentation Guide. Retrieved from WVU IMC 626 Week Two Readings on August 29, 2009

Pine, J and J Gilmore (1999). The Experience Economy. Harvard Business Press.
Spiller, L and M Baier, (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall

Vanides, Alexia (2009). Case Study: Chiquita Banana and the Distribution Channel. Retrieved from WVU IMC 626 Week Two Assignment on August 29, 2009.

Vanides, Alexia (2009a). Lesson 2: Developing OST for B-to-B DM Campaigns, About Lead Generation Management. Retrieved from WVU IMC 626 Week Two Lesson on August 29, 2009.

Five Pressing Issues in CRM

The Web site has published a series of blog postings that analyze customer relationship management. Here is a synopsis of five of those CRM postings.

Customer Relationships Need a Personal, Not Robotic Touch.
The foundation of customer relationship management, indeed all of marketing is how we communicate with customers or publics. Engwall (2009, p1) speculates that the feedback method chosen by companies is often inappropriate for the customer relationship they are trying to build. For example, an email requesting a customer to take an anonymous Web survey is not a method for building closer customer relationships. He suggests that customers who are making "big decisions" want a more personal dialogue. Therefore, vendors need to spend the time to learn the operations of their customers. What distinguishes successful B-to-B companies is a structured approach that is personal at the same time. It "sends a strong signal about the commitment to listen and respond to customer needs." There is the old saying that a system, like CRM, is only as good as what we feed into it.

CRM is Too Associated With CRM Technology’s Front-End Focus.
Lee (2009, p1) reports that an enterprise-encompassing viewpoint is now outflanking the old viewpoint driven by CRM software, with its emphasis on the front office. Customer-centric behavior needs integration of the entire enterprise, front and back offices. This is "clearly beyond the capabilities of CRM software," according to Lee. He asserts that customer-centric planning is "the tail [wagging] the CRM dog," and notes that more and more companies are initiating comprehensive customer-centric efforts that don’t include the perceived limitations of CRM. His prediction: "[CRM] is not coming back."

Can CRM Systems Prevent Sales?
Apollo (2009, p 1) says that CRM is "no magic wand" to improve sales. Conversely, the immense resources invested in CRM are "often wasted." Apollo’s firm found that CRM systems do not reflect how the most promising prospects buy. He identifies five warning signs that a CRM system is a sales prevention machine:

  1. Your CRM sales process stages are based on sales person activity rather than prospect commitment.
  2. Your CRM has a Give/Get imbalance: it demands more of your sales force than it returns to them.
  3. Your CRM has poor sales forecast accuracy: CSO Insights estimates that such accuracy is now less than 50%.
  4. Your CRM is based on a static sales model, which hasn’t been verified and validated "for ages and has failed to take account of changing market conditions, buyer behavior and sales best practice."
  5. Your CRM fails to reflect the prospect decision-making process; today decision makers are more risk averse and filled with growing uncertainty.

Taking Your Eye Off the Ball.
Band (2009, pp 1-2) describes Forrester research conducted on CRM technology. He expresses a concern that businesses are concentrating their attention on trendy CRM technology such as Social CRM rather than CRM technology that provides the best value. Forrester found that "Selling, Ordering, and Servicing" technology returns the most CRM value to a business. There are other categories of CRM technology offerings, each having its unique drawbacks.

Examples of CRM technology with risk/reward drawbacks are "Enterprise Marketing Management" and "Partner Relationship Management." They are not considered "critical for business success" but both are hard to implement. In another category, "Customer Insight" and "Data Management" solutions are critical but are risky and extremely challenging to implement. "Contract Life-cycle Management" and "Configure-price-quote" systems offer moderate benefits but again are very difficult to deploy. Finally, the contemporary Social CRM has yet to prove itself. Band’s conclusion (p. 2): "’Selling, Order-taking, and Customer Service’ remain the solutions that deliver the most certain business value-add."

Confused Meaning of CRM
Thompson (2007, pp 1-2) says it’s time to say goodbye to the term "CRM." Its confused meaning encumbers true customer-centric business operations. Consultants say "CRM" is an approach to business process improvement and their "CRM" is a package of consulting services. On the other hand, software vendors say "CRM" is a practice implemented around their technology. Industry analysts define "CRM" as a set of front office applications. So, "CRM" can mean many different things to different people. CustomThink research suggests that the IT-focused "CRM" projects have enjoyed modest success, which is to say they have positive ROI, but "have not [generated] strategic benefits." Thompson advises us to erase the term "CRM" from our lexicon, and instead embrace "the development and implementation of a customer-centric business strategy."

Overall Conclusion
The first thesis of the Cluetrain Manifesto is that markets are conversations among many players (see Levine, et al, 2001, pp1-3). The Internet has unleashed powerful changes in customer relations, and Levine, et al summarize that "smart markets will find suppliers who speak their own language." Customer-centric thinking has become even more imperative for companies. The CustomerThink Web site agrees. On it, Thompson (2007, p 2) says we need to become customer-centric by understanding customers and giving them "what they want." The five issues discussed in this report have a theme of customer focus, and customer centered business organization and operations. The 19th thesis of the Manifesto says "Companies can now communicate with their customers directly. If they blow it, it could be their last chance."

Apollo, B. (Sep. 03, 2009). Is your CRM System a Sales Prevention System? Inflexion-Point. Retrieved on September 7, 2009 from

Band, W. (Aug. 14, 2009). The Extended CRM Application Ecosystem: Value, Risk and the Future of Social CRM. Forrester Research. Retrieved on September 8, 2009 from

Engwall, E (Aug. 31, 2009). Customer Feedback: The Method is the Message. E.G. Insight, Inc. Retrieved on September 7, 2009 from

Lee, D. (Jun. 15, 2009). Has the CRM Industry Become Redundant? High-Yield Methods. Retrieved on September 7, 2009 from

Levine, Locke, Searls & Weinberger (2001). The Cluetrain Manifesto: The End of Business as Usual. Retrieved on September 8, 2009 from

Thompson , B. (Jan. 22, 2007). Why "CRM" Must Die for Customer-Centric Business To Thrive. CustomerThink Corp. Retrieved on September 8, 2009 from

Saturday, September 19, 2009

IBM On-Demand Services is Timely

IBM On-Demand services is a timely introduction. They are the company that defined the era we live in with the introduction of the IBM Personal Computer in 1981. They will work vigorous wreckage on the Microsoft, Sun and Oracle with this new foray into on demand services, defining the next era. IBM (2009, p 1) says the world is “Instrumented. Interconnected. Intelligent.” And that these on demand services are “Inevitable.” They report that there are now 1 billion transistors per human. Over a trillion things are networked. All those things have intelligent devices in them. “The time is right now.“ Who better to define the next era than the one who has been defining next eras for over a century.

You could look at On-Demand Services as outsourcing your IT function and keeping the backoffice part of it off-premise. This saves you the costs of the network (replaced by Infrasturcture as a Service or IaaS), server computers (replaced by Platform as a Service or PaaS), and software (Software as a Service or SaaS), and the people who maintain them. You pay for what you use, like the electric utility. It is a boon to small businesses because they might gain access to automation services they could not otherwise afford.

The pieces are already offered: GoogleDocs is an example of SaaS. So is the On-Demand CRM service discussed in the Carlson Marketing (2007, p 2) article. They reported that an On-Demand service that has already proven successful is Customer Relationship Marketing. All businesses need it and small businesses may consider it a luxury because of the cost and difficulty of implementing traditional solutions (see Doyle and Martin, 2003, p. 1). Amazon offers IaaS and PaaS with service level commitments.

The leaders are IBM and AT&T, according to Leong and Chamberlain (2009, pp 1-2), in a Gartner Magic Quadrant. Amazon and Google are niche players now. Even though Ray Ozzie is the visionary who invented Lotus Notes and sees cloud computing as the future, Microsoft is not considered even a niche player. They are trying to fight the trend with what they call Software Plus Services. In other words, you still pay for the software license up front and then again as you use it. According to Wainwright, the Microsoft Azure effort at cloud computing is really a defensive effort to offer a .NET version of the cloud to keep exisiting customers in the fold.

Here's an example of MS Software Plus Service he gives:

"A Microsoft spokesperson told me that customers will need to buy a SharePoint server, which ranges from $4,400 plus CALs, or $41,000 all CALs included, if they want to share documents using the online version of Office 2010."
$41,000 to get what Google offers for free with Google Docs, not to mention the pounding the prospects will take in buying Office. Azure only makes sense if you are an existing MS customer and already own the licenses.

Carlson Marketing (2007). No More Limits: On Demand CRM Goes Strategic. Oracle. Retrieved on September 17, 2009 from WVU IMC 626 Week 3 Readings.

Doyle, M., Starr D., and R. Martin (2003). Salesnet: Change or Die. Retrieved on September 4, 2009 from WVU IMC 626 Week Three Readings.

Leong, Lydia and Ted Chamberlin (July 2, 2009). Magic Quadrant for Web Hosting and Hosted Cloud System Infrastructure Services (On Demand). Gartner Research, ID G00168687. Also, retrieved on September 16, 2009 from

Wainwright, Phil July 20, 2009). Assessing Microsoft’s Cloud Intentions. EBiz. Retrieved on September 16, 2009 from

U.S. Cap and Trade Bill and IBM On-Demand Services

Green marketing is no longer an appeal to conscious. With the passage of the Cap and Trade Bill, it will become an appeal to wallet also. Waxman and Markey's bill (2009, pp 652-672) put a cap on carbon footprint and will dictate an allowance to each business. All companies will be required to purchase an "Emissions Permit" and over time this allowance will continuously get smaller to squeeze companies to further reduce carbon footprint. The "trade" aspect enables good-boy companies with an allowance greater than their footprint to sell credits to bad-boys at whatever the market will bear. IBM On-Demand services reduces server and glass-house carbon footprint. We can take it a step further as well. With On-Demand services, you really may not need an office building- they are just big filing cabinets. People can access On-Demand services from anywhere they have Internet access.

So On-Demand services can help companies with a quick reduction in glass-house carbon and later with smaller building carbon savings. Teleworking becomes a more feasible option. This is considered by both the Heritage Foundation and the Brookings Institute as one of the most sweeping pieces of legislation ever contrived. Heritage is opposed. Brookings is keeping distance. Plausable deniablity is a good ploy with something that can go really wrong. Although not yet signed into the law of the land, it is expected to be so before the Copenhagen World Environmental Summit. Obama wants to showcase it there. The expectation is that it will reduce global temperature by 1/10 of a degree to 2/10 of a degree.

Waxman and Markey (2009). H.R. 2454, aka The Cap and Trade Bill. U.S. House of Representatives. Retrieved on September 18, 2009 from

I Choose a New Star This Day

NeuStar is a sophisticated vendor to communications companies and to business customers of communication services (see their 10-K, Our Company Section). They just started a direct response campaign to direct marketers, an audience interested in efficient corporate communications with the world. Here is their online ad.

Please notice, this is a NeuStar ad (logo is at bottom right). I found it at DM News Online. For fear the ad will not be in rotation when you view the page, I made a picture of the page for you, so you can see and it is here - the DMNews Page.

The ad immediately grabbed my attention with “270 Million Customers,” while I was on the DM News Web site. It kept me engaged with “Free Nielsen White Paper.” Spiller and Baier (2005, p 126) tell us that words like free and new are attention getting. In addition, Nielsen is a name I know and trust. Finally, as Kostermans (2007, p 4) recommends the ad uses “fonts that are easy to read.” Okay, so I click the download link and this pops-up.

This quick registration, before getting the free gift, separates prospects from muffin men. It also gives permission to be contacted by the Common Short Code Administration, which I know, and/or NeuStar. Kostermans (2007, p. 2) says that we should make it clear what action we want readers to take. In this case, we want them to register with us to get the Nielsen report. Vanides (2009, p 2) reports using a similar technique in a Hughes 500D campaign to register interested prospects for follow-up, in her case at a later conference.

If I am interested in mobile marketing, I should know short codes and the CSCA. As Spiller and Baier recommend, the NeuStar body copy gives the benefits and ends with a call for action. The sentences are short and active. I type and submit. The Nielsen report appears and I save it (here at Nielsen Mobile Marketing).

Not surprisingly, the report mentions NeuStar. After the download, I have the option to connect to the NeuStar Web site, which I do. Here it is: their snazzy Web site Although, I have never heard of NeuStar, they have partnered with names I do know and trust. Moreover, I am interested in Nielsen’s views on mobile marketing, which is a free gift (if I register).

I watch the NeuStar produced video and its quiet clarity is professional enough to direct market to direct marketers. I now believe that NeuStar is an important player in corporate communications. I’d be willing to talk with them about Mobile Marketing as well as communications infrastructure topics.

In summary, I find this NeuStar direct response ad to direct marketers to be effective because as Kostermans (p. 6) recommends, it is “solving a problem for them – not touting how great your product is.” The solution is for mobile marketing. Helped by big names, Nielsen and CSCA, NeuStar registers prospects with an interest in the NeuStar mobile marketing, short code solution.


Kostermans, J (3/12/2007).Lead Generation Top Tips: 28 Ways to Optimize Direct Mail Design. LeadGenesis. Retrieved from WVU IMC 626 Week Four Readings on September 9, 2009.

Spiller, L and M Baier, (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall

Vanides, Alexia (2009). Lesson 4: Proven Creative Strategies for B-to-B DM Implementation. Retrieved from WVU IMC 626 Week Four Lesson on September 9, 2009.

Saturday, September 12, 2009

Tracking Attitude with CRM and EFM Systems

Tracking attitude is essential according to Beasty (2007, p 32). The dated practice of unique surveys that are discarded after use is being replaced by the use of templates in EFM systems. Beasty says that "by making previous templates and survey results accessible" companies can re-issue a survey and track how customer attitudes are changing. The old ways, where every survey had a different set of questions, had limited utility because analysts could not reference to previous work to identify trends.

Musico (2009, p 30) says that "predictive analytics" lets us do what-if analysis on future consequences based on current attitudes. This again is part of the feedback funnel enabled by EFM. He goes on to say that this is an absolute must. Who knows, maybe the distinct smell of Chapter 13 in the air will get senior management to ferry their attention through a slide presentation and then give their blessing to these techniques before the lethal swing of customer disatisfaction cuts them down.

Beasty, C. (February 2007) Feedback Mountain. Customer Relationship Management. Retrieved on September 4, 2009 from EBSCOHOST.

Musico, C (January 2009). The Feedback Funnel. Customer Relationship Management. Retrieved from EBSCOHOST on September 6, 2009.

CRM and Market Communications

Markets are conversations among many players. So says the Cluetrain Manifesto. First published online and then as a book, The Cluetrain Manifesto (see 95 Theses ) is an apocalyptic warning. Things are unraveling. Systems are broken. The Internet has unleashed long-term trends that will assert themselves.

Cluetrain has nailed 95 theses to the door. Here are a few that caught my attention:

3. "Conversations among human beings sound human. They are conducted in a human voice."
12. "There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone." (Customer Satisfaction Studies may in fact be an effective way of getting such feedback).
27. "By speaking in language that is distant, uninviting, arrogant, [companies] build walls to keep markets at bay."

On, Thompson (2007, p 2) says we need to become customer-centric by understanding customers and giving them "what they want." I think this could be the 96th thesis.

Thompson , B. (Jan. 22, 2007). Why "CRM" Must Die for Customer-Centric Business To Thrive. CustomerThink Corp. Retrieved on September 8, 2009 from

Tracking Customer Satisfaction Especially Important for New Products

Learning of and responding to customer dissatisfaction is especially important for newly introduced products or services. Gladwell (2002, p 278) asks what kind of people are willing to risk purchase of new products? His answer, mavens - the influencers who are information founts for others in the organization or network.

Getting feedback quickly and responding effectively can make or break such a new product. No one expects perfection but if we are not listening and fixing, that word quickly spreads throughout the network and the product is finished. With that in mind, CRM and EFM should be tuned and focused appropriately for customers using new products.

Gladwell, M (2002). The Tipping Point. Back Bay Books.

CRM and EFM Systems Compenstae for Bounded Rationality

EFM and CRM support good solid decision making in an unexpected way also. Psychologists and management theorists assert that bounded rationality confines our decision making (see Weick, 1979, p. 20 or Simon, 1960, pp 80-84). Bounded rationality means that all of us have perceptual and information processing limits. We may always intend to act fully rational but usually we act on easy to get to knowledge, use undemanding rules to search for a conclusion, and take shortcuts whenever possible.

EFM and CRM can extend the boundaries of our decision making through easy access to more and better information. In addition, they can impose rules on our account handling so we can't always take undemanding short-cuts. EFM and CRM define a process out of a chaotic void. A process can be changed and improved. Chaos remains chaos. Transparency demands that I reveal my profession is IT, one biased to processes.

Simon, H.A. (1960). Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization. Macmillan.

Customer Communications

Scott (2007, pp 162-3) says that after a deal is closed with a new customer it is essential to keep a dialog with them. We need to give them ample opportunity to give us feedback, which helps us make the products better, as well as keeping them as customers. He goes on to review SugarCRM and concludes (p. 165) that to be effective, marketing must constantly measure and improve. This to me is what CRM and especially EFM systems are all about.

Musico (2009. p. 33) says we need to know our racket. This means it is crucial to have a comprehensive view of the customer, “because the only way to get that needed view of the customer …is through improved analytics.” Such an improved view of the customer can improve revenues. Musico speculates that feedback can also help improve efficiency.

Musico, C (2009). SERVING UP SERVICE STRATEGIES. Customer Relationship Management. Retrieved on September 9, 2009 from EBSCOHOST.

Scott, D (2007). The New Rules of Marketing and PR. Wiley.

Situational Awareness with CRM and EFM

At the shore, Sandpipers walk in brisk and purposeful fashion in their pursuit of opportunities. There is a ridiculous joy watching them go about their business. As I move towards them they move away in unison to stay at a safe distance. When I move away, they likewise retake the territory. With their quick reaction time they appear to be reading the mind of a beachcomber like me. This is situational awareness and it makes them an apex survivor.

Customer Relationship Management and Enterprise Feedback Management systems are tools that help less capable survivors like us obtain such situational awareness. According to the Aberdeen Group, these “technologies have helped many [organizations] apply structure into the management of their customer relationships and improve customer sales, service, and profitability.” In addition, Doyle, et al (2003, p 1) report that people using these systems have the highest success rates in the business. Why? “The reason is simple: salespeople actually use it. It’s the solution they love….”

To answer the Discussion Topic posed in the WVU IMC 626 Course, I disagree that CRM/EFM are “not the way to go with large customers.” To be fair, the tool under comment was customer sat studies, but as Gartner points out, customer sat surveys are the tactical end of EFM (see Kolsky, 2006, pp 3-5). Vanides (2009, p 4) points out that CRM is the who, what, when, where and how of customers. EFM is the why. In addition, EFM provides the surveying framework for customer management. Vanides sums it up by saying (p. 1) that everyone in the organization needs sales analytics specific to his or her role.

She goes on to say (p. 4) “Measuring and predicting a customer’s attitude toward a company and/or its products, however, is still quite new, and represents the third piece of the customer data trifecta when combined with behavioral and transactional information.” She mentions predicting. This predicting makes us quicker. We become just like Sandpipers and appear to be reading our customer’s minds.

Beasty (2007, p 29) says that companies now want to know what customers are thinking. They are turning to EFM systems for that answer. He also observes that EFMs have helped organize surveys and integrate them with the enterprise data so that the information they return can be used throughout the business (p. 30).

Enterprise Feedback management applications have three levels of functionality, (see Kolsky, 2006, pp 3-5), which are additive, the latter upon the earlier:

  • Tactical: Feedback is collected through a single channel, and basic reporting is done to understand opinions and feelings on a specific subject. It lacks historical perspective, centralization, advanced analysis and integration with processes.

  • Process: Feedback is used as part of a process to aid or improve profiling and interactions between the enterprise and employees, partners and customers.

  • Enterprise: Feedback is accumulated and centralized from internal sources and third parties (such as market research agencies) to analyze information and reach conclusions to establish or modify a strategy, and using data mining to derive unanticipated conclusions.
In reply to our guest visitor, I would say that customer sat surveys are valid by letting us know what is going on and how we can improve to keep our customers happy. The purpose is more than getting a customer tell us they are satisfied but more importantly to learn how to make them happy.

Aberdeen Group. Sovereign Bank: Improving Sales Processes and Customer Service with Salesnet. Retrieved on September 4, 2009 from WVU IMC 626 Week Three Readings.

Beasty, C. (February 2007) Feedback Mountain. Customer Relationship Management. Retrieved on September 4, 2009 from EBSCOHOST.

Doyle, M., Starr D., and R. Martin (2003). Salesnet: Change or Die. Retrieved on September 4, 2009 from WVU IMC 626 Week Three Readings.

Kolsky, E (May 6, 2005). Making the Transition from Surveys to Enterprise Feedback Management Systems. Gartner Research. Gartner ID# G00126781

Kolsky, E (July 5, 2006). How to Decide Which Enterprise Feedback Management Tool is Right for You. . Gartner Research. Gartner ID# G00140842

Vanides, Alexia (2009). Lesson 3: Developing OST for B-to-B DM Campaigns, About Lead Generation Management. Retrieved from WVU IMC 626 Week Three Lesson on September 4, 2009.

Differentiating Fungible Products Through Brand Alliances

Brand alliances can be an effective method for differentiating especially a fungible product, say like bananas. In a commodity war of declining profits and upstart retail chains, one tactic a marketer and distributor like Chiquita Banana can use to differentiate itself is by co-branding its wares with Gerber baby food, Ben & Jerry's, or Mrs. Smith's Banana Cream Pies.

Keller (2008, p 289) says that co-branding can both broaden the meaning of a product and increase its access points. Co-Branding can (p. 290) create "compelling points of difference" and create access to a higher profit margin category. Spiller and Baier (2005, p 320) note that often a manufaturing intermediary has an inelastic demand for the price of a banana in comparison to shoppers at Wal-Mart (be nervous about any 800 pound gorillas in a closet with you). This is because the cost of a banana in a Cream Pie is a small part of the total cost of the ware.

Keller, K (2008), Strategic Brand Management. Pearson/Prentice-Hall.

Spiller, Lisa and Martin Baier (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall

Symbiotic Co-Marketing Expenditures Increasing

Duncan (2005, p 510) reports that symbiotic, co-marketing expenditures have increased over the past decade at the expense of traditional consumer promotions and advertising. The reason? Several factors he says: lost effectiveness of traditional advertising, economic changes have forced marketing managers to be accountable, and finally there has been a power shift from manufacturers to retailers. Sounds like Wal-Mart and Chiquita Brands.

Duncan does say (p. 507) that a sales team must take precautions with the hippos in the channel, however. Retailers especially are often more interested in building their own brand and use co-marketing funds to subtlely do that. How to counter this misuse? Manufacturer sales teams produce their own ads or tv spots for the retailers/channel to use. The local retail outlet has a time slice to give name and address.

Duncan, T (2005). Prinicples of Advertising & IMC. McGraw-Hill/Irwin.

Using Equivocality in Sales Team Interaction with the Channel

Equivocality in the information a sales team presents to the channel should be varied depending on the relationship with the individual channel intermediaries. For someone not in our fold, we may be able to capture their attention and involvement by increasing equivocality in the information we exchange with them. In his work “The Social Psychology of Organizing”, Weick (1979, p 174) describes equivocality as inputs or messages that have multiple significance.

He notes that if we enter enough equivocality into the information we send to a group, that group must deal with our messages in a non-routine manner because that information will not make immediate sense and will not fit neatly into the classifications understood by the group. In other words, they question their retained beliefs about their environment, which is what we want if they are not a card-carrying, loyal customer. On the other hand, for one of our loyal customers, we would instead want our messages to erase all ambiguity in their retained beliefs about us. The information we send should re-enchant them with our offering, and reduce equivocality.

As a marketing example of a sales team using equivocality, in the late 90s, Sun Microsystems used it by raising doubts about the Air Force directory system. In turn, this impacted Microsoft Exchange, which relied heavily on the existing directory approach. Sun did not compare its messaging solution with Exchange but instead created doubt about a more fundamental USAF process that Exchange needed. Sun's proposed solution: Java Naming and Directory Interface (JNDI). Sun's questions about the fundamental USAF process resulted in the USAF discarding their retained beliefs about how to identify both people and resources, the essential purpose of a directory. Then Sun stepped in with the solution, which happened to use their offering, with implications for other more valuable systems downstream like Exchange messaging. This is from my own experience on a Microsoft sales team.

Cognizant Technology Solutions Corp. and Borland, reported in the Neale-May (2005, p. 2) article, also used equivocality. They did not first talk about the characteristics of their offering. First they raised doubt by highlighting the organizational vulnerability to obsolete software. The vehicle was a survey to C-level execs. The survey had the intended effect of challenging the orderly world view that these execs had about their information systems. As the equivocality, the little recognized discontinuity, worked its powerful wreckage on retained beliefs, Cognizant steps in and offers expertise for a solution.

I think this a useful marketing tactic with big customers, B-to-B or B-to-C. More is needed than a comparison of our offering with our competitors. Creating a point of pain that challenges retained beliefs is a better first step. Then step in with a solution. Neale-May says:

"Winning companies today go well beyond the trumpeting of product features and functions. They are now putting their solutions and services into context by mapping the market landscape to identify pain points and little-recognized vulnerabilities, risks or costs."

An equivocality is something that causes our perception of the environment to no longer make perfect sense, and it creates a need to rethink things. It can be fear, uncertainty, doubt, vulnerabilities, risks, costs and the like. Weick calls them Equivoques. They can create big reversals in the status quo.

Cognizant and Borland are a perfect example of using equivocality to create favorable change for themselves. Their survey introduced the worry over the risk and cost of obsolete software. It was information that did not fit into the orderly worldview of the C-level execs. Instead it challenged that view with a sense of vulnerability that caused them to rethink their retained beliefs about their organizations.

Wallace (1960, pp 146-52) describes the stages we go through in such a transformation.
1. Orderly Steady State
2. Increased stress in individuals
3. Organization distortions in attempting to deal with the issue and reformulate beliefs
4. Period of Revitalization - some solution is reached, communicated and the organization transformed to reflect it
5. New Steady State

The PC revolution was another like the Cognizant and Borland effort.

Neale-May, Donovan (September 12, 2005). Using intellectual capital to build market capital. Retrieved 9/1/2009 from

Wallace, A (1961). Culture and Personality. Random House.

Weick, Karl (1979). The Social Psychology of Organizing, 2nd Edition. McGraw-Hill.

Saturday, September 5, 2009

Push-Pull Strategies in Symbiotic Relationships

In symbiotic relationships in nature, one party provides an instrumental service to another that benefits both. The great Canadian anthropologist Anthony Wallace (1960, pp 31-8) analyzed instrumental and consummatory acts to model symbiotic relationships between groups or even individuals. His work applies really well to push/pull strategies.

By using an immersive mix of both push and pull strategies, you can revitalize your intermediary channel from a disorganized gang of the living dead, zombies clothed in rotted medical bandages to a crisp and professional new face for your company, one that ultimate customers hold dear. This, however, requires you to perform an instrumental act of training the channel intermediaries on the advantageous differences of your offering: Symbiotic on your part.

You may also need to create awareness of these advantageous differences with the ultimate consumer, another instrumental act. This will motivate the channel to become a better partner. Both intermediary and end consumers will also perform the consummatory act of buying your offering. Voila!

The alternative is to die a horrible death at the hands of the zombies and let them turn you into one of them when they eat your tissue or worse, turn your offering into a commodity that competes on price. Our assigned comment captures with attractive eloquence the purposes of push and pull strategies.

Spiller and Baier (2005, p271) give a more academic explanation of the concepts. In a push strategy, our sales efforts are directed at the channel to encourage intermediaries to buy our products. This is the “how [our] offering satisfies existing business customers’ desires….” A push strategy is part of supply management, making sure the channel provides our offering to the end users.

Vanides (2009, p 7) says that a serious barrier in reaching the “right prospects” is time deficit disorder. Proper preparation and understanding is a must for all would be Oxpeckers. In our readings, Omniture (2007, p 3) tells how to establish understanding through profiles or personas of our various intermediaries. So does Wallace but in 1960 personas were called modal personalities.

To continue with Spiller and Baier, a pull strategy is marketing activities directed at the ultimate consumer with the purpose of creating destination demand that pulls our offering through the intermediate channel. This is the “Sometimes demand patterns must be modified for the business customer…” in our comment. A pull strategy is demand management, making sure the end consumer demands the unique characteristics of our offering from our channel.

Two pull campaigns come to mind. “Intel Inside” and DuPont’s “Miracles of Science.” Or in a prior age, before having a chemical halo was unsightly, DuPont’s “Better living through chemistry.” Vanides (2009, p 2) lists general DM campaign objectives including money but also responsibility to community. DuPont has something to say about this.

According to Butler (2001, p 2), DuPont’s objective in this pull strategy is to inform the buying public “what products we make and how they are used, to demonstrate that these do improve the quality of life, and therefore that DuPont is a good and useful institution that deserves political consent and business patronage.” It is an umbrella for numerous product campaigns also.

The goal of these push/pull strategies is to make it easier for our intermediaries to sell their products by accepting our support from both ends, a symbiotic relationship. Here we are now with a few of our channel intermediaries trying to keep them healthy and presentable for the viewing pleasure of our ultimate consumers.

Butler, Steve (10/08/2001). DuPont. Chemical Market Reporter. Retrieved on August 28, 2009 from EBSCOHOST.

Omniture (February 2007). Online Marketer‘s Segmentation Guide. Retrieved Retrieved from WVU IMC 626 Week Two Readings on August 29, 2009

Spiller, L and M Baier, (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall

Vanides, Alexia (2009). Developing OST for B-to-B DM Campaigns, About Lead Generation Management. Retrieved from WVU IMC 626 Week Two Lesson on August 29, 2009.

Wallace, AFC (1960). Culture and Personality. Random House