Archive | October 2012

Basket Case

Look at the picture below. Recognise it?

Yes that’s right it’s the M&S in Bangor, now what’s wrong with it?

The second question is a lot harder to answer. In fact, to you and I there is nothing wrong with this image. The sign is where it should be, the stock looks fine and the baskets are in their usual place. And BINGO, you’ve accidentally stumbled upon the problem – the baskets are in their usual place.

What you are looking at is known as the ‘transition zone’ or ‘landing zone’ (Underhill, 2000). This is the area where the shopper first enters the store and then adjusts to their surroundings – if it’s raining outside, this is the area where they remove their coat or if it’s sunny outside, this is the area where they remove their sunglasses. This is also the area where people tend not to pay much attention. BUT despite this, it is the area where stores always put their baskets.

In 2000, a book was written by Paco Underhill looking specifically at the science of shopping. In his research for the book Underhill found that fewer than 10 percent of customers used baskets when they were positioned by the door of a store. Other research has shown that people‘s purchases increase if they have a basket (Desai and Talukdar, 2003). Therefore, if less that 10 percent of shoppers are using them, this is a large problem for shops.

So how do you solve the problem?

Simple – move the baskets!

Let’s use the example of a book shop.

People who go to book shops rarely take a large shopping list with them. They usually go with just one book they want to buy in mind. But bookshops are attractive places, you can browse and flick through fascinating books on all sorts of subjects and nowadays you can even enjoy a coffee while you do it.

Quite often people will find more books that they want to buy and they will stack them up in their arms. But books are often big and uncomfortable so even if they find another book they really want to buy (perhaps a consumer psychology one!) they won’t pick it up because they physically don’t have room in their crowded arms.

What do they need? That’s right, they need a basket. Paco Underhill argues that baskets should be positioned right through the store encouraging people to make impulse purchases. He also found that at a store in America a member of staff went round the shop offering baskets to the customers who didn’t already have one. Because of this simple act, basket use rose instantly and unsurprisingly so did the size of the average sale.

Paco also argues that in stores like bookshops where the products for sale are heavy, a different basket should be used.

The big plastic ones you are given can really make your arm ache if you pile them up with a few textbooks so Underhill suggests that over-shoulder canvas bags should be used instead. This stops people not buying more things they want, because they physically can’t carry them anymore.

Summary

This idea shows that it just takes a little creative thinking to make a huge difference to  a company’s profits. This idea is also great because it is totally accessible for small and medium sized enterprises as the whole concept is inexpensive – in fact canvas bags are cheaper for a store to get hold of than the plastic ones. So if you ever get the chance to run a store, think twice about where your baskets are located.

Thanks for reading.

Spot the Difference

The Importance of a Unique Selling Point (USP)

Three weeks ago my girlfriend and I decided to buy a tent – a lightweight, all-weather tent which we could take with us when we went walking.

Not surprisingly, there were hundreds of little canvas homes for us to choose from. So we did what all rational people would do and worked out our budget and figured out exactly what specifications we needed. This helped us to filter down our choices but there were still a wide range of tents available to us. So we went online and searched for reviews. After reading these, and getting rid of some of the brands we didn’t trust, we were left with 8 tents to choose from.

All of these tents were very similar in price, weight and size. They were all totally waterproof and all had a porch for kit. The styles and shapes of each of the tents differed but the main product features were the same. All except for one tent…

This tent was set up by pitching the fly sheet (the outer sheet which keeps the rain off) before the inner sheet (the mesh chamber in which you sleep). This makes very little difference if you pitch your tent on a nice day. But if you are unlucky enough to have to erect it in the rain (which is quite likely in North Wales in October) then it means that the area where you sleep never has to get wet.

This feature of the tent is a USP and needless to say it was the reason that we eventually parted with our cash and bought it.

What is a USP?

A USP refers to the features of a product or service that offer unique benefits which are not found in its competition (Egan, 2007). Companies often use USPs to compete with dominant brands in the market (Tholke, Hultink, and Robben). For example Domino’s Pizza’s attempted to differentiate themselves from the competition in the fast food industry by guaranteeing customers that they will receive their pizza within 30 minutes of ordering or it will be free of charge:

Some companies can compete with their rivals by using a USP that claims superiority over a shared product feature (Kippenberger, 2000). For example Xerox claimed that their printers are 3 times faster than HP’s fastest printer. Another example of this is ASDA, who regularly used low prices as their USP:

Does a USP make a difference?

In a word – Yes.

ASDA, Dominoes, Xerox and even my new tent are all examples of how a USP can be the difference between a product or service being purchased or not, particularly in a highly competitive market.

So why are we more drawn to a USP?

Research suggests that a USP is beneficial for a number of reasons. One reason is that consumers give more attention to something novel and therefore often think more positively about it (Carpenter, Glazer and Nakamoto, 1994). A USP that involves a direct comparison is also favourable because it usually results in better consumer evaluations (Ziamou and Ratneshwar, 2003). This means that if a company claims to offer better customer service than its rivals, consumers are likely to praise the company for this reason in a post purchase evaluation.

Finally, I will look at three other reasons for why a USP draws people to a company, product or service. These were were uncovered by Simonson and Nowlis (2000) and include:

1. Consumers often use unconventional reasons to express their uniqueness and independence. For example, people may decide to purchase Spitfire Ale because they are the only person they know who drinks beer brewed in Kent, England.

2. Unconventional, non-obvious reasons allow a person to use and demonstrate their intellect. For example, people with Xerox printers are likely to feel that they are smarter than HP printer owners for making such a shrewd purchasing decision.

3. Novel reasons are more persuasive. Tents where you pitch the fly sheet first are amazing!

And owning the world’s most versatile camera seems like a pretty good idea, right?

Summary

We live in an era where most markets are now more competitive than a Manchester Derby. From the evidence and research discussed in this blog it is clear to see that a USP is an incredible way for a company to differentiate itself from its competition.

So if you want people to choose your product make sure you make at least one thing different!

You must have an example of where a USP has altered your consumer behaviour. If so I would love to hear it.

Many thanks for reading.

Guerrilla Marketing

Guerrilla Marketing

Guerrilla marketing is an unconventional form of marketing. It involves using advertising strategies which focus on imagination, innovation and energy rather than a big marketing budget (Levinson, 1983). The term guerrilla marketing was originally devised by Jay Conrad Levinson in 1983 and since then has become recognised by academics as a valuable marketing tool. When Levinson first coined the expression it mainly described advertising strategies that were free or inexpensive and were useful for smaller firms who didn’t have the money for anything else (Turner, 2000). Early guerrilla marketing strategies included word of mouth marketing, viral marketing and innovative techniques such as flash mobs and reverse graffiti (see below) where companies clean dirt from a surface to display their logo and / or a message.

In current times guerrilla marketing is a term that has changed to incorporate all unconventional branding projects. These can cost millions of pounds and are often used by multinational companies such as Sony (see below).

It’s probably worth noting here that there are hundreds of other examples I could give you, all showing global companies splashing the cash to promote themselves in really unique and fun ways, but this isn’t what this blog is about. I’m interested in the small-scale stuff. I’m interested in the guerrilla marketing that could really help small and medium-sized enterprises (SMEs) particularly those who have little or no marketing budget.

Let me give you an example. Imagine you run a private dental practice and you want to remind people from the local community that you exist. Well, what better way to reach your target audience than placing an advert in an area where you know local people will visit regularly – the community gym.

Especially if it’s an advert that’s going to be remembered, right? Well how about this:

Personally, I love it. It’s cheap to make, it stands out and it puts a smile on your face (please excuse the extremely well thought out pun). This is exactly what guerrilla marketing is all about – encouraging companies to be creative and to step away from the traditional forms of advertising.

What’s the psychology behind guerrilla marketing?

Like all marketing, guerrilla marketing is initially concerned with getting people’s attention (Sacharin 2000).

According to Blackwell, Miniard and Engel (2006) attention is defined as “the amount of thinking focused in a particular direction” (p. 585). This means that companies must not only get people to look at their advert but also to concentrate on it and even engage with it.

 How does guerrilla marketing get people’s attention?

Researchers have found that advertisers use a variety of approaches to get and then keep people’s attention, these include; aesthetics, arousal, colour and brand identity to name but a few (Hoegg and Alba, 2008; Kahneman, 1973; Mikellides, 1990; Zajonc and Markus, 1982). Guerrilla marketing does, of course, utilise all of these elements as well as a host of others. I am, however, only going to focus on two main techniques that guerrilla marketers use to get people’s attention; novelty and humour.

 Novelty

Berlyne and Parham (1968) argue that using novel elements is a good way to break through the clutter of advertising stimuli as well as being a good way to get through people’s selective perception filter. This is demonstrated by the fact that novel products such as JK Rowling’s first ever adult book (again please excuse the exquisitely crafted pun) often sell well in their first year (Lavinsky, 1993).

The rationale behind the fact that novel products and novel marketing strategies are frequently successful is because they are distinctly different from the competition and can therefore easily grasp the audience’s attention (Boyd, 2010).  The below example demonstrates how a SME can use the novelty of guerrilla marketing to make their advertising stand out.

This is actually an advert for the film Ratatouille but I think it would work really well for a pest control company. Either way, it’s a clever idea, cheap to produce and people would be more likely to pick this up and read it than any of the other junk mail lying on their doormat.

 Humour

Humour is commonly used in advertising (Krishnan and Chakravarti, 2003). Research has shown that humour affects attention positively (Lammers, 1991; Weinberger and Gulas, 1992) and it is for this reason that is so widely used in guerrilla marketing.

As well as gaining people’s attention, humorous advertising campaigns are also more likely to be spread by both word of mouth and over the internet. Lindgreen and Vanhamme (2005) found that viral marketing is more likely to be successful and wide-spread when the content is fun, humorous and exciting.  The below example demonstrates how humour can be a powerful factor in guerrilla marketing.

Initially this message about global warming would have just reached those people in the boat but because it was broadcast all over the world, via the internet, countless people will have seen it and then shared it with their friends and family.

Summary

The last example really sums up the nature of guerrilla marketing – it’s always cool and it’s often funny. So people notice it, they sometimes laugh at it, they remember it, they talk about it, they share it (either face to face or through social media channels) and maybe they even blog about it. In fact, they quite often do the marketers job for them.

It is for this reason that guerrilla marketing can be such a great tool for SMEs to help them break through the clutter of advertising. SMEs don’t have vast marketing budgets so why not let Joe Public raise awareness for them? The majority of examples that have been highlighted here are relatively inexpensive, and it is the strategies such as these which could stop smaller companies being ‘out-marketed’ by the corporate giants.

In the future I hope that more and more SMEs will use their creativity, their imagination and their energy to make people aware of their products and services rather than just concentrating on the conventional forms of advertising.

I hope you found this interesting.  It would be great to hear your thoughts on this blog and guerrilla marketing in general.

Thanks for reading.