New Product Marketing Playbook (in other words, they won’t come just because you built it)

Let’s face it- given the poor performance of most innovations, that new product you are working on doesn’t have the averages in its favor. Most innovations are going to be mediocre at best- an HBR article quotes “Less than 3% of new consumer packaged goods exceed first-year sales of $50 million”. That means marketers and product managers that place a bet on an innovation are more likely to be “explaining” its performance than have it be an accolade on their annual performance review.

And yet every successful marketer or company will unanimously agree that innovation is the lifeblood of growth. Innovation is vital to offering a better product or service, managing your business more efficiently and/or effectively and as a safeguard against competitive share losses. Unless of course you are the only game in town- if you are, then congrats, you may stop reading right now. If you are like the rest of us and not running a monopoly operation then hopefully some of this post will be of relevance.

There are really only 3 major ingredients to orchestrating a successful innovation agenda- a good product, one that is relevantly differentiated, a Marketing strategy that engages your target market with the right message at the right place and time and a consumer intelligence apparatus that allows you to course-correct rapidly. Note I said “successful innovation agenda” not “successful innovation”. Secret to innovation sanity is not betting all your money on a single idea but beating the average through a portfolio of innovations (unless you are a startup, then its OK to be all in on the one big bet).

Check the full article out on LinkedIn:

3 under-appreciated trends in consumer behavior (and resultant imperatives for marketers)

The US economy is heavily consumer dependent- that is pretty much stating the obvious. What we seem to be oblivious to is how much the consumer that drives the economy has changed since the Great Recession. We do however feel the symptoms- the tried and tested remedies of the past struggle to drive momentum. Profits stagnate- data from the Bureau of Economics indicate corporate earnings have been in decline since 2012 after staging a recovery following the recession. 

Many marketers are opting to simply take price up as demand stagnates without truly understanding the shift in consumer behavior that is making past playbooks irrelevant. Below LinkedIn in post hones in on 3 familiar yet often underestimated trends that are directly shaping the interplay between consumer behavior and marketing strategy.

LinkedIn Post

Mike Walsh on building businesses for the 21st century @ IRI CPG Summit, Orlando-FL...

As I am recovering from the 2 months of prep-work that culminated in IRI’s premier annual event last week in Orlando, I was thinking of some of the keynote speakers and this guy Mike Walsh popped up in my mind. Mike is a self-described “globally renown (ed) futurist and keynote speaker on future trends, innovation and how to build companies for the 21st century. BTW Mike if you read this, not sure if you noticed the typo on your home page meta id descriptor, I know it is nit-picking but Google indexer  has already picked it up with the typo J.

So in his very entertaining presentation, he had these things he calls “mind grenades” (basically key takeaways) and two stood out-

1.       If your kids had your job, what is one thing they would do differently? First I thought, is he asking us to bring the Crayola set or the Wii to work (depending upon how old your kids are)? Then as I thought more, it made perfect sense. Mike's point was to recruit the next generation of thought leaders and see how they would approach your tasks from their vantage view. Cool.

2.       What is something that your customers do today that drives you crazy? (Hmm, where do I start?) So the point here is that the points of friction between the service you are trying to provide somebody and how they are trying to consume it is an opportunity for innovation, and therefore, engagement. Freakin awesome! (and simple, why didn't I think of this??).

My two cents- every business today and in the future needs to create a “simplicity filter”- a device or process that takes every product or service you design and score it- a plus for features that make it simple and a minus for things that make it complex. If the pluses are not twice as many (at least) as the minuses, pull it off the market. Life is getting increasingly complex and if your product adds to that complexity rather than taking away from it, you are doomed from the get go...

IRI CPG Blog Post: Surf’s up! Time to Ride the Online Video Wave?

Posted on the IRI CPG Blog a couple of weeks back about the traction Online Videos have been getting in the industry in direct competition to traditional TV advertising.

The post highlights 3 reasons to get in on Online Videos today:

1. Efficiently enhance your message reach on traditional TV
2. Test your TV campaigns
3. Reap early adopter benefits

Check the original post out here.

Employee Strategy: (in?) Flexible Work Program @ Yahoo!

This past week Yahoo! HR head purportedly issued a memo revoking work-from-home arrangements for employees. If the "internal" memo at the above link is to be believed, the HR Head, among other reasons cited "Speed and quality are often sacrificed when we work from home" as being one of the reasons for the change. Holy smoke! If this is true, then essentially this is an  admission on HR's part that in this day and age when telecommuting is a way of life, they have failed at instilling a corresponding performance management culture that can leverage this awesome advancement in work culture to happen in a 100 years. With the right performance tracking processes and communciations protocols, telecommuting can increase productivity several fold. I say this because I am surrounded by people who do this every day (including myself) and everybody is working well over the mandated 8-hour workday, actually getting stuff done. So if this is all true (I still don't believe it), then Yahoo! just admitted they failed at getting telecommuting right. Corporate culture is a two-way street, the company has as much a responsibility of creating an atmosphere of accountability as well as trust as employees have of being diligent. Every CEO probably has at least one decision they are going to regret for the rest of their career and, if this is really her decision, Marissa Mayer may just have made the one that will top her "I wish I had thought this through a bit more" list!

SetFocus: Revisiting your 2013 Marketing Playbook

 It is halfway into Q1 2013, as you do a reality check of your fiscal year AOP with marketplace conditions, here’s a little cheat sheet on what you need to know as a marketer in order to beat the plan.

The U.S. Economy in 2013…

General consensus among economists is that of weak to moderate growth in early 2013, and a stronger recovery coming in the later half from the Housing sector, but there are other headwinds at play that could have a dampening effect early in the year, including the debt ceiling debate (once again), expiring tax cuts and spending reductions (collectively known as the “fiscal cliff”). On Jan 23, the “No Budget, No Pay Act” temporarily suspending the Debt Ceiling until later in the year, but without congressional action this issue will resurge before year end if there is no budget adopted by Senate by then. The recurrence rate of this issue is taking a toll on consumer confidence and capital investment/job creation, as indicated by low readings of the Michigan Consumer Sentiment- this indicator, has been exceeding consensus expectations for the last couple of months – today’s reading at 76.3 is above expectation of 75, but still well below the low 80 readings going into 2012 year end.

On the positive side, there’s some indication including forecasts from The World Bank Commodity Price Forecast, of lower commodity prices in 2013, which can provide some tailwinds[1]. The DOE also predicts lower gas prices in 2013[2], which generally helps consumption by freeing up disposable income and driving shopping trips up.
The Employment report in February (for January) came in a bit below expectations at +157K, which is lower than the previous revised number of +196K- 2012 average growth was 181K/month.

What does this mean for your 2013 Marketing Strategy?

If economic uncertainty continues building up into mid-2013, then marketing strategy early in the year should emphasize your value proposition, focusing on share growth through Trade and Consumer promotion investment. Any relief in costs from favorable commodity pricing changes should be passed through 100% to consumers. Advertising focus, both online and off-line, should be on lower funnel that aims to increase conversions by “nudging” consumers sitting on the fence on your brands and retaining existing consumers that may be vulnerable to competitive promotional incursions. Paid Search is especially a good way to get in front of consumers one step before the purchase decision. Paid Search importance is going to be even greater in driving conversion with Product Listing Ads (Google Shopping’s new rich ads functionality[3]).

As the economic uncertainty abates towards mid-2013, focus should shift to longer-term brand building and differentiating your brands to reduce dependence on promotions through strong upper funnel advertising activity. Later in the year is also a good time for new product launches as consumers tend to be more open to trial under lesser economic uncertainty. This shift to shoring up brand equity should help position your portfolio for a strong finish to 2013and create a strong momentum into 2014.

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[1] http://www.worldbank.org/prospects/commodities

[2] http://www.eia.gov/forecasts/steo/

[3] http://www.istrategyconference.com/app/media/whitepapers/Products_Up_Whitepaper_en.pdf

Hurricane Sandy and Income Inequality debates..

Came across this article on Reuters from Pulitzer-prize winning columnist David Rohde "A Hurricane's inequality". The article points out how even a natural disaster like Hurricane Sandy affected the rich and the poor differently and how the event highlighted income disparities in New York. The author used examples like the rich evacuating to hotels while service folks continued servicing. He then goes on to point out that "Last year the wealthiest 20 percent of Manhattan residents made $391,022 a year on average, according to census data. The poorest 20 percent made $9,681".

While I appreciate the point he is making, I am not sure the analysis is entirely fair. First of all the fact that everyone, irrespective of being rich and poor should have been able to retreat to safety. I view the fact that service folks continued servicing as a failure of the City authorities to enforce safety measures- businesses had no business (no pun intended) keeping employees back beyond a certain point.

That said, the income disparity between the top vs. the bottom quintile shouldn't be surprising based on economic behavior. The top 20%'s earnings being high is an artefact of NYC's ability to attract highly skilled labor that commands a wage premium, which in turn creates an abnormal demand for a secondary market of relatively lower skilled labor (nannies, waiters etc). Urbanization is known to create income inequalities for this reason- cities tend to attract from cheaper labor markets (immigrant, students etc). This is partially related to the Kuznets curve effect:

Except that the inequality continues to rise exponentially due to a free inflow of unskilled labor that is willing to compete on price with existing unskilled labor. Comparing top-bottom quintile income disparity in a city that is only ~400 Sq miles yet boasts 1.2 Trillion dollars in GDP is pointless- there is an extreme division of labor and a continuous supply of labor (skilled and unskilled) that is more than willing to compete on price. Profits/income are inversely correlated to competitive intensity, labor markets are regulated in order to contain this profit-maximizing behavior within rational limits. Now what is worrysome is that based on New York State's minimum wage and a 40-Hour work-week, the lowest wages should be ~$15,000 p.a, the fact that it averages $9,681 in the bottom quintile could indicate a significant number of the labor market working below minimum wages, which probably reflects a failure in enforcing minimum wage discipline.