FOAM MAGAZINE TRENDREPORT GROUP F - GLOBAL TREND WATCHING
Index Introduction
P.4-5
Plan of attack
P.6-7
Chapter one Internal analysis
p.8-9
Chapter two Competitors
p.10-11
Chapter three destep
p.12-15
Chapter four trend canvas 4.1 analysis 4.1.1 trend: sympathetic pricing 4.1.2 Basic Needs 4.1.3 Drivers 4.1.4 Consumer expectations 4.1.5 Inspiration 4.2 application 4.2.1 Innovation Potential 4.2.2 The who 4.2.3 innovation
p.16 p.17 p. 18 p.19-21 p.22-25 p.26-27 p.28-29 p.30-31 p. 32-33 p.34-35 p.36-37
Chapter five additional advice
p.38-39
Bibliography
p.40-43
Introduction This report contains research on the current market, the trend ‘sympathetic pricing’ and an analysis of the innovation potential of this trend, resulting in an innovation for Foam magazine. Furthermore, this report contains general advice on how to widen the target audience of the magazine and increase sales, as well as advice on what more can be offered to existing customers. The internal analysis in chapter one gives an overview with key facts about Foam magazine. After describing the competitors in chapter two, chapter three gives insights into the external environment affecting Foam by using the DESTEP model. In chapter four the sympathetic pricing trend will be analysed and applied within the Canvas Model. The first part of the Trend Canvas consists of ‘Basic Needs’, ‘Drivers of Change’ and ‘Emerging Consumer Expectations’ which will each be discussed in more detail. Six examples will serve as an inspiration source for the innovation development. All the research findings and inspirational input will be used to develop a new innovation for Foam magazine. Therefore, general innovation potential and the affected target group will be described. An innovation will be laid out that fills the gap between emerging consumer expectations (from the trend sympathetic pricing) and what foam is currently offering to its target audience. In the end of the report, additional advice on how to increase sales from a marketing perspective will be given.
Plan of attack. The client for this project is Foam, the photography museum. Several times a year Foam brings out Foam magazine, a high-end photography magazine that can be considered as a collectors’ item. The problem is that the sales of the magazine are not high enough and subscribers are not long-term but unsubscribe after approximately two years. When this problem started is yet to be announced by the client.
Problem statement How can we write a research report on Foam magazine, the current market and competitors and make a trend canvas, to come up with an innovation to help increase the sales of Foam magazine? Objective Give insights in Foam magazine, the market, the competitors and a relevant trend, to come up with an innovation to help increase the sales of Foam magazine.
Sub questions 1. What is Foam magazine? 2. Who are the competitors? 3. What is the current situation on the market (DESTEP)? 4. What trend is relevant for Foam magazine? 5. What are the basic needs this trend fulfils? 6. What are the drivers of this trend? 7. What are the consumer expectations that emerge from this trend? 8. What is the innovation potential of this trend? 9. What (new) consumer groups should the innovation be for? 10. What innovation could help Foam magazine to increase their sales?
Method of research & justification Method of research Deskresearch
Field research Quantitative research
Sub question 1
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Sub question 2
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Sub question 3
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Sub question 4
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Sub question 5
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Sub question 6
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Sub question 7
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Sub question 8
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Sub question 9
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Sub question 10
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Qualitative research
All the research in the report will be desk research. In the case of this particular project, doing field research is redundant and unpractical seen the time frame. For the research we will be using the trend canvas, a tool developed by Trendwatching. This tool is trialed and proven effective. Most research will be done via the internet and only known trustworthy websites will be used. Time schedule Week 22 – Meeting Matthijs, briefing, brainstorm. Week 23 – Internal and external analyses, everyone finds one or two relevant trends and explains the relevancy. Week 24 – Decide on the trend to use, start trend canvas, check research done. Week 25 – Put document together, make and prepare presentation. Week 26 – Deadline handing in project, presentation. Group details and agreements made We will meet once a week for two hours and get things done straight away rather than splitting up and having trouble putting them together. Furthermore, we will force ourselves to ask more ‘why’-questions, meaning that we explain more specific what we are doing and why we choose certain trends/examples. Not showing up without letting the group know beforehand: 3 sanction points Being late: 1 sanction points Not delivering work: 5 sanction points Not finishing in time without a good excuse: 5 sanction points 12 points = cook dinner for the group and a bottle of wine (a good one!)
ONE \\ Internal ANALYSIS Foam magazine is an international photography magazine with inspirational content, published three times a year. Each issue has a different theme. The themes can vary from documentary content to fashion. The contributors can be world famous photographers or arising talents. Each issue holds 288 inspirational pages containing portfolios, interviews or expert insights within the photography field. The magazine has been praised and rewarded with numerous awards, not only for its graphic design but also for its high quality content (FOAM,2015). The price of the magazine is €22,50 and is available at Foam for € 15. Of every issue, around 6.000 copies are printed. Most issues don’t sell out and if they do, it doesn’t happen directly. Of every issue around 3.500 copies are sold and 1.500 copies are given away. This is the problem the innovation at the end of the trend canvas needs to solve: Foam magazine’s sales aren’t as high as Foam would like it to be. (Bakker, M. June 2015)
TWO \ \Competitors In this chapter the competitors of Foam magazine are shown and analysed. The chosen competitors all have one or more characteristics that could be interesting to Foam.
i-D magazine i-D magazine is a glossy magazine with edgy content, which comes out six times a year ever since the 80’s. i-D has built up a reputation as being a consistent source of inspiration focusing on fashion culture. Besides fashion they document contemporary culture, music, photography, interviews and interesting essays. Next to their ‘physical’ issues, they also have their online platform offering the content of the magazine (i-D, 2015). For Foam magazine this is seen as a competitor because unlike i-D, they do not seem to put too much focus on their online content yet. Another interesting point for Foam could be the frequency and number of issues i-D publishes.
Stack Stack brings together the world’s best independent magazines and delivers them monthly to their describers. This is interesting because they have monthly issues and cover more then just one magazine. With sending out a different magazine readers stay excited and interested in what they will receive ‘this’ month (Stack Magazines, 2015)
Brewster
Another interesting but probably not the first competitor that comes into people’s minds when looking into the competition field of the Foam magazine, is Brewster. The reason for that is that they use their independent magazine in a new and unusual way. Their content focuses on photography and traveling. They, just like Foam, do not currently provide a lot of online content and have only published three issues so far. However, they stand out from the crowd because their magazine is 3-D printed and they come with two 3-D glasses. Doing something different, unusual or even creating an experience for consumers is something more brands seem to start focusing on. (Brewster, 2015)
Kinfolk Founded in 2011, Kinfolk is now the leading independent lifestyle magazine for young creative professionals and also produces international editions in Japan, China, Korea and Russia. Published quarterly, Kinfolk maintains a vibrant contributor base from Copenhagen to Cape Town and hosts hundreds of global events that bring the community together. They are relevant competitors because they cover online and physical content, have more issues and besides subscription also collection options / gift options and more. (Kinfolk,2015
What makes these competitors really compete with Foam magazine is that they all offer a little extra, something special. i-D magazine for instance has a great focus on their online platform, not unlike Kinfolk. Stack is an interesting competitor because it offers variety to its customer that is quite unique in the magazine industry. Lastly, Brewster makes reading a magazine a whole other experience than it used to be, which gives them that something extra
THREE \\ Destep In this chapter, external drivers influencing the (photography) magazine market will be analysed using the DESTEP model. This includes insights in demographic, economic, social, technological and ecological developments. In this report political aspects – usually discussed within the DESTEP model – will be left out because this area seems irrelevant when analysing developments in the (photography) magazine market. Foam distributes its magazines through the Foam museum in Amsterdam and online, with major sales in the United States of America. Therefore, the external analysis will mainly focus on the Dutch and American market.
Demographic In regards to demographic changes, both markets will most likely face a growing older population, as well as an increase in ethnic diversity within the countries. There will be 18.1 million Dutch inhabitants by 2060 – this is the result of a population forecast by Statistics Netherlands (Statistics Netherlands, 2014). Besides a growing number of migrants coming to the Netherlands, this outcome is mainly driven by an increasing life expectancy. Today the average life expectancy is 79.9 (male) to 83.3 (females) years. This will increase by seven years until 2060 as a result of medical advancements. There is no doubt that the number of elderly will rise rapidly. The United States is facing similar demographic developments with small minority populations doubling in size (Washingtonpost, 2015). These changes could have an impact on the photography magazine market. It opens opportunities to target new consumer groups, such as the 50+ generation and ethnic minorities.
Economic As a result of a growing older population, the gap between working and non-working consumers is widening. In order to pay for social benefits like pensions, tax fees will most probably rise and ultimately lead to a decline in disposable income (Central Intelligence Agency, 2014). With Foam being a high quality product and prices around €22,- per magazine, a shrinking purchasing power within the target group could lead to significant declines in sales.
Social-Cultural Growing ethnic minorities, as mentioned above, often means an increase in different religious groups living together and influencing the culture of a country. This could also create new target potential for Foam when dealing with issues concerning religion. The current Foam magazine with the topic ‘Imagebased activism today’ (Foam magazine, 2015) is a great example of portraying a social-cultural topic that is now and most probably in the future of high interest within the target group. Moreover, people nowadays are confronted with worrying news, such as global warming, overpopulation and terrorism. They live in uncertain times and do not know what the future will bring. This could result in changing values and lifestyles and, furthermore, consumer behaviour (Trendsactive, 2015). For Foam, this could mean that people save money for uncertain times, rather than spending it on luxury products such as high gloss magazines. On the other hand, it could mean that they put a bigger emphasis on consuming experiences and art, rather than goods that leave them with nothing after being consumed. A great chance for Foam might appear when considering the rising ‘visual’ generation. According to trend interpretation agency Trendsactive (2015), a new visual culture is emerging. They think and learn by the use of images because they grew up with an abundance of visual impressions.
Technological Over the past few years, technology has been an important subject within the world of print, whether it is in books, magazines or newspapers. Especially the internet and devices like tablets have had a big influence on the publishing industry. The world of publishing has transformed into a new marketplace. Publishers’ traditional functions are becoming less relevant, as content moves to digital (Huffington Post, 2013a). The question “is print dead?� has dominated the magazine and newspaper industry. A lot of people in this industry have lost their jobs and a shift from print to web makes people wonder if the industry will stay afloat, since online publications are mostly free and advertising income might not be enough to keep business running (Flat World Education, 2015). The internet has had a great influence on this and has affected magazines greatly. It has forced them to adapt to a flourishing online market. One of these adaptations is for example that most print magazines have created websites. These websites offer online-only content that is not available in print form. It is likely that these additional features stem from the need to attract audiences with less time to devote and too short attention spans to read entire articles (Flat World Education, 2015). Nowadays there are also a lot of websites that function as magazines do or once did. These websites are similar to magazines in terms of format. Of course, these websites have many features that are not available in print, like music and videos (Flat World Education, 2015). Devices like the iPad and the eReader have also drastically changed the media landscape. Readers increasingly want to access publications on their tablets (The Economist Group, 2012). Consumers are abandoning print newspapers for tablet editions and reading on their smartphones (The Media Briefing, no date). There is still hope that publishing in both print and online is possible. For magazines, the transition to digital via tablet is happening pretty slowly. A survey from Deloitte shows that 75% of the respondents still prefer to read magazines in print (The Media Briefing, no date). After all, there is something special and unique, something luxurious about reading a big, glossy magazine (Flat World Education, 2015). For traditional publishers it is important to form real bonds with their readers (Forbes, 2012).
Ecological For decades people have been becoming more aware about environmental issues, but only in the last decade this awareness has picked up momentum. This awareness is exerting pressure on day-to-day actions and individual behaviour is changing. These changes are not just a fad or symbolic trend; they are a durable element of changing values (Huffington Post, 2014). The environmental awareness of the consumers is also important for the magazine industry, because magazines use paper and, therefore, have an impact on the environmental issues such as deforestation.
To summarize, the changing demographic and the growing population of the 50+ group opens up opportunities to appeal to new consumer groups. This will also have an impact on the economy, which can lead to a decrease of disposable income. This is something the consumer worries about, among a lot of other worrying news, which also caused people to be more environmentally aware. As for technological impact goes, the digital world certainly has an impact, but is not as much of a threat as some people think. The trick is to use digital to add value to your product, instead of rejecting it.
FOUR \\ Trend CANVAS
A tool that helps to understand consumer trends and applying them to new innovations is the ‘Consumer Trend Canvas’. The structure of the Canvas model will be used in this report, to detect opportunities for Foam and to come up with a new innovation within the trend sympathetic pricing.
4.1 Analysis The first part of the trend canvas model is the analysis. To create a product or service that serves the changing consumer expectations, it is essential to understand what this trend is all about, where it comes from and how it influences consumer behaviour. Therefore, basic needs that are addressed by the trend will be determined. After that, drivers of change that thrive the emerging of the trend sympathetic pricing will be explained. They can be divided in triggers (short-term changes) and shifts (long-term changes). The identified changes cause new consumer expectations. These need to be taken into account when developing an innovation because, eventually, the aim is to fill the gap between what consumers have and what they want. The last step of the analysis is to gain inspiration through collecting examples of other businesses applying the trend.
4.1.1 Trend: Sympathetic pricing Trendwatching.com (2014) explains the trend ‘sympathetic pricing’ as ‘Flexible and imaginative discounts that help ease lifestyle pain points, lend a helping hand in difficult times, or support a shared value.’ (Trendwatching, 2014b). This trend seemed very suitable to create a product innovation for Foam magazine, because it helps reaching a wider target audience and, therefore, increases sales. Moreover, it leaves space for creative ideas and serves as a great source of inspiration.
4.1.2 Basic Needs Consumer trends are driven by people’s basic needs and desires. To fully understand the trend ‘sympathetic pricing’ it is necessary to observe and understand these basic needs first. They will be explained below.
Empathy Empathy means understanding and identifying other people’s feelings and sharing their emotions. In this matter it is about consumers wanting from companies to understand their pain. Nowadays people perceive different aspects of products and services as valuable as they did in earlier days. Therefore, a story attached to a brand can be more important for consumers than functional benefits (Insightsinmarketing, 2014). According to Trendwatching.com, consumers do not believe the brands that constantly tell them that they care. They expect companies to prove their compassion (Trendwatching, 2014b).
Saving money People save money for different reasons. Some people save up for something they really want. Others use their savings as an emergency cushion or for their retirement. Basically, people save money because they cannot predict the future (InCharge, no date). Searching for discounts is one way to save money. A reduction of the basic price of a product or service can kill pain points, leaving customers with a good feeling that they purchased a cheap product without downgrading the quality.
Feeling appreciated Consumers want to have the feeling that they matter. They want to be appreciated and valued as an individual. As an aftermath of new technologies and globalization, more products and services are produced than there is demand. Moreover, there is a lack of differentiation (Moerlie, 2015). Therefore, consumers tend to switch brands quickly if they see a cost benefit in it. Building an emotional connection is important to maintain customer loyalty by making them feel safe, appreciated, and smart (Schlack & Chao, 2012). An easy way for companies to show their appreciation and their willingness to be more human is pricing, or better to say discounts (Trendwatching, 2014b).
Authenticity The word authenticity refers to the qualities of genuineness, truth, and reality (Liao & Ma, 2009). Consumers want to know the truth about product quality, about a company and about working conditions along the supply chain. They search for companies with honest solutions and communication. According to research, consumers aim control and connection. These goals reflect societal norms, such as the need to be practical, to participate in community and to be moral (sciencedaily.com, 2009). Consumers want brands to share their values.
Ease In many companies, the mentality of making things easier for the company itself and not the customer is still the case. However, providing ease and convenience for people can help a company to fulfil or even exceed customer expectations (Morgan, 2015). Ease is defined as a ‘condition of being comfortable or relieved’. It also means ‘freedom from pain, worry, or agitation’ as well as ‘freedom from financial difficulty’ (thefreedictionary, no date).
Support People are looking for helping hands. A Brandshare survey showed that 39 percent of America’s population think that brands should support and share consumer’s ambitions more (Edelman, 2013). On the other hand, consumers more and more appreciate the possibility of self-service (zendesk.com, 2015). Therefore, a balance that allows people to act independently, as well as having the feeling that companies support their needs, is necessary to gain customer loyalty and increase the target audience.
All in all, it can be said that the trend sympathetic pricing comes from people seeking for compassion and the feel to be valued as an individual person. Besides saving money, they want to connect with authentic, true brans that help them ease their pain.
4.1.3 drivers At this point it is clear what the trend sympathetic pricing is and what basic needs it fulfils. In this chapter it will be discussed why this trend is emerging now and where this trend is coming from. Therefore, shifts and triggers will be analysed. Shifts are long-term, widespread changes in society. Triggers are recent, short-term changes and technologies. By looking at these shifts and triggers, the origins of this trend can be identified.
SHIFTS Digital changed the game By the year 2020, an entire generation will have grown up in a primarily digital world. Already the effects of an increasingly digitized world are reaching into every corner of people’s lives (Strategy&, no date). This digitized world has changed the game in many different ways. First of all, it has changed pricing in retail. In the online world, pricing is ultra-flexible, personalized, transparent and dynamic, and what consumer get in one field, they start to expect in another one, too: they have come to expect those prices in the offline world as well (Trendwatching, 2014b). Later in this chapter, more changes in pricing will be discussed. An important part of digital changing the game is social media. Consumers are now massively and aggressively using it to influence business attitudes and to force companies into greater social responsibility (Forbes, 2011). This social responsibility and the power consumers get from social media will be addressed later in this chapter, as well as changes in consumer expectations influenced through digitalization.
Increasing importance of corporate responsibility There is a rising pressure on businesses to be more socially responsible (Forbes, 2011). Study reveals that global consumers view corporate social responsibility as their personal responsibility (JKGroup, 2015). A company’s corporate social responsibility is an increasing factor in consumers’ purchasing decisions (Time, 2012). 90% of 10.000 surveyed consumers even said that they would switch to brands that supported responsible causes. Consumers have grown suspicious of corporate behaviour and are no longer willing to take corporations at their word (JKGroup, 2015). They want proof and the companies to show them that they really care.
Individuals have individual needs There is a societal, consumer and cultural trend toward individuality (Opt4success, 2009). As discussed before, consumers expect brands to be concerned about social, political and environmental issues. Now they also expect brands to consider the issues they face as individuals (Trendwatching, 2014a). One size no longer fits all and personalization is the new standard, no longer the exception (Opt4success, 2009). Consumers want brands to become more personal. This is also partially a result of the digital world: digitalization has made everything personal and consumers are now expecting this in their brand interactions (SupermarketGuru, 2014). People want businesses to take their individual needs into account.
Growing power of consumers Another driver that can be partially attributed to the growing digital world is the increasing power of consumers. The consumer is empowered by access to more information, digital devices and social networks and is well equipped to find the right product or service to suit his or her needs (Deloitte, 2014). Today’s consumer has expanding choice options, access to unlimited information and is extremely connected (Kellogg, 2013), and thus, has more power over brands than ever before. When it comes to trust, many consumers prefer to turn to independent sources rather than to go directly to businesses. The ability of like-minded people to compare experiences and promote their collective voice allows the most active consumers to demonstrate the power of the crowd (Deloitte, 2014). Think for example of online customer reviews. These are carrying more clout than ever before. Problems one customer has with a company can go viral (CNBC, 2013). The importance to give consumers what they want is now more important than ever.
Importance of well-being and growing inequality Well-being is becoming a more significant goal on an individual and a societal level. People focus more and more on self-improvement and self-actualization (Sitra, 2014). Research has shown that in indicating the level of happiness, the level of inequality is very important. Reducing inequality is the best way of improving the real quality of life (The Guardian, 2014). However, the gap between rich and poor on an individual level will become more uniform and increasing social inequality propagates the growth of societal problems (Sitra, 2014). With more pain points in people’s lives, while at the same time wellbeing is becoming more important for them, people start looking at brands to help them reach their personal goals and help them relieve their pain.
TRIGGERS Human values Brands are increasingly aligning themselves with various beliefs and issues, and consumers appear to desire this quality in brands (Chartrand, T., Fitzsimons, G. & Shepherd, S., 2015). This becomes even clearer by looking at the fact that the world’s most successful brands are built on an ideal of improving lives in some way (Sustainable Brands, 2012). Brands want to show their human side, and consumers respect and reward brands that embrace the harder to adopt attributes, like authenticity, compassion and sympathy (Trendwatching, 2014a). These are exactly the attributes this sympathetic pricing trend is all about.
Discount fatigue In the age of discounting, buying something at full-price is an anomaly. However, in a time where the consumer is being bombarded by brands with special offers, discounts alone are no longer enough: consumers are having discount fatigue (Marketing Magazine, 2014). The endless discounts have lost their (cheap) thrill (Trendwatching, 2014a) and people are less willing to spend time finding a good deal, while their desire for a deal remains (Marketing Magazine, 2014). By attaching meaning to a deal or targeting it in a surprising way, brands can energize those suffering from discount fatigue (Trendwatching, 2014a). This is exactly what the sympathetic pricing trend does: giving the deal an extra twist to make it appealing to consumers. Consumers seem to like it: 8 out of 10 consumers reported that they would be more likely to purchase a product from a company that supports good causes and has fair prices, than a company that simply offers discounts (Trendwatching, 2014a).
Message saturation Today’s consumer is suffering from message saturation. The key idea of message saturation can be explained as follows: to survive in our information-saturated culture, we put our minds on “automatic pilot” to protect ourselves from the flood of media messages we constantly encounter (Sagepub, no date). This definition is very general and about all kinds of media messages. In regards to sympathetic pricing, the message saturation is more specific. Brands have been saying how much they care about people, society and planet for years. The consumer has heard these vague promises and goals so many times, that they have started to tune them out. Now they need the brands to prove that they actually care (Trendwatching, 2014b) instead of all keep shouting that they do. A big driver of this trend is the digital world, which changed the game in a lot of different ways. Consumers have a lot more power than they used to and they are letting brands know what they want. They want brands to help them on an individual level and to work on their corporate social responsibility, and not only say that they are, but actually do it. Brands are becoming more human and show it in their actions.
4.1.4 consumer expectations The previously explained Drivers of Change create new consumer expectations. These emerging needs, wants and desires will now be identified, to later on spot gaps between expectations and availability of products and services meeting these needs.
Brands catering to individual needs The first important consumer expectation that arises from this trend is consumers expecting brands to cater to their individual or personal needs. Sympathetic pricing is all about brands offering relief on pain points for the consumers. Arising from the trend is the expectation that they do this continually. They want, for instance, personalized discounts or product offerings, but not only in the form of short-term campaigns or mass offerings. This flows seemingly with the customization trend; the need to personalize everything and anything.
Low priced products - price differentiation/personalized discounts Secondly, this personalized sympathy is expected to be cheap. One of the biggest pain points for consumers is product pricing in general. This could be the result of the growing number of unemployed consumers, the economy being portrayed negatively almost every day or product prices going up in general. Therefore, consumers expect brands to understand their ‘pain’ and feel that it is the brand’s job to act on it. Also, the large amount of discounts has taught consumers that there is some wiggle room; prices aren’t as fixed as brands make them seem.
Expect from brands to go the extra mile Thirdly, this trend raised the bar for brands. Consumers more often choose the brand that steps up as being an ‘advocate for the right’. The rise of for instance social media has created more transparency of brand towards consumers. Consumers have strong opinions on what is right or what is wrong and are not scared to share this with their peers or anyone who wants to listen. This results in consumers’ increased need for brands that are willing to go the extra mile. A brand portraying itself as one that truly cares about its customers creates a strong market position nowadays. Not only do they have to care about their own consumers, they are expected to be conscious about the planet and everyone and everything on it. They no longer just hold the function to ‘sell’ their products.
Brands to show proof (put their money where their mouth is) Lastly, the previously mentioned transparency also creates in need for proof. As mentioned before, consumers suffer from message saturation because of brands constantly telling them how much they care. The sympathetic pricing trend is all about brands proving that they care, and consumers are now starting to expect brands to start proving all of their claims The expectations show that consumers have a very strong opinion nowadays and have high expectations concerning the choices brands make. On the other side consumers expect brands to keep in mind what the pain points of its customer are and hold them into account when offering their products.
4.1.5 inspiration To find inspiration for the final innovation and to see how other businesses used the sympathetic pricing trend, six examples were collected. These examples will be explained shortly, along with what can be learned from them.
AnyPerk AnyPerk is a platform for employee perks and discounts to companies of all sizes, dedicated to employee happiness (AnyPerk, no date). A pain point in the life of employees could be that they do not feel appreciated or rewarded for their hard work. AnyPerk offers a solution for this in the form of a reward system that can be used by employers. The platform
: lets employers easily recognize employees’ achievements and noteworthy milestones with gifts that the individuals can select themselves. An employer can send credits to an employee, team, or an entire company, who can use these points towards a gift or discount of their own choice (AnyPerk, 2015).
Free Krushers for cracked phones There are a lot of people who have cracked phone screens and still use their phones. A KFC in Japan used this fact to promote their new drink, the Krusher. Everyone with a cracked phone could get a free Krusher. KFC even handed out hammers to people who
Blizzard discount In January 2015, the Northeast of America was snowed in by a blizzard. Some quick thinking brands turned this into an opportunity, by having today-only sales to target the people who were snowed-in. The sales were
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wanted the drink for free, but didn’t have a cracked screen (yet) (Techly, 2015). This campaign made having a broken phone, which is safe to say most people do not like to have, a positive thing.
: online, so that people did not need to leave the house to buy something. The brands that had these sales were Old Navy, L’Occitane and Cole Haan (Adweek, 2015).
Free life-long EV charging for investors The consumer is becoming more environmentally aware and more and more of them start buying electrical cars. This contribution to the environment has its downsides: trying to find charging stations. The Amsterdam-based company Fastned is trying to help with this, by expanding its fast-charging station
network. Everyone who invests 10 euros in this project will get free charging at their stations for life (Springwise, 2015). This solves the funding problem for Fastned as well as the problem of finding a charging station and paying for it for the consumer.
Chores for accommodation People are increasingly finding value in meeting new cultures and doing international cooperation. A lot of people want to travel. The problem is that travelling can be expensive and there is a substantial amount of people who are not able or willing to spend that much money on accommodation. Amons has a solution for this. It is a platform that provides an environment for the
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connection between hosts and travellers, in order to allow shortterm voluntary exchange. This means that hosts can post a listing of what kind of help they need and travellers can help them in exchange for free accommodation (StarterPad, 2015). This way, travellers and hosts both get what they need, without having to pay for it.
Wage gap shop There is still a wage gap between men and women; in most cases, women still make less money for the same job. In the meantime, they do have to pay the same price for the same product as men. Because of this, a woman named Elana Schenkler started a wage gap shop named Less Than 100. The shop sells art, ceramics and paper crafts
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: in the name of equality between the sexes. For every dollar a man has to spend, a woman only has to pay 76 cents. Schenkler explains the endeavour by saying it is not about discriminating men, but about giving women a discount reflecting the current wage gap (Trendhunter, 2015).
One of the most striking features of two of these examples, is that it has a sense of “quid pro quo�; brands offer some relief of a consumer pain point, but get something in return for it as well: Fastned gets funding and Amons hosts get chores done. The examples of the wage gap shop, the KFC cracked phones and the blizzard discounts are all about offering the consumer discounts, because of a bothersome situation they are in. AnyPerk on the other hand (not unlike Amons for travellers) offers rewards for hard work and gives the users recognition for hard work they otherwise might not get. This shows that the sympathetic pricing trend can be used in many different forms.
4.2 application
After analysing the trend, it is time to search for ways to apply it to Foam magazine. Identifying the innovation potential and choosing a target group will lead to a new innovation idea.
4.2.1 Innovation potential This chapter will discuss the innovation potential of the trend sympathetic pricing. After doing research, it is now time to consider how and where this trend could be applied to Foam’s vision, business model, products/services and campaigns.
VISION When discussing the drivers of the trend sympathetic pricing, long-term shifts such as new expectations towards flexible pricing were discussed. The arising want for discounts, as well as the customers’ wish for relieving lifestyle pain points, a helping hand in difficult times, or supporting shared values could shape Foam’s perspective about the future of the magazine. To help Foam preparing for the future, upcoming opportunities for the magazine market resulting from the trend can be taken into consideration when adapting the company’s vision. Foam could change the way they think about pricing and reaching out to their target group. In order to increase sales, a wider target audience could be taken into account. Especially non-customers in difficult times, searching for financial pain relief could be future customers in Foam’s vision about the magazine. Furthermore, digitalization could play a bigger role in Foam’s future perspective about the magazine, because it is not a short-term trigger, but an essential change in society’s development and therefore needs consideration.
BUSINESS MODEL Changing the business model, meaning creating a whole new business venture or brand is another way to apply a trend to a company. Sympathetic pricing can be used to push sales momentarily. However, communicating flexible pricing as a substantial part of a company’s business model could make customers who do not receive discounts think that they are paying too high prices. Therefore, it is advisable for Foam not to include the trend into the business model.
PRODUCT / SERVICE Another opportunity within the trend sympathetic pricing is the creation of new products and services or the adaption of existing offerings. Reinventing products that cater to the needs of those who participate in the trend is a possible way for foam to attract more customers. An adaption of the current Foam magazine could be, splitting the magazines published three times a year into smaller and more frequently appearing magazines for littler money and discounts. This opportunity will be discussed in greater detail in chapter 5. Furthermore, offering a special service that helps relieving people’s pain points could play a major role in an innovation based on sympathetic pricing.
CAMPAIGNS Sympathetic pricing can be incorporated into Foam’s magazine campaigns, to show consumers that the company speaks their language, that they “get it” (Trendwatching, 2014b). Discounts and pain relief are great topics to create a campaign with, because it attracts a lot of attention. Therefore, the innovation discussed in chapter 4.2.4 will include a campaign based on the trend. Besides all the arising opportunities, sympathetic pricing can also be threatening to a company. There is a possibility that customers perceive the non-discounted products and services as overpriced or they might get used to discounts and expect it for the future. Therefore, the trend should be used in a fun way and make people who do not receive discounts understand, smirk and even be happy for those who do. Using this trend wisely could make Foam stand out from the competition, attract new customers and increase their sales.
4.2.2 The Who At this point it is time to choose a consumer group to focus on. The choice of consumer group will be discussed in this chapter. In a personal meeting, Matthijs Bakker (2015) mentioned that Foam magazine attracts a reasonably young audience. The decision was made to stay with a young audience, since the magazine already appeals to them. So the consumer group needed to be young, it needed to be a large group, it needed to be able to be applied internationally, but still needed to have common qualities and characteristics to target and focus on. This lead to the choice of the target group: Generation Y. Generation Y is the generation born during the 1980’s and early 1990’s (Business Dictionary, no date). The members of Generation Y are a mosaic of traits that often seem incompatible. They are considered the most parented generation in history (How Stuff Works, no date) and they grew up in a time where things were given to them much faster than to previous generations. This has left them with an 'instant gratification mentality’ (Brazen Careerist, 2009) and they are notorious for not being able to wait in line (Jason Dorsey, no date). They are fast movers and will change jobs and even careers many times in their work lives (Forbes, 2013). In fact, it is the first generation in the workforce that has never expected to work for one company their entire lives (Jason Dorsey, no date). They have a focus on short-term success, but that does not make them less committed to work. This generation is engaged, committed and prepared to work as hard as previous generations (Forbes, 2013). On the other hand, they see work as something that helps them live their lives, rather than seeing work as life. In other words, they work to live and do not live to work (How Stuff Works, no date). They do have high expectations of their employers and are not afraid to question authority (About Careers, no date). So they are hard workers, and they like recognition for that. Generation Y likes to be loved and craves constant feedback and gratitude (Generation Y, 2015). They crave attention in the forms of feedback and guidance and seek frequent praise and reassurance (About Careers, no date). This generation is used to being rewarded for participation and not achievement (Inc, 2015) and thus expect frequent rewards for their work (Brazen Careerist, 2009). They consider the feedback they receive as a vital part of their personal and career development (Forbes, 2013). They want to grow and get ahead in their life and career. People within this generation are at risk of getting a so-called ‘quarter-life crisis’. Generation Y tends to be extremely confident, some might even say overconfident (How Stuff Works, no date). They have a feeling of entitlement, because of the way they were raised. They have big expectations, but do not always know or value the steps involved to reach those expectations (Jason Dorsey, no date).
A quarter-life crisis occurs amongst 20-somethings, because they are frustrated with things not manifesting the way that they had planned in high school and college (Brazen Careerist, 2009), in other words: their high expectations are not met. They transition into the world of work with a sense that the world is their oyster and they can do whatever they set their minds to. Consequently, as they look forward and consider their future, they are in crisis, because they do not know what they actually want out of life. They can get frustrated and experience a quarter-life crisis. This means questioning “is this who I want to be?� at a spiritual, personal, professional and an emotional level (Tomorrow Today, 2014). This quarter-life crisis can be fuelled by the digital world they grew up in. Generation Y grew up with technology and they rely on it (About Careers, no date); they are not so much tech-savvy as tech-dependant (Jason Dorsey, no date). They are known for their intensive use of social media and virtual communication (Forbes, 2013), which they among other reasons use to closely network with friends and their peers, whom they trust first (Inc, 2015). 70% of this generation checks their phone every hour (Forbes, 2013). As mentioned before, this extensive use plays a role in the quarterlife crisis of the members of Generation Y, because social media creates a world where everything others are doing is visible. Most people present an inflated version of their own existence and the people who chime in the most about their careers and relationships are usually those whose career or relationships are going the best, which they broadcast, which leaves Generation Y taunted, frustrated and feeling inadequate (Huffington Post, 2013b). In short, Generation Y is confident and ambitious, which can backfire on them in the form of a quarter-life crisis. They are hard workers and value the opinions of their peers and friends. They grew up in a digital world, which has had a positive and a negative influence on them.
4.2.3 Innovation At the final part of the trend canvas, it is time to describe the innovation that derived from the research on Foam and Foam magazine, the competitors, the current market, the basic needs this trend fulfills, the drivers of this trend, the emerging consumer expectations, considering the innovation potential and the consumer group. In order to understand the journey from determining a trend and in the end coming up with an innovation that fills the gap between customers’ expectations and what the current market offers, a brief summary of the most important research findings will be outlined. First of all, the paper magazine is not dead. In the external analyses, technological advances that influence the magazine industry have been discussed. Digitalization has been considered a threat to the traditional magazine, but for a few types of magazines (including photography magazines) this does not apply as much as to other types of magazines. Owning and holding a big paper magazine still gives consumers a feeling of luxury. Furthermore, consumers want a brand to support them and help them save money. They want to feel like they matter, but not only by getting a simple discount like everyone else does, because they are tired of the discount overload. That is why a discount needs to have an extra twist, to give it more meaning and to make it authentic. Moreover, the consumer group needs to be considered. The innovation needs to fit them and their needs. As discussed in the chapter ‘Who’, the target group of the innovation is Generation Y. So what is most important about them? What is their pain point Foam can help relieve? Generation Y has been called entitled; they have a certain view on how their lives should be and what they should have. Once they enter ‘the real world’, they get disappointed, because it does not live up to their great expectations. The ‘real world’ is not how they want it to be, which can lead to a quarter-life crisis. With this innovation, Foam magazine offers them an escape from reality, their reality. Photography can be considered as an escape from reality, which it truly can be. But it can also be an escape from people’s own reality, into someone else’s. That is what this innovation, a campaign, allows them to do. The campaign has the appropriate name ‘Escape to reality’. This campaign will ask the target group how they escape from their reality and daily lives. They can share a picture that illustrates this on social media, with the hash tag ‘FoamEscapeToReality’. Sending in the pictures on social media is the best fit for the attention craving and tech-dependent Generation Y, especially considering the fact that the
target group is international and, therefore, reach. Users who share their ways to escape magazine. The best pictures get shared on a Reality’ campaign page on the Foam website and edition of the magazine.
with this way easier to get a discount on Foam special Foam ‘Escape To could even be used in an
The people who participate in the campaign do not only get a discount, but they get attention from their peers, whose opinion they value so greatly, and get to share their pain with them. They also get ideas from their peers on ways to escape from their reality and they get to escape in theirs. For Foam magazine this will not only lead to an increase in sales, because of the discounts, but also to a stronger bond with the consumer. It shows them that they understand their pain and that Foam magazine can offer them help. The fact that the campaign is online and runs via social media will increase the brand exposure and brand awareness, especially when taking the fact into account that Generation Y loves to share. People who get to know the brand (better) via this campaign will start to see Foam magazine as an escape from the pain of their daily lives, which inspires brand loyalty. The Escape To Reality campaign will tie the consumer to Foam magazine and make it a bigger part of their lives. It will bring a connection of understanding and support between brand and consumer, which they can both benefit from. Bringing this campaign to life will help Generation Y to escape their reality and Foam magazine to make reaching their goals reality.
5. Additional advice While doing the research and working on the trend canvas, a few more ideas on how to improve sales of Foam magazine came up. These are on a marketing level and will be discussed in this chapter. Three types of buyers of Foam magazine were identified: fanatics, the collectors and the impulse buyers. Foam magazine focuses mainly on the fanatics and the collectors; those who are fans of Foam magazine and who are willing to spend money on it. the impulse buyers, Foam magazine is less attractive, since appears three times a year as one big book and might be expensive to be an impulse purchase.
the now big For it too
This is why a new format and frequency might work to attract not only the fanatics and collectors, but also the impulse buyers. As mentioned before, this new format and frequency would also be a good combination with the previously discussed campaign. The idea is the following. Instead of bringing out three big books a year, Foam magazine will be a monthly magazine. This will speak more to the impulse buyer group. The fanatics would like it too, because they could enjoy the magazine monthly instead of three times a year. For the collectors there would need to be something extra, to still keep it a collectors’ item. Therefore, the idea is to sell a highquality collecting-binder, where the collectors can put all the editions of a certain year in and all together it looks like a coffee table piece. The backs of multiple binders will create a picture together. In that way no collection will look complete without the next binder. The idea of this is to please not only the fanatics and the collectors, but also the impulse buyers and those who like photography magazines, but only sporadically buy one and do not want a big book for an equally big price. Making Foam magazine appealing to different buyer groups could increase sales and the amount of frequent readers.
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