Marketing News: July/August 2016 by Molly Soat

American Marketing Association

ama.org

July/August 2016

The Global Issue July/August 2016 No.

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table of contents

JULY/AUGUST 2016

AMERICAN MARKETING ASSOCIATION

VOL. 50 | NO. 7

Cover photograph by Andrew Nawrocki

AMERICAN MARKETING ASSOCIATION

Rob Malcolm Chairperson of the AMA Board 2015-2016

Russ Klein, AMA Chief Executive Officer rklein@ama.org Andy Friedman, AMA Chief Content Officer afriedman@ama.org EDITORIAL STAFF

Phone (800) AMA-1150 • Fax (312) 542-9001 E-mail editor@ama.org Molly Soat, Editor in Chief msoat@ama.org Michelle Markelz, Managing Editor mmarkelz@ama.org Zach Brooke, Staff Writer zbrooke@ama.org Hal Conick, Staff Writer hconick@ama.org Sarah Steimer, Staff Writer ssteimer@ama.org Vince Cerasani, Associate Art Director vcerasani@ama.org ADVERTISING STAFF

Fax (312) 922-3763 • E-mail ads@ama.org Sally Schmitz, Production Manager sschmitz@ama.org (312) 542-9038 Michael Gay, Account Executive mgay@yourmembership.com (727) 329-4421 Nicola Tate, Account Executive ntate@yourmembership.com (727) 329-4437 Jordan Berthiaume, Media Sales Representative jberthiaume@YourMembership.com (727) 497-6565 x3409 Marketing News (ISSN 0025-3790) is published monthly except July/August and November/December by the American Marketing Association, 130 E. Randolph St., 22nd Floor, Chicago, IL 60601.

featureS COVER STORY

After economic collapse and a crippling volcanic eruption, a social tsunami cleaned the slate for Iceland and rebranded the country as the go-to adventure destination.

POSTMASTER: Send address changes to: Marketing News, 130 E. Randolph St., 22nd Floor, Chicago, 60601-6320, USA. Periodical Postage paid at Chicago, Ill., and additional mailing offices. Canada Post Agreement Number 40030960.

Marketing News welcomes expressions of all professional viewpoints on marketing and its related areas. These may be as letters to the editor, columns or articles. Letters should be brief and may be condensed by the editors. Please request a copy of the “Writers’ Guidelines” before submitting an article. Upon submission to the AMA, photographs and manuscripts will not be returned unless accompanied by a self-addressed, adequately stamped envelope. Annual subscription rates: Marketing News is a benefit of membership for professional members of the American Marketing Association. Annual professional membership dues in the AMA are $220. Annual subscription rates: $35 members, $145 nonmembers and $190 libraries, corporations and institutions. International rates vary by country. Nonmembers: Order online at amaorders.org, call 1-800-633-4931 or e-mail amasubs@ebsco.com. Single copies $10 individual, $10 institutions; foreign add $5 per copy for air, printed matter. Payment must be in U.S. funds or the equivalent. Canadian residents add 13% GST (GST Registration #127478527). Advertisers and advertising agencies assume liability for all content (including text, representations and illustrations) of advertisements published, and also assume responsibility for any claims arising therefrom made against the publisher. The right is reserved to reject any advertisement. Copyright ©©2016 by the American Marketing Association. All rights reserved. Without written permission from the AMA, any copying or reprinting (except by authors reprinting their own works) is prohibited. Requests for permission to reprint—such as copying for general distribution, advertising or promotional purposes, creating new collective works or resale—should be submitted in writing by mail or sent via e-mail to permissions@ama.org. Reprints in quantity are available by contacting Kristy Snyder at Sheridan Reprints: (717) 632-3535. Printed in the U.S.A.

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dePartmentS 2

30 Little Island, Big Voice

Circulation: (800) AMA-1150, (312) 542-9000 Tel: (800) AMA-1150, (312) 542-9000

Opinions expressed are not necessarily endorsed by the AMA, its officers or staff.

Local Beer, Global Markets

The world beer market is getting larger by the day. To compete, native breweries must use savvy marketing tactics to prosper in faraway, previously untapped markets.

46 Gold-medal Marketing The world of sports marketing is unique in that it’s centered on “evangelizing the movement,” says Lisa Baird, CMO of the U.S. Olympic Committee.

marKetinG manaGement

the buzz

THOUGHT LEADERSHIP

Marketers’ Confidence Index

snapshot

core concepts

the middle market

scholarly insights

theSkimm

Michael Krauss reviews Steve Case’s new book, The Third Wave.

product design digitization

24 Shopper Marketing

Lawrence Crosby opines on the death and rebirth of the shopping mall.

Sam Pierce, director of Ogilvy Pride

ama careers

ama community

expert advice

Karen Leland, founder of Sterling Marketing Group

Strategic Communications

David Aaker weighs in on how to create a signature story for your brand.

The Charles Coolidge Parlin Marketing Research Award

68 back page

Schultz on Marketing Strategy

Don Schultz warns against relying too heavily on a “linear” marketing plan.

seven sages

54 10 minutes with

Riley Dugan, Ric Sweeney and James Kellaris break down “verbing.”

20 At C-level

data tracking the cloud

Professional Parlance

International Trade

Michael Czinkota and Valbona Zeneli explain the TTIP and the TTP.

FIND OUT MORE AT

aMa .org

OR FIND US ON

7/15/16 10:06 AM

thebuzz Letter from the Editor

The Wide World of Marketing

he world is shrinking. While marketers are able to reach more people across the globe, they’re simultaneously tightening their messaging, abandoning the sprayand-pray approach to advertising and storytelling and choosing what specific international markets are right for their brands. Staff writer Hal Conick looks at the global beer market (page 38), where small-town breweries have found recent success by entering select far-flung locales. When a natural disaster affects not only its country of origin but countless countries across the globe, it’s hard to forget. In the spring of 2010, Iceland needed to dig itself out of a PR quagmire after a volcano erupted and shut down international air travel for days. The country’s tourism board as well as the government and people of the small nation banded together and created a social media campaign that launched Iceland’s reputation as the go-to travel destination for the hip and worldly set. Managing editor Michelle

Markelz spoke with the smarties in Iceland (page 30) about how they used existing travel fans to get the word out about the country’s awesome attractions. “A survey of tourists revealed that 80% of visitors to Iceland would recommend it as a destination, making it the most recommended of any European destination. Realizing the power of word of mouth, [it] turned its aim on fans of Iceland to spread the island’s message on its behalf,” Markelz writes. “Why not let those inspired by Iceland share their stories?” As marketers, you know the basis of all decisions should be sound research— even seemingly no-brainer decisions, like expanding your marketing to the LGBT community. But a dearth of research on queer audiences has left many marketers at an impasse. Staff writer Zach Brooke spoke with Sam Pierce (page 54), who heads up the LGBT-focused arm of Ogilvy & Mather, Ogilvy Pride, to find out how marketers can best reach those communities in different countries. “North America, parts of Europe,

Australia, parts of South America— even though in some of those regions it is still a contentious issue, there is broad acceptance in the way of life versus some parts of Africa and China, where there is limited acceptance and it’s not high-profile at all,” Pierce says. “It’s about understanding diversity and understanding the needs of the brand and what’s acceptable in the market, and then working on strategies and delivering that appropriately.” When it comes down to it, isn’t that a marketer’s whole mission: to understand human diversity, and how different customer needs dovetail with the needs of a brand? Molly Soat Editor in Chief @MollySoat

Contributors

Kelsey Ogletree

Alison Herzog

Beverly Jackson

Ogletree is a Chicago-based journalist specializing in travel, events and destination marketing, which serves her well in her role as executive editor of Connect, a national B-to-B magazine for professional meeting planners.

As the director of global social business and digital strategy at Dell, Herzog was recognized by Top Rank as one of 50 influential women in digital marketing. She is known for innovation, tactical straightforwardness and being data-driven.

Currently the vice president of social media marketing and content strategy for MGM Resorts International, Jackson has also held senior marketing positions at Yahoo and the Recording Academy, where she ran social media for the GRAMMY Awards.

marketing news | July/August 2016

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thebuzz AMA News

AMA’s Marketers’ Confidence Index Cites Virtual Reality and Internet of Things as Growth Markets

he Marketers’ Confidence Index remained stable in the second quarter of 2016, increasing two points from 121 to 123, despite a dampened jobs report, stock market turmoil and political upheaval. A reading of 100 in the index represents neutral. The index, released by the AMA in partnership with Millward Brown Vermeer, measures the degree of optimism regarding the state of the economy that U.S. marketers are expressing through their organizational spending and growth. The index found 53% of U.S. marketers surveyed believe their businesses’ revenue will grow in the next few years, and 60% believe marketing will become more influential within their organization. Others expressed concern that senior leadership does not understand the value of digital technology, and worried that there isn’t sufficient

Investment Climate Jan 2016

May 2016

60%

61%

Good time

13%

12%

Bad time

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thebuzz

Past (6 months) Customer spending Jan 2016

May 2016

40%

39%

19%

21%

Increase

Decrease

Past (6 months) Marketing Budget Jan 2016

May 2016

32%

22%

21%

Increase

Decrease

Future (6 months) Customer spending Jan 2016

May 2016

39%

40%

14%

12%

Increase

Decrease

Future (6 months) Marketing Budget Jan 2016

May 2016

27%

28%

14%

13%

Increase

Decrease

training for how marketers can convert Big Data and analytics into results or drive true digital transformation. The latest findings identified technology and digital tools as primary drivers of organizational power and influence, highlighting virtual reality, social media, live marketing and the Internet of Things (IoT) as new opportunities to increase customer interaction and drive continued loyalty. Spending also played a big role in the index, since more than 60% of marketers feel like this is the right time to invest; 40% feel as if customer spending will increase; and nearly 30% plan on increasing the size of their marketing budget over the next six months. (Continued)

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thebuzz

Marketer’s Confidence Index

Assessment of Organization’s Customer Centricity1

Q1-121 Q2-123

Expected performance of revenue growth

Jan 2016

Note below 0-100: 0-100 scale represents how customer-centric marketers perceive their organizations to be, 100 being perfect.

72 / 100

May 2016

50%

53%

Improve

Decline

Changes from the January 2016 wave: up from 73/100.

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snapshot

media upstart

Take a Longer Look at theSkimm Cultivating a unique mind meld with its readership has allowed e-newsletter theSkimm to outpace its competitors By Zach Brooke | staff writer

 zbrooke@ama.org Goal It takes a lot of confidence to launch a news outlet these days, but in 2012 New York roommates Danielle Weisberg and Carly Zakin felt up to the challenge. The pair ditched their jobs at NBC News to team up and create theSkimm, a curated daily newsletter that summarizes the day’s most significant events in a breezy, casual tone. It doesn’t stop with current event recaps, however. TheSkimm also uses its platform to share recipes, offer birthday shout-outs, ask for feedback and display native sponsorship from brands it believes are highly relevant to its audience. Building their newsletter from scratch, Weisberg and Zakin knew theSkimm needed to be highly relevant to future readers if they were going to lure people away from other outlets.

“We knew when we launched theSkimm we were filling a real void in the market for news that fit the routines of our target demographic—smart, busy women on the go,” Zakin says. “The initial goal was simply to get as many people to sign up as possible. It was a true grassroots effort and spread by word of mouth in the early days.” “From the beginning, we were adamant that we were not building a newsletter company,” Weisberg adds. “We have always thought much bigger than that. What we are creating is an audience company that makes it easier to be smarter. One of our first hires was a growth and analytics lead to help us make this a reality. If we were going to build a company around our audience, we needed to make sure we understood it inside and out.”

Action The first conscious decision Weisberg and Zakin made to build their audience was defining it. “The target audience has always been our friends—female millennials. They are on their way to leading in paychecks and degrees, so why not focus on them?” Zakin says. The understanding that readers would mirror their social circles is reflected heavily in how theSkimm is written. Using a conversational voice that deviates profoundly from the detached reporting in most news stories, theSkimm communicates in a style more akin to a corporate happy hour. An example of how this tone is shaped can be seen in a summary of the global reaction to the U.K’s Brexit vote, which was typically reported in weighty political and economic terms. “Late last week, after a really close vote, the U.K. said, ‘It’s not me, it’s you,’ to the EU No one took the news well. British Prime Minister David Cameron— who called the vote for the Brexit as a campaign promise but wanted to stay in the EU—said he’s putting in his three month’s notice and will leave office in October. And global markets dropped like it was bloody hot. The pound hit its lowest level since 1985 and $2 trillion

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MEDIA UPSTART

disappeared from world markets. Breakups are messy.” This distinct style of storytelling was quick to garner a devoted following, which theSkimm leveraged by creating a group for superfans. TheSkimm harnesses that brand passion of its most avid devotees, called Skimm’bassadors, by coaching them to promote the newsletter to others. In return, Skimm’bassadors are showered with Skimm swag they can use in their everyday lives—T-shirts, tote bags, umbrellas, etc.—and are connected to a professional network made up of like-minded enthusiasts. They also are given early access or exclusive offers to theSkimm’s partner brands. “Our Skimm’bassador program took off in a way we never planned. That was a happy accident and fueled our company in a truly authentic way,” Weisberg says. Even non-Skimm’bassadors can be called on for word-of-mouth sharing by clicking on “Skimm This” social media buttons embedded in every edition. “The buttons have definitely helped remind people to share something they loved in the newsletter that morning. We’ve had fun putting GIFs into the sign-up share-text that stands out in feeds,” Weisberg says. Results Since its inception, theSkimm’s readership has swelled to 3.5 million active subscribers, and its social platforms reach an audience of nearly 1 million followers, more than 80% of whom are female. More than 13,000 people have signed up as Skimm’bassadors. TheSkimm boasts an open rate close to 40%, which Weisberg and Zakin describe as “industrycrushing.” They say their service is replacing morning television for their target demographic. This assuredness has pushed the pair into the realm of app design. In April, theSkimm announced it was launching Skimm Ahead, a monthly subscription service that offers a curated calendar of upcoming events important to its audience, such as Beyoncé concert dates, Netflix release schedules or the State of the Union address. Initial results have been positive. On launch day, Skimm Ahead was the top

snapshot

coMPany

theSkimm HeaDQUarters

New York FoUnDeD

2012 resUlts

3.5 million active subscribers; 1 million social followers; 13,000 brand ambassadors; 40% open rate.

news app in the Apple App Store and the ninth-most popular app overall. The app is proving to be an extension of theSkimm’s initial success, which Trevor Wade, global marketing director for brand design and consulting firm Landor Associates, attributes to a deep understanding of its audience. “They know how busy [readers] are. They know their routines. They know whether they have a TV, and they know their pain points,” Wade says. Using this knowledge, Wade says theSkimm sets itself apart from competitors by adroit execution of three basic marketing tactics: a unique brand voice, word of mouth and building a user community.

“All brands have a voice, whether they’re aware of it or not, and the strongest brands create and use an intentional voice. TheSkimm has done exactly that,” she says. “We know [word of mouth] is one of the best ways to market a brand … because you have the trusted opinion and recommendation of somebody, and you’re much more likely to give something a try or come to it predisposed to like it when you hear it from a friend.” In fact, Wade believes theSkimm has accrued so much relevance that it’s morphing into a lifestyle brand. “They’re curating news and offering it up in a certain way, and they’re not out there trying to get the story first or the original coverage. They’re not playing that game,” Wade says. “If you skipped reading theSkimm, you would think that something was missing with your routine. You lack something.” m July/augusT 2016 | MARKETInG nEWS

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coreconcepts

online tracking

To Track a Customer Most of us have heard of cookies, but few really grasp the technology behind the digital ads we see. Here’s a primer on the tracking that goes on beneath consumers’ web use. By Michelle Markelz | managing editor

 mmarkelz@ama.org

nyone with an internet connection has been served an ad. No matter what you’re doing online, whether it’s shopping, planning a trip or researching a physician, chances are your behaviors are being tracked and ads deemed relevant to you are being published on the sites you visit and the apps you use. Consumers have largely come to accept that they are being tracked, but exactly what information is being gathered by the invisible pixels painting the internet and how it is used is not as commonly understood. Marketers should be literate in the language of digital tracking and

advertising so that they can inform an integrated marketing campaign. Cookies One of the oldest tracking technologies, a cookie is a script added to a URL to track visitor engagement with a webpage. Most consumers are familiar with cookie use for retargeting, wherein their visit to a website or their product browsing is tracked by a cookie, and once they leave that site or browsing session, an ad is served to them related to the site or products they just viewed. “At the most basic level, we’re using cookies … to identify that someone

has either visited a site or seen an ad and [then] identify that same user again when there’s another advertising opportunity,” says Matt Ellinwood, senior director of data products at advertising software platform Tube Mogul. Using cookies, advertisers can assign anonymous IDs to consumers. “The industry has to infer more about those groups of IDs,” Ellinwood says. These assumptions could be about the gender of the users, their purchase behavior or any number of characteristics to narrow segmentation. When a visitor has provided a website with personally identifying information such as a name, e-mail address or log-in information, the site can assign a deterministic ID to that person. Actions that the visitor takes on that site can be tracked as first-party data. “That’s really similar to pointof-sale data,” says Ellinwood. “If your customers are coming to your website and are logged in, you can use a cookie to identify them and follow their purchase behavior.”

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online tracking

Device IDs In the mobile world, cookies are notably less useful to advertisers. That’s because 90% of consumers’ time spent on mobile devices is in-app as opposed to the mobile web, and without a web address, there can be no cookies. Instead, advertisers use device IDs to track and target consumers. Device IDs differ from cookies in that they don’t have to be placed by an app the way cookies are on a web page; they are recorded from the device on which the user accesses an app—be it an iPhone, Android or tablet—and they are rarely reset, making them reliably consistent across many visits from the same user. “It’s an anonymous ID you’re able to use to identify the same user at different times,” says Ellinwood. “The way you set it and the way you get it is a little different [from a cookie], but the application is almost identical.” Just like cookies, Ellinwood says, device IDs can be grouped by segments to create audience targets. “Whether it’s a cookie or device ID, the way the industry is going, we don’t really care anymore. We know we want to serve a user a specific ad because we’ve seen them before, and we know they’re male, for example, and we’re able to make that decision based on the ID right then and there.” IP Mapping and Geolocation Advertisers can also use location-based data points to segment their audience. On desktop, the best way to gather this information is by IP mapping, and on mobile it’s geolocation. Unlike cookies and device IDs, IP mapping and geolocation serve different purposes. Whereas identifying the location of a mobile device can be advantageous to bricks-and-mortar businesses looking to drive traffic to their stores, IP mapping can be studied to surmise characteristics about the consumers who are browsing on an address. “We’re turning the router inside your home into the most accurate way to target digital ads to you,” says Greg Mosley, director of sales at El Toro, an ad-targeting company that has mapped IP addresses to physical households, which can then be cross-referenced with publicly available data sets. Mosely

describes the use of IP mapping to digitally target advertising to consumers like a direct mail campaign. For example, a car dealer could target the home addresses of car lessees whose leases are near expiration or owners of competitors’ cars and cross-reference them with IP addresses that have been verified with home addresses to serve those households digital advertisements. Limitations “Cookies are really your online behavior,” says Dustin O’Dell, senior director of business development at Barometric, a tracking platform. But there are limitations to knowing the behaviors of an anonymous consumer, Mosley notes. “One of the big concerns in the online advertising space is who’s seeing the ads. When you’re targeting in a cookie-based world [the web], you’re targeting an unknown. If I’m selling luxury vacations, cookies say all the people who’ve gone to Forbes.com are highly affluent. That’s not accurate.” A good marketer won’t rely solely on cookies, but even with the incorporation of device IDs and geolocation technologies, it can still be difficult to recognize consumers across devices. Imagine a consumer sees your ad on a tablet, browses your mobile website on their cellphone and converts on their desktop computer. The data provided by those impressions would suggest your brand interfaced with three different consumers because the tablet and phone will have unique device IDs, and the cookie you may have used on your site recognizes the desktop visit as unique from the mobile visits. “If you target them as three different people, your targeting may not be as effective as it could be,” says O’Dell, because it removes the possibility of targeting sequentially or upselling your target. The Tracking Tool Belt A smart digital marketing strategy won’t rely on a single method of tracking, nor will it take data at face value. What differentiates the spray-and-pray approach from an integrated marketing approach is data science.

coreconcepts

Big Data must be translated into smart data. From IP mapping marketers can learn a consumer’s postal address. When a particular device ID, tied to a particular geolocation, shows up every day from 8 p.m. to 6 a.m., it can be assumed that that device lives there, says O’Dell, allowing marketers to deduce that the person using that device lives there as well. When the geolocation of the device matches up with a postal code, any devices in that home environment are representative of the same consumer—or at least a small set of consumers (a family) who are interested in seeing the same ads. And to those devices, a persistent ID is assigned. “If I’m targeting you at home, whether you’re going to Forbes.com or PerezHilton.com,” Mosely says, “because we’ve identified you as the right target, we’re no longer having to bid on the context of the website.” Cutting out the guess work or the chance of serving an ad to the wrong audience is every marketer’s aim; achieving that efficiency is a process of experimentation. “That’s the goal: to make assumptions about where you’re going to see better performance for your ads by getting them closer to your target, inspecting performance and then shifting your budget and your strategy according to whether or not those targeting strategies are delivering for you,” Ellinwood says. “What we’re gravitating to is how to serve the best ads to the fewest number of people at the right time so there’s more efficiency and less waste. But that’s really hard.” Experts agree there is no single best practice or technology for knowing your customers online. Rather, marketers need to evaluate the right mix for their budget and goals. “You balance scale and precision in a lot of cases,” O’Dell says. “I call it the dartboard effect. You can shoot for the bullseye, and those are super premium, top-level audiences, but you may only get 10 people. You should absolutely use those 10, but we understand you need scale, too. The more scale you get, you have to understand the precision may not be there, but if you use a combination of both, that will get you to a place that’s beneficial.” m July/August 2016 | marketing news

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themiddlemarket

the cloud

The Middle Market’s Cloud Computing Conundrum Cloud computing technology has been growing in prominence, hype and cash flow over the last few years, but is the middle market ready for the change it brings? By Hal Conick | Staff Writer

 hconick@ama.org

loud computing has gone from a swelling buzz phrase to a nearinescapable reality. Just look at some recent stats: Amazon Web Services, perhaps the most well-known cloud service, generated nearly $8 billion in revenue in 2015. Morgan Stanley predicted Microsoft’s cloud products will generate 30% of its revenue by 2018. Worldwide spending on cloud services is expected to reach $141 billion in 2019, up more than 100% from 2015. Midsize organizations, which contribute 33% of the U.S. private sector GDP and 60% of all new jobs created, according to data from Cisco, usually work with smaller budgets than large companies. Cloud services, known for cutting costs when compared with on-premise IT services, may seem like the logical fit, but the industry still has something of a cloud computing conundrum on its hands. A 2015 report from Deloitte found that 42.4% of middle market companies were in the deployment phase of cloud computing in 2015, up from 26% in 2013. Approximately 21.2% of midmarket companies had a successful, mature deployment of a cloud solution in 2015, up from 9.2% in 2013. Midmarket companies have quickly realized the cloud’s benefits and have already started increasing their budgets. Thomas Stewart, executive director for the National Center for the Middle Market, says companies have already planned for a 17% increase in digitization spending this year. That’s not all cloud investment, he notes, but the cloud is where much of the spending—and savings—will come from.

However, the cloud is still imperfect in the eyes of many middle market executives and is far from ubiquitous across the industry. Deloitte’s report says the middle market’s relationship with the cloud is “complicated,” with a third of executives stating they still prefer on-premise solutions. Security: The Main Concern or the Main Benefit? Thirty-five percent of respondents to Deloitte’s survey said ensuring data integrity and reliability was the biggest obstacle to deploying the cloud, while 34% cited confidence and data security. In other words, businesses don’t want to become the victim of a devastating cloud security breach. Even though some middle market companies are concerned about data security in the cloud, Stewart says cloud services can actually be an inexpensive way to improve security. “Basically, it’s a way of riding cybersecurity on someone else’s technology rather than having to do it yourself,” he says. “For midsize companies with varying degrees of budgetary constraint … that can be a playing-field leveler and a real advantage.” John Moses, Cisco vice president for the U.S. commercial central area, says security is likely compromised before a cloud service is even considered due to a lack of centralization. This is due to what he calls “shadow IT,” or software brought into companies without IT clearance. Moses says 80% of employees use software not cleared by IT. Organizations believe they’re using between 90 and 100

public cloud services on average, Moses says. However, after an assessment, the average company is often found to be using close to 1,200 public cloud services. Of those 1,200 services, 44 are considered “high-risk” on average, he says. “The lines of business have been producing their own solutions, like cloud,” he says. “They want to be able to drive business value. It’s a great opportunity, and it’s producing great productivity enhancements. However, what we’re seeing is an increase of cost and increase of security risk, and this is why IT and the lines of business [are] trying to get their arms around this phenomenon. What they’re trying to do is bring it all together, so it’s truly optimized and truly secure.” A Boon for Competition The main reason for midmarket adoption of cloud technology has been to get a leg up on competition, Moses says. It’s a way for these companies to differentiate from others, reduce costs, improve productivity and create a better customer or work experience. Some companies are using the cloud to completely redefine their business or create an entirely new market. “What you’re seeing is people leveraging hybrid cloud,” Moses says. “It gives them the flexibility and the ability to digitally transform their organization. They want to use that power of the cloud-native development trends out there to [maintain control of security and performance]. That’s where the cloud piece is coming in.” Stewart says there could be a danger in getting left behind for companies that choose not to investigate or adopt cloud technology. At the same time, midmarket companies need to adopt their cloud technologies for the right reasons; they can’t simply adopt because it could save money or give the organization a market benefit, he says. “You can delude yourself in either direction,” Stewart says. “You can delude yourself and say you’re going to get a competitive advantage when really you’re going to shave a nickel off your costs. Or you could delude yourself and say, ‘The only thing I need to worry about is cost,’ and miss a huge opportunity on the differentiation front. By definition, if

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employer branding

you’re renting something from someone else, your competitors can rent it, too.” Midmarket organizations need to ask tough questions and have a realistic set of expectations for what the cloud can bring. He suggests taking a “realistic and imaginative” look at cloud technology and getting all of the executive team on the same page. “One of the things I think that we’ve learned in our looks at digitization and innovation in midsize companies is [to not] let the CIO or the CFO have the whole decision,” he says. “Your marketing guys, for example, just as they have a lot to say about [adoption of] CRM and analytics … they may have a lot to say about the cloud. Make sure your innovation guys, your sales team [and others, are] canvassing all the functional areas so that you don’t just get one specialty’s point of view on what cloud can do for you.” A danger for midmarket companies looking to adopt the cloud is focusing too heavily on the technology and losing focus on the core business, Stewart says. Distracting from business and siphoning away resources is a present danger with any new adoption, according to Stewart, so companies need to think strategically about how the cloud may alter operations, for better or worse.

What’s the Future of Middle Market Technology? The cloud has a big future in the middle market, Stewart believes. One big growth opportunity is spending more of the technology budget on future innovations. Currently, he sees 40% of cloud investment going to back-office technology and 40% to current business, with the remaining 20% going to future business. Over time, he expects the future to be a much greater focus. “To me, a big question—it’s almost a marketing question—is, ‘What are the [innovative] uses of the cloud?’ Not in just managing my back office, but in managing my current business, my sales relationships and developing my future business,” Stewart says. “And if cloud applications become really valuable in that way, and putting your business in the cloud becomes valuable, you’d expect it to grow longer than if it is simply something that helps me contain my costs.” Another future connected technology is the Internet of Things (IoT), a cloudbased concept in which previously non-internet-connected objects have connectivity with other devices. Moses says at least one midmarket industry is watching what happens with great interest: the central U.S.’s 13,000

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manufacturing plants. These companies are looking at bringing connectivity to the factory floor, coalescing it with IT. With 500 billion devices expected in use by 2025, it’s no wonder organizations are keeping a keen eye on IoT’s future. “That’s a huge market opportunity; it’s an inflection point,” Moses says. “With the connected machines, there’s huge ROI and data points. Connected machines are [a] big frontier.” At Fanuc Robotics, a company that has already adopted connected machines, Moses says the company has reduced downtime by 48%, reduced defects by nearly 50% and improved equipment efficiency by 16%. These are changes that, if implemented across the middle market’s manufacturing industry, could save millions of dollars at any given company. Much like with the cloud, Stewart says companies tend to get excited anytime there’s a new trend. Some get too excited and, “We don’t know who they are until they fall on their faces.” “The great advantage of fads is that when people fall, you get to understand the limits of the idea, and you just hope that you’re not the one who has to teach himself the lesson,” he says. “You hope you learn the lesson from someone else.” m July/August 2016 | marketing news

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scholarlyinsights

form vs. function

How to Balance Style and Substance in Product Design Marketers must balance an aesthetically pleasing design and high-performing functionality to compete in competitive markets By Lance A. Bettencourt | contributor

 lance@liftphd.com

n the past decade, design has gone from a company activity to a strategic priority and a source of competitive advantage. A simple internet search of “product design excellence” reveals dozens of awards, such as those by the Industrial Designers Society of America and the Medical Design Excellence Awards. If you’re anything like me, your first thoughts of “design” might veer toward what you can see—the visual appeal of a product. Certainly, what is referred to as “form design” gets our attention—and it certainly is a motivating factor for some consumer segments. There are going to be some people who want that leafshaped and bright green colored couch even if it’s not the most comfortable seat in the room. But design is much more than this. Research and our own experience reveals two other very important dimensions. First, there is “function design,” which refers to how well a product fulfills important utilitarian needs of consumers. Second, there is “ergonomic design,” which refers to how easy and comfortable a product is to use. Dyson vacuum cleaners, for example, have established themselves on their differentiated design for function and ergonomics. Because of an unusual form, they have exceptionally strong suction without the need to clean or replace filters. Design elements such as self-adjusting cleaner heads and ball technology make it easier to clean different surfaces and maneuver around sharp corners.

As firms look to design as a strategic capability, it is important to consider how the different types of design work together to impact bottom-line results. Is more always better, or is there a point of diminishing returns? Do different types of design excellence reinforce one another, or is it better to set priorities for each? Research on Design Strategy In a forthcoming Journal of Marketing paper, “Designed to Succeed: Dimensions of Product Design and Their Impact on Market Share,” researchers investigate these questions using a sample of automotive brands in the U.S. lightvehicle industry. Looking at data for 33 brands (including Acura and Volvo) across 22 vehicle categories (e.g., low-price small cars, large-size pickups, etc.) over six years, the researchers analyzed how consumer ratings of form, function and ergonomic design drawn from JD Power’s consumer ratings affected vehicle market share, calculated based on sales figures reported in Automotive News. To rule out alternative explanations, the research team made sure that any impact of design on market share was beyond vehicle price, advertising, dealer share, brand, category, and professional and consumer quality ratings. The analyses revealed that, on average, higher function and ergonomic design lead to higher market share. In fact, the analyses revealed that having a design rating one standard deviation above

average would translate into a $50 million market share gain. In contrast, form design did not have a significant impact on average market share. Perhaps more interesting is what the research reveals about how the three distinct design dimensions interact. Function and ergonomic design are supportive of one another. An increase in function design has a positive effect on market share at high levels of ergonomic design, but no effect at low levels of ergonomic design, and vice versa. In contrast, an increase in form design only leads to market share gains at low levels of either function or ergonomic design. When either of the other types of design is high, increases in form design

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lead to losses or no gain in market share. (The opposite is also true: increases in either function or ergonomic design only lead to market share gains at low levels of form design.) How Firms Should Strategically Invest in Design The results suggest an important strategic design trade-off for companies. As the authors conclude, â&#x20AC;&#x153;Firms can either design for satisfaction by meeting utilitarian needs on both function and ergonomics, or design for delight by delivering on form and meeting the hedonic needs of consumers.â&#x20AC;? More than that, the results indicate that firms should design either for satisfaction

or delight. They should either invest to be a leader in form design along with goodenough function and ergonomics or they should invest to be a leader in function and ergonomics while delivering goodenough form design. It is costly for a company to invest in designing for both utilitarian and hedonic needs of consumers. Such products are likely to exceed customersâ&#x20AC;&#x2122; willingness to pay, which is why market share may actually decrease as both types of needs are satisfied by design. They are over-designed from a consumer perspective. In contrast, the results indicate that a company should make simultaneous investments in both function and

scholarlyinsights

ergonomic design. The market share of a high-performing product is undermined when it is not easy or comfortable to use. In the same way, a product that is easy to use will not reach its market share potential when function is not exceptional as well. m Lance A. Bettencourt is a cofounder and managing partner of LIFT PhD, a service that matches corporate decision-makers with the expertise of business school professors. Bettencourt is a distinguished marketing fellow at the Neeley School of Business at Texas Christian University, and author of Service Innovation: How to Go from Customer Needs to Breakthrough Services. July/August 2016 | marketing news

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sevensages

DIGITIZATION

seVen eXPerTs weigH in on THe ama’s

Seven Big Problems Problem Three: The digital Transformation of the modern corporation

brian gregg

Laura beaudin

alison herzog

beverly Jackson

Partner at McKinsey & Co.

Partner at Bain & Co.

Too often, customers experience a company’s brand “via the org chart,” meaning a company communicates and interfaces with its customers through multiple uncoordinated teams (call center reps, store/branch associates, digital marketers, etc.) without a unifying mission. In this digital era, a critical barometer of success will be the ability to serve customers in the way they want to be served at key points in their journey. To pull this off, organizations will need to reorient internal mechanics with the customer as the ultimate guide: architecting cross-functional teams around customer journeys, building a holistic view of all customer touch points and governing decisions and incentives around customer metrics.

More companies are seeing value in a “digical” experience for customers— products or services that combine digital and physical elements. Digical can create effective targeted marketing where customers feel the company knows what they want and helps them find it. The Chinese cosmetics company Jahwa provides reps on the retail sales floor with mobile devices that tap into an integrated database. When the rep puts in the name of the customer she’s serving, the device provides recommendations tailored to that customer. This logic applies in business-tobusiness markets as well. A machinery manufacturer automatically collects electronic data about end users and product use. That lets the company’s marketers understand the needs of specific groups of buyers and design appropriate offers.

Director of Global Social Business & Digital Strategy at Dell

Vice President of Social Media Marketing & Content Strategy at MGM Resorts International

Ninety percent of the data in the world today was created in the past two years. The inherent challenge is knowing how to use this data to tell a meaningful, actionable story. While our day-to-day activities have changed, our psychological drivers haven’t. Digital transformation is really about eliminating friction, solving pain points, understanding needs before the customer does and putting the customer in the driver’s seat. The Internet of Things has made it possible to optimize something you don’t think of as digital, such as a farm, into a place where sensors aid in minimizing water waste, maximizing crop yield and even monitoring product lifecycle in real-time. Social listening allows us to perform real-time market research, understand where a customer’s real passion lies and understand the literal terminology customers use. The outcomes of these two digital transformation initiatives are what every company wants: happy customers, brand advocates, and increased revenue.

The digital transformation of today’s organizations will be most successful when designed to include the entire infrastructure. The rapid acceptance of digital innovation can’t be fully effective when implemented in silos. There is no question the evolution brings organizational efficiencies, increased productivity and campaign effectiveness. However, the challenges to this ground shift towards digital transformation are the disproportionate allocation of technology, resources, training and a general lack of appetite for the resulting change. The digital revolution is destined to fail if the entire organization is not included. The transformation and change management must extend beyond sales and marketing teams. Why not include people management, finance, public relations and other B-to-B functions that could amplify the transformation? When it comes to digital transformation, it’s an all-in proposition.

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digitization

Eric S. Pelletier

Pat Spenner

Sarah Schaffer

Global Director of Strategic Workforce Planning at Korn Ferry Hay Group

Director of Strategic Initiatives at CEB

Editorial Director at HZDG

Digitization breaks down barriers in traditional corporations. The safe wall between inside and outside becomes porous. Customer value propositions and employee value propositions are merging. New business models imply new processes, new organizations and new, rare skills. Technology flattens our world and companies must dispense with silos and become less hierarchical to succeed and to attract the right talents. Speed of execution, internal information sharing and learning abilities become competitive advantages in themselves. The ability to manage legacy issues—from IT systems to product and service lines to workforce— will decide the fate of traditional corporations.

The best way to guard against the myriad of disruptors associated with digital transformation today is to be so in tune with your customer that you can anticipate their unarticulated needs. With that insight, leading marketers then assemble the combination of product and service components— some of which may be provided by other parties outside the brand—to simplify whatever job it is the consumer wants done. And in the process, you disrupt your own business before the disruption happens to you.

Three generations— millennials, Gen X and boomers—are working today in corporate America, which means the modern C-suite must foster and support a variety of communications channels, many of which embrace what I’d call the postdigital age. Leading-edge marketing agencies are tracking emerging trends and incubating new ideas democratically (and quickly) using real-time messaging programs like Slack. In my eyes, a team’s effective digital collaboration creates a “halo” effect for all things digital. If junior- and seniorlevel colleagues can brainstorm faster or make a project come together better via digitized internal communication, then their shared confidence in other digital products or service offerings is likely to rise. And when it comes time to evangelize the power of digital to clients, they can speak from a unified position of authenticity and strength.

sevensages

Digital transformation is really about eliminating friction, solving pain points, understanding needs before the customer does and putting the customer in the driver’s seat.

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professional parlance

Nouns in the Wintering of our Discontent By Riley Dugan, Ric Sweeney and James Kellaris

 rdugan1@udayton.edu  ric.sweeney@uc.edu  james.kellaris@uc.edu

evin, a recent graduate of Anywhere University’s sales certificate program, walked into a business development meeting. When a discussion of negotiation techniques began, Kevin eagerly related a recent encounter with a client: “I opened the meet with Jim at the Children’s Hospital by dialoguing about where to summer this year. I wanted to beach-out in Hilton Head, but my wife argued we should holiday in the Caribbean. I championed my preference and positioned that we could attend the charity golf tournament to which we got an invite, and perhaps get a golf ball signatured by Arnold Palmer. I’m actioning my successful negotiation by booking our flights and hotel tonight!”

To the chagrin of those who revere language, it should be evident that Kevin has fallen into a practice that has become popular in some marketing circles, i.e., using nouns as verbs and verbs as nouns—a phenomenon known as “verbing.” Here are some cringe-worthy examples of verbing we have encountered recently, from both students and marketing professionals: “We haven’t languaged that yet.” “Can we action that by next week?” “We are efforting to find a solve for this.” “Let’s focus on the build.” Does verbing make a speaker sound more professional, more intelligent or more competent? On the basis of our observations, the answer seems to depend on whom you ask. To many, it seems goofy. It is business speak at its worst. It cannot be justified as the jargon

of a discipline because it is simply a flagrant violation of linguistic norms and listeners’ expectations. Others perceive it as a colorful and clever use of language, as hip and even impressive. Reactions to verbing may also depend on how egregious the example is. Whereas it is normal to “head” a committee, “shoulder” a burden, or “eye” a dessert, it is jarring to “incent” a salesperson or to “over-choice” customers with too many options. We conducted a small study to see how our own students would react to verbing in a sales presentation. The evidence shows greater acceptance of the practice among marketing students than we found among a sample of working adults. Given divided opinion, should marketing educators ignore, promote

or combat verbing in the classroom? Our answer is simple: Verbing is bad English. It betrays a lack of knowledge about the English language. It shows wanton disregard for non-native English speakers who have bothered to learn the language that facilitates our thinking, learning, communication and mutual understanding. It conveys an unprofessional image to people outside of business and to many inside business. Consider that people in other respected professions have not adopted the odd practice of noun-verb reversal. A surgeon does not “scalpel an incision.” A lawyer does not “affidavit a witness.” But some marketing professionals (and aspiring marketing professionals) appear to go out of their way to speak goofily. There are many reasons to combat verbing in the marketing classroom. Verbing violates the rules of standard English and linguistic norms, which in turn violates listeners’ expectations. When expectations are violated by use of substandard English, educated listeners may draw negative inferences, such as assuming the speaker is uninformed and, by extension, speaking with low credibility. Verbing, like other forms of business speak, is the subject of mockery outside of business circles. Its use undermines the image of marketing among other professions and in educated society. Insistence on proper communication practices is an educational quality issue. We set high standards for students on other dimensions. Why would we encourage or even permit the habitual use of substandard English? By analogy, verbing is to business speak as syllable multiplication is to airline rhetoric (e.g., “Federal law prohibits passengers from utilizing smoking materials in the lavatory facilities,” i.e., “Don’t smoke in the toilet”). It is an attempt to dignify a speaker and her profession using inefficient prose to unintentionally comical effect. In defense of verbing, one may argue that usage dictates meaning—meaning does not dictate usage. The flaw in this argument is that mutations in

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professional parlance

usage are justified only when they bring about improvements in the outcomes language facilitates. Verbing rarely brings about such improvements. Moreover, students should master a language before presuming to improve it. How many practitioners of verbing are aware of the linguistic rules they violate? Our suggestion is straightforward: Don’t verb or use excessive business speak in the marketing classroom, and correct students when they lapse into this practice. As marketing educators, we want our students to succeed. Do we want to indulge students in the delusion that speaking abnormally will help them achieve success? We have an opportunity as marketing educators to inform our

students in a way that distinguishes them from the mindless masses of verbing practitioners. Returning to our salesperson friend Kevin, we are not suggesting that he needs to speak with the erudition of William F. Buckley to communicate effectively in a business setting. However, we do believe that a world where business English is transforming into creative patois is bad business and bad for the image of the marketing profession. Having opinioned our take on the topic, we must now get back to professoring. m

marketingmanagement

He is actively involved with the Fiore Talerico Center for Professional Selling at the University of Dayton. His research concerns personal selling, sales management and issues in sales and marketing education.

Ric Sweeney is an associate professor-educator at the University of Cincinnati’s Lindner College of Business, and is the immediate past chairman of the AMA’s Board of Directors. James

Kellaris is the James S. Womack/ Gemini Corporation Professor of Signage and Visual Marketing at the

Riley Dugan is an assistant professor

University of Cincinnati’s Lindner

of marketing at the University of Dayton.

College of Business. July/August 2016 | marketing news

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marketingmanagement

AT C-LEVEL

A Case for Steve Case’s Third Wave by miChaeL krauSS

 michael.krauss@mkt-strat.com

hould you read The Third Wave: An Entrepreneur’s Vision of the Future, by steve case? a lot of luminaries think you should, and i do, too—except we believe it’s a great book for different reasons. On the back page of the book, you’ll find laudatory quotes from former secretary of state Colin Powell, GE CEO Jeff Immelt, investment genius Warren Buffet and Facebook COO Sheryl Sandberg. They tell you to pick up this book. You will learn about entrepreneurship and the future of innovation and business. They’re right. This is a great book. There are many good reasons to delve into The Third Wave. Understanding the future of the internet is the obvious one, but gaining insights to guide your marketing career is the real reason to read this book. Case is cofounder and CEO of America Online, former chairman of AOL Time Warner and the current chairman and CEO of investment firm Revolution. He articulates a compelling roadmap and describes the “first wave” of the internet (1985 to 1999) when companies such as AOL, IBM, Cisco, Sun and others laid the foundation of the internet. He also discusses the “second wave” of the internet (2000 to 2015): the creation of an application economy and mobile revolution that includes the rise of Google, Amazon, Twitter and Facebook. In 2016, Case explains, we are entering a “third wave” of the internet, where “ubiquitous connectivity will allow entrepreneurs to transform major, realworld sectors.” In this next wave, says Case, “The internet will be integrated into every part of our lives—how we

learn, how we heal, how we manage our finances, how we get around, how we work, even what we eat. As the Third Wave gains momentum, every industry leader in every economic sector is at risk of being disrupted.” Today’s marketers know the stories of Uber and Airbnb—companies that have few physical assets, yet are on their way to becoming the world’s largest taxi and hospitality enterprises thanks to digital technology and the internet. A book on digital disruption is interesting, but not unique. Case is unquestionably a successful internet entrepreneur and venture investor. Creating AOL and selling the company to Time Warner—a compelling tale Case retells in the book—certainly qualifies him for a leading position in the pantheon of business leaders and entrepreneurial success stories.

The foreword to The Third Wave is penned by Walter Isaacson, the CEO of the Aspen Institute and author of The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution and of biographies of Steve Jobs, Albert Einstein, Benjamin Franklin and Henry Kissinger (all great books to read in their own right). Case is friends with many of our era’s most influential technology and business luminaries. He is one of the elite. Yet his story points out that he is really just like each of us. He emerges from humble beginnings. His accomplishments make the book relevant to us as marketers, but the real power of this book is this: Any of us could be Steve Case. Yes, Steve Case is smart. Yes, he is entrepreneurial. He had sales skills and marketing skills, and he is driven. And his book paints a roadmap for any of us who aspire to be the next successful marketerturned-entrepreneur. Case grew up in Hawaii. At 10 years old, he and his older brother Dan, then 11, established Case Enterprises. “We hoped that no one would notice that we were too young to drive,” jokes Case. “We billed ourselves as an international mailorder company. At one point we became the exclusive distributor for a Swiss watchmaker, though I can’t recall actually selling any watches. Most of our efforts involved knocking on doors and trying to sell greeting cards to our neighbors. Most of our customers were buying what we were selling just to be nice.” Case went on to study at Williams College where he continued his entrepreneurial ways. “At one point my

Yes, Steve Case is smart. Yes, he is entrepreneurial. He had sales skills and marketing skills, and he is driven. And his book paints a roadmap for any of us who aspire to be the next successful marketer-turned-entrepreneur. MICHAEL KRAUSS

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advisor pulled me aside and suggested I was spending too much time on my entrepreneurial efforts and would regret it,” Case adds. “‘Look at the educational opportunities in front of you,’ I remember him saying. ‘You should immerse yourself in them. Your business

pursuits are distracting, and frankly, they are ill-suited for campus life,’” Case recounts in his book. Case discovered groundbreaking ideas in the Williams College library. Case stumbled onto futurist Alvin Toffler’s book, also titled The Third Wave.

“It completely transformed the way I thought about the world— and what I imagined for its future,” Case says. “Toffler wrote about a coming global transformation. In his telling, the ‘first wave’ of humanity was the settled agricultural society that was dominant for thousands of years. The ‘second wave’ was the postIndustrial Revolution world, where mass production and distribution transformed how people lived. … Toffler’s ‘third wave’ was the information age: an electronic global village, where people could access an endless array of services and information, participate in an interactive world and build a community based not on geography but on common interests,” Case says. “He predicted the world as we know it today. … I wanted to be part of making it happen.” Case graduated from Williams and took a marketing job at Procter & Gamble. After two years in brand management he landed a role as director of new pizza development for Pizza Hut. Case then moved into technology, and the rest is history. His book describes how hard work, good luck and sales and marketing savvy enabled the success of AOL. There are vignettes about how the name “America Online” versus “Online America” was chosen. There’s a description of how the memorable phrase, “You’ve got mail,” and the voiceover artist who read those famous words were selected. Many of us built Kool-Aid stands and sold greeting cards door to door as kids. But Case took it a step further. He identified groundbreaking ideas from a thought leader, Alvin Toffler. He picked up sales and marketing skills at P&G and Pizza Hut, and then he set out on his entrepreneurial quest. That’s the reason you should read The Third Wave by Steve Case. Even if you don’t get as far or as rich as Steve Case, The Third Wave describes the journey as exciting, challenging and a lot of fun. m miChaeL krauSS is president of Market Strategy Group based in Chicago. July/augusT 2016 | MARKETInG nEWS

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Schultz on Marketing Strategy

Linear Fallout By Don E. Schultz

 dschultz@northwestern.edu

estern civilizations have always been about lines. Think of the Roman legions whose basic fighting structure was a box-shaped phalanx. We still line up for school activities. Many, if not most, of our organizational structures are based on lines and boxes. We read in a linear fashion, one word after another, one paragraph after another, one page after another. No wonder much of our marketing and communication planning and implementation is focused on and driven by linear concepts and approaches.

Compare that to the Eastern cultures where eating is commonly a group event, conducted on round tables. In the East, there are few hard edges. The most common response to a difficult question is, “It depends …” Even Native American discussions, conferences and powwows are conducted while everyone is in a circle. Linearity seems to be unique to Western culture. Linearity has pervaded marketing philosophy. The most dominant marketing concepts have developed out of linear processes used to structure marketing plans, advertising campaigns and even media programs. All are planned, developed and implemented via linear structures. Just look at our planning process: We start with a situation analysis, then move on to marketing goals, then linearly flesh out those with advertising programs, followed by linear media plans. All linear. All one step followed by another. At the end of the marketing process, unless we can avoid it, we try to measure the results, again with linear models. All those seem to assume

consumers move in lock-step through the marketing systems we have developed. For example, we use funnels to guide and direct our linear programs and control consumer behaviors. We put prospects at the top, apply our marketing and communication magic and then see them come out as enthusiastic brand supporters at the other end. We’re always in control, and prospects are always pliable. That’s the way it has always been, and that’s the way it’s going to be, or at least that’s the way we think it should be. I began musing on this linear marketing process several months ago, wondering how it started, how it developed and whether or not it makes any sense in today’s interactive, multilayered, circuitous, increasingly social media-dominated marketplace, where one post can start a landslide of public discussion and change of opinion. It seems much of this dominant linear marketing and advertising thinking started in the early 1960s with the stilldominant concept of the hierarchy of effects as proposed by Robert Lavidge and Gary Steiner.

The hierarchy-of-effects approach, seemingly the mother of all linear marketing processes, was hypothesized by two Chicago-based marketing research gurus. They speculated that the basic model for marketing and advertising practice followed a linear process that started with awareness and led to consumer knowledge from which preference was developed. Finally, conviction completed the process. At that point, it was assumed consumers were ready to buy. Lavidge and Steiner argued that while their process didn’t lead directly to sales, as it was only a communication model, the end result came out the same. The key point was that marketing communication activities led prospects through the process. Therefore, the more marketing messages delivered, the faster the prospect would move to “conviction” and likely purchase on the next occasion. The model was all outbound and all controlled by the marketing organization, which made it particularly attractive to marketing managers focused on growing their brands and justifying their budgets and spending. While the hierarchy-of-effects approach was a useful methodology for marketers challenged to grow sales and profits in the last century, it is not so much the model itself that challenges marketers today as it is the marketing and media fallout it has created. For example, the concept of “share of voice” grew directly out of hierarchy of effects thinking and planning. If marketing communications directly drove prospects through the process, and, if I, as a marketer, outspent or out-communicated my competitor, I would move more prospects more quickly in the direction favoring my brand. Likewise, the hierarchy-of-effects model provided an easy and convenient way to track and measure the success of any marketing communication program. The marketing manager could watch prospects move from knowledge to preference, thus justifying the communication investments. Another fallout of the hierarchy-ofeffects model has been the reach and frequency approach, which has developed in media planning. Reach is simply how many prospects or consumers were

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exposed to the marketing messaging. The question then became, how much frequency was required to generate movement through the hierarchy-ofeffects process? Lavidge and Steiner never really addressed that issue, so it was done by someone else. Herbert Krugman, research director at General Electric in 1963, speculated that “television worked through three exposures.” In the first, the consumer said, “What is it?” The reaction to the second exposure was, “I understand it,” and the third exposure resulted in, “I don’t need to see it again,” or audience saturation. Media experts lifted this approach and applied it to the hierarchy-of-effects concept so that all media planning is based on this optimization of reach at three exposures. That is considered the base for all media planning. There is no real support for the concept, but every media optimization model around the world uses the “three exposures” as its optimization base. But, what about today? New media forms, new technologies, new mobile forms of communication; new everything—except the old linear models which support them. No wonder we have so much difficulty getting agreement on how we should

communicate, at what level and what effect to assume or measure. The greatest problem with these linear models and their fallout is that this is not the way the world works today. Prospects aren’t malleable and pliable receptors of marketing and communication messages, no matter how they’re delivered. They simply have access to too much external information. The traditional bragand-boast approaches delivered to undifferentiated audiences are simply no longer relevant. Dressing up these messages and incentives in “engagement-stimulating activities,” such as price-reducing coupons and freebies, doesn’t seem to work either. So, what to do? Clearly, we can’t toss out all the historical research that has been done and start over. There are still too many customers and prospects who use and believe in traditional advertising and marketing communication to discard what we know works. Nor does it seem possible or practical to accept all the new concepts and approaches to interactivity. There just isn’t enough evidence of a hugely committed social media audience (with money) to keep a business afloat. We clearly need some new concepts, approaches and thinking to get over this transition hump.

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First, most of the hierarchy-of-effects models and their kith and kin treat all customers and prospects alike, assuming they all go through the process at the same rate with the same level of interest and acceptance. What if we simply created some groups of prospective customers based on their media consumption? Then, we treat them as individual audiences, moving them through the various stages based on the media forms they use. Same concept, different views on how to use it. When it comes to optimization, what if we flipped the model around? Not how to optimize media distribution, but what if we found ways to optimize consumer income flows that return to the marketing organization? Same principle, different view of the value. Or, what if we scrapped the entire idea of a linear model? What if we accepted the increasingly recognized idea that consumers start, stop and reverse themselves, try new approaches, go out of the market for a while and even get to the “altar of purchase” and then simply walk away? We’re quickly learning that customer journeys aren’t linear or predictable; they’re more like a bowl of spaghetti that is all tangled up, messy and not very coherent. What that seems to require is starting with the customer and working back to the product and the problem to be solved so we can develop some type of understanding. In the classroom I use Legos and Tinker Toys to illustrate this concept. I ask students to build a consumer behavior model from the toys. They quickly learn that Legos only go together in one way and that is driven by the linear concept on which they are based. Tinker Toys, however, can be put together in infinite patterns based on the ingenuity of the student. They quickly grasp the concept. Maybe that’s what marketers need to do as well. m Don E. Schultz is a professor (emeritus-in-service) of integrated marketing communications at Northwestern University. July/August 2016 | marketing news

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shopper marketing

You’ve Heard of the CX. How About the MX? By Lawrence A. Crosby

 lawrence.a.crosby@gmail.com

grew up a baby boomer in the Midwest. My hometown of approximately 35,000 people had a vibrant Main Street, which housed regional retailers like Marshall Fields and many family-owned specialty stores. Fifty-six years ago an outdoor mall sprang up off the interstate, followed 16 years later by an enclosed mall anchored by Montgomery Ward, J.W. Knapp (replaced by J.C. Penny) and Elder-Beerman. Like many other Midwest towns, the central business district in mine subsequently cratered. For the next few decades, the enclosed mall became a de facto community center: a place to shop, eat, hang out (perhaps you’ve heard the term “mallrats”), avoid the winter cold and get a bit of exercise walking around. But that was then and this is now. Like traditional fullprice malls across the country, it continues to struggle. According to the International Council of Shopping Centers, there are 115,429 shopping centers in the U.S. The ICSC classifies centers into 10 types with the bulk (96%) being strip/convenience or neighborhood centers. The enclosed mall in my hometown would be considered a regional mall. There are 597 of those and 625 superregional malls. Having recently visited a number of these traditional malls, I am struck by the same sad story. Many are becoming ghost towns with low occupancy, light traffic, skeletal staffs and declining sales. They are so cookie-cutter (the same architecture, brands and dated feel) that I almost can’t tell where I am. Experts forecast that as many as 50% of these malls will fail in the next 20 years.

Their fortunes are very much tied to their anchor department stores, which have become uneconomical. Once the anchors leave, you have a so-called “dead mall.” Many factors have contributed to the decline of the traditional mall. Notable among these was the recession that swelled the ranks of value shoppers and drove them toward big box-dominated power centers (2,240 in number) and toward outlet malls (365 in number). Under financial pressure, department store retailers developed discount concepts (e.g., Nordstrom Rack, Saks OFF 5th, etc.) and located those new stores elsewhere. The simultaneous growth of online channels (about 8% of total retail sales) has taken another

chunk of the traditional mall’s business. Some malls were also hammered by the declining fortunes of their trade areas and many have simply failed to jive with the tastes of the millennial generation. While some of these factors were largely uncontrollable, traditional malls have sown the seeds of their own demise by failing to reinvest in the shopper experience. Perhaps it was just too easy to sit back and milk the rents, but it seems unrealistic to expect that any retail concept would continue to prosper for more than half a century. Sure, some have replaced their former department store anchors with discount retailers such as T.J. Maxx, Ross and Marshalls to help attract value shoppers. In an effort to bolster the shopping experience, others offered events, such as wine tastings and book signings, provided common-area seating or added food and entertainment options. I suspect these malls have fared somewhat better. But as a group, regional malls have failed to transform themselves in a significant way to appeal to today’s shopper. In contrast are lifestyle malls (466 in number), which the ICSC describes as “upscale national-chain specialty stores with dining and entertainment in an outdoor setting.” As a group, these malls are doing quite well, not just because of their clientele, but because of their willingness to constantly innovate. Examples include Victoria Gardens in Rancho Cucamonga, California; Fashion Island in Newport Beach, California; and Scottsdale, Arizona’s Fashion Square. These and similar centers are all about the shopper experience with modern architecture, unique stores and restaurants, music, fountains and sculptures, gardens and playgrounds, luxury movie theaters and other amenities. Customers are willing to visit and pay near full price at these lifestyle malls due to the value of the total experience, tangible and intangible. Lifestyle malls also have a certain appeal to millennials and their desire to integrate work, play, housing, dining and shopping within a narrow radius. A number of these malls are surrounded by upscale condominium and apartment

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complexes, resort hotels, glass office buildings and maybe even a golf course (e.g., Kierland Commons in Scottsdale). Traditional malls have found themselves caught between upscale and discount alternatives. Adding to that challenge, we also have the expansive growth of outlet centers. Originating in the 1930s, factory outlets were adjacent to apparel and shoe factories and sold excess production at low prices. The concept morphed into outlet centers and malls composed of a mix of brandowned stores selling their products directly to the public and retailers selling excess inventory and clearance items. Outlet centers have historically been no-frills and criticized for offering inferior goods. But with the advent of premium outlet malls, that characterization is rapidly changing. Examples include the Woodbury Common Premium Outlets outside of New York City and the Desert Hills Premium Outlets east of Los Angeles. While still seeking the value-oriented “power shopper,” premium outlets are replete with luxury brand stores (e.g., Brioni, Canali, Jimmy Choo, Robert Graham, etc.), selling quality/in-season merchandise specifically produced for the outlet malls, at discount prices, in a comfortable and aesthetically pleasing outdoor setting. While outlet malls have historically been found in rural locations outside major cities or attractions (where rent is low), that may be changing, too. For example, the Las Vegas Premium Outlets are within walking distance of the Freemont Street Experience. The courting of foreign tourists— specifically Chinese tourists—to outlet malls is not unique to the U.S. It is estimated that 170 million Chinese tourists will travel overseas in 2016 and spend more than $160 billion. Consequently, premium outlet malls are springing up around the world and offering a variety of services to attract the overseas visitor, not just from China, but that is a key target. This continues a trend that began about 20 years ago with the growth of the Chinese economy. Hong Kong quickly became a top destination for affluent Chinese with discretionary

income seeking to buy name brands not available in their country. More recently, despite a slowing Chinese economy and expanded retail options in mainland cities, the diaspora of the Chinese shopper continues to Japan, the U.S., and Europe. The Japanese have a word for the Chinese shopper: “bakugai,” which means “explosive buying.” To meet that demand, the Shisui Premium Outlets offer regular bus service to and from Narita, Japan, international cuisine in its food court, a multilingual information desk and floor guides, foreign exchange, a tax- and duty-free office and monitors showing airport arrivals and departures. In Europe, luxury outlet developer McArthurGlen (22 outlets) offers similar concierge services and special promotions during Chinese New Year, which explains in part why the Chinese account for 20% of its tax-free purchases. What do these trends mean for regional malls like the one in my hometown, which is not an international tourist destination? Shopping center industry experts contend that the best hope for the traditional mall is to embrace the omni-channel trend. Current and speculative ideas include: • Serve as locations for online retailers going bricks-and-mortar (e.g., Amazon, eBay, Bonobos, BaubleBar, etc.). • Become delivery and return sites for e-commerce.

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• Shrink mall stores to showroom size, holding limited inventory, allowing customers to actually examine and touch the product and obtain advice, but with transactions completed online. • Double-down on personal services that require human touch and faceto-face interaction. These ideas are still largely incremental. I’m unconvinced that the regional mall is better-suited for these purposes than lifestyle, power and outlet centers. In order to survive, I would suggest that traditional malls need to be entirely reinvented, making heavy use of technology to transform the mall experience. This may involve some yet undiscovered combination of mobility, sensors and beacons, 3-D printing, holography, virtual reality, data-driven individualized interaction and even artificial intelligence and robotics. The bigger question is who is going to make the investment to support the transformation: individual malls, property management firms or tenants? That may prove to be a tougher nut to crack. m Lawrence A. Crosby , Ph.D. is the retired dean of the Drucker School of Management, a regular AMA columnist since 2000, and currently president of L.A. Crosby & Associates, Inc. July/August 2016 | marketing news

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STRATEGIC COMMUNICATION

Signature Stories by david aaker

 daaker@prophet.com

tories are a hot topic in marketing because they have been shown to be superior to facts in getting attention, being remembered, changing opinions, stimulating social activity, developing emotion and, curiously, communicating facts. many firms have added journalists, editors and filmmakers to their staffs to create or find meaningful stories and present them in a compelling way. Stories often support tactical communication objectives. But there is also a strategic role for stories that is developed in an article by Jennifer Aaker and me entitled, “What Are Your Signature Stories?” in the spring 2016 issue of California Management Review. We call such stories “signature stories” because they represent some form of strategic statement about a mission, values, the brand, customer relationship or strategic intent. Signature stories do this much better than a recitation of facts, which usually ends up sounding not only boring but similar to a host of other firms. Consider L.L. Bean, a brand aiming to communicate its innovation culture, passion for the outdoors, commitment to quality, concern for the customer and the functional benefits of the Maine Hunting Shoe. Stating such facts is unlikely to create interest, credibility or even a connection to L.L. Bean. In contrast, consider the following story: Leon L. Bean, an avid outdoorsman, returned from a hunting trip in 1912 disgruntled because of his cold, wet feet. With little resources but a lot of motivation and ingenuity, he invented a new boot by stitching lightweight leather tops to waterproof rubber bottoms. The boots worked so

well he offered them for sale via mail order as the Maine Hunting Shoe, using lists of nonresident Maine hunting license holders. Unfortunately, most of the first 100 pairs sold had a stitching problem and leaked. Bean faced a defining moment. His response? He refunded the customers’ money, even though it nearly broke him, and fixed the manufacturing process so that future boots were watertight. This story communicates the L.L. Bean brand far better than any presentation of facts. A signature story is an intriguing, authentic, involving narrative (as opposed to a stand-alone set of facts or features) with a strategic message that enables growth by clarifying or enhancing the brand, the customer relationship, the organization or the business strategy. It is a strategic asset that can be leveraged through time, providing inspiration and direction both internally and externally. A signature story needs to: • Be intriguing—some combination of thought-provoking, novel, provocative, interesting, informative, newsworthy or entertaining to the audience. • Be authentic—the audience cannot perceive the story to be phony,

contrived or a transparent selling effort. Further, there should be substance behind the story and its message in the form of programs, policies or transparency that support it. • Be involving—the audience member should be drawn into the story, which can precipitate a cognitive, emotional or behavioral response. • Be strategic—have a message linked to the brand that enables growth by clarifying or enhancing the brand, the customer relationship, the organization or the business strategy. A signature story is an asset with enduring relevance and capacity to inspire and provide direction over a long period of time. As they get retold, signature stories gain authenticity, traction and influence. The principle targets for signature stories are employees and existing and potential customers. Signature stories can provide employees a source of inspiration and a cornerstone for organizational culture and values. The L. L. Bean story supports a higher purpose around innovation, the passion for the outdoors, quality and the customer. Millennials, in particular, are attracted to firms that are aiming for more than sales and profits. A signature story can help with making that purpose authentic and clear. Customers are also a valuable target because there is a segment that will find a brand’s values, customer relationship and strategy important to them as they develop loyalties to brands and firms. Advancing the strategic position of the brand and organization in the eyes of this audience is challenging because of message clutter, media dynamics, growing customer ownership of context and the complexity of social media. Signature stories can be an answer, providing not only breakthrough visibility, but communicating the basic essence of a brand and organization. To determine what story content would be useful, it is important to understand who you are, what you do and where you are going. Look to your brand vision and value proposition, drivers of customer

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strategic communication

relationships, your organizational culture and values, as well as your business strategy. What are the priorities? What perceptions and attitudes need to be created, reinforced or changed to allow the business strategy to succeed? To find or create signature stories, look broadly for story heroes. Stories can be motivated by a variety of heroes such as customers, employees, programs, a founder, an offering, a business revitalization strategy or a future business revitalization strategy. The customer as hero can be effective because there is no “my brand or product is better than yours” connotation, and the customer story is likely to be closely linked to either the organizational values or the brand’s value proposition. LinkedIn has a series of professionally created, one-minute stories about “creating you own success” that involve leveraging LinkedIn. Dr. Chavez told about his dream of

getting pets off of processed foods using LinkedIn to share his big idea. Jenni was laid off during the financial meltdown and several months of intense networking led to a marketing positon and, ultimately, supported her decision to be on her own. The employee as hero can be a source of a strong and memorable signature story because employees are on the front lines. Zappos.com, the online shoe store, has a set of signature stories about its 10 core values, one of which is to deliver “wow” customer service. One such story involves a Zappos.com call center employee who, at 3 a.m., received a call from a customer who could not find an open pizza store. Instead of gently turning the customer away, the employee actually found a pizza store open and arranged a delivery. The business revitalization story can clarify and motivate a new strategy and inspire employees and

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customers. Consider Zhang Ruimin, who became the CEO of a troubled Chinese appliance manufacturer, Haier, in 1982. Early in his tenure, he used a sledgehammer to destroy 72 defective appliances. The story and its symbol, the sledgehammer, served to define a new strategy and culture that ultimately led to Haier becoming a global leader. Not all stories are worth elevating to signature status. There needs to be an evaluation process to identify the strength and promise of candidate stories. When candidate stories emerge, make sure that they are not just a list of facts (or features) but rather a narrative that appears intriguing, is perceived as authentic, engenders involvement and has a strategic message. m David Aaker is vice chairman of San Francisco-based marketing consultancy Prophet and author of Aaker on Branding: 20 Principles That Drive Success. July/August 2016 | marketing news

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international trade

New Rules of Engagement: Understanding TTIP and TTP By Michael R. Czinkota and Valbona Zeneli

 czinkotm@georgetown.edu  zalbona.zeneli@marshallcenter.org

hen the signing of the Havana Charter in 1948 initiated the International Trade Organization (later named the World Trade Organization, or WTO), the die was cast for an international negotiation forum and process. Centre William Rappard became secretariat for one of the most successful international institutions in the world. The edifice in Geneva remained tightly targeted on trade and investment zones, and achieved real global change, particularly in its tariff reduction negotiations. These lower tariffs led to lower prices, better products and more choice. They have made the organization, in spite of its government constituency, the pre-eminent glorious knight battling on behalf of consumers.

All of that began to change in the past two decades. Success attracted allies. The number of WTO members rose from 27 nations in 1948, to 123 in 1994 to 162 today. For decisions, the WTO still uses a consensus-based system, which means that every member gets to vote and that all votes have to be unanimous. Agreement and progress slowed to a glacial pace. The lubricating oil of past U.S. leadership was diverted to the heat of military preoccupations in the Middle East. Pervasive terror threats encouraged politicians to focus on the high intensity and visibility of the politics of national security and war, as opposed to the low-intensity politics of trade and investment. Progress also slowed due to

shifts in the center of trade gravity and challenges in current markets by rapidly growing competitors. When current negotiations were initiated in 2001, they were started as the Doha Round, where, as was tradition, “all play for everything.” A special focus on developing countries was promised. Despite major enthusiasm and public support, 16 years later the industries targeted in the initial focus—primarily agriculture, services and intellectual property rights—remain uncovered. The global recession intensified the tendency to ignore international economic issues as attention shifted to domestic job creation and protection of domestic credit markets. In consequence,

liberalization has taken a new approach outside the WTO. A do-it-yourself approach emerged in the past two decades, defined by mega-regional agreements and preferential plurilateral trade negotiations, handmade for a limited number of players. The Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are key to this development. TPP is a freetrade agreement covering 12 countries from North and South America to the Pacific region, and TTIP represents a free-trade agreement between the U.S. and the European Union (EU). The TPP negotiations were successfully concluded in October 2015 after four years of intensive talks. Legislative ratification will be the next step. TTIP has been under negotiation since June 2013, aiming for completion by the end of 2016, making use of the transition time for administrations and Congress. The combined trans-Pacific and trans-Atlantic space covered by these agreements encompasses 60% of the world economy and 22% of its population, according to data compiled by the International Monetary Fund. The two agreements cover similarly sized populations, but the economies differ in terms of per-capita income and living standards. The TPP economies represent 27.3% of world GDP and 10.7% of the world’s population. The TTIP economies represent 33% of world GDP and 11.2% of the population. The average income per capita for the 12 TPP countries is $30,697, while the TTIP average income is $47,607. Beyond the differences in membership, however, there are also notable differences in the scope and goals of the agreements themselves. First, TPP is focused on opening markets and eliminating tariff barriers on trade and investment, whereas TTIP is mainly focused on tackling costly nontariff barriers and strengthening foreign direct investment (FDI) rules. Since 2000, U.S. investment in the European economic area has made up 55% of the total U.S. FDI flow. By contrast, U.S. capital flow into the TPP economies amounts to 21%.

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international trade

Similarly, the European Union’s FDI in the U.S. comes to 61%, in comparison to 24% by the TPP. Trans-Atlantic tariffs, on average, are much lower than those of the transPacific with an average of only 4% trade tariffs, apart from sectors such as textiles, agriculture and automotive. TTIP is more about investments than free trade, with both parties extensively embedded in each other’s economies. Such a relationship has produced more income, created more jobs and generated more wealth than trade alone. In fact, according to a PricewaterhouseCoopers report on the economic impact of U.S. subsidiaries, such investment directly supports nearly 8.3 million jobs. TTIP negotiations also aim to improve regulatory convergence, reducing nontariff barriers and opening up the service flow across the Atlantic. TTIP is also more ambitious in comparison to TPP. In addition to the financial and economic benefits, TTIP will have a larger geostrategic impact, because it reinforces the strong ties that exist between Europe and the U.S. TTIP is a natural Western partnership with mature, well-developed and consolidated markets on the one hand and a strong defense relationship based on the North Atlantic Treaty Organization (NATO) on the other— both components are missing in Asia.

However, this might change with the tumultuous exit of Britain from the EU. Economic realities emphasize TTIP as well. The trans-Atlantic economies are the innovation powerhouse of the global economy and a crucial element in future growth and balance. The U.S. is the largest global spender on research and development (R&D), strengthening its role as the dominant force in global research across numerous industries. It spent $465 billion on R&D in 2014, almost 3% of GDP and 32% of global research and development spending. The EU spends, on average, little more than 2% of its GDP (or $283 billion) on R&D, about 20% of the world’s total. The U.S. and the EU are by far the two largest trading blocs in history. To remove unnecessary obstacles to the economic activities of these two economies is good. Given the size and scope of the trans-Atlantic economy, standards negotiated by the U.S. and the EU could become a leading benchmark for future global rules and slow down the acceptance of competing standards. The balance of power in the global economy might also be affected. The deal reached at the UN Climate Summit to reduce global greenhouse gas emissions showed that the EU and the U.S. possess the political will and the resources to set the standards. In fact, TTIP’s sustainable energy framework

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chapter would offer both political and economic impetus to both sides of the Atlantic. A separate forum could then support a successful TTIP. TTIP and TPP are strategically interlinked with each other. Both agreements are important in terms of how the various partners, including the pivot of the U.S., jointly relate to rising powers and whether the West still has the energy and dedication to set standards for the international economic order. Both TTIP and TPP take on an increasingly strategic importance in light of the continuously growing role of China and other emerging markets in the global economy. Achieving progress in the simplification of trade and investment relations via the two negotiated agreements would push the WTO to expand its useful life. TPP’s conclusion is also important for the EU. Higher growth rates in the U.S. will help the European economy through increased exports, but TPP also reinforces the geopolitical reality of rebalancing Asia. All of this represents more pressure to Europe to conclude TTIP. Achieving progress in the simplification of trade and investment relations is important to global prosperity. The approaches taken by TPP and TTIP may indicate the future of trade negotiations: tightly focused talks between selected participants aiming for improvements in fields of comparative advantage within a clearly defined time frame. Operating within such framework constraints may also hold the key to the future of the WTO. m Michael Czinkota works at Georgetown University and is a former deputy assistant secretary of commerce in the United States Department of Commerce. Valbona Zeneli is a professor at the George C. Marshall European Center for Security Studies. The views presented are those of the authors and do not necessarily represent views and opinions of the Department of Defense or the George C. Marshall European Center for Security Studies. July/August 2016 | marketing news

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LITTLE

Island, BIG e c i Vo

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after economic collapse and a crippling volcanic eruption, a social tsunami cleaned the slate for iceland and rebranded the country as the go-to adventure destination

BY MiCHelle MaRKelZ

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V r o n i M s ’ d n a l e c I ” “ Why . m e l b o r P r o j a M Is a

g c n i y f i r r e t e h “T d n a a v a l f o n o r d l cau s a h t a h t g n i lightn i a r u o o t s o a h c t h g brou g L L I T S s ’ t i d an These were the headlines that brought iceland into the international consciousness in the spring of 2010. although the eruption of eyjafjallajökull was less explosive than other notable eruptions such as Mount st. Helens in 1980, the ash it spewed eight miles into the sky complicated life for more than the 800 icelanders who evacuated its perimeter.

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o n a c l r Vo s t s a C o .” n a c “ Vol

n a e p o r u E r e v O d clou ” . y m o Econ “In Iceland, they have a phrase, ‘Keen is the eye of the guest.’ That means you don’t see what you walk past every day. It was a very enlightened move for Iceland to appoint a partner from overseas, but they saw the benefit of a fresh perspective,” says George Bryant, strategy partner at the Brooklyn Brothers. The perspective that Brooklyn Brothers brought was to embrace nontraditional strategy. “Traditionally, we recognize tourism as some of the poorest marketing,” says Bryant. “It often feels like propaganda: ‘Come here; the sky is always blue.’” Compounded by the fact that Iceland’s budget was small compared to its competitors, such as the U.S. and Scandinavia, Bryant says the marketing plan had to defy conventional thinking. “We started with a fact,” Bryant says. A survey of tourists revealed that 80% of visitors to Iceland would recommend it as a destination, making it the most recommended of any European destination. Realizing the power of word of mouth, the agency turned its aim on fans of Iceland to spread the island’s message. Why not let those inspired by Iceland share their stories? “We look at ‘Inspired by Iceland’ as an unfolding story, and each year is a chapter,” Bryant says of the testimonial campaign that galvanized Iceland’s rebranding. Although 2010 marked the first chapter of Iceland’s renewed tourism campaign, the rising action of its story began two years earlier.

… s t r o p r air ” . g n o r t s g n i L go Air traffic came to a standstill at the crossroads of Europe and North America for seven days. Media told stories of floods, air pollution, lightning storms and possible climate disruption. Rather than the glossy images of cavernous glaciers, mossy fjords or the Aurora Borealis, would-be tourists saw towers of ash and bursts of lava. Just more than a month out from the tourism season, the island nation’s summer could go one of two ways: The international coverage could either pique the interest of travelers far and wide, or the tourism industry could take a serious hit. Within a week of the eruption, the country’s tourism organization, Promote Iceland, put out a request for proposal. The challenge was twofold: reverse the negative perception surrounding Iceland as a tourist destination for the summer and get people to book vacations immediately. The chosen comrade in arms: London-based global branding agency the Brooklyn Brothers.

eConoMiC CollaPse anD MaRKeTinG ConsoliDaTion

Prior to 2008, says Hlynur Guðjónsson, Iceland’s counsel general and trade commissioner for North America, “What we were lacking was some vehicle to give us awareness.” Then, in the span of seven weeks from October 4, 2008, more than 600 articles were written about the island—equivalent to roughly two decades’ worth of content, Guðjónsson estimates. The subject: the international financial crisis. When Iceland’s

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“Inspired by Iceland” gave tourists a platform to share their favorite Icelandic experiences.

three largest banks collapsed and its currency, the krona, depreciated by more than 30%, it provided a vehicle, unlikely or not. “After the downturn, suddenly Iceland became a value destination,” Guðjónsson says. With multiple marketing offices abroad, however, Iceland’s tourism messaging was mixed among markets, and 2009 saw a 1.6% decrease in foreign visitors—the first drop since 2002—followed by another decrease in 2010, that time 1.1%. The government of Iceland conducted an audit of its international tourism marketing operations in 2008 and deemed them too disjointed. The Trade Council of Iceland, Invest in Iceland and the marketing efforts of the Icelandic Tourist Board were consolidated under one organization, Promote Iceland. More than 100 companies gathered with the government of Iceland and the city of Reykjavik to form a public-private marketing initiative with the unified goals of increasing off-season tourism, getting tourists to travel farther in Iceland and stay longer. The design target for these goals would be called “the enlightened tourist,” says Inga Hlín Pálsdóttir, director of tourism and creative industries at Promote Iceland. “We identify that person to have education and income above average. It’s a person who will travel independently, likes to book on her own—a person who has an interest in culture, is open to taking a vacation out of season, seeks adventure and is ready to share the stories of the country.” Perhaps the most important trait is the last. “According to Google, 92% of tourists use online tools when choosing their next destinations, 62% of whom use a search engine as their primary source of inspiration,” says José Filipe Torres, CEO of nation- and place-branding agency Bloom Consulting. “The search is the consequence. The cause can be social media, a conversion or something published offline.”

22 Million Testimonials

Iceland’s social push began with a national call for chatter. On June 3, 2010, schools, parliament and shops closed as President Ólafur Ragnar Grímsson kicked off “Iceland Hour” with a request for the people of Iceland and its friends abroad to share a story of positivity about the country. The address was broadcast on live TV and live-streamed via the internet. Participants could compose their own stories and share them through their own social channels, or they could submit them through the Inspired by Iceland site and use prepackaged content, such as Icelandic singer Emiliana Torrini’s music video for “Jungle Drum,” featuring a montage of people dancing in tourist destinations across the country. Within one week, they answered with 1.5 million stories.

“It created a buoyancy in Iceland,” Bryant says. At the beginning of the initiative, more than 80% of the hits “Iceland” turned up on Google were negative stories of natural disaster and financial distress. Ten weeks after Iceland Hour, close to 22 million stories of positivity—from riding Icelandic horses to welcoming locals to “magic” landscapes—had been shared via image, video, post and comment on Facebook, Twitter, Vimeo and YouTube. On the Inspired by Iceland website, visitors could see an interactive map of Iceland with pins dropped around the island geolocating each story. Even celebrities contributed. Submissions from Bjork and Eric Clapton were filmed and circulated through the site and social channels while Yoko Ono endorsed the campaign from her blog and Twitter account. “The digital country is the new platform that very few countries are looking at with the care, focus and investment they should,” says Torres. “Whatever you find on the first page of a Google search is the ultimate measurement of the first impression someone may have about your country. The country with the best brand—not the biggest budget— and the best positioning wins.” According to Bloom’s digital country index, which measures brand appeal, Iceland ranks 29 out of the top 50 countries in the world for tourism, ahead of the U.K., Switzerland and Argentina, among others.

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ant w t s u j t ’ “ They don d n a l y e n s i to go to D g. u m e h t t and ge to y r o t s a They want hey want e. T take hom to live it.”

The summer of 2011 proved the reach of the campaign; the island saw 565,600 foreign tourists, 77,000 more than the previous year and equivalent to a 16.6% increase. “It became the most successful summer in Iceland’s history,” Bryant says. The campaign grew as well, focusing on video aimed at promoting Iceland as a year-round destination.

Though strong summers were beneficial for the tourism industry, Eyjafjallajökull proved the vulnerability of singleseason reliance. “The tourism industry is very sensitive to any issue, like the eruption of 2010,” Pálsdóttir says. “When Promote Iceland took over, we put a lot of effort into increasing awareness of the culture and the people, and that’s why we’ve been getting Icelanders involved to tell the stories.” Fans of Iceland had proven with their testimonials that they were not just leisure-seekers. “They’re people who love stories and experiences,” Bryant says. “They don’t just want to go to Disneyland and get the mug. They want a story to take home. They want to live it.” Iceland invited these enlightened visitors to tour the country like an islander. They called the campaign “Honorary Icelander.” Upon deplaning, tourists arriving in the winter of 2011 received an official Icelandic passport and became honorary citizens. They were taken in by more than 1,000 Icelanders, including the president and his wife. They were brought into recording studios for live musical performances. They picked wild mussels with Icelandic families. They relaxed in hot tubs alongside locals. “The president said, ‘Come to my house, and

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mazing a n a s a h “Iceland etic . h t s e a n a i cues Scandinav n g i s e d g zin It has ama it also t u b , e t s and ta elf too s t i e k a t and t i doesn’ t w a ’s e r . The seriously self d n a r o m a hu ery v a ’s t I . n o deprecati ich is h w , y r t n u humble co elcoming.” ow why it ’s s I’ll make you pancakes and we’ll go on a nature walk,’” Bryant says. A British Academy of Film and Television Arts (BAFTA) award-winning documentarian was commissioned to document the most successful winter the tourism industry ever fielded. Just fewer than 673,000 foreign tourists visited Iceland in 2012, nearly a 19% increase that shattered the previous year’s record-breaking numbers. In 2013, following a marketing campaign to rename Iceland—the winner, out of 10,000 entries, renamed it the island of Aweland for a day—134,000 more foreign tourists travelled to the island than the year before, a 20% increase, making for three straight years of double-digit growth. Contributing to that surge were strong performances in the winter months, starting with a 27% increase in visitors in January 2013, a 43% increase the subsequent February, a still greater 46% increase in March and bookended with a 26% increase in November and a 49% increase in December. Continuing the trend in 2014, just shy of a million foreigners visited the island, a 23.6% increase from the year before. The winter months again saw the biggest gains with increases between 26% and 40%. At the end of that year, the tourism industry accounted for 28% of foreign exchange earnings, a 9% increase from 2010. With seasonality effectively mitigated, a third pillar of Iceland’s rebranding had yet to be tackled: getting tourists to travel farther.

enTiCinG THe enliGHTeneD ToURisT

The supremacy of digital had thus far proven a true guiding light, so 2015’s chapter opened with another web-based campaign. “We set up a human competitor to Google,” Bryant says of the “Ask Guðmundur” series. Seven ambassadors from each of the regions of Iceland—all citizens really named Guðmundur, or the female Guðmunda—were recruited to

answer questions from fans such as, “‘Game of Thrones’ is partly shot in Iceland. Any of it shot in the North of Iceland?” and “Are Akureri’s red traffic lights really heart-shaped?” (They are.) And, “Why are there always three sheeps [sic]? I mean, literally: always!” Curious tourists submitted their questions from spring to fall using the hashtag #AskGudmundur on Facebook and Twitter. More than 200 video responses were recorded. The Guðmundur campaign, much like its predecessors, relied on volunteers, not paid actors. “Citizens are the best ambassadors,” Torres says. “People want to feel the culture and learn.” The endearing quirkiness of the campaign has been carried through, setting a new brand aesthetic for “Inspired by Iceland.” Acknowledging that enlightened tourists want to understand customs, respect nature and behave in a culturally conscious manner, and that sustainability is central to Iceland’s brand, the focus has shifted again in 2016 with the launch of “Iceland Academy,” a video series allowing viewers to earn badges for completing different courses about how to visit Iceland responsibly, safely and in a culturally appropriate way. Each “term” has four “classes,” and viewers who complete all the classes can win a “field trip” to Iceland to apply what they’ve learned. The series is led by eight experts, this year referred to as “tutors.” While the production value has certainly gone up with scripted scenes and a departure from the home-video aesthetic of the Guðmundur campaign, the videos still have an artistic quality á la Wes Anderson with a bouncy harpsichord soundtrack, dynamic text (in hip typefaces) and characters with

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The #AskGudmundur campaign recruited seven Icelanders to answer tourists’ questions via social media.

just enough idiosyncrasy to make them intriguing. “Iceland has an amazing Scandinavian aesthetic,” Bryant says. “It has amazing design cues and taste, but it also doesn’t take itself too seriously. There’s a wit and a humor and self-deprecation. It’s a very humble country, which is why it’s so welcoming.” “Iceland Academy” has garnered nearly 3 million views since its launch in February 2016, and more than 7,000 people have completed courses online. Thus far, viewers have been able to earn badges for avoiding hot tub awkwardness, staying safe in Iceland, travelling responsibly in Iceland and understanding winter sports on the island. Soon, they’ll have the opportunity to prove they know how to eat like an Icelander, drive in Iceland, navigate Iceland’s festivals, capture the Northern Lights and travel farther.

In half a decade, Iceland has reinvented itself, bringing its tourism industry from the brink to a new apex every year. The strategy of “Inspired by Iceland” has evolved with the needs of the country, Bryant says, and rather than fighting the attention brought on by early trials and tribulations, it has ridden the wave of adversity, says Torres. What’s next for the island will likely reflect new goals, new interests brought by Promote Iceland and changes in international tourism. In Torres’ estimation, Iceland has found the sweet spot for destination marketing, a perfect mix of luck and authenticity, putting it right on trend with the market. “Iceland said, ‘This is who we are, and this is what Iceland is all about,’” Torres says. “Consumers want something exotic, different and not massive. Iceland is a different planet. [Tourists] want to live that experience.” m

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The world beer market is getting larger by the day. To compete, native breweries must use savvy marketing tactics to prosper in faraway, previously untapped markets.

By Hal Conick

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People often ask Brooklyn Brewery founder steve Hindy if he expected his beer to be as well-known as it is now; he often replies,

“Hell yes.” “I didn’t start this to be small,” Hindy says. “But I didn’t really imagine we’d be selling a lot of beer in Stockholm or Paris.” Hindy initially imagined competing with the import beer market, which was 2% of the U.S. market when he founded Brooklyn in the mid-1980s. Since then, the craft and import beer markets have boomed. Statistics from Mintel show a huge increase in imported beer’s share of the U.S. market, rising to 15.5% of the beer market in 2015. Craft beer has risen from almost nothing to 10.2% or 12.2%, according to Mintel and the Brewers Association, respectively. While U.S.-brewed beer has been steadily gaining market share stateside, it’s also starting to earn admiration overseas. The Brewers Association, which represents small and independent craft brewers, reports the craft beer market export volume grew 16.3% to $116 million in 2015, mushrooming by approximately 446,000 barrels. An even greater number of beers have entered the states. The Beer Institute reports more than 11 million barrels were imported by the U.S. as of April 2016. The majority, more than 230 million barrels, contain popular Mexican beers, such as Modelo and Corona.

“That’s just going to grow and grow,” says Jonny Forsyth, global drinks analyst at market research firm Mintel. “That’s just tip-of-theiceberg stuff.” Just as craft beer has disrupted the U.S. beer market, Hindy and others believe it is also changing and creating beer markets across the world. These breweries ensure new markets know about their brews by navigating tricky international regulations, unique populations and social norms.

serendiPity in Brooklyn, ePHeMerA in denMArk Hindy’s brewery opened in 1987 in Brooklyn, New York, its namesake borough. Very quickly, importers from across the world started calling. The calls surprised Hindy, as they were still having a difficult time catching on in Brooklyn. “Nobody understood that kind of beer 30 years ago,” he says. “It really required a lot of work and a lot of educating people about what we were doing. We needed the sales, so we basically said to people in Japan and Stockholm, ‘We’ll send you beer— just pay us before we send it,’ which is a great deal for us and a terrible deal for them.”

Now, Hindy says, approximately 50% of the company’s business comes from sales overseas, with its biggest markets including Scandinavia, the U.K., France, Brazil, Australia and China, the fastest-growing market for Brooklyn Brewery. After years of practice, Hindy and company have connected with better importers and watched Brooklyn beer gain popularity across the world. In 2016, Hindy traveled to cities, including Seoul, South Korea, to evangelize for his brand. He threw parties and hobnobbed with local residents, letting them get to know the beer and the brand. “The biggest thrill for me as a craft brewer is going into a place and seeing people ordering my beer,” Hindy says. “It’s a double thrill to see them ordering the beer in Stockholm or London.” Across the Atlantic Ocean, Mikkeller, a Denmark-based microbrewery founded in 2006, also had a bit of serendipity involved in its spread across the world. Company co-founders Mikkel Borg Bjergsø and Kristian Klarup Keller started as a home brew operation in 2002 and almost immediately began winning home brew competitions and awards. Their first customer was in the U.S., according to Jacob Gram Alsing, operations manager at Mikkeller. The U.S. beer scene became Mikkeller’s main driver and inspiration for its beer and business. Brewing creativity and creating inroads to new markets have been essential to Mikkeller’s success. Denmark is what Alsing calls a “discount market,” where consumers mainly buy beers far less expensive than those Mikkeller produces. Even now, Mikkeller’s home country is only its eighth- or ninth-largest market, with Sweden and the U.S. coming in first and second, respectively. Historically, the company has worked batch-to-batch, partnering with other brewers and creating

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unique recipes instead of opening its own production facility. It has also opened a network of bricks-andmortar bars and breweries to create more inroads to the international beer market, Alsing says, opening locations across the world in places Bjergsø enjoys visiting. Now, Mikkeller has an official brewery open in San Diego, bars in cities across the world and beer available in 49 states, as well as countries such as Thailand, South Korea and Iceland. Mikkeller found its international success through a combination of Bjergsø’s ability to create interesting recipes, their work with De Proefbrouwerij in Belgium, which Alsing calls “the best technical brewery in the world,” and an understanding that branding beer is about more than just the beer. “[Mikkel has done an] extremely good job by using the right designers, the right packaging, putting the right collaborations in place and putting his beer in places where it gets noticed,” Alsing says. Another European craft brewer, the Scotland-based BrewDog, made a similar choice in joining the U.S. market by moving its production stateside. After starting in 2007 and

opening more than 40 bars across the U.K., co-founder James Watt says BrewDog is working to open a 42-acre “hop cathedral” in Columbus, Ohio. This will allow BrewDog to roll out its beers in the U.S. and Canada this fall. “The craft revolution knows no borders. We’re firmly on a mission to get the best beer to all corners of the world,” Watt says. “We’ll start with Columbus, but we’ll spread quickly.”

A Period of Discovery The increased interest in international beer comes from what Mintel’s Forsyth calls “discovery,” or the interest in products and cultures different from the consumer’s own. A beer from a different country— one which may tell the story of its culture—will have great allure in a

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foreign market, particularly with millennials, he says. “Consumers assume it’s superior just because it has come from a different part of the world, especially if it comes from another part of the world that’s known for beer making,” he says. “There are similar things going on in food as well.” This is all very new for beer, Forsyth says. Just five years ago, the world had “no respect” for U.S. beer, which languished in the endless creation of big-brewery lagers since prohibition ended in 1933. Now, a typical U.K. resident will walk out of a bar if there are no U.S. craft brands on tap, Forsyth says. The Brewers Association reported in December 2015 that there are currently 4,144 breweries in the country, breaking the 1873 record of 4,131 breweries. This has given many brewers new license to export their beer, Forsyth says. While Europeans still tend to avoid big U.S. breweries, craft beer has gained something of an iconic status, carving new niches in foreign markets. Bart Watson, chief economist with the Brewers Association, says regional breweries have seen stateside growth begin to diminish. Looking to international opportunities gives brewers an improved chance at maturation. “Brewers who are used to a certain growth rate are going to look for other places where they can get that growth rate, and markets abroad will be one of them,” Watson says. Matt Simpson, owner of The Beer Sommelier, an industry consultancy, says the export market from the U.S. is still almost nil, so brands will typically open their own production facility or partner with another local brewer to save time and money, as well as preserve freshness. This is the route Brooklyn and breweries such as San Diego-based Stone Brewing have

taken. But, he qualifies, “There is no typical. Everything is new and being played by ear.” Instead of playing by ear, here are some tactics used, tips offered and challenges faced by brewers trying to launch a product in an international market.

BrAndinG An iMAGe A tactical marketing plan can go a long way to win favor in a novel market. Two brands that do particularly well with using their country-of-origin and name as a selling point are Stella Artois and Guinness. Forsyth cited a Mintel study that found 38% of U.S. millennials think Stella is a craft beer, while 27% believe Guinness is craft. In reality, both are mass-produced. Far from craft, Forsyth called Stella a “down-market” beer. “In America, there’s a certain reverence for Europe,” he says. “It’s

11% cAnAdA

BrAZil

the Old World and they do things really, really well. They’re trading on a bit of that. [U.K. residents] find it absolutely hilarious.” While Guinness sees a huge lift from being “foreign and different,” Forsyth says Stella Artois has played up the heritage and history of Belgium. As an example, Stella came to the U.K. in the 1980s with the tagline “Reassuringly Expensive,” taking with it an above-market price tag to increase sales. Robert Cialdini wrote about this marketing method in his landmark book, Influence. If customers follow the “You get what you pay for” rule long enough in life, they’ll end up believing that expensive is always better. “It plays on the fact that the average consumer really doesn’t know and they’re very influenced by perception and branding,” Forsyth says. “If you say your brand is more expensive, they’ll take that as proof that it must be better.”

33%

Western euroPe

JAPAn

12.5% AsiA PAcific

BreWers AssociAtion

eXPort develoPMent ProGrAM GroWtH 2014-2015

totAl eXPort GroWtH: 16% 42

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A beer from a different country—one which may tell the story of its culture— will have great allure in a foreign market, particularly with millennials.

uniQue trAits in uniQue MArkets Before launching in a new market, the Mikkeller team sits down with importers and distributors to discuss strategy. Every market is unique and deserves to be treated as such, Alsing says. For example, Mikkeller didn’t want to send hoppy beers from Belgium to the U.S., as that style already dominates the local market. “The markets [in each country] are so different, it’s necessary that you actually sit down and think together with the importer and distributor about what the strategy should be,” he says. “In Germany, we’re only in

supermarkets. Because they have [an environmentally driven bottle refilling and] refund system that makes it impossible for Mikkeller to introduce all the beers we have. We only introduce five beers out of 1,000 in Germany.” Each Mikkeller market receives a special touch. The brewery creates unique designs and styles in each, Alsing says, but also tries to take popular aspects of local culture and implement them into its beer. “It’s still very much a playful thing,” he says. “If Mikkel gets an idea he thinks is interesting, then regardless of what the business case is, he’ll do it. … No matter how much we grow in volume or how many bars we have, we need to always be innovative, have individual solutions and be playful in what we do. The second we lose that, we will not be Mikkeller anymore. It’s a very big part of our DNA.” Paying respect to the local culture also has a marketing case: Alsing sees breweries enter markets with only their own DNA, but believes this is a “narrow-minded” approach that will limit them to non-local, tourism business. “In the states it’s about showing European traditions. In Europe, it’s about showing what the American traditions are,” Alsing says. “Every time we do something, we also take something back. … You need to be humble about what goes on in the [different markets] and, at the same time, showcase what you can do.”

knoW WHere reGulAtory cHAllenGes lie The U.S. likely poses the toughest challenges for export-minded brewers. Each state has slightly different regulations on alcohol, whereas most other countries have a single regulatory body, Simpson says.

“If you decide to come here, you’re going to need to be an importer yourself or find an importer. Then you’re going to have to find different distributors in every one of those states,” Simpson says. “My advice to [breweries] is to always start in populated areas where they’d do really well and then expand out from there once they start getting their legal and administrative act together. Start moving out from one wellproviding area to others. You want to entrench yourself.” To make matters more complex, the National Association of Broadcasters disapproves of consumption of alcoholic beverages in commercials. While there is no law on consumption in advertisements, this disapproval dissuades TV and beer executives alike from pushing the boundaries on air. Other countries present their own set of challenges for marketers, Forsyth says: France doesn’t allow alcohol to be advertised on TV at all. Turkey has cracked down on all alcohol advertising aside from sponsorships. Russia has banned alcohol advertising in most media, aside from certain pay channels with greater than 75% Russian viewership. “There are definitely a lot of regulatory challenges in terms of the big brands and getting their message out,” Forsyth says. “It’s not an easy thing.” Countries that only sell alcohol via state-run stores present another challenge to exporting beer. Watson says this means stores have to be convinced that the beer deserves a spot in the “local monopoly.” However, Watson notes that a lot of these challenges can be opportunities for success once they’ve been worked through. An example is in Germany, which instituted a beer purity law called Reinheitsgebot in 1516. This law only allowed beer to contain hops, barley malt and water. The law has been weakened over the years,

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giving companies like Stone Brewing opportunities to bring unique flavors into Germany. “German consumers have a set of styles of beer they’re used to. Certainly, Stone is going to challenge a lot of those preconceptions,” Watson says. “But at the same time, that means they’re going to be immediately differentiated from every other beer on the marketplace.”

Pick Potent Partners Pushing a beer into an international market is like traveling to a new country: It’s always easier to have a local show you around. “To be honest, we don’t really do much market research; we look for a motivated importer who we believe understands what it takes to build a brand,” Hindy says. “We look for people who will trust our strategy on going into a new market, which basically involves picking out the right kind of bars and restaurants to place the beer into, because it’s not like selling Budweiser in a market where you’re spending $30 million on advertising … You have to find the right bars and restaurants that are into craft beer and place it there and really work to help them sell and market the beer.” It doesn’t take a genius to realize partnerships are essential, Hindy says. The company’s recent social media success in Seoul came via a connection to a Korean importer. Partners can also help bypass the logistical nightmare of shipping beer across the world by brewing a foreign beer at their local facility. For example, Cooper’s Brewery in Australia brews Brooklyn Lager, allowing Brooklyn to focus on shipping specialty beers that hold up better due to high alcohol volume. Understanding and solving logistical challenges is essential for forming a local, long-term branding

plan, Watson says, as it will allow the brewery to focus on its business goals.

Guerilla Tactics The overseas growth of Brooklyn hasn’t come from spray-and-pray advertising or dumping millions of dollars into TV commercials; Hindy says its main tactic has been “guerilla marketing.” In many cities, the company will hold a Brooklyn Mash: a four-day festival celebrating local, creative culture. Brooklyn invites artists, painters, writers, musicians and entrepreneurs to allow the locals

to get to know their beer. In turn, Brooklyn gets to know the locals. Watt and the BrewDog crew are taking a similar approach in Ohio, making appearances to get familiar with the area and its people long before opening. A big benefit to Brooklyn’s tactics is the halo effect created by social media. “Thirty years ago, I would do a beer tasting or a beer dinner at a restaurant and I’d think, ‘Wow, [we] touched 50 people today.’ Now, you do an event with 50 people and 15 of them are taking selfies with you and tweeting it all over the place,” he says. “Social media magnifies all those efforts. That’s

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our primary vehicle for marketing here in the U.S. and around the world.” After an event with the press in Seoul, Hindy says Brooklyn had 30 new online posts about them by the end of the day, in addition to a piece on Seoul’s local TV news. “Loopholes” around standard marketing and advertising like these create good public relations for companies, Forsyth says. It gets brands noticed in markets where they may otherwise be ignored. “I guess that comes back to the point of building up presence in bars,” Forsyth says. “The bartenders become gatekeepers. They can really help you recruit people.”

tHe future of internAtionAl Beer If it seems like there’s a greater opportunity for breweries to create new markets and brand internationally, that’s because there is. “Not to sound hyperbolic, but there is only room to grow,” Simpsons says, “There’s always room for introduction of good beer to the marketplace. If it’s good, it’s welcome. … If it’s not, it will fizzle out just like a lot of small American craft brewers who aren’t making good products.”

A tactical marketing plan can go a long way to win favor in a novel market.

According to Allied Market Research, the global beer market is expected to increase 6% annually until 2020 when it is predicted to reach

$688.4 billion. The Asia-Pacific region will likely see the most growth at 7.28% per year. Watson cites Mexico as an “untapped opportunity” for export-minded U.S. brewers due to its proximity and relaxed trade barriers. Creating a new market will mean a lot of leg work, which calls for renewed marketing and branding efforts. Many parts of the world are simply not attuned to what the U.S. craft beer market has to offer, Simpson says. Presenting a country like Thailand or China with a unique craft beer, however, has a huge upside for success. “The craft beer revolution is definitely spreading around the world,” Hindy says. “There is demand for craft beer. As with domestic markets in the U.S., the real question is going to be, ‘Who can get it there fresh, and who can support it to ensure that people are getting the freshest possible beer?’” Even with the growing world market, Watson says local beer will always reign supreme. After all, beer is mostly water, water is heavy and heavy things cost a lot of money to ship. Breweries of the present and future will need to consider whether their beer has a value high enough to be successful in new markets. For Hindy, the international value proposition has always made sense. However, many people have been critical of his decision to ship across the world, he says, asking, “Isn’t this supposed to be a local thing?” Is it supposed to be local? Is local a better way to work for most? Hindy briefly pauses, considering his response. “When you start a beer company, you follow your brand,” he says. “This wasn’t our strategy in the beginning, but it just happened. You go where your brand takes you. Our brand happens to be poised to [become] the international craft brand. That’s a pretty good spot.” m

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Gold-Medal Marketing The world of sports marketing is unique in that it’s centered on “evangelizing the movement,” says Lisa Baird, U.S. Olympic Committee chief marketing officer, and marketing the Olympic Games is no different. She talks sponsorships, virtual reality and a new generation of fans.

By Kelsey Ogletree Freelance Writer

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All of Lisa Baird’s work over the last two years will be on a world stage come August. As chief marketing officer for the United States Olympic Committee (USOC), Baird is the ringleader in charge of lighting a fire of enthusiasm in fans around the globe for Rio 2016. Leading a team of 60 marketing and sales professionals at USOC, Baird is responsible for managing 35% of the USOC’s revenue in a calendar year through sponsorships. But after seven years in her role, Baird—who previously served as senior vice president of marketing and consumer products for the NFL—is up to the challenge, hardly able to contain her enthusiasm for the events surrounding the upcoming Summer Games. In the middle of one of her busiest weeks of the year, she talked with Marketing News about the ever-increasing requests for experiential marketing, how the USOC is staying ahead of the curve by marketing to a younger generation and what sponsors are doing to impress her the most.

The Olympic property is different every single time. It’s a new city, a different set of athletes, a different course of marketing progression. The biggest challenge for us is reinventing ourselves every two years. But it’s fun, because you get to bring a lot of creativity and innovation to that.

to athletes. What we always want to do is make sure that through controlled media, we’re telling America the stories of how these athletes are doing what they do to be the best in the world and how they’re overcoming challenges. We talk with media a lot to tell those stories, and we engage with our sponsors, like P&G and BMW, to make sure they’re using athletes to tell their stories as well as market their products.

When you talk about being creative, what are some ways that you and your team find inspiration?

Are advertisers asking for new or different things this year?

One source of creativity for us is always where the games will take place—how to capture the spirit of that and talk about our athletes’ journey on that particular road to that destination. “The road to” has become a big marketing platform for us and our sponsors. Each [Olympics] is different, and we reinvent that. That’s the biggest form of inspiration. But how you talk to consumers and how they engage with athletes and our content is also rapidly changing, so we’ve thought through a ton of change based on social engagement, fan experience and how people are joining us now. That’s all part of the challenge.

Yes. This year is going to be one of the most marketed games of all time. Every sponsor is working on ever-more interesting, ownable ideas to their property. The fun part for us is to be able to dive deep with a brand to say, “Here’s your brand, here’s our platform. Where is that unique area where we can tell the story?”

What is the biggest challenge you face in marketing the Olympic Games?

How do you maintain a balance of new sponsorships without losing sight of the personal nature of the games for athletes? The more money we can raise, the more money we can give directly to athletes and national governing bodies. From sponsorships, 82 cents of every dollar goes directly

Are you embracing experiential marketing this year? Very much so. The demand for experiential keeps growing. One of the areas we have a lot of difference in this year is how USA House (a gathering place for USOC staff, Team USA members and families, corporate partners, suppliers and licensees) at Rio Games will be used as an experiential platform for brands to reach back to U.S. audiences. Our USA House is where we entertain a lot of people during the games. [Sponsors such as] Budweiser are doing things that will be fun for fans back home to also experience.

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How do you manage expectations of sponsors and advertisers while keeping athletes happy? We work on a lot of different levels with the athletes. We help sponsors create personal endorsements with athletes, so we make sure all our sponsors are sponsoring what we call, “the unnumbered ambassadors.” The more athletes you sponsor, the better it is for us. One of the things we love doing is working with our licensees to bring branded apparel to life—Nike with their podium apparel, fan gear and village; Ralph Lauren with what they do for opening and closing ceremonies—that’s really our segment. The athletes love to get that Team USA gear. Nothing makes you feel more like an Olympian. When they get their gear, they’re so excited to be a representative of Team USA.

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How are you dealing with fears around the world about the threat of Zika virus? Are you expecting it to affect attendance? We’re doing everything we can to make sure the latest information from the CDC and the World Health Organization is available on our website. They are the experts. We’re also taking all the precautions we can when we entertain and with hospitality, providing things like insect repellent. So far, we’re really excited about ticket sales. Every Games, we encourage our sponsors to host private events at USA House, and the Rio Games are no exception. We are sold out completely. We’re expecting a pretty big convention of Americans to travel to the Olympic Games. What new technologies are you employing in your marketing efforts? One thing we’re excited about is virtual reality (VR) demonstrations of different Olympic sports, a showcase in our Road to Rio fan tour. It’s really cool. Getting to experience a dive from a 10-meter platform with virtual reality is very interesting to see.

“ Th e r oa d t o ” has b e co m e a b i g ma r ke t i n g p l at for m for us a n d o u r s po n s ors.

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It seems like in the coming years, VR could be a game changer in how people watch the Olympics.

Speaking of generations, how will Generation Z influence your marketing efforts in the future?

Yes, I think it will be. Americans are very familiar with sports like basketball and football because they see them on their TVs every week during the season. But I think being able to experience gymnastics or diving or speed skating, that’s not something every American can see and know about. [VR is] going to help us expose our national governing bodies (NGB) in sports to a whole new generation of Americans. We have to continue to get in the pipeline for sports to grow and recruit those next generations.

We’re already there. If you look at the growth of our fan base, where we continue to be very strong, the Olympics is a No. 1 property for millennials and teenagers, and it’s because our sports are exciting and engaging to that audience, so we’ve already been there working. It goes to the great job the [International Olympic Committee] has done to innovate on sports. Things like “snowboard cross,” where it was just snowboard initially, then some of the new things they’re doing with action sports, get people exposed to that via the platform of the Olympics. We’ll always go to our sports as our core area for every

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new generation that comes up. Now that we’ve reached Generation Z, we’re already thinking, “What’s next?” What is your strategy for social media? We have an enormous social strategy for the Rio Games. It starts with understanding what our core messaging and communications are. We want to tell the stories of our athletes, plus make sure that all Americans are going to be able to watch the games on TV, so we’re making sure that we’re telling people what the schedule is and when to tune in to NBC to watch. We’re also supporting our sponsor initiatives through social media. A lot of our sponsors will integrate with us and do branding content video, and that is distributed via our website and social media channels.

I think the thing that’s new to these games is that because the fan base of the Olympics is so diverse, we’re able to utilize a different voice on each social media outlet— Snapchat, Instagram, Facebook—to really target those specific users. That’s been a lot of fun to see how the core messaging is interpreted. You’ve been CMO since 2009. How has your job changed over the past seven years? We started with a very small footprint of our marketing platform, and it’s gotten bigger and bigger as we’ve had success filing more sponsors. We’re still a fairly small nonprofit, so being able to keep up with the exploding world of media, the number of sponsors we have and the

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U.S. to their yogurt. It’s about really understanding how different sponsors have very different problems to solve and initiatives to get behind, and then creating the time to listen and understand how you can help them achieve their business objectives. Any other new sponsors that you’re excited about? Hershey’s just came on, and it’s fun to work with them and all of their brands to create programs for Team USA. We’re also excited to have the milk board that markets on behalf of milk processors. People talk a lot about virtual reality and e-sports, and that’s all exciting, but I love to see the creativity and innovation that our partners are bringing to things like packaging. Coca-Cola has done so well to make their packaging more expressive and in the moment. You see what Hershey’s is doing to change their chocolate bar wrapper, which they haven’t changed in 122 years. And every time you open a cup of Chobani yogurt, you’ll see a quote from one of their athletes. I’m really enjoying the packaging and points of purchase at retail programs more than ever before. You spent time in high-level corporate marketing positions at General Motors and IBM before working for the NFL, and finally landing at USOC. What makes sports marketing unique from other marketing roles?

increasingly long time frame of work with future Games is definitely challenging. Through your career, what have you learned about building relationships with sponsors? I think the most valuable relationships come when you, as a property, understand [a sponsor’s] business problem and their business objective. The mistake I see is people say, “I have a program, sponsor it.” Instead, we try to come at it from a customer point of view. For example, United Airlines has been our partner for 35 years, so they have a very different goal and problem to solve than someone like Chobani, which is a brand new sponsor. We’re on our third games with them, and they’re still trying to introduce the

My last job before the NFL was with IBM, where I was the senior vice president of marketing and communications across all the countries IBM marketed in. It’s a very different and fast industry. You really have to keep up with all the fundamental differences in technology because they are the industry leader. In sports, we’re trying to preserve brand leadership, and we’re making sure we’re changing our marketing objectives, strategies and platforms to keep up with the market, but a lot of our work is to make sure that all of our stakeholders are coming along with us—whether its NGBs, volunteers, athletes, federations or sponsors. There’s a lot more of what I call “evangelizing the movement,” making sure we’re constantly telling the story of how important those stakeholders, and particularly Americans, are to the future of Team USA. How we can bring Americans along in our journey to ultimate success is probably the biggest change. m

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Making inroads

knowledgebase

10 Minutes With

Sam Pierce

Global Business Partner at Ogilvy & Mather By Zach Brooke | Staff Writer

ď&#x20AC;¸ zbrooke@ama.org

he rise of LGBT acceptance in many parts of the world over the past decade has created opportunities for marketers looking to target this previously underground market. Yet the rush to reach lesbian, gay, bisexual and transgender consumers is hindered by a dearth of market research and case studies necessary to foster inroads with queer audiences. Enter Ogilvy Pride. A division of Ogilvy & Mather, Ogilvy Pride launched last year to help brands understand and tap into LGBT consumers. The division is led by Sam Pierce, a former global business partner for Ogilvy & Mather Advertising, who assumed leadership of Ogilvy Pride earlier this year. Marketing News spoke to Pierce about how LGBT marketing varies by country and what brands need to appeal to LGBT advocates and allies.

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knowledgebase

making inroads

You’ve been in advertising a long time. How has LGBT marketing and advertising changed over your career?

You see it moving from niche advertising into the mainstream where it’s just a way of life and not necessarily, “Oh, look at what this company is doing.” Here in the U.K., recently there was a Lloyd Bank commercial where there happened to be, as part of a slice-of-life spot, a gay couple getting engaged. Interestingly enough, all of the online commentary about the ad was about something else that happened in the ad. [Nobody] was really noticing or commenting on the fact that it featured a gay couple. I really think that is the trend. It’s moved into mainstream versus being these niche one-off ads that you see.

When Ogilvy Pride was founded in 2015, were there a lot of brands that were looking to make inroads with LGBT customers and didn’t know where to turn?

I think that is a great part of it. Originally the other office that had launched here last year spent the first year working on raising the external profile and building the internal community. Now we’re looking more into the commercial aspect of it. The [LGBT] market was recently valued at $3.7 trillion. It’s just trying to help our

Photos: Oglivy Pride

clients do meaningful communications to these target groups that they previously had not been.

How big is the global LGBT audience and market, and where do those numbers come from?

The global audience—I’m speaking from a site called LGBT Capital— was estimated last year around 450 million people globally, which is somewhere between 5% and 10% [of the global population].

What else does your research tell you about LGBT people in terms of who they are, their professional and family lives and how that informs marketing campaigns?

It doesn’t necessarily make sense for every brand in every campaign to have a specific portion of their campaign targeting LGBT audiences. It’s just like any target. When you look at a campaign

targeting women, it’s not just broad strokes “women.” There are specific insights behind their target and I think it’s [important to] make that prevalent in the brands as you target LGBT [consumers].

As a lot of marketing campaigns become increasingly global, LGBT acceptance and openness varies widely by country and culture. How do you navigate that when working with brands in different countries?

North America, parts of Europe, Australia, parts of South America—even though in some of those regions it is still a contentious issue, there is broad acceptance in the way of life versus some parts of Africa and China where there is limited acceptance and it’s not high-profile at all. I think it’s just about understanding diversity and understanding the needs of the brand in what’s acceptable in the market, and then working on strategies and delivering that appropriately. But it really is a marketby-market case.

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making inroads

Are there any places Ogilvy works where overt LGBT advertising is prohibited?

I don’t know specifically about it being prohibited, but I do know that Ogilvy Pride recently launched within the last month in Hong Kong. In the Hong Kong office they did some work for KFC last year. For example, they did a radio spot that chronicled the life of people. It was around [the theme], “there’s a

knowledgebase

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knowledgebase

making inroads

PHOTO: BURGER KING

“At this point there are very few sectors of companies where there is not someone in that group making inroads into the LGBT audience.”

meal for everyone at KFC.” One of those people was transgender. Currently in Hong Kong, I don’t think it’s illegal to advertise this way, but there obviously is a very low acceptance of openness of being gay in society.

How do you reach customers in markets where there is that low level of acceptance?

It has to be done smartly. In some cases where you can be more necessarily overt, you can just state your

stance, and it’s more openly targeted. There are some nuances by showing the [gay] couple in a montage of several couples versus having the whole spot around [them]. It’s about being very careful and being smart about the realities of your market.

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knowledgebase

a company that supports all types of relationships.

Care to highlight any specific campaigns Ogilvy Pride has created since its inception?

There’s been some great work out of Ogilvy Paris where they did a Google Hangout with couples where one half lives in a country where you can be [same-sex] married, and the other half lives in a country where you cannot, and how you can bring people together. Our Dade office in Miami did the [Burger King] Proud Whopper last year, so there is definitely some interesting work happening.

You’re putting together a Pride think tank. How do you envision that looking, and what purpose would it serve?

It’s helping clients within Ogilvy. Both potential new clients and outside people understand the power of the LGBT audience. A lot of times marketers or clients feel they should be doing this but don’t know how to go about it.

For what brands or industries would it be most appropriate to target LGBT individuals? Which have already created those inroads?

Are there some areas where using LGBT characters can appeal to a general audience?

Absolutely. Last year the New York office did as part of one of their Tiffany’s campaigns. It

showed couples around engagement rings. There were four, five, six ads, and one of those couples just happened to be a gay male couple getting engaged. I think that raises their profile with open-minded consumers and shows that [Tiffany’s] is

It can be any brand. … You see car advertisements. You see food. You obviously see more high-end retail. It really does run the spectrum. It is on a brand-by-brand basis. At this point there are very few sectors of companies where there is not someone in that group making inroads into the LGBT audience. m

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Michigan State University, Eli Broad College of Business, Department of Marketing, is seeking applications for an entry-level assistant professor with primary responsibilities in teaching, research and publishing in leading marketing journals, and engaging in service activities for the academic discipline department. This position is an assistant professor position (tenure system) and is on an academic year basis. The position focuses on quantitative methods, quantitative marketing and marketing management. A doctorate in marketing is required and demonstrated accomplishments in research and teaching at an AACSB accredited university are preferred. The position will start in January, 2017. Salary is negotiable. The Michigan State University Department of Marketing is currently ranked #6 in the world among public universities and #12 in the world among both public and private universities is in regard to research impact. Named as one of the top 10 universities in the nation to work for, Michigan State University is located in East Lansing, Michigan, an attractive community appreciated for its high quality of life, excellent schools, and easy access to major Midwest population centers, along with boundless recreation and cultural opportunities. The review of applications will continue until the position has been filled. Preferred starting date is January, 2017. Submit applications online at https://jobs.msu.edu – posting #3502. Please refer to the job posting for a complete job description and application information. For additional information, contact Dr. Tomas Hult (hult@ broad.msu.edu). MSU is an affirmative action/equal opportunity employer and persons with disabilities have the right to request and receive reasonable accommodation. The university actively encourages applications of women, minorities, veterans, and persons with disabilities.

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MARKETING NEWS | JULY/AUGUST 2016

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Position Open – Open Rank Quantitative Empirical The Department of Marketing at the University at Buffalo, State University of New York at Buffalo (SUNY) is searching for a candidate, specializing in empirical quantitative modeling, to fill a tenure-track/tenured faculty position with an appointment date of Fall 2017. Candidates will be considered for appointment at the full, associate or assistant rank. The position requires the interest and ability to do top quality research, and is for faculty members doing primarily quantitative empirical research. Candidates seeking an appointment at an advanced rank, must currently have a successful record of publications in top marketing journals, (e.g., Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, Marketing Science, Management Science) excellent teaching evaluations, and a record of service commensurate with their experience. Preference will be given to those that have at least the rank of Associate Professor, at a researchoriented (preferably AAU) institution. Consideration for an advanced rank appointment will be given to a candidate with strong professional records that would qualify them either for the immediate granting of tenure at the University at Buffalo or with a clear trajectory to achieve such a record within one year of appointment. All candidates, regardless of rank, must at a minimum have a doctoral degree in Marketing or related field in hand or near completion by start of Fall 2017 semester, preferably from an AAU institution. Candidates will be expected to demonstrate their research capability and performance. Additionally, they require prior teaching experience at an institution of higher education. A background including practical marketing experience is desirable. The position involves teaching in one or more of the following areas: Marketing Management, Quantitative Modeling, Analytics, Pricing, Marketing Research, and Doctoral Seminar.

SERVICES CONSULTING Apple Inc. has the following position open in Cupertino, CA: Professional Services Consultant (Req#9DCTRL) Support growth of the Apple Online Store, through strategic focus on operational readiness for & delivery of new products. Refer to Req# & mail resume to Apple Inc., ATTN: L.J., 1 Infinite Loop 104-1GM, Cupertino, CA 95014. Apple is an EOE/AA m/f/ disability/vets.

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The School of Management has established a Center for Relationship Marketing. It maintains a unique database from a major supermarket chain consisting of over 3 million households. The data is updated on a daily basis and offers tremendous academic research potential. Salary and benefits are competitive. We are especially interested in identifying prospective minority and women candidates. Buffalo, the second-largest city in New York, has all of the benefits and amenities of a large city without the high costs of living, traffic, and crime. The area boasts of excellent cultural and sporting facilities. Its close proximity to Toronto and Niagara Falls provide a wealth of sightseeing opportunities. SUNY/Buffalo is an affirmative action/equal opportunity employer. We will be interviewing applicants for this position at the AMA Summer Educators Conference August 5-August 7 in Atlanta. Applications for this position, UBJobs posting number 1600377 must be made online at www.ubjobs.buffalo.edu/applicants/Central?quickFind=58966. The position will remain open until filled. If you have any questions, please contact Sharon Cosentino, department secretary at 716-645-3261.

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amacareers

expert advice

Top Industry Experts Offer Advice for Marketers in the Early Stages of their Career

he first years in the professional world can be rough, and many marketing initiates struggle with uncertainty about how to realize their career aspirations. With that in mind, we reached out to some of the most successful, nationally recognized marketing professionals and asked them for one piece of advice they would give marketers starting out in the industry. Their responses distill the wisdom and experiences that shaped them as they ascended the ranks of the business world and provide valuable lessons to marketers at all stages of their careers. Here’s what they had to say:

Allen Gannett, CEO of TrackMaven:

“If you d id n ’t le a r n it in sc h o o l, le a r n d ata sc ie nce and bas ic statistic s a s so o n a s p o ssib le. Ma r ketin g is becom in g a d ata -info r me d a r t. O ve r th e n ext few d e cad e s , new C MO s w ill b e re q u ire d to h ave a f u n d a me nt a l understa n d in g o f d ata .” Colin Mitchell, global brand vice president at McDonald’s:

“ Stu dy cas e histories . Most of w h at we d o in marketi ng is s ome form of patte r n re co g n itio n . A ll marketi ng problems are uniq u e, b u t a ll a re a lso si mi l ar to previous problems in at le a st so me ways. Th e reason that people still va lu e ex p e r ie n ce in a to psy-turvy industry is that th e ex p e r ie n ce d min d can make thes e connections fa ste r a n d mo re d e e p ly. Case h i stories are a s hortcut to ex p e r ie n ce.” 62

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Beryl Greenberg, executive coach for career success in marketing and advertising:

“Know yo urse l f we l l and allow your pa ssi o n to shi ne. U nd erstand what you a re pa ssi o nate a bo ut. Be clear about why yo u a re pursui ng your career in m a r ketin g a nd se i ze o ppo r t uni t i e s to f u rther that passion. No m atte r how l a rge o r sma l l t he t a sk is, seize every mom ent a s a le a r n in g o ppo r t uni ty! “A llow yo urse l f to ma ke co nt r i but i ons from day one. These co ntr ib u tio n s c a n be ba se d o n what ma kes sense to you. While th e re a re m a ny ‘ how- to s’ i n ma r ket i ng, there are also a lot o f intu itive t hi ngs a bo ut ma r ket i ng. A s a new employee, you b r in g a f re s h pe rspe ct i ve t hat c a n be valuable if you allow yo u rs e lf to be l i eve i t a nd spe a k up.”

Dennis Yu, chief technology officer at BlitzMetrics:

“Fi nd a m e nto r— two o f t he m i f you c a n —w h o yo u’d l i ke to e m u l ate. A n d se r ve t he m e a g e r l y, w i t h yo ur ava i l a b i l i ty a s yo u r g re ate st a s s et . T h ey w i l l o p e n do o rs fo r yo u a n d g i ve yo u a n unfa i r a d va nt a g e. W hy l e a r n t h e h a rd way? Re l at i o nsh i p s f i rst .”

amacareers

Dana Anderson, senior vice president and chief marketing officer at Mondelēz International:

“ I h ave thre e p ieces of a d vice to g ive new [ma r keters]: 1) A lways be g en erou s a n d g rateful , 2) n ever stop lea r n ing, and 3) trea su re c reativity; i t’s wh at ma kes th e wor ld s o d a r n ed interestin g .”

Lisa Donohue, global brand president at Starcom Worldwide:

“ W h et h e r you pl a n to be wi t h a n orga n i z at i o n for on e ye a r or 10, i t ’ s i m por t a nt to be i n an e nvi ron m e nt t h at a l i gn s wi t h you r goa l s an d pe rs on a l a n d profe s s i on a l va l u e s . W h e n yo u ’ re a u t h e nt i c to you rs e l f, pe opl e s e e t h e powe r t h at i s you a n d yo u c an dr i ve you r own s u cce s s — c a re e r a n d ot h e r wi s e.”

Eric Siebert, vice president of global digital marketing and global brand strategy at Boston Scientific and author of Careers in Marketing: The New Insider Book to Traditional and Digital Marketing Careers:

“It’s really important to think through many things as you ‘point the compass’ for your first job in marketing. The more honest you are with yourself now, the more the compass will be pointed in the right direction, minimizing any ‘rethinking’ about what you really want to do in the future. “Start by thinking about your passion and interests. Overlay this with your key strengths and differentiating talents. Factor in your tolerance for stress and scope of responsibilities. And then adjust for career growth and earnings potential. And, presto, you have found the perfect marketing career. If it only were that simple.”

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amacareers

expert advice

Marla Kaplowitz, CEO of MEC North America:

“ H ave the confi d ence to take mo re r isk s earl y on, even if it me a ns that you mi g ht tr ip a lo ng the way b ecause, ultimate ly, you wi l l l earn f ro m tho se exp eri ences. Ask fo r the big assi g nment, make that cro s s -country move i f it me a ns more op p ortuni ty fo r grow th and p ersonal and pro fe s s io nal d evel op ment.”

Mark Cuban, owner of the NBA’s Dallas Mavericks, Landmark Theatres and Magnolia Pictures; chairman of the HDTV cable network AXS TV and investor on “Shark Tank”:

“If you want to be successful, reduce the stress of those around you. Go to work. Have fun. Be yourself, and make some magic happen. That’s it!”

Michelle Lynn, chief insight officer at Dentsu Aegis Network:

Paul Wolfe, senior vice president of human resources at Indeed:

“ D o th e m ost yo u c a n d o, n ot th e l e a st yo u c a n g et away wi t h. T hi s i s a s u re f ire way to se pa rate yo u rs e lf f rom t he pa c k. Eve n th e s ma r te st pe o pl e f in d th e m s e l ve s c utt i ng co r n e rs . Co nst a nt l y re mi nd yo u rs e lf to t a ke t he t i me, e s p e c ia lly at t he be gi nni ng o f yo u r c a re e r. Yo u w i l l n eve r b e s or r y.”

“ S o me of th e most intere stin g c andidates th at we h ave h ire d are t h os e wh o have dive rs e ex per ie n ce s , s o don ’t be afraid to ex plore adj ace nt jo bs t h at h ave transfe rable s kills . P utting to o much emphas is on a s pecific j ob title c a n h o ld you back from ex plor in g oppor tu nities t h at could h ave long-te r m care er benefits.”

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expert advice

amacareers

Stacey Lane, career coach and consultant:

“Get involved with a professional organization. Don’t just attend, but find a role that’s enjoyable for you. If you like planning events, volunteer to help with an upcoming conference. If you like doing research, offer to help research potential speakers or compile a resources section for their website. If you want to grow your networking confidence, volunteer with the membership committee to greet new members/visitors. Not only will you make great connections that will build over time, but it can give you great experience to talk about during future job interviews.”

Ric Sweeney, director of the Circle of Excellence and associate professor at the Carl H. Lindner College of Business at the University of Cincinnati:

“Never stop learning. Your college degree is the foundation for your professional career, but it shouldn’t be the end of your quest for knowledge. Our world is changing every day, and so is the collective knowledge we create and share. Take advantage of this evolution of knowledge in our world to grow your professional career. ”

Stephen Strauss, head of sales enablement and content marketing for PayPal’s large enterprise group:

“ E arly in my career, the best thing I d id was listen. I took tim e to m eet people in d if fe re nt roles and departments to understand w h at they did and why they liked it. This h e lp e d m e imm ensely with choosing my own path and figuring ou t what aspects of m arketing I liked best (or didn’t ) . Ke e p an open mind as to which direction you might pursue.”

Tim Boswell, executive vice president and general manager at Mediabistro:

“ It i s i m por t a nt for a l l [you n g m a r kete rs] to foc u s on bu i l di n g t h e i r pe rs on a l bra n d. T h i s i s e s pe c i a l l y i m po rt ant fo r gra du ate s st a r t i n g t h e i r m a r ket i n g c a re e rs , a s t h i s prov i d es gre at i n s i ght for pros pe ct i ve e m pl oye rs a s to h ow t h ey t h i n k a bou t pos i t i on i n g a n d m a r ket i n g t h e m s e l ve s .”

Umang Shah, former global director of digital marketing and innovation at Campbell Soup Company and director of social strategy at Walmart:

“I a l ways te l l my mentees one thing: Never turn down a good opportunity b e cause o f l o c at i o n. Sure, moving to a new city can be unnerving and scary, but it te ach e s yo u i nva l ua bl e p eople sk ills and how to be flexible and adaptable. Plus, a g ood o ppo r t uni ty i s a good opportunity and will help you progress in your care e r. I f all e l se fa i l s, yo u c an always move back , and you will be richer for the expe r ie nce. July/August 2016 | marketing news

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advertisers’index

ADVERTISERS’ INDEX Quick source for contacting the suppliers in the July/August 2016 issue of Marketing News. 2016 AMA Annual Conference / Answers in Action.............. inside back cover URL: h ttp://www.AMA.org/annual

AMA Webcasts ......................... p. 4 Email: sales@ama.org URL: http://www.AMA.org/ webcasts

ab+c Creative Intelligence . ........................... p. 3 Ph. 1-888-848-1552 URL: http://www.a-b-c.com

AMA Whitepapers ................... p. 6 Email: sales@ama.org URL: http://www.AMA.org/ whitepaper

AMA Member-Only Webcasts . ............................... p. 66 URL: h ttp://www.AMA.org/mow

FocusVision ................. back cover URL: http://www.focusvision.com/ quantqual

RTVC ....................................... p. 5 URL: http://rockthevizcomm.com Salesforce Marketing Cloud . ............... inside front cover Ph. 1-866-558-9834 URL: http://www.sfdc.co/ nestlewaters Savitz Consulting .................. p. 7 Ph. 267-422-4997 / 214-957-7167 Email: jsavitz@savitzresearch.com

JULY/AUGUST 2016 | MARKETING NEWS

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Awards

amacommunity

Michel Wedel Awarded the Charles Coolidge Parlin Marketing Research Award

he American Marketing Association and the American Marketing Association Foundation announced Michel Wedel, the PepsiCo Chaired Professor of Consumer Science at the Robert H. Smith School of Business and a distinguished professor at the University of Maryland, as the recipient of the Charles Coolidge Parlin Marketing Research Award. The Charles Coolidge Parlin Marketing Research Award, which was established in 1945 by the Philadelphia Chapter of the AMA and The Wharton School in association with the Curtis Publishing Company, was created as a memorial to Charles Coolidge Parlin, the founder of marketing research. The award honors extraordinary achievements in advancing the market research industry and recognizes innovative techniques in a wide range of areas spanning new marketing research concepts, methods, measurement and analysis. Only scholars and practitioners in marketing research are eligible for this annual award. “The effect Wedel’s strategic leadership and integration of methodologies has had on the marketing research industry is profound,” says Russ Klein, CEO of the AMA. “We honor his commitment to marketing research, his market-based knowledge and the transformational impact he has had on the entire marketing community.” Wedel, who ranks as one of the most productive market researchers in the world, specializes in the development and application of statistical and econometric methods for research in marketing. He has written six books on market segmentation and visual marketing, and is an area editor

for Marketing Science, the AMA’s Journal of Marketing Research and the AMA’s Journal of Marketing. His more recent work addresses visual marketing using eye-tracking technology. Wedel has been honored with numerous awards for his contributions in marketing research and serves as a fellow of the American Statistical Association and the Institute for Operations Research and Management Science. Wedel holds an M.S. from the University of Leiden in

biomathematics, an M.S. from the Netherlands Association for statistics and operations research in statistics and a Ph.D. in marketing from Wageningen University. Wedel joins a list of 70 other award nominees recognized for their pioneering work in the marketing research industry, including Robert Wood Johnson, Peter Drucker, Arthur C. Nielsen, George Gallup, August A. Busch III, Paul E. Green, Philip Kotler, Robert J. Lavidge and Kevin J. Clancy.

July/August 2016 | marketing news

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backpage

Executive Insights

“If you’re not defining

your brand, someone else is going to define it for you.”

What role does the internet and social media play for business and personal brands in 2016?

A Background The growth of social media has triggered the rise of the online brand. But having a presentable, consistent online brand may be rarer than most think.

Karen Leland, branding expert, founder of Sterling Marketing Group and author of The Brand Mapping Strategy, says she fell in love with branding 15 years ago when she had to figure out how to promote a book. At the time, she was working as a management consultant; within six years, she was a full-time branding professional. In Leland’s newest book she gives seven core elements to branding, including having an anchor statement, a unique branding proposition and brand energy. How can brands and marketing professionals alike improve their online brand? Marketing News spoke with Leland for tips on how to take an online brand from sloppy to ship-shape.

Anyone can look up anyone on the internet and find out a huge amount in just a few clicks, so everyone today has a personal brand and every business has a brand, whether it’s by design or by default. For a lot of individuals and businesses, they’re still building their brand by default, particularly smaller businesses and entrepreneurs. … If you’re not defining your brand, someone else is going to define it for you.

What are the best tips you could give for branding online?

Set a Google alert for yourself and your company, so when you’re mentioned on the web, it comes up. People are often surprised, [thinking], “I didn’t realize they were going to talk about me or they were going to write about me or they were saying this.” There are certainly more sophisticated things you can do, but these are the best practices. Make sure your core social media— LinkedIn, Twitter, Facebook—are all consistent in your look, feel, tone, message and the language you use. You’ll go to people’s social media and you’ll see, even a company, their Twitter looks different from their Facebook and LinkedIn. They’re not consistent, and consistency is really important.

Also, it’s important to make sure those social media profiles are absolutely well-branded and use best practices. Many times I’ll go to the LinkedIn of a CEO or executive who has called me, and their LinkedIn is not up to best practices by any stretch of the imagination. … The other common mistake that people make is they don’t think about their brand beyond a logo, a tagline or an elevator pitch. A lot of people say, “I have my brand,” and what they mean is they have a logo or they have an elevator pitch. That’s really, really different than thinking your brand through. In my book, I talk about seven very distinct aspects of your brand you have to articulate: What’s your unique branding proposition? What’s unique about your brand? Not better than other people, necessarily, but what you bring to the party that’s powerful in terms of your brand. What’s your signature service? What are the services you offer that are particularly unique to you? It could be something propriety or something you’re an expert in. Everyone has signature services, even if you work in a company. You’re still providing services within that company. You have to go into those seven areas of depth to really have a brand that’s well-articulated, rich and deeply expressed. Those expressions have to translate to your website, your social media and the things you put online. m

–Hal Conick

marketing news | July/August 2016

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