learnthe4ps.com - For students of marketing.

Italian mannequin maker Almax has developed mannequins that can see and hear what customers are doing.  The new mannequins could allow retailers to monitor shopper behavior and potentially even listen to what customers are saying about what a mannequin is wearing.  At $5000, the mannequins are not cheap.  They provide a potentially new source of marketing research while also raising ethical and privacy concerns.

You can read more in this Bloomberg Businessweek article “In Some Store, the Mannequins Are Watching You” (December 6, 2012).

What do you think of this marketing research approach?  What could retailers learn?  Are there any ethical or privacy issues?  Why or why not?

Your marketing instructors probably preach the value of relying on solid marketing research and analysis when making marketing strategy decisions.  That said, many students (and managers) fall into the bad habit of relying on personal opinion. I guess that Ad Age wouldn’t be posting this article, “The ‘I think’ Syndrome Destroys Many a Campaign” (October 31, 2012) if we all couldn’t use a reminder.

What other tricks could marketing students (and managers) use to make sure they don’t fall back on personal opinion?  Under what conditions might “I think” be an acceptable argument?

“Design thinking” is an emerging school of thought around innovation and new product development. Many who practice this approach believe in rapid prototyping — getting products into customer hands quickly, soliciting feedback, and then adapting the product before going through additional rounds of the same.  While the approach has many advocates, a culturally engrained “fear of failure” can make adoption of the concept a challenge. A post at the HBR Blog Network, “The No. 1 Enemy of Creativity: Fear of Failure” (October 5, 2012, you may have to register to access) provides some background. As regular readers know, I have a soft spot in my heart (and my classes) for creativity — click on the “Creativity” tag on the right for some past posts on the topic.

What do you think about the authors’ assumptions?  Do you agree that we are raised to fear failure?  Does this fear of failure result in more cautious ideas — less creativity?  If you think that begin more accepting of failure would make you more creative, how can you begin to change your mindset?

[Update: right after I posted this I found the video below that provides some great examples related to this idea.]

Timothy Prestero shares a very interesting story of design and innovation at TEDxBoston. He describes his company’s efforts to design incubators for newborn babies in developing countries. They thought they had it figured out, their product won awards but it didn’t save babies.

The lessons Prestero shares are especially powerful in the context of his experience.

Sorry for the relatively light posting frequency over the last month. Between taking some time off and working on the latest revisions to my text books, I have neglected the blog a bit. I will get more posts up in the next couple of weeks to offer some current material to add to your classes this fall.

An important concept in marketing is the index.  An index is a measure of the relative purchases of a particular group. So if men age 18-34 purchase twice as much fast food as the average American, then this group would index at 200. If women in this group purchased 25% more than Americans on average — they index at 125. These numbers are examples, I don’t know the real numbers.

A geographic information company, Esri, developed an interactive map that uses demographic data from consumers surveys – it shows the relative purchases of cat treats — you can click on the “legend” button to see how each geographic area indexes.  Plug in an address or zip code to find out how much that area spoils its cats.  You can also click the large map link below this image to get a full page image. Then zoom out (the – button on the map) to get a better picture.

View Larger Map

This year unseasonably warm spring temperatures gave drivers of Good Humor ice cream trucks (which often roam neighborhoods in U.S. cities and towns) the opportunity to make some money early in the selling season. But many of these same drivers are now upset as Good Humor has run out of customer favorites — like the Toasted Almond and Chocolate Éclair ice cream bars. These drivers are important channel members for Good Humor, and when they can’t stock customer favorites everyone loses. This situation provides an opportunity to discuss the tradeoff faced by many producers of goods and services. When forecasting sales, producers have to tradeoff inventory costs and possibly spoilage if they overestimate demand against lost sales and the loss of consumer and dealer goodwill when demand outstrips supply. Good Humor plants will eventually catch up with demand — can you wait until the end of July???   You can read more in this Wall Street Journal article, “Not Cool: I Scream, You Scream, We All Scream ‘Where the Heck’s Our Ice Cream‘” (May 25, 2012, non-subscribers may need to click here).

Did you know that only 40% of British households own a dishwasher? That compares to 78% market penetration in the U.S., 77% in Germany, and 52% in France. Did you also know that dishwashers are more economical and use less water than washing by hand? So why aren’t the British buying more dishwashers? It appears that at least part of the problem comes from a lack of understanding about the benefits. You can read about a marketing strategy that hopes to change these numbers in “Will More Britons Buy Dishwashers?” (Bloomberg Businessweek, March 22, 2012).

Changing engrained consumer behavior can be a challenge.  It is not like appliance makers have not been trying hard to get the Brits to buy more dishwashers.  What do you think of this marketing strategy? What other ideas can you think of that might work?  What assumptions about British consumer behavior are you making with your suggestions?  If you understand your assumptions you can do market research to test those assumptions.

Scott Anthony has an interesting guest blog post at the Fast Company Co.Design blog, “3 Ways to Predict What Consumers Want Before They Know It“.  He offers three great suggestions for developing insight into what consumers want — and none of them directly ask customers.  There are also some great examples, including the  ChotuKool portable refrigerator.  This disruptive innovation targets India’s poorest households.

Read Anthony’s post.  Can you think of some potential new product ideas based on your own observations or personal experience?  Where do you, your friends, or family experience dissatisfaction that might be addressed with a product or service innovation?

Human beings are actually not very rational decision makers — there is a great deal of evidence to that effect.  We are subject to predictable biases.  Increased computing power and better databases are allowing companies to use analytics and make better (unbiased) decisions.  This is sparking the rise of new companies that can analyze data and some new applications.  You can read more in “So, What’s Your Algorithm?” (Wall Street Journal, January 4, 2011 – non-subscribers may need to click here).

Read this article and think about how other firms (beyond the Schwan’s example in the article) could use “big data” to make better marketing decisions?  Also, how do you think trends like this will impact your future career — answer by referencing your career?

A couple of interesting stories about how retailers utilize high-tech analytics to better understand customer shopping behavior. I heard “The secret life of discounts” (Marketplace radio, December 16, 2011, link to listen or read the transcript) as I drove to the airport last night to pick up my daughter who was coming home from college. There are some examples about how stores use analytics to try to remain profitable with consumers conditioned to buy only at a steep discount.

In “Big Brother is Watching You Shop” (Bloomberg Businessweek, December 15, 2011), you can read about retailers using in-store video cameras and tracking your cell phone to better understand how you move through a retail store. Analyzing video from a Miami store allowed Montblanc managers to more strategically locate merchandising, signage, and salespeople. The result — a 20% bump in sales. Other retailers follow customers’ cell phone signals to track and map movement through stores. This of course is raising privacy concerns.

What else could stores learn by carefully analyzing video of consumers shopping?  Does it bother you that your cell phone signal allows you to be tracked while you shop?