The video:
Saturday, October 17, 2009
Turning Inventory
Several years ago I was introduced to the writings of Roy H. Williams. Every Monday he sends out a newsletter that gets you to think about business, life, marketing, etc. Click here to go to his site and register for his weekly Monday Morning Memo.
Here's what he sent me last week:
Turn, Turn, Turn
The Mark of a Remarkable Business
Business midgets focus on profit margin, “I can sell these for double my cost!” But business giants focus on turn, “How many more would I sell if I lowered my price?”
Retailers call it “inventory turn.” Restaurateurs call it “table turn.” Either way, it’s a measurement of how efficiently a business uses its assets.
Inventory turn tells the retailer how many times he sold and replaced his inventory over a period of time. Table turn tells the restaurateur how many times he emptied and filled his restaurant during a single mealtime.
Turn is Sales divided by Inventory.
Bob and Samantha are competitors. Bob makes a 100 percent markup on everything he sells. Samantha adds only a 50 percent markup. Which of them has the better business?
Your instincts tell you Bob makes more money but actually, it’s Samantha.
Bob carries an average inventory of 6 million dollars and sells each of his items an average of once a year at twice the price he paid for it: 12 million dollars in sales with an annual gross profit of 6 million dollars. Bob “turned” his inventory once.
Samantha carries an average inventory of just 1 million dollars. She sells and replaces each item an average of 12 times a year, adding only a 50 percent markup each time. Samantha does 18 million dollars in sales and her annual gross profit is 6 million dollars, exactly the same as Bob’s.
But Samantha turned her inventory 12 times.
Both retailers made 6 million dollars but Bob is slowly going broke. Samantha is quickly becoming rich and powerful.
Bob invests 6 million to make a gross profit of 6 million a year. This means Bob has to make a 6 million dollar investment every time he wants to open a new store. And Bob’s inventory is getting out-of-date because he has to sit on it for a whole year before he can replace it. This problem compounds itself each year.
Samantha invests just 1 million dollars to make 6 million. She can open a new store with just a million dollars invested in inventory. But wait, it gets better.
Bob bought only 6 million dollars worth of product last year. Samantha bought 12 million. And Samantha is opening new stores. Lots of them. This is what makes Samantha powerful. Soon the suppliers will be charging Samantha lower prices than they charge Bob because Samantha is a much better customer. And the suppliers will give her 90 days to pay but Bob must continue paying immediately.
Do you realize what just happened? Not only can Samantha open a new store with an investment of just 1 million dollars in inventory, she can sell that inventory for 1.5 million dollars each month for 3 months – putting a total of 4.5 million into her bank account – before she has to pay the first million dollars for the first month’s inventory. This leaves 3.5 million dollars sitting in Samantha’s bank account, allowing her to inventory 3 new stores, each of which will be able to fund 3 additional stores in just 90 days.
Samantha has opened 12 stores in just 6 months. If she keeps it up, she’ll have 432 stores at the end of the year. And Samantha started with just 1 million dollars in inventory while Bob started with 6 million.
Bob likes to boast that he offers “6 times the selection,” but the public knows Bob charges $100 for the same item Samantha sells for just $75.
Care to make a guess how this is going to turn out?
The moral of the story is this: you can’t get a high inventory turn without offering the public what they really want. In my opinion, the person who selects a company’s inventory is the most important person in that company. I could be wrong.
But I don't think so.
Roy H. Williams
Losing
from Drew's Marketing Minute:
Posted: 08 Oct 2009 07:47 PM PDT
We all love chasing after new clients. The rush of winning a new account or having someone new announce to the world that they love you is heady stuff. It's enough to make many a business leader swoon a little.
Fast forward a few months...and all of a sudden, that shiny new client is a whole lot less interesting.
Net result? Nearly 70% of business lost in America is lost due to post-sales apathy.
Amazing isn’t it? We spend all this time and effort luring them to our business. We seduce them on the sales floor. We listen attentively to their problem and help them find a solution. We gave them a fair price. We smile and wave as they leave.
And then, we ignore them.
There is no hotter prospect than your current client. They know you. They liked you enough to try you once. Hopefully, they had a reasonable or even good experience the first go around. So why aren’t you talking to them? Why aren’t you telling them more about you? Why aren’t you asking them more about them?
If you don’t have a customer retention program – one that turns your clients into raving fans…you need one.
Make it simple, easy to implement and something you will actually do. Consistently. Start on it today. It’s that important. Sphere: Related ContentFriday, October 16, 2009
Friday Night Marketing News from Mediapost
5 nights a week, you can read and click:
Beverages
by Karlene Lukovitz
"SNL" will feature highlights from "SNL" viewing parties that will be hosted by Bud Light Golden Wheat across the country on Saturday evening. A-B will also use innovative formats such as "Backstage with Bud Light Golden Wheat," a series of never-before-aired clips from "SNL" shows over the years. ... Read the whole story > >
Retail
by Sarah Mahoney
A report finds that consumers are much more engaged in talking products and deals in the social world. Facebook, with active users now averaging about 15 hours on the site per week, contributes more than 3% of all traffic to the top retail sites online, it says, and as many as 25% of social network users post links to other companies, products or services. ... Read the whole story > >
Automotive
by Karl Greenberg Despite declining consumer confidence, Suzuki is optimistic that the timing of its brand reinvention is spot on, according to Gene Brown, the company's VP of marketing and communications. "It's a chance to accelerate our plans instead of seeing it as a disaster," he says. ... Read the whole story > >
Beverages
by Karlene Lukovitz
"The same consumers who value local foods, artisan products and traditional food preparation methods are finding those values expressed in the new cocktail movement, with its glorification of pre-Prohibition libations, micro-batch spirits and culinary inspiration," sum up the report's analysts. ... Read the whole story > >
Electronics
by Aaron Baar The new effort uses an interactive microsite and game to leverage word-of-mouth positioning and encourage engagement with the brand. At the site, users can enter a sweepstakes to win a trip for four to Las Vegas, and then play an interactive game where they use their best looks and lines to try to pick up women. ... Read the whole story > >
Packaged Goods
by Tanya Irwin
Film and TV actor Jason Lewis will star in a marketing campaign for Iconix Brand Group's Charisma, which includes fashion bedding, sheets, blankets, coverlets, rugs, bath accessories and towels. The winter 2009 campaign will debut in December issues of shelter and lifestyle magazines, and will be featured on outdoor advertising and online. ... Read the whole story > >
Tarte Pairs With 'Girl On Top' For Contest
Sphere: Related Content
Do You See What I See?
One of the benefits I offer my clients is that I have worked with a variety of different types of businesses and can help them with this....
From MarketingProfs.com
Peripheral Vision
If we were to ask you to describe your competition, you'd probably talk about companies that do exactly what you do. The owner of an Indian restaurant will discuss other Indian restaurants, for instance, while a florist will focus on rival flower shops. That approach is completely understandable—they are, after all, direct competitors.
But if you let your vision get too category-specific, you might miss the fact that you're also competing with companies that offer products and services quite unlike your own.
"On any given night," explains Rohit Bhargava at the Influential Marketing Blog, "any Indian restaurant might compete with a fast food joint, or even a grocery store. The flower shop might compete with a chocolate store on Valentine's day, or even with charitable causes when it comes to donations people make in memory of their departed loved ones."
Battle your indirect competition head-on. One way to lure customers from alternate categories is to make yours the more convenient option.
"People decide on dentists, dry cleaners, gas stations and much more based on little more than whether or not you happen to be on their way home," he says. Another is to demonstrate how your product or service addresses their underlying need in a way they might not have considered.
The Po!nt: "As marketers and businesspeople, we often focus on fighting against our competition," says Bhargava. "Sometimes, the better course might just be to see if you're even fighting against the right foe."
Source: Influential Marketing Blog. Click here for the full post. Sphere: Related ContentSocial Media Marketing Tips
The Dumb Little Man Blog this week posted a guide to using social media for your marketing:
7 Free or Cheap Ways to Effectively Promote Your Business Online
Posted: 14 Oct 2009 06:48 PM PDT
As a business owner, sales person, or marketer, you should always be trying to find ways to drum up more business – especially with the current economic climate. Each dollar that you spend on marketing and advertising should show a return on your investment and produce results that can help increase your bottom line. Easy enough right?While recent times have made many businesses tighten their belts on their spending, it’s extremely important to the success of your company to keep marketing your business in order to gain new customers and continue to generate revenue.
Luckily for marketers and business owners, there are several ways you can very affordably advertise your services and products online (many of which are free). Let's go through a handful of them.
Twitter, Facebook & Social Sites
Connecting with your customers or potential customers is more important than ever. Take part in the conversations people are having about your industry or business by interacting with them on social networks.
Where to start: Twitter, Facebook, MySpace, LinkedIn
Tips & Resources:
· 50 Ideas on Using Twitter for Business
· 32 Ways to Use Facebook for Business
· Using LinkedIn As a Small Business Owner
Video
Whether you’re promoting products or offering your services, creating videos is an excellent way to attract new customers. Additionally, videos have a tendency to go viral and quickly reach a large audience.
Where to start: YouTube
Tips & Resources:
· YouTube Marketing – 11 Terrific Ways to Promote Your Business on YouTube
· How to use video to promote your small business
· How to Produce “Business-Quality” Online Video on a Small Business Budget
Blogs & Forums
Similar to social networks, blogs and forums are a great place to take part in creating a dialogue. You want to be resourceful, really help people, and provide valuable information in order to gain the maximum benefits of these mediums.
Where to start: Google Blog Search & Forums Relevant to Your Business
Tips & Resources: 10 Rules For Driving Traffic Using Forums
Press Releases
A great way to gain new customers is by creating press releases about your services, products, or business. Try and stay away from highly commercial press releases that simply show your company in a positive light. Instead, focus on a unique angle that will draw visitors’ attention to something you are doing or an interesting aspect of your business.
Tips & Resources:
· The New Rules of PR (PDF – 21 pages)
· 20+ Free Press Release Distribution Sites
· Online Press Release Checklist
Local Resource Sites & Classifieds
If you’re an offline business that is looking to promote your company, ensure that you are listed in all of the sites that relate to your local area. These can include newspaper sites, local portals or hubs, classifieds, and national sites that focus on local businesses like Yelp, CitySearch, or Yellow Page directories.
Where to start: Yelp, CitySearch, SuperPages.com, Google Local & Yahoo! Local, & Craigslist
Tips & Resources:
· List your business on Google Maps, Yahoo Local & More
· GetListed.org
· Local Search Ranking Factors
· A Look at Important Local Business Listing Attributes
Email Newsletters
Not only will building an email list help you connect more often with your customers, it is a great way to promote people who are extremely interested in your products or services. This can be one of your most powerful online marketing tools because you become less reliant on search engines and other ways of generating traffic to your site.
Where to start: Constant Contact, MailChimp, Aweber, and iContact
Tips & Resources:
· 5 Common Newbie Mistakes
· Choosing An Email Newsletter Provider
· 50 Ways to Get Email Newsletter Subscribers
Contests & Giveaways
To be successful with contests and giveaways, you need to give people things that are valuable and relate to your business or industry. The great thing about contests is that you can give your own products away and your only out-of-pocket expense will be your hard costs for the product(s)
Where to start: Promote them on blogs, forums, press releases, video, and newsletters
Tips & Resources:
· Anatomy of a Successful Blog Contest
· 14 tips for Twitter contests that build followers and brand visibility
+1 Bonus Tip: Start a Blog
One of the most beneficial and inexpensive ways to promote your site online is by creating a blog that compliments your business’ services and products. Not only does it give a chance for you to talk about new happenings in your industry, but it allows you to start connecting with people on your site – where you can promote your own business as much as you want.
Where to start: WordPress, Blogger, TypePad
Tips & Resources:
· Freelancers: Here’s Why You Need a Blog
· Does Your Company Need a Blog?
 | Written on 10/14/2009 by Big Manta. Big Manta writes tips aimed at helping people succeed online. He covers a wide variety of topics including: blogging, business, marketing and making money with the internet on his blog - BigManta.com. | Photo Credit: Intersection Consulting |
Don't Interrupt
Selling is all about relationships:
Overcoming 'True' Objections
People buy on emotion. Whether they are introverts or extroverts is immaterial, if emotions are not expressed, no purchase will be made. Just because not all people are vocal about their feelings does not mean they do not have them. It is the job of the salesperson to uncover emotions.
In any sales opportunity, a top salesperson wants one of two outcomes: closing the deal, naturally, or the opportunity to overcome objections.
Yes, you heard me correctly. If prospects are not ready to become clients, the next best thing is for them to object. The key, though, is for it to be an objection. If a concern by a prospect can't be overcome by you -- or another vendor -- it's not an objection. It's a deal-breaker and it's time to move on.
Think of your own buying habits. When you've made a purchase, if you have not done so from the get-go, but were waffling, did you ask questions? Did you "object?" When people are interested in something, whether it is good or bad, they react. They have their emotions generated. The world of sales is no different.
But how do we determine what are true objections? And once we do, what do we do to overcome them to skyrocket our sales?
Pause
Let prospects gather their thoughts. Who says they were objecting? Have you ever thought aloud? Have you ever been in a situation where your "out loud" comment was more for your sake, than who you were speaking with?
You'd be amazed. What you think was an objection may have just been an immaterial statement that prospects themselves will overcome because they were never issues from the get-go.
Relax
Gather your own composure now. Count to 10. Take a deep breath. Take another moment before responding. Remember, there is still silence, but in the world of sales, silence at this point in the process is a terrific thing. We said above that objections are "emotions being expressed." Silence is an emotion. The question is, what emotions are going on in your prospect's mind?
When silence is abounding, the prospect is always thinking about why to buy your product, not why not to buy.
For instance, when I sold long distance service for LCI International, I often ran across scenarios like this:
Prospect: "I really wanted to bring my rate all the way down to .07 per minute."
Me: Silence, 10 seconds pass.
Prospect: "But I guess .08 is pretty good, too. After all, my rate now is .15/minute and you do have much better billing. I also like the effort you have put on the account. Okay, sign me up."
(Note: Yes, this was years ago. Long distance rates have dropped dramatically.)
Empathize
Notice how I say empathize, not sympathize. This is where the "feel, felt, found" technique is effective, but you have to be careful. If you are talking to seasoned salespeople, you might want to change the words around, because they might get annoyed if they recognize what you are doing. Then again, they might be impressed and even have a good laugh with you, not at you, as they will know what you are trying to accomplish. It goes like this:
"Mr. or Ms. Prospect, I do understand how you feel. Frankly, lots of my customers have felt the same way when they first heard about our program, but what they found out after further discussion were the benefits heavily outweighed the limitations."
Probe
I disagree strongly with the premise "buyers are liars." Buyers want to tell you their true concerns. They just don't know sometimes what these concerns are. The job of the salesperson is to bring out this concern.
A better saying: "Buyers are not liars, when the right questions are asked." When prospects object, ask what they really mean in an open-ended format. For instance, you may say, "How do you mean?" or "Please explain." Then make sure you are quiet to let them answer.
Playback
If you make it to this point and the objection has still not diffused itself, it's now your turn to address the matter. But first you have to repeat back what you view as the objection -- verbatim and slowly. Then ask prospects if you understand it properly. There are two reasons to do this:
1) Ensure you understand prospects' issues
2) Ensure prospects understand their own issues.
Often when people hear something repeated that they said, they say, "Oh, is that what you heard? That's not what I meant."
Solve
Only now, do you address the objection itself and try to offer a solution. It's important that you utilize all the information you received in the first four steps. Referring to the prospects' words and needs will get you the deal. When you get that nod of agreement, then you ask for the business. Now, and only now, have you earned the right to close the deal. Don't miss it.
Source: Todd Natenberg, President, TBN Sales Solutions (www.toddnatenberg.com)
Thursday, October 15, 2009
Thursday Night Marketing News from Mediapost
Clickable headlines:
Retail
by Sarah Mahoney "Everyone is looking to save money," says In-Stat's Allen Nogee, "and while many people might be resistant to buying a TracFone -- they may worry that the coverage won't be as good as, let's say, a Verizon or a U.S. Cellular, for example -- the fact that Wal-Mart is putting its brand name behind the product may make a difference." ... Read the whole story > >
Tourism
by Karl Greenberg
Karen Sortito, the former head of promotions for MGM, Fox and Paramount who joined NYC & Company as SVP and general manager earlier this year after consulting for the organization, tells Marketing Daily that NYC & Company is now "in constant dialogue with the entertainment business. Movie studios and television are just as important to us." ... Read the whole story > >
Beverages
by Tanya Irwin "The print and digital ads as well as Izze.com are directing consumers to the Sparkle Generator," the spokesperson tells Marketing Daily. "We're also sending announcements to our community on Facebook and Twitter. Our last print campaign was in June 2008, but it was of similar scope. This is only the third time we've run print ads, so it's very much new and exciting for us." ... Read the whole story > >
Regulation
by Aaron Baar
Marketers using bloggers to promote their products will have to instruct those bloggers to disclose financial arrangements in their promotion. Products submitted for review or nominal free samples would not necessarily immediately fall under scrutiny, though that could change if a reviewer consistently gives positive comments to a marketer's products. ... Read the whole story > >
Automotive
by Karl Greenberg Experian Automotive said Ford Fusion, Ford Edge and Ford Five Hundred owners showed the industry's highest brand loyalty, returning to buy a Ford Motor Co. vehicle 62.4%, 57.9% and 56% of the time, respectively. The Ford Freestyle was fifth, the Ford Escape was seventh, and the Ford Focus came in ninth. ... Read the whole story > >
Research
by David Goetzl
Comcast COO Steve Burke has hyped the potential for massive growth from advanced advertising platforms that are being developed by Canoe Ventures. A new report seems to buttress his belief, projecting industry-wide revenues in the emerging field will top $4 billion in 2014. ... Read the whole story > >
Bill Directs FCC To Regulate Loud Ads
Sphere: Related Content
The Problem with Wally-World
A few years ago, I lived in the small-medium size town of Warsaw, Indiana.
When Walmart built their first store in Warsaw, the outlots were filled with local retailers who took advantage of the drawing power of Walmart to bring customers to their parking lot.
Then when Walmart built a SuperCenter, they did it in a different part of town and all of those local retailers had to move too, because the old shopping center became a ghost town.
Walmart's draw isn't the same overseas according to this story from Business Week:
Wal-Mart's Painful Lessons
Having grown in fits and starts, Wal-Mart's international unit has a new game plan. Can it master world markets?
It's rare that a $100 billion business can be marginalized, but such is the case with the international arm of Wal-Mart Stores (WMT). As a stand-alone company, it would rank among the top five global retailers. Inside the $401 billion retail giant, though, the business has traditionally received short shrift. Its Bentonville (Ark.) headquarters is underwhelming—a drab, largely windowless, one-story structure named after Bill Mitchell, a former Walmart executive whom nobody seems to remember.
Since venturing into Mexico in 1991, Walmart International has grown haphazardly. During the 1990s the retailer exported its big-box, low-price model. While that strategy worked in North America, the results were so bad in Germany and Korea that Walmart withdrew from those countries in 2006. In response, Michael T. Duke, the former international chief and current CEO, gave local managers more autonomy while instituting more stringent financial goals for each region.
The results are mixed: International sales rose 11.5% in the second quarter (before the impact of exchange rate fluctuations), while U.S. sales barely budged. But over the past few years, operating profit margins have declined on the international side, which now has 3,805 stores operating under 53 distinct banners in 15 markets. As international chief C. Douglas McMillon says, Walmart is "progressing from being a domestic company with an international division to being a global company."
A Tale of Four Countries
The trick is how to get there. Four countries illustrate the challenges the world's largest retailer will face in the coming years as it seeks new sources of global growth. In Japan, managers are trying to revitalize a business that has hemorrhaged money for years—weighed down by a ho-hum brand, the country's byzantine distribution system, and cultural resistance to the discount model. In India, restrictions on foreign ownership have forced the company to team up with conglomerate Bharti, an odd coupling that has so far resulted in one store. Walmart has spent more than five years in Russia, maintaining a team of 30 executives who are still trying to plot an entry strategy at a time when other foreign retailers, like Carrefour, are bulking up their presence. And in Chile, a decade-long courtship finally led to the acquisition of the country's leading supermarket chain earlier this year, bringing with it a different business model, based in part on financial services.
All four demonstrate the perilous but potentially lucrative terrain that lies outside the saturated retail markets of Europe and North America. And Walmart's success will ultimately hinge on its ability to learn from past mistakes and adapt quickly to the shifting realities of these markets. Ahead, a look at the company's strategies.
JAPAN
It's lunchtime at a newly remodeled Seiyu supermarket in Tokyo, and shoppers are swarming around bento boxes that sell for 289 yen, or about $3. In the back, peaches, bananas, and pears are stacked neatly in the bins they were shipped in while the front of the store houses bottles of Chianti and Burgundy from Asda, Walmart's British chain. Nami Misawa, 26, is looking through near-empty discount bins. The recession prompted her to come back to Seiyu, and she's glad she did. "This store used to be a mess," she says, "but now it looks great."
Misawa's newfound enthusiasm is welcome news for Walmart, which has taken a beating in Japan. It entered the country seven years ago with the purchase of a 6% stake in the 371-store Seiyu chain. Despite continued losses, Walmart gradually raised its stake, making Seiyu a wholly-owned subsidiary in June 2008.
Walmart has had to confront numerous issues in Japan, from longtime Seiyu managers resisting its initiatives to a tendency among Japanese shoppers to equate low prices with inferior products. Bulk deals don't play well in a country where many live in small urban apartments, and the country's grocery distribution system is populated with wholesalers who broker deals between suppliers and retailers, skimming profits. Rival Carrefour abandoned the market years ago. "I have no idea why [Walmart is] still there," says Neil Z. Stern, a senior partner at consultancy McMillan/Doolittle.
Tapped for a Turnaround
Edward J. Kolodzieski is the man in charge of turning Seiyu around. As CEO of Walmart Japan, Kolodzieski has slashed expenses, closed 20 stores, and cut 29% of corporate staff. In-store butchers were removed, with most meat now processed in a central facility. With the freed-up floor space, Seiyu bulked up meals-to-go offerings. To bypass the middlemen, Seiyu has also boosted the number of products it imports directly from manufacturers by 25% over the past year, and is also focusing on increasing sales of its own private-label brands.
The biggest change, however, is a shift away from weekly specials to "everyday low prices" in areas like baby care and pet products, and, eventually, throughout the store. Taking a page from Britain's Asda, Seiyu instead uses its marketing dollars to compare prices against competitors. With the depth of the current recession, argues Tokyo-based business consultant Ken Hasebe, Japanese consumers "have finally accepted that you can buy quality merchandise for a lower price."
One positive sign: Seiyu has been posting positive comparable store sales since last November, including a 1.3% gain in same-store sales in the second quarter. (Comparable or same-store sales is a key retail metric that tracks the results of stores open a year or more.) Still, profit margins declined in the same period, proving that progress is slow: "It's taking a little longer than any of us would have liked," says CFO Thomas M. Schoewe.
INDIA AND RUSSIA
India and Russia are widely regarded as two of the world's fastest-growing retail markets—and two of the most frustrating for foreign retailers. Walmart boasts one wholesale outlet so far in India, and it has only a 30-person development office in Moscow to show after more than five years of scouting in Russia. But through a combination of joint ventures, acquisitions, and expansion, the retailer is hoping to become a major player in both.
India's $350 billion retail sector is composed of small family-run ventures, with organized chains accounting for less than 5% of sales. To get around government restrictions on foreign retailers selling to consumers, Walmart recently teamed up with Bharti Enterprises to open a cash-and-carry operation in the northern city of Amritsar. Best Price Modern Wholesale, as it's called, technically caters to merchants and small businesses. But with few restrictions, more than 30,000 members have signed up for the first store.
As in the U.S., the emphasis is on a wide selection of goods in one location at a low cost—everything from Castrol motor oil and sneakers to milk in large canisters that can be tied to the side of bicycles. Best Price employs 25 people to go around the region each week and check prices at mom-and-pop shops, to ensure that they're consistently offering the best value. Raj Jain, a former Whirlpool executive who now heads Walmart's Indian operations, also opened a training institute in Amritsar last December in partnership with Bharti and the Punjab government.
Have Tractor, Will Shop
With so few retail chains, employees have no background in the kind of merchandising and customer service skills needed to work at a large store. They also need to learn how to help customers with goods they have not seen before, such as the Japanese guava that some restaurant owners sampled on a recent visit.
Jain is also tapping Walmart's expertise to buy from farmers directly, cutting out local distributors. About 10% to 15% of Best Price's produce currently goes right from the field to the shelves, and Jain says he wants to increase that to 40% by next year.
Though small, the venture shows promise. Jaideep Singh and his sister, Shalini, now drive a tractor 25 miles to pick up goods for their father's store. Jaideep says profits are up about 20% because of the low-priced goods that Best Price stocks. "We come two or three times a week," he says.
Confronting Russian Corruption
Walmart plans to open 10 to 15 outlets through the partnership over the next three years, eventually employing about 5,000 people. But McMillon wants to see Walmart running its own retail stores there, too. He pressed his case with commerce and agriculture ministers in New Delhi in July. "What I tried to convey is that we would invest more, and faster, if we had the opportunity to do so," he says. A representative from the Indian government declined to comment.
In Russia, the impediments to retail development are less visible but no less worrisome. Corruption is rampant with various administrative authorities capable of gumming up operations if payments are not made. Anticorruption group Transparency International ranked Russia 147th out of 180 countries on its most recent corruption perception index. In June, Swedish furniture retailer IKEA said it would halt further investment in Russia, citing the "unpredictability of administrative processes." The retailer's stores have been temporarily shut down in the past due to various questionable violations, and IKEA founder Ingvar Kamprad went on Swedish radio earlier this year to link those problems to IKEA's refusal to pay bribes in Russia. (A Russian government representative declined to comment.)
While Walmart is looking at opening its own stores in Russia, it's far more likely it will start by acquiring a local retailer. Analysts say the prime candidate is Lenta, a fast-growing, privately held chain of 34 hypermarkets and the nation's fifth-largest retailer. Lenta founder Oleg Zherebtsov is saddled with debts and sold his 35% stake to the investment group of private equity firm TPG and the private equity arm of Russian state bank VTB in early September. "There was a time when we felt that market was overpriced, and that has changed somewhat," says McMillon. With rivals such as Metro expanding their presence through new stores, and Carrefour opening its second outlet in September, "they cannot wait," says Planet Retail analyst Milos Ryba.
CHILE
Chilean shoppers strolling through the aisles of their local D&S supermarket recently came across something not usually offered by the discounter: Apple (AAPL) iPods. That's not the only change coming for the 224-store chain, which sold a majority stake to Walmart earlier this year for $1.6 billion. (It now owns about 75% of D&S.)
In acquiring D&S (short for Distribución y Servicio), the nation's leading grocer and third-largest retailer, Walmart hopes to cement its dominance in Latin America, where it is by far the biggest retailer with $38 billion in sales, estimates research firm Planet Retail, double that of its closest rival, Carrefour. In Chile, Walmart enters a market that has long been inhospitable to foreign retailers. Home Depot (HD), Carrefour, and J.C. Penney are among the companies that have tried, and failed, to make it in Chile, a nation of 17 million with the sixth-largest retail market in Latin America.
Rather than go it alone, as others have attempted, Walmart cultivated close ties with D&S for more than a decade: Bob L. Martin, who ran the international division in the 1990s, says he first visited Chile in 1997. D&S, in turn, modeled much of its business practices on Walmart, looking to Bentonville "as an icon," says Claudio Pizarro, a professor at the University of Chile. (Walmart also imports products like salmon from Chile.)
Financial Services a Draw
Walmart has increased D&S's expansion budget from $150 million to $250 million, which will go toward opening nearly 70 stores this year, many of them small stores that cater to lower-income shoppers, according to Vicente Trius, Walmart Latin America's president and CEO.
The appeal of D&S goes well beyond its stores. About 1.7 million Chileans carry a Presto card issued by its financial services unit, up from 1.2 million in 2004. "There is a saying here that large retailers generate sales with [stores] and earnings with their credit cards," says Rodrigo Rivera, a partner with the Boston Consulting Group in Santiago.
Indeed, some South American retail chains generate upwards of 70% of their profits from financial services, analysts estimate. (At D&S that figure is just 17%.) Walmart already offers financial services in Mexico and Brazil, though its attempts to launch a bank in the U.S. have failed. The retailer is keen to grow the Presto business by adding more low-risk services such as selling life insurance for outside vendors.
Achieving the right balance between local knowledge and global scale is not easy. "We're in the early stages," says McMillon. "But we know you can't run the world from one place."
Boyle is deputy Corporations editor for BusinessWeek.
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Save a forest. Cut the cords. Moisturize. Let's launch!
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Seagram's Vodka launched a trio of ads that take NFL rivalries to an enjoyable, lowbrow level. A patriot talks smack to a sassy dolphin in the first ad, seen here. The dolphin has a hard time taking threats seriously from a man wearing a wig and makeup. It's a giant trading barbs with an eagle in the next ad, seen here. The deep-voiced giant threatens to crush the eagle, which plans on feeding the giant to his kids. My favorite ad pits cheese against bear. "Keep it down queso," says the bear. "Shut your bear trap before I beat you into hibernation," replies the cheese. See it here. "Celebrate classic rivalries with Seagram's Vodka," concludes the spots, created by David&Goliath. 
Graceful moisture penetrates multiple layers of skin in an ad for Vaseline Sheer Infusion, dubbed as lotion that delivers moisture across all layers of skin. How many layers are we talking about here? Fifteen acrobats play the role of Sheer Infusion, piercing skin in a polished manner. Watch the ad here, created by Bartle Bogle Hegarty New York.
Travelers Insurance protects businesses, homes and automobiles. Possessions covered in countless red umbrellas are a dead giveaway to protection by Travelers. "Drifters" begins with a dozen red umbrellas floating in the sky. The number of umbrellas multiplies as the flock travels over a pond and through a city, until landing on a parked car and covering the roof of a house. "When it comes to protecting the things you care about, leave nothing to chance," says the voiceover. See the ad here. Fallon created the ad, edited by Rock Paper Scissors. a52 provided visual effects.
The Las Vegas Convention and Visitors Authority launched the latest ad in its "What happens here, stays here" campaign -- and it does not disappoint. A bereaved family gathers to hear a will reading. The widow gets the house, the son gets a rare coin collection -- and John the concierge receives the Monet, Bentley and Italian villa for reasons only he and the deceased, Stanley, are privy to. Speechless family members turn to John, who offers his condolences. Watch the ad here, created by R&R Partners.
I want a Powermat, stat. It's a flat pad that wirelessly charges cell phones, iPods and handheld games. All you need to do is plug in the Powermat and you're good to go. I'd probably have the same reaction as those featured in two TV spots introducing Powermat to the world. Two college students are so amazed by the Powermat that they swear uncontrollably and are bleeped out, for the sake of the children. They're also hopeful the device will help them land chicks. Good luck with that. Watch it here. The Powermat equally impresses a pair of co-workers, who are unable to suppress their potty mouths. Their boss joins the conversation then tells them to "get back to bleepin work." See the ad here. Print ads, seen here, here and here, show a previous life full of tangled cords. Woods Witt Dealy & Sons created the campaign, with editing handled by Crew Cuts. Maxus handled the media buy.
Does your IT department treat you like the duo in this online video? Members of this virtual IT department berate and speak to users as they would a child, have little time for unimportant problems, and play "Star Wars" with one another. The video ends with a Web address: TalkToTheITGuy.com, a site that promotes Alot's Web snapshots, a toolbar application that lets PC users take screengrabs of Web pages, useful when writing presentations. And there's less of a chance of needing the IT folks' help. In addition to the online video, there's rich-media banners running on business-targeted sites across Yahoo and the Lotame Network. Walrus created the campaign.
Amazing things happen when you think twice before printing. Forests are saved. Trees grow between buildings and city streets, making the commute to work all the more challenging. A director's cut for Kaiser Permanente promotes the company's paperless medical records. Less printing means added shade and trees as tall as surrounding buildings. "Paperless medical records are a beautiful thing," closes "Emerald Cities," seen here. Campbell-Ewald, Los Angeles created the ad, directed by Noam Murro of Biscuit Filmworks.
"Le Sens Propre" is a short film that bowed earlier this year to promote Adobe's Creative Suite 4. A whimsical tale is told through the imaginative eyes of a little girl. She watches children play outside while she remains inside with a stomachache. Mom gets a glimpse of life from her daughter's point of view, which involves edible clouds, cupcakes, lollipops and chocolate. I'd like to visit often. Since it's a dream world, hopefully I can eat all I want without gaining weight. See the film here, created by Goodby, Silverstein & Partners and written and directed by Cisma from Blacklist.
Random iPhone app of the week: An app that encourages users to play with their food. LongHorn Steakhouse launched its first-ever 3D application, additionally touted as the first app for the casual dining industry. Users can play with a steak, flip it around, and those with 3-D glasses can see it all take place in stereoscopic 3D. The free app, created by Grey New York, is available in the App Store.
| Amy Corr is managing editor, online newsletters for MediaPost. She can be reached at amyc@mediapost.com. |
New ways to Generate Leads
It's been nearly seven years that I've been going to work for a group of radio stations in Fort Wayne, Indiana in the advertising sales department.
I worked in radio sales before, Detroit, about 15 years ago, and the one thing I disliked then was cold calls.
When I returned to this business in 2003, I did the cold call routine but I also started networking and generating referals. As a matter of fact, this morning I am filling in at a B.N.I. group that I was a memeber of for three years.
The last few years I have expanded my world to include social media and marketing. And this week, I posted on my facebook page that I have a "Buy Local" program for area businesses to participate in. Within a couple of hours, I had requests from friends wanting the details.
Recently I received this from Jill Konrath:
Cold Calling Isn't the Only Way to Get Prospects
Posted: 12 Oct 2009 09:11 AM PDT
Today's post is by Kendra Lee, author of Selling Against the Goal and President of KLA group.
Not many sellers like cold calling. They may be forced into it but they go kicking and screaming, avoiding it with any excuse.
Unfortunately, they think it’s the only approach to prospecting, but it doesn’t have to be that way.
John was a managed services provider looking to grow his company. He created a cold calling plan to reach three different micro-segments that he’d identified as his hottest opportunities.
Together we put a strategy in place with a dynamite approach. He learned how to tailor his message to different companies, tips to get past gatekeepers and techniques for leaving gripping voicemails.
John was excited! He spent weeks perfecting everything, holding off on any calls until he felt he was fully prepared.
And then it was time to execute.
After two weeks of failed attempts, John fessed up. He didn’t want to pick up the phone.
He’d convinced himself that this was the right way to prospect. John assumed that all successful sales people did it, and if his business was going to be successful, he had to master it, too.
Not true.
Cold calling can be one of the most inefficient ways to find leads. Unless you have a list of specific contacts you want to reach, it simply isn’t your best technique to fill your funnel.
I’m a passionate believer in alternate ways of prospecting, especially when you’ve got a big region you’re attempting to cover and you’re strapped with a large number to sell. Instead, you need a plan that’ll bring leads in the door in a manner that’s comfortable for you.
It’s time to change your prospecting strategy. Here are some ideas for you.
- Start an email campaign. Afraid of the spam laws? Keep your list small and personalize your emails to participants’ needs so it feels as if you sat down to write them an individual message. Send a series of 3-4 emails three days apart to encourage a response.
- Know your target market. John knew where to look for his hottest opportunities. You want to do the same. Keep your micro-segments small, 20-125 contacts at a time, so you can be more personal in your communications.
- Hold an on-line event. Sound time consuming and expensive? You can run one practically for free so don’t let the price stop you. If content or participation is your concern, remember that you’re the expert. Make your topic relevant to your target market’s top issues and they’ll want to hear what you have to say. Share recommendations based on work you’ve done with other clients. Offer something at the end that’ll separate hot prospects from warm leads.
- Use social media, press releases and / or articles to get noticed. They’ll keep you in front of your target market where they get to know you as an expert. You’ll begin to create a relationship even before they require your assistance.
- Create a mini-campaign by linking email, events, social media, and articles together to keep you in constant touch with your micro-segments. As a seller you don’t have time to run a complicated 6-month campaign, but you can run a simple one over 6 weeks that generates new leads all along the way.
Some people love cold calling. But if you aren’t one of those people, relax, breathe a deep sigh of relief and change your prospecting strategy.
Not only will you build your funnel, you’ll also create awareness for yourself and your company through consistent exposure. When your target prospects have a need, they’ll remember you and reach out. And isn’t that so much more inviting that interrupting their day with a cold call?
Wednesday, October 14, 2009
Wednesday Night Marketing News from Mediapost
I've seen the Verizon ads, have you?
Telecom
by Aaron Baar "I think the strategy is cheeky. It's certainly good for Verizon to get out there and snipe," Andrew Nusca, an associate editor at ZDNet, tells Marketing Daily. "But at the same rate, it's just as questionable that they would have to snipe in the first place. When you're the leader, you're not supposed to look at who's behind you." ... Read the whole story > >
Automotive
by Karl Greenberg
The ad campaign, via Hyundai's sibling company, Innocean Worldwide Americas, includes five TV spots to run through November. They show people kicking tires in Hyundai showrooms and counsel that owning a car is a long-term commitment: Even though buying one takes relatively little time, it's time enough to make a mistake. ... Read the whole story > >
Spirits
by Karlene Lukovitz The timing reflects not just the need to have a new campaign in place for the critical holiday season, but also the first application of extensive, new worldwide research conducted to get a deeper understanding of what the brand means to consumers, Bacardi rums brand director Maggie McDonnell tells Marketing Daily. ... Read the whole story > >
Retail
by Sarah Mahoney
Americans are fiercely focused on price, says Synovate, a Chicago-based market research firm, which polled 6,700 people in 10 markets around the world. Some 39% of shoppers in the U.S. say they are spending less than they did 12 months ago, and 78% would happily switch one food brand for another if it were a better deal. ... Read the whole story > >
Retail
by Tanya Irwin Marketing for the shirts includes e-blasts to customers, says the spokesperson. Tommy Bahama retail locations have been promoting within the stores by talking about it with guests and taking pre-orders. The shirt will also be advertised in the World Series program, the spokesperson says. ... Read the whole story > >
Beverages
by Karlene Lukovitz
Ongoing marketing opportunities include tie-ins to supermarket commodity promotions when retailers promote Florida agricultural products in newspaper and home-delivered ad circulars; reduced-cost tradeshow assistance; being featured in a trade magazine for buyers; and signage and point-of-purchase materials. ... Read the whole story > >
P&G Looks Outside U.S. For Long-Term Growth
Sphere: Related Content
How to Be Different, Better, & Successful
Perhaps you have heard of Vera Bradley. Earlier this month, we hosted the District 6 Fall Conference for the American Advertising Federation and one of the speakers told us the inside story of how this company began in Northeast Indiana, and has become a national brand.
They are different, better & successful.
FastCompany took a look at another company that is different, better & successful:
FC Expert Blog
Fix It – Even If It Ain’t Broke
BY FC Expert Blogger Kaihan KrippendorffThis blog is written by a member of our expert blogging community and expresses that expert's views alone.
When something works, people grow fixated on it. They stop looking for alternative options. And this fixation creates an opportunity for those willing to reconsider the accepted approach. The company I introduced last week, Rosetta Stone (RST), hasn’t been satisfied with the fact that its products work. Instead, it continues to challenge the norm.
In 1995, RST executives decided to bundle their language tool products and sell the package for $300, which was much more expensive than their competitors' price tag of $5 to $20. If they accepted that the only way to sell language tools was through bookstores and catalogs, like their competitors were doing, it would be almost impossible to sell a $300 product. People are unlikely to put that much money on their credit cards after only reading the back cover of a box.
Recognizing this, RST had to either give up its $300 pricing strategy or diverge from industry norms. It dared to veer. RST headed for the mall and airports. It lined up its high-end language learning software with other kiosks hocking sunglasses and hair extensions.
RST seemed perhaps a fish out of water - $300 software next to $20 sunglasses - but this is precisely what a smart strategist wants. Because the fish out of water has no other fish to contend with.
The strategy worked. RST’s well-informed sales people could walk customers through its unique product, addressing in full detail the concerns that stand between curiosity and purchase. These kiosks also allowed the sales person to show potential customers the software and process that makes RST so effective.
“We needed to open places where we could demonstrate the products,” says CEO Tom Adams. "So we opened kiosks. We bet that if we demonstrated it to 10 people, five would buy, because they’d get it.”
This pattern of taking the unorthodox path has worked for millennia. Genghis Khan used it often to surprise his opponents. They expected he would come over the flat land, while he marched his men over mountains and frozen lakes to appear out of nowhere at the back door. This approach also gave Dell a two-decade-long competitive vacuum, for others would not risk upsetting retailers to sell directly to end-users.
RST’s kiosk strategy may keep competitors out of the way for a while. It may take a few years for them to copy. But what may offer long-term value is the company’s willingness to veer from the orthodox path. Tom says, “If everyone is telling you not to do something, it is very likely the right thing to do. My theory is ‘do the opposite.’”
If this is true, if RST can make the propensity for the unorthodox part of its DNA rather than a one-off strategy, it may repeatedly surprise the market for years. Ask yourself the questions below to see if you can find an uncharted path to success.
1. What path are others fixated on because they assume it is the right one?
2. What ideas do I have to change that approach?
3. How can I make things better, faster and more efficient?
4. How can I research my ideas without spending a lot of money upfront? Sphere: Related ContentStop Screaming
Some of the most successful ad campaigns I've created for radio were relationship oriented. Not the screaming buy now, Buy Now, BUY NOW, BUY NOW, BUY NOW campaigns that are still being aired by too many advertisers.
So it makes a lot of sense that this is also true online:
Consumers Responsive to a Light Touch Online
Against a backdrop of blinking ads and aggressive product pitches, online consumers are increasingly responsive to subtlety and soft sells.
That's according to recent data from MTV Networks and InsightExpress, which found that audiences liked -- and were more apt to remember -- short-lived pre-roll and overlay ad combinations.
What's more, to surmount negative audience attitudes toward online video ads, marketers will need to develop a mix of ad formats that suits the increasingly varied content consumed, according to eMarketer.
Specifically, a less intrusive mix of pre-roll and other ad delivery formats, such as overlays, is recommended to reduce audience resistance. Video ads attached to traditional content -- for example, TV programs -- are more likely to evoke positive audience attitudes than other types of online video.
"It will mean making the length of video ads suitable to the length of content, so that they are not too pushy, and devoting resources to develop high-quality video creative that is well-targeted to the intended online audience," said David Hallerman, eMarketer senior analyst.
Marketers still generally shun user-generated video, according to eMarketer, but the proliferation of short professional content gives them more opportunities for video advertising.
Of particular note, choosing an appropriate amount of advertising for the content and its audience will be key, eMarketer makes clear.
TV and online video are not one and the same -- the Internet audience does not necessarily respond to the same ads in the same way they would after viewing them on TV.
Therefore, developing ad creative just for Internet video will give marketers a competitive edge.
(Source: Online Media Daily, 10/06/09)
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