Marketing Without Advertising

Hard to understand

Market and 16th.

If you want to see and enjoy San Francisco low life with a high density of people at one place, this is the place for you....but only in the day time.

The weirdest piece of marketing I remember seeing is on this corner.  For many people in this neighborhood their cash is in their boot, underpants or being held by an armed 'associate' nearby.  Their drug inventory is in the crotch of a raunchy looking woman also standing nearby.

So here is this Pacific National Bank ad in a window with a high paying 2% CD for people who have $100,000 or more to deposit. 

What am I missing?  Or does this bank know something I don't know.

Grocery delivery

This is a stunning description of grocery home delivery...how far its gotten in Japan and how to do it right.

"the value of “net super” orders (groceries ordered over the internet) reached 23 billion yen in the same year—1.7 times the value of the previous year. The growing elderly population and increasing number households where both partners work are cited as reasons for presumed market growth."

"A popular example is the Co-op supermarket chain online Pal System that allows neighbors to form community purchasing groups, saving money on bulk purchases and receiving free shipping. To date, over a million shoppers around the country are enrolled in the Pal System."

Bing listing

I find the new Microsoft search engine to be wonderful.  I particularly like the fact that the search terms can be in 'natural language'.  Thus, in a photo search you can add the word 'ironic' and get interesting results.

To get your business listed accurately on Bing.com go to this site.

Looks tasty but isn't

I have been watching the genius of food styling on TV for about a year.  Every time I see one of those beautiful meals with shrimp, sizzling beef, squeezed lemons and steaming vegetables I get hungry.

Foolish as I am, I have tried three of these national sit-down restaurant chains.  First a disclaimer.  I live in San Francisco where even the lowliest diner has four kinds of lettuce in the salad, rarely serves fried dishes of any sort and tends to grill most food especially vegetables.

In each case in the national TV restaurant chain the food was poor (I won't mention the names because one of them may be the only restaurant in town for some of my readers). The meat was tenderized and still flavorless, fish was fried, the veggies were steamed and over cooked, the salad was iceberg with Safeway dressing. The service was just: I'm Shirley, I'll be your waitress today...and five visits from an unknown host interrupting 'Is everything fine, sir?' The waitress had ten buttons on her blouse promoting god-knows-what.  The table was cluttered with special drink promos.

Those brilliant food styling shots have misled me badly. Deceptive, if I have a vote.

Find the market first

I actually created a whole new world of perfume and get no credit, but when I walk around Tokyo, I am fully rewarded.

What happened?  In the early 1980s a 50 year old fellow was introduced to me and he hired me for consulting.  It was a simple consulting project. 

The gentleman had been an employee, what the Japanese call a 'salary-man', in the perfume business.  At the time very few Japanese women wore perfume because it was all Western and alien to native taste. Western perfume is a combination of musk and floral fragrances (rose, Camellia, citrus..).

My client said the Japanese would respond to a range of essences from trees and herbs such as sandalwood.  Herb and tree bark smells have been a staple in Japan for centuries.  Traditional 16th Century parties were focused on guessing the subtle ingredients in incense.

I suggested the gentleman package 100 bottles in an appropriate shape and design and ask his friends at the highest status department store to see how customers reacted.  

The department store turned out to be Odakyu in Shinjuku and the new perfume became the basis for the entire modern Japanese perfume business.

Special pricing

The first chapter of Marketing without Advertising is about the distressing extent of deceptive advertising as a reason that much advertising is so ineffective.  People don't trust advertising.  If it is interesting that the public views advertising with a curious eye.

One of the current offenses is airline advertising.  Several airlines are advertising rates that are particularly low because they don't include airport fees.  This is especially deceptive when it comes to international rates because the airport fees can exceed 15% of the price of the ticket.

It is not uncommon in standard American advertising to exclude sales tax in the price of a product or service. Most often consumers know their local sales tax, but not always. This is inherently deceptive because sales tax varies in ways that consumers can not compensate for, such as absence of a tax on take-out food but not on eat-in food in some states. 

The airline omission of airport fees is much more serious because consumers (1) don't know when an airline has omitted the fee and when it hasn't. (2) has no way to know what airline fees are and (3) airline fees are always applied...there is no way to avoid the on the part of the consumer.

Deceptive advertising is typical short range marketing thinking.  It attracts the ignorant customers to the false lower prices and keeps away the more competent customers who are generally more loyal to a business. 

It also makes all consumers more leery of all advertising which is why the advertising industry is short sighted in permitting deceptive advertising.

The official word on false advertising

The following headline appeared in the MARCH 11, 2009 Wall Street Journal: In Ads, 1 Out of 5 Stats Is Bogus* 

*Actually, It's Misleading, Incomplete or Obscured in Fine Print That Few People Read.

We were in an advertising bubble

In 1984 Salli Rasberry and I published the first edition of Marketing Without Advertising, we are now working on the seventh edition. Chapter one says something that had never before been publicly stated and with fact that had never been said by anyone else since: Advertising doesn't work. The $150 billion spent annually on advertising in the U.S. is part of an hysterical bubble that is based on no reality.

A major part of the current collapse of many businesses is due to the slow understanding of what we said in 1984.

First I have to explain what advertising is and why it doesn't work. I make a distinction between advertising and listing.  A listing is placing marketing information where a potential customer is looking for it.  Examples are: Yellow Pages, click-throughs on Google, signs on stores, Wednesday newspaper ads for food and Macys' sales and giveaway maps. Almost everything else, placed where potential customers have to ignore the marketing material is advertising.

Advertising is somewhat effective (1) when directed at tourists who had few other good sources of information (before the Internet), (2) children who are fairly gullible and (3) employees of the advertiser who learn from the advertising message what their company is directing at the public.

Small businesses, 98% of the time, find advertising useless, which is what I learned early on and led me to first teach the course Marketing Without Advertising and then to write the book.

Back to the bursting advertising bubble.  I think Google and click-through Internet listings have raised the question in the minds of all business people about the ineffectiveness of advertising.  That has led to a rapid decline in advertising in magazines and newspapers and a decline in advertising overall. 

On the other-hand click-through Internet listings work miracles for many businesses, so does good Google placement and effective websites. Craigslist works because it is broken down into tiny geographic neighborhoods where you know whether you can drive over and pick up the object for sale.

I've had over two thousand clients in my long consulting career...I haven't made any of this up.  The advertising doesn't work and the advertising bubble has burst.

Added related note: 73 million people have and use TIVO...mostly to avoid the intrusive advertising that destroys most TV programs.

Much less is more

It is very hard for technical businesses of every sort to understand a simple rule: simpler is better. Less features can mean more sales.

Technology businesses are founded by technophiles who love more technical features.  Some customers do to, but most never figure out how to use the features.  Fancy toasters sell a tiny fraction the number that simple two slice toasters sell.

I make my point with three good marketing examples. 

First is the ASUS eee the product that created the new field of netbooks.  The ASUS entered the market with no hard drive, little memory and the simplest possible Linux software designed to connect to the web and not much else.  It was a small screen. Last year, the second year on the market, netbooks sold over 10 million products.

The second smashing hit has been the Flip video camera.  It just makes an hour long video of medium resolution, fits in your pocket, connects directly to a computer USB port and has nothing else.

Lastly, the car that cracked the imported car market, the late 1950s VW had only one round dashboard panel with nothing else on it but the speedometer, the simplest possible car in every way.

I could mention many more including the Ipod and the original Swatches.

Good American branding

I have often cited Harley Davidson as one of the great branding achievements. 

It is great for two reasons.  You can measure the value of the brand.

(1) The same motorcycle design by Honda sells for $10,000 less than the Harley.

(2) Everything about the Harley brand fits into everyday living.  That includes logos, cigarette lighters, coffee cups, long trips to Harley events, Harley riding friends and the Harley rider's perceived personality.

Nothing else in the world of branding or even the idea of branding comes close.  Harley has made some lemons, quite a few actually, but it has never phased the brand. 

Part of Harley's success comes from the love of the product by the Hell's Angels MC which no corporation could ever hope to duplicate.