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Posts Tagged ‘brand loyalty’

Impulse Purchased Products

05 Sep

How much time do you spend thinking about which type of gum you are going to pick the next time you are in a grocery store? Do you have a favorite gum brand? If yes, why is it a favorite and how did you develop that loyalty?

I would advise you against taking these questions lightly, we are talking about $19 billion industry here (about SAR 71.25 billion)!

Gum is one of those products that are usually purchased based on an impulse. You rarely plan to go to a supermarket or a grocery store to buy a gum! Most of the time you will be standing in a cashier queue and you will see it somewhere around and simply extend your arm to grab one.

It is argued that building loyal customers to such products is difficult, and I tend to agree on that argument. Distinguishing such products based on taste or quality is difficult if not impossible, and after sale services rarely exist!

However, being memorable through intensive advertising might be the only solution! Now if you remember my questions at the beginning of this post, and you truly have a favorite gum brand, I would bet that you have been exposed to many many many advertisements for that brand so when you stood in that cashier queue and extended your hand to grab a gum, you took the one that looked most familiar to you. Familiarity with a brand name or its package somehow generates confidence about the quality of products.

Nevertheless, advertisements are not everything in marketing, there is the new hype; social media marketing. The social media sites are getting more and more popular and more and more access in this part of the world. Although Arabic companies were a bit reluctant at first to jump on the wave, they realized the potential now and are trying their best to catch on (check out this post about Saudi companies and social media in 2009).

One of these attempts is Mentos Arabia. Mentos is a well known gum and mint brand, it has been around since 1950. And now its Arabic marketing team is working on different social media platforms to personalize the brand and engage with its customers (check out their Twitter & Facebook). Again, for such impulse purchased products, it is not an easy job, but they are doing a great job as I have been invited to see. The way they are engaging their online fans and potential customers through games, offers, and challenges is admirable. Such method will keep the brand name memorable and always in front of the customers’ eyes! However, I have noticed that although it is Mentos Arabia, I have not seen any posts in Arabic. This is somthing they should really consider to widen their audiance and reach more potential customers in the Arab world.

 
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Posted in Advertisement, Branding, Marketing, Social Media

 

Al Marai, What did you do?

08 Jul

They increased the price of one of its products by one riyal, and it is like they opened the gates of hell!!

Overnight, Al Marai just turned to be the talk of the country, and especially, the talk of Twitter! Boycotting campaigns and accusations of theft and deceiving are all over the place!

Given that anyone has all the right to reject a certain product and even invite others to boycott it as long as he/she is providing some kind of logical reasoning. What happened with Al Marai is a bit different. It is something like an explosion of illogical, and in a lot of times superficial, reasoning and poor justifications all mixed with a tone of hatred and accusation of theft and deception. Which is to be honest, a very strange reaction to one of the icons in the Saudi business environment!

The following should not be taken as a defending attempt on behalf of Al Marai, I am quite sure they have what it takes to defend themselves, I will only be trying to defend the logic of business, from where I see it at least!

  • The Price!

In any industry, and for any product, specifying a price is the most challenging task ever. It is a mix of facts, market status, and aspirations. Facts in the sense of raw materials and production lines. The money, human resources, distribution lines costs, and so on. All these are hard figures that are built on management decisions to provide a certain product, in a certain shape, with a certain quality. And the facts might be the easiest part of the determining-the-price-process.

Then, there is the market status; who are our competitors and who are our customers? What are the prices in the market? What is the quality standards in the market? And most importantly, what is the economical status of the targeted market? The main question in here is, where does the company want to be in regard to all of this?

And finally, there is the aspirations of the company, what are the profits margins it is trying to achieve and keep, what kind of a message and values it is trying to provide?

In short, there is no book or research ever written in the logical human universe that states prices should be fixed along the whole product life cycle, or else, the company producing that product is nothing but a symbol of evil!

  • They were making profit, weren’t they?

Yes they were, and guess what, they are planning to keep it that way. For those been through Al Marai financial statements and arguing that it is making profits despite its claims of maintaining the production costs under control, there are two major points to put into considerations here: First, the remarkable increase in profits goes primarily  back to the brilliant accusations and product portfolio diversification strategy that the company embarked on few years ago. It is not  anymore a milk producing company, it is a food company (so to speak). Second, in a volatile economical situation, it is becoming harder and harder to rely on the historical data to make accurate assumptions about the current and future statuses. For a company working in a very sensitive market to the raw materials prices fluctuations, any observer to this market should have definitely noticed the instability the food market is going through globally.

  • Al Marai, the brand!

Let’s look into this from a different angel. I would guess that Al Marai could have kept the prices the same or even lower if it decided to compromise its well known quality standards.  The company is in the market since 1976, and there is a reason that most of its products are market leaders each in its respective segment. Al Marai branding philosophy has always been built on quality, and I believe this is what they should be emphasizing on in such current events.

 
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Posted in Branding, Branding, Communication, Marketing, Saudi business

 

Send it to Mrs. Obama

18 Apr

In a lighthearted, but definitely interesting, piece published by the ‘Harvard Business Review, Nov. 2010,’ David Yermack has collected data to show that the brands that Michelle Obama wears in her public appearances tend to gain higher values in stock markets. Let me repeat this, whenever Mrs. Obama wears a brand in a public appearance, the brand she wore would start scoring returns that cannot be attributed to normal market variations!

On average, the brands she wears generate a value of about $14 million per appearance. And as a total of 189 public appearances, 29 brands scored about $2.7 billion in stock market value. And if you are a lady and reading this, you might be interested to know that in those 189 appearances, she wore about 245 items of apparel; so do you still think your closet collection is fashionable? …  yeah, right!!!!

So why this post? It is to stress on the importance of celebrity endorsement in marketing, branding, and eventually generating value. Mrs. Obama is definitely a special case. For instance, she is not paid to wear what she does. This is giving her a credibility that is pretty hard to establish in any celebrity endorsement campaign. Mr. Yermack goes further and attribute this huge impact of Mrs. Obama on the fashion industry to three reasons: her personal and authentic interest in fashion, her position as the first lady, and the power of social internet and e-commerce that makes such effects almost instantaneous; you could watch what she is wearing live, and start ordering it online right away!!

Now, reflecting that on the Saudi market, and the whole Arab market if you would, our celebrity endorsement campaigns are dreadful, to say the least. For a lot of marketers in this part of the world, unfortunately, it is only about getting the celebrity using the product in front of a camera and … that’s all!!! So for us, the consumers, it is a lousy performer, hugely paid, trying to convince us that this is the best juice, shampoo, telecom network out there!!! There are no common traits that the brand and the celebrity share and try to communicate to the consumers. Now I am saying this just assuming that those ads are created based on a branding strategy!!

To get the right picture, just think of Nike and its famous tennis players sponsoring/celebrity endorsement campaigns, or even better, check out the “elegance is an attitude” campaign of Longines watches and the beautiful Indian actress Aishwarya.

Having said that, there is one campaign that I would exclude from the Arab misfortunate celebrity endorsement campaigns. That is the campaign of Coca Cola and, the Lebanese singer, Nancy Ajram. Although the most favorable drink in the world, Coca Cola is usually facing a hard time, or a tough competition, from Pepsi in the Middle East and in the GCC countries to be more specific. Having Nancy on board, Coca Cola definitely scored high returns in all; market share and loyalty (I hope I’m in possession of hard numbers to support this argument, but I, unfortunately, do not). So why Coca Cola and Nancy were successful? because they both communicated the same message, having fun (read my latest post!). They knew how to mix the attractiveness of Nancy, who some would attribute to her childish appeal and some would attribute it to her explosive femininity, with message of being happy while having a bottle or a can of Coke (see some examples below)

Now, to conclude this post, if it happens that you are into fashion designing, you may want to consider sending some of your designs to Mrs. Obama!

 
4 Comments

Posted in Advertisement, Branding, Marketing

 

It is Not about the Marketing Budget

15 Apr

I do not have hard figures to support this, but after the telecom companies, I guess Al Marai is one of the biggest advertising spenders amongst the Saudi companies. Its products are everywhere. TV ads, billboards, newspapers ads, etc. It is O.K. to have such a huge marketing budget, but this budget is better to be used wisely!There is a major problem with Al Marai, at least from where I see it, you just do not know what is the message they are trying to deliver. Their brand has no personality or consistency.

Having said that, it is important to admit that Al Marai is one of the exemplary Saudi companies when it comes to strategy. They managed to break away from merely being a ‘Milk’ company, so to speak, to become one of the biggest ‘food’ companies in the whole region. Its portfolio of products has grown exponentially in the recent years to the degree that it is on the verge of having a monopoly on a number of sectors.

But when it comes to the brand … mmm … let’s put it this way … it is tasteless.

Just take a moment and think of how many ads for Al Marai that you could recall right now!!! Notice that their ads are all over the place, all the time. And if it happens that you are one of those who have super memories, can you specify the message in that ad!!

Their ads (check some samples below) are so old style. It is like saying we have a butter, a milk, a juice go ahead and buy it!!! These kinds of ads are soooooooooooo dead. brands now have personalities and messages that they are trying to portray and deliver. They want to leave certain feelings and trigger certain images in the consumers hearts and minds. They want to ‘communicate’ with their consumers, they want to engage them, and turn them into loyal customers. Not only telling them about products!!

Let me give you an example; the most famous drink ever, Coca Cola. In a study by Zaltman and Zaltman in their book ‘Marketing Metaphoria: What Deep Metaphors Reveal About the Minds of Consumers,’ they found Coca Cola is usually associated with ‘having fun and being happy’ in the minds of its consumers. That’s why there is a consistency in Coca Cola ads. Most of them revolves around celebration, surprises, signing and dancing. Most of them revolves around people who are having fun and being happy!

 
3 Comments

Posted in Advertisement, Branding, Branding, Marketing

 

The iPhone 4 in Saudi

26 Sep

I really hope some undercover Apple agents were present yesterday around the retail stores of the phone company that officially released the iPhone 4 in Saudi.

The scene of customers, all types of them: technical savvy, young, mature, students, and employees, all waiting in lines for hours to have the chance to get their hands on that magical device called iPhone 4 is an indication that Apple products are having a good opportunity to grow even bigger in the Saudi market (read more about it in this Saudi Mac post).

So the logical question in such situation would be: how come that a central country in the region with a huge fan base (and huge disposal income!) does not have a direct presence  in the form of Apple Stores or at least a certified representative! To get an answer to such question, a one should be able to penetrate the Apple management minds, which is not a very wise nor save thing to do?!

By choosing not to be in the Saudi scene, Apple has allowed its products and its prices to be manipulated in the market and its fans to be taken advantage of (a friend told today that he knows someone who bought an iPhone4 before it was released in Saudi for about SAR7000 = $1866.5). And let’s not start talking about warranties and technical support.

Will Apple ever listen to its Saudi fans? lets wait and see …

 
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Posted in Branding, Marketing, Saudi business

 

Ramadan’s Prices Hikes

04 Aug

Few days to Ramadan and the consumerism carnival has already started. Consumers, retailers, and the Ministry of Commerce and its monitoring bodies are the usual triangle sides of the price hiking struggle and debate; who did what to whom!!

One of the strangest analyses that popped out this year came from ‘an official’ at Jeddah Chamber of Commerce and Industry (JCCI) according to Arab News (here) The manager of the Corporate Social Responsibility at the JCCI is saying that the consumers themselves are the problem of any prices hikes because, those bad consumers, have brand loyalty!!!! He is also adding that there is no need for any prices monitoring systems, and assures us all that the Saudi market is one of the most open markets in the world, even more open than the West!!

I am not sure how Mr. Official understands the concepts of brand loyalty, consumer protection, and open markets but here are some comments:

  • When consumers trust a brand and develop some kind of attachment to it, then it should be their own choice to continue with it or not if the brand owner decided to increase the price for any reasons (e.g. manufacturing costs, new features, raw materials cost, etc). But when the prices increase not because of the brand owner but because of other factors in the local supply or distribution chains, then whose responsibility is this? And even more, what if the brand owner is a local who takes advantages of different seasons to increase prices without any reasonable justifications, whose responsibility is this?
  • There are no contradictions whatsoever between free markets and consumer protection activities. Not only that, I can take it a step further and argue that, consumer protection groups are major signs of a truly free market!
  • Prices monitoring is one of many responsibilities of consumer protection groups. Quality checks, fighting monopolies, be the channel of communication between the customers and other governmental bodies are all examples of such activities. Again, how all these activities contradicts free and open markets??

 
9 Comments

Posted in Branding, Culture, Saudi business