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Lego is the world’s most admired toy company.  It hasn’t always been that way — back in 2004, the company teetered on the brink of bankruptcy as it lost a million dollars a day.  In Basic Marketing we have a great chapter opening case scenario that uses Lego.  This was one of my favorite openers to write.  Bloomberg Businessweek‘s cover story “Lego is for Girls” (December 14, 2011) provides the latest chapter in this story.  The article provides some insights on the development of the latest marketing strategy for Lego.  This one targets girls.  The article includes a bit of history – showing some of the toymaker’s previous failed attempts to appeal to girls.

The article provides some good examples for market segmentation (boys v. girls, differences in play across international markets), market research (researchers “embedded” with families to observe how Lego kids live and play), and product strategy (product design to appeal to girls).  The result is the Lego Friends line of toys.  Lego has put $40 million behind its global marketing effort.  Still it might be a while before we know if this will work.  Lego decided to wait until after the holidays to launch the new line.  Given the importance of Christmas to toy sales, it might be a year or two before we know if Lego has finally cracked the code for the other 50% of the toy market.

McKinsey’s Business Technology Office has been tracking business use of Web2.0 technologies (blogs, podcasts, social networks, wikis, RSS, etc.) for the last few years.  Their most recent survey results are posted with a neat interactive feature in “Business and Web 2.0:  An interactive feature” (McKinsey Quarterly, November 2011).  To see the whole article you will have to register at the site, but let me share some highlights related to marketing (there are lots of non-marketing related findings).

• Top 3 tools companies use in “acquiring customers” in 2011:  1) social networking (69%), blogs (39%), and video sharing (26%)
• Top 3 tools companies use in “developing products” in 2011:  1) social networking (61%), blogs (35%), and microblogging (15%)
• Top 3 tools companies use in “gathering insights” in 2011:  1) social networking (69%), blogs (36%), and microblogging (20%)
• Top 3 benefits from customer use of Web 2.0 technologies:  1) increasing effectiveness of marketing (65% of companies reported benefits), 2) increasing customer satisfaction (44%), and 3) reducing marketing costs (41%).

Other trends include rapid growth of social networking — blogs were the leader in many categories just three years ago — now everyone is using social networks.  Marketing is the functional area making the greatest use of Web 2.0 tools.

I have been reading a lot of articles this week about the new line of Amazon Kindles.  The most intriguing of these is the Kindle Fire which appears to provide a worthy competitor to the Apple iPad.  While more limited, the Fire is also less than half the price.  The best article I have found on the new Kindles is from Bloomberg BusinessWeek, “Amazon, the Company That Ate the World” (September 28, 2011).  This article, while long, really digs into the marketing strategy angle from Amazon’s perspective.  It also provides a nice compare and contrast of the marketing strategies of Amazon and Apple — two companies that are bound to have a big impact on American business for many years to come.  The article is also very relevant given our recent post titled “Tablets Drive Online Shopping” (September 30). The article also provides an update to the case scenario on Amazon that opens chapter 3 in each of our books.  We have also posted this at Learn the 4 Ps.

This article provides examples you might find useful when you cover price, competition, marketing strategy planning, new product development or retailing.
 

This is a great story of customer needs, marketing research, and new product development.  Those of us eating French fries while driving know that the squeeze packets didn’t work real well.  Actually, the squeeze packages don’t work well in a fast food joint either.  Ketchup-maker Heinz knows that better than any of us.  So they set about to change the packet — and came up with a great solution.  The new packets allow you to squeeze the ketchup onto a sandwich or if you tear off the top, to easily dip your fries.  The packets cost more, but customers use fewer packages and fast food restaurants hope that the new packages heat up slow sales of fries that the drive-thru window.

You can read more — including examples of some of the marketing research Heinz used to develop the new packaging in “Old Ketchup Packet Heads for the Trash,” (Wall Street Journal, September 19, 2011, non-subscribers may have to click here).  The article provides you with useful examples of customer needs, marketing research, new product development, and functional packaging.

That (see title) is the goal of neuromarketing research firms.  These market research providers use MRIs and EEGs to check out how your brain responds to various stimuli — like different olive oil labels.   The research firm NeuroFocus claims to see things consumers don’t even know about themselves.  For example, did you know that snackers “enjoy” a “sense of giddy subversion” when they have that orange dust from Cheetos on our fingers?  I didn’t know that either.   NeuroFocus looked at how women responded to Baked Lays — and the results influenced the subsequent advertising campaign and the introduction of single-serving packages.

The article, “NeuroFocus Uses Neuromarketing To Hack Your Brain” (Fast Company, August 8, 2011) is very long, but it includes lots of details and examples.  The article mostly advocates the practice — though a few critics are quoted.  I don’t think there is a lot of empirical evidence supporting (or refuting) its reliability and validity as a research method.  Time will tell — in the meantime, it is interesting.  For a related story, see a T4Ps previous post “New Product Development — For Pop Songs?“

Brain researchers at Emory University have found that brain scans can help predict the future success of new music.  Oh what is the world coming to?  This would be fun to show as an example of market research or new product development.  It might be fun to ask students what they think of the approach?  The article “Songs Stick in Teens’ Heads” (Wall Street Journal, June 13, 2011, non-subscribers click here) and companion video should be of interest to our student — many of whom have an interest (if only as consumers) in the music industry. We have also posted this over at Learn the 4 Ps.

The often provocative and always interesting Dan Ariely, James B. Duke Professor of Psychology and Behavioral Economics at Duke University, wrote a very interesting short article in the Harvard Business Review (May 2011), “The Upside of Useless Stuff.“  My link goes to Ariely’s blog where he reprints the article.  While critics contend that marketing just makes people buy useless stuff, Ariely argues that the desire for useless stuff may fuel innovation.  We also posted this at Learn the 4 Ps. 

What do you think?

China represents a huge potential market for all kinds of companies — vehicle sales in China grew more than 32% in 2010 to more than 18.1 million (more than in the U.S.).   As the average Chinese gains more disposable income, many are in the market for a new car.  At the low end of the market — less than 50,000 yuan (about $7500) — three out of four cars sold are domestic Chinese brands.  These brands — like the Tianjin FAW Xiali pictured here — don’t have a great reputation for quality.   Volkswagen, GM, Nissan, and Honda see an opportunity and are responding with lity with lower cost models.  So this is what many of these car makers are trying to do with stripped down variations of traditional models — with new brand names. This article “Foreign Carmakers Try Brands Just for China“  (Bloomberg BusinessWeek, March 3, 2011) provides a good example of international product adaptation.   The decision to use new brand names — instead of the more well-known Western brand names could also be discussed.

With demographics you can see the changes coming from a long way off.  The oldest baby boomers turn 65 this year — and many companies are changing marketing strategies to appeal to this growing market.  This article “How to Market to an Aging Boomer: Flattery, Subterfuge and Euphemism” (Wall Street Journal, February 5, 2011 – non-subscribers click here) provides some great examples about how a diverse range of companies from ADT Security Services, to Kimberly Clark’s Depend brand, bathroom fixture maker Kohler and paint retailer Sherwin-Williams are carefully approaching the new baby boomer.  Great examples of how these companies are adapting promotion, place, and product to better meet the needs of this target market.

Sometimes marketers just shoot themselves in the foot.  Such has been the case for consumer electronics firms trying to reinvigorate the television market.  As prices for HDTVs plummeted, they foisted 3DTV and web connectivity on us — creating mass consumer confusion and delayed purchases.  This article, “How Faulty Marketing Has Stalled TV Sales” (BusinessWeek, January 20, 2011) provides lessons from these mistakes.