Investing a Brand with Personality

Kulula – The Airline That Doesn’t Take Itself Seriously

Having identified a gap in the market for a low-cost airline to bring air travel to the South African masses, Kulula.com launched in July 2001. It operates on major domestic routes out of Tambo International Airport and Lanseria on the outskirts of Johannesburg.  As building a business based on price alone would make it vulnerable to attack from more established airlines, it has hewn a positioning based on ease, inspirational service and safety. This is summed up in its name which means ‘easy’ in Zulu. Though most distinctive are the personality traits of the brand.  Being totally honest, straight-forward and helping people lighten up.

Kulula.com is an airline that doesn’t take itself too seriously. Its humourous personality is evident in all aspects of the brand experience:

Advertising

Launching with a budget of just 3m rand (c. £200k) demands cut-through communication. Their super heroes launch campaign with catchy jingle espouses “Now Everyone Can Fly”. Watch the launch trailer and note there isn’t an aircraft to be seen.

Product and service appearance

Similarly to easyjet’s bright orange in the UK, Kulula has adopted a distinctive lime green livery.  The unconventional markings include ‘this way up’ and arrows pointing to parts of the aircraft, for example, rudder, nose cone, sun-roof and where ‘the big cheese’ (‘captain, my captain’) sits.

Kulula aircraft cockpit …. the big cheese sits here ….

Kulula aircraft front door, cockpit and nose cone, co-captain sits here …..

Kulula aircraft loo, black box, fans, throne zone ….

Kulula aircraft tail fin, boot space, secret agent code …..

 

Public relations

In 2010 South Africa hosted the FIFA World Cup and Kulula.com ran a campaign describing itself as the “Unofficial National Carrier of the You-Know-What”, which took place “Not next year, not last year, but somewhere in between”. Another advert announced “affordable flights [to] everybody except Sepp Blatter” (the FIFA president), who was offered a free seat “for the duration of that thing that is happening right now”. Obviously, oblique references to the World Cup which FIFA intervened to stop. Thus creating even more publicity for Kulula.

People

Kulula flight crew are encouraged to be friendly and let their natural talent show through. This is evident in the entertaining in-flight “safety lecture” and announcements. Here are some examples that have been heard or reported:

“Welcome aboard Kulula 271 to Port Elizabeth. To operate your seat belt, insert the metal tab into the buckle, and pull tight. It works just like every other seat belt; and, if you don’t know how to operate one, you probably shouldn’t be out in public unsupervised.”

Meet Kay Lula … the hostess with the mostess …..

“Weather at our destination is 50 degrees with some broken clouds, but we’ll try to have them fixed before we arrive. Thank you, and remember, nobody loves you, or your money, more than Kulula Airlines.”

“Your seats cushions can be used for flotation; and in the event of an emergency water landing, please paddle to shore and take them with our compliments.”

“Kulula Airlines is pleased to announce that we have some of the best flight attendants in the industry. Unfortunately, none of them are on this flight!”

“We’ve reached cruising altitude and will be turning down the cabin lights. This is for your comfort and to enhance the appearance of your flight attendants.”

Here are some comments heard after a few extremely hard landings ….

“Please remain in your seats until Captain Crash and the Crew have brought the aircraft to a screeching halt against the gate. And, once the tyre smoke has cleared and the warning bells are silenced, we will open the door and you can pick your way through the wreckage to the terminal..”

“Please take care when opening the overhead compartments because, after a landing like that, sure as hell everything has shifted.”

The airline has a policy which requires the first officer to stand at the door while the passengers exit, smile, and provide a “thanks for flying our airline”. In light of a particularly bad landing, he had a hard time looking the passengers in the eye, thinking that someone would have a smart comment. Finally a little old lady walking with a cane disembarked saying,

“Sir, do you mind if I ask you a question?” “Why, no Ma’am,” said the pilot. “What is it?” “Did we land, or were we shot down?” said the little old lady.

Part of a flight attendant’s arrival announcement:

“We’d like to thank you folks for flying with us today. And, the next time you get the insane urge to go blasting through the skies in a pressurized metal tube, we hope you’ll think of Kulula Airways.”

“As you exit the plane, make sure to gather all of your belongings. Anything left behind will be distributed evenly among the flight attendants. Please do not leave children or spouses.”

“Please be sure to take all of your belongings. If you’re going to leave anything, please make sure it’s something we’d like to have.”

“Thank you for flying Kulula. We hope you enjoyed giving us the business as much as we enjoyed taking you for a ride.”

Marketing Inspiration

1. Designing brands with personality, i.e. characteristics, beliefs and behaviours enhances stand-out.
2. In a world awash with corporate grey, a rich and clear personality, injects colour and breathes life into brands. Executed effectively this maximises impact, engages and forges a strong emotional connection with customers.
3. When problems occur or disasters strike, as are prone happen in the service industry, a self-deprecating or humourous personality can defuse issues and provide a stress release or antidote. 
4. As Kulula says “smiles and jokes are free” (1). And great ideas make budgets go further.
5. A humourous brand message and personality is entertaining. In turn this creates a talking point and encourages sharing via social media and email.
6. And leave readers to question whether this is an April Fool’s joke or not….

References

1. www.kulula.com

Thanks to Joe Flynn for inspiring this article

The Marketing of Christmas with Music

SFX: Christmas Bells: Ring, ring. Ring, ring!

Music has long been associated with Christmas, and Christmas with music. The first specifically Christmas hymns (carols) for Christians appeared in the fourth century. Music is also a terrific gift; the size of the market increases in the run up to Christmas and record labels battle to win the coveted #1 single and album slots. Marketers are also catching on to the power of music at Christmas.

For the last three years, John Lewis has been top of the pops in using music to market their business. The Gabrielle Aplin cover of ‘The Power of Love’ used in John Lewis’ 2012 Christmas campaign by Adam & Eve/DDB knocked Olly Murs off the top of the official UK singles chart on 10 December. You can watch it here.

John Lewis’s sales for the week ending Saturday 8 December rose 15% year on year to £142m. John Lewis is attributing this to the success of its “omnichannel strategy”. It says sales were driven by customers looking for that special Christmas gift, including gloves, cashmere, lingerie, handbags or jewellery. The strong performance of gloves as a gift coincides with the Christmas ad showing a snowman making a long journey to get a pair of gloves for his snowwoman.

In 2011, John Lewis used the Slow Moving Millie soundtrack, ‘Please, please, please’ to promote its Christmas offer. This has amassed nearly 5m You Tube views.

Ellie Goulding’s haunting cover of Elton John’s ‘Your Song’ was used in its 2010 Christmas ad. But can you recall the ads pre 2009?

Our Christmas card to you!

Since we founded our marketing consultancy in 2005, we’ve included lyrics from Christmas songs in our cards. Finding lyrics that convey the right sentiments is a tough task! Matching words and pictures is equally difficult. This year we’ve selected lyrics from a song written by Leigh Haggerwood called ‘My Favourite Time of Year’. Disappointed at the high-jacking of the Christmas charts by likes of X-Factor, Leigh wrote this song to reflect the true values of Christmas. Funded without the backing of a record label, and promoted only by social media it charted at just 40 in December 2010. You can watch it here. ‘There is goodwill in the air tonight’. We wish you a Merry Christmas and Prosperous 2013!

Marketing Inspiration

1. Music elicits powerful emotional responses and influences behaviour. It’s also powerful in rekindling memories. Thus if used correctly the sound of sleigh bells can have a powerful effect on tills.

2. Remember the narrative. While many John Lewis ads pre 2009 also used music, for example, Taken by the Trees version of ‘Sweet Child of Mine’ in 2009, Virginia Labuat’s version of ‘From me To You’ in 2008 and Prokoviev’s Romeo and Juliet in 2007, none are arguably as emotionally engaging and heart warming as the more recent ads.

3. Ensure consistency in communications (through different channels and over time) to help get the message across, be understood and acted upon.

Marketing Strategy: How to ‘Bottle’ Marketing Success?

What enables some businesses to weather the changing economic climate and the cold wind of market forces, while others wither? The most successful businesses grow income and budgets steadily, while the weakest are left with diminishing income and budgets or none at all.  Just as Darwin observed, the fittest survive or thrive, and the weak are acquired by others or become extinct.

Popping the cork to celebrate marketing success

There have been many studies over the years. Some such as Jim Collins and Jerry Porras (1) have revealed some of the business success factors such as having an ambitious and engaging business goal, but the role of marketing has received less attention.The pre-eminent role of marketing is understood and acknowledged by leading consumer goods companies. It is most influential in the most successful ones, such as Procter & Gamble and Unilever. However, the discipline remains less influential or plays second or third fiddle in companies operating in sectors such as business-to-business (b2b) and utilities.

The effects of marketing communication campaigns are well documented, some showing positive results, some negative. Though it is harder to find empirical evidence to demonstrate what aspects of marketing drive business success, and inform what businesses should do strategically. This article draws on a number of studies published in the last few years and attempts to unearth ‘hard’ evidence and ‘lift the lid’ on what really works.

Booz & Company (2) have surveyed over 30,000 businesses and in 2006 identified that businesses with ‘healthy marketing DNA’ were almost 60% more profitable than their competitors, and that those with ‘super DNA’, some 9% of the sample, were 20% more likely to exhibit superior growth. But what is ‘healthy marketing DNA’ and how can it be ‘bottled’?

Decoding Superior Marketing DNA

Here’s a summary of the three marketing functional characteristics that correlate with businesses outperformance:

1.      Ability to measure contribution to business growth

While a challenge, successful business development requires sophisticated measurement and modeling to correlate marketing activities to sales. As long ago as 1955, Peter Drucker famously wrote ‘what gets measured gets managed’ (3). Yet still in 2005, a CMO Council study of US CMOs (4) revealed that more than 80% of organisations had not developed meaningful, comprehensive measures or metrics for their organisations. Conversely, the 20% of organisations that had instituted useful measures substantially outperformed their competitors in terms of revenue growth, market share and profitability. The importance of measuring ROI remains high on CMO’s agendas. According to IBM’s Global CMO Study (2011), nearly two-thirds (63%) believe that measuring marketing ROI will be the most important measure of success in the next 3-5 years (5).

It is disappointing therefore that many organisations continue to hire marketers with lots of experience in a business sector and then just rely on them to make judgment calls on what to do and where to invest. This is a false economy and contributes to the perception that marketers are ‘fluffy bunnies’. It also compounds the perception that marketers are unworthy of a place at the board-room table.

2.      Broad capabilities, scope of operation and ability to influence senior decision makers

In some organisations marketing operates solely as a communications or promotion department. In others, as a management ‘gopher’, responsible for tactical initiatives, and reactive to management demands.  Organisations with marketing functions that work closely with the CEO, operate across the organisation, and assume broader strategic responsibility, are more successful. Their roles include, for example, business analysis and development, product innovation, and approving large investments. This allows them to grasp customer insights quickly, communicate and make decisions based on those insights across organisation boundaries, and implement its marketing model. Looking at this another way, marketing functions in outperforming organisations are also better at engaging management and employees.

 3.      Deep customer understanding, adding value proactively

Successful business development requires deep business and customer understanding, and strategic know-how to design, promote and deliver experiences that customers want.  Outperforming organisations invest significantly more effort in capturing and using customer information to drive decision making and foster customer relationship. IBM’s CMO study confirms that market research is the single most important source of information to influence strategy decisions (cited as important by 82% CMOs). Reassuringly, 63% of CMOs believe they can grow their influence by being the voice of the consumer (5). Research by The Chartered Institute of Marketing adds that the marketers’ influence is also greater when competition is intense and the market turbulent (6).

Marketing Inspiration

Unlike the DNA of living organisms, organisational DNA can be changed. This starts with understanding where the business and marketing capability is now, needs to be and should be. From The Marketing Directors’ research (7), there are just 14 executive marketing directors on the main boards of the UK FTSE 100 companies. At one level this might suggest that marketing is relatively unimportant in 86 of those companies.  Yet the role and ability of marketing to drive business growth is widely misunderstood. All marketers should embrace and address the challenge to explain what marketing is, can and should do to drive business growth.

Effective and superior marketing involves understanding customers, accumulating facts, and influencing and making decisions based on those facts, to advance the growth and profitability of organisations. Marketers should view themselves as the voice of customers and directors of organisation growth. To do this they should invest more in understanding customers and use this information to make strategic decisions. In turn this will advance their case to sit at the boardroom table.

References

(1)   Porras Jerry and Collins Jim I, Built to Last, 1994. Involved researching and analysing pairs of companies in  18 industries, covering their history, organisation characteristics and financial performance from as early as 1915 to 1990.

(2)   Landry Edward, Tipping Andrew, Dixon Brodie, The DNA of Marketing, Booz & Company and the Association of National Advertisers, 2006. Based on over 30,000 responses to an online survey in 12 languages

(3)   Drucker Peter F, The Practice of Management, 1955

(4)   The CMO Council, Assessing Marketing’s Value and Impact, 2004

(5)   Korsten Peter, Heller Baird Carolyn, et al, From Stretched to Strengthened, Insights from the Global Chief Marketing Officer Study, IBM, 2011. Based on face-to-face conversations with 1734 CMOs in 64 countries. In this study outperforming organisations are rated 5/5 in terms of performance by their CMOs, though additional tests were undertaken to ensure this correlated with superior financial performance

(6)   Argyriou Dr. Evmorfia, Leeflang Prof. Peter, Saunders Prof. John, Verhoef Prof. Peter, White Paper: The Future of Marketing, The Chartered Institute of Marketing, 2009

(7)   Arnold Tim, Tomlinson Guy, The Marketing Director’s Handbook, 2008

Read more about our strategic marketing consultancy services here.

The Marketing of Science

It was a typical Manchester day as we drove north to my old University town. But a rainy day tinged with excitement at the invitation to listen to the University’s astrophysics professor, and particle physics researcher at the Large Hadron Collider (1) near Geneva, Switzerland, Brian Cox to speak on the subject of ’A Scientist in the Media’.

Brian Cox – A Scientist in the Media

Both of his BBC tv series have mesmerised - The Wonders of the Solar System and The Wonders of the Universe. And coming soon, a  physicists take on The Wonders of Life. As Brian explains “It is what hydrogen atoms do when given 13.7 billion years”.

Brian Cox delivers The Cockcroft Rutherford Lecture 2012

Astronomer, Carl Sagan was one of the first scientists of the television age. His award-winning 1980s series, Cosmos – A personal voyage, opens with the stirring words. “The cosmos is all it is, or ever was or ever will be. The contemplations of the cosmos stir us. There is a tingling in the spine, that catch in the voice. A faint sensation as if a distant memory of falling from a great height. We know we are approaching the grandest of mysteries. The size and age of the cosmos are beyond ordinary human understanding. Lost somewhere between immensity and eternity is our tiny planetary home, the Earth. Our future depends on how well we understand this cosmos in which we float like a speck of dust in the morning sky.” Underlining that science not just about creating a few smells and bangs, but a cultural endeavour to understand and shape our futures.

More recently Jim Al-Khalili’s (Professor of Physics,  University of Surrey) BAFTA nominated series on Chemistry: A Volatile History and Alice Roberts’ (medical doctor, anthropologist and Professor at the University of Birmingham) The Incredible Human Journey have won widespread acclaim. Both series have powerful narratives. As testimony to their abilities, both have been appointed Professors in Public Engagement in Science by their respective Universities.

But the promotion of science predates the television age. The Royal Institution of Science has championed public interest in science for 200 years.  Started by Michael Faraday in 1825, they are most famous for their Christmas Lectures. Situated in Albemarle Street in London, this is the site of the first one-way system – established to marshall gentry in their horse-drawn carriages to and from the Royal Institution.

But what has this all done for interest in science? It has been a difficult year for Universities, with overall applications for 2012 entry down by 7% vs 2011 (180k) to 2.37 million (2). Against the backdrop of up to £9,000 fees introduced this year this is hardly surprising.

Yet what about science specifically? University applications for sciences have held up better than the UK average for all subjects accounting for 33% of 2011 applications compared with 31% in 2010. Biological science applications are 4.4% (9k) lower while physical sciences are just 0.6% (546) lower and medicine and related sciences are 1% (4k) higher (2). Applications to the University of Manchester are 10% (5.3k) lower vs 2010.

Looking at another measure of public interest, the book best-seller lists; the hardback of Brian Cox’s The Wonders of The Universe sold over 100k copies in 2011. This was one of only two ‘science related books in the non-fiction hardback top 20, along with David Attenborough’s Frozen Planet (3). In addition, Amazon reported sales of telescopes were up 500% following the airing of Stargazing Live.

So what’s the report card on the marketing of science? Shows much promise; has successfully increased appeal to more than just spotty geeks.

Marketing Inspiration

The media, and television specifically, are powerful means to promote all subject-matter, products and services. And win hearts and minds. Use them if you can!

Universities can and should think like media brands to drive awareness, interest, and demand for their services. Their offerings comprise more than courses, but principles, beliefs and sheer force of personality to inspire and empower. Thus far overall 2011 University of Manchester application figures suggest ‘could do better’ but the 2012 Cockcroft Rutherford lecture is an example of the University at its best. Watch the lecture, be inspired by the answer to life the universe and everything – and the small blue dot that we call home.  I hope that this blog-post makes a small contribution to the University’s aims!

References

(1) Built by the European Organization for Nuclear Research, the Large Hadron Collider is the world’s largest and highest-energy particle accelerator. It allows physicists to reproduce the conditions just after the ‘big-bang’ and advance understanding of the deepest laws of nature.

(2) UCAS 2011

(3) Nielsen BookScan 2011

10 Winning Digital Marketing Strategies: Why It Helps To Be A Gamekeeper!

An English Gamekeeper by Richard Ansdell

In 1970 US market research firm Yankelovich estimated that the average New Yorker saw 3000 advertisements per day. Today that figure is estimated to exceed 5000. And this figure is growing through the increase in digital communications such as email and online advertising. Unsurprisingly, of 4000 people interviewed by Yankelovich, 50% thought marketing and advertising were out of control (1)! As evidence of digital’s growth, expenditure on digital communications exceeded that on television in 2009 in the UK. This trend is likely to be mirrored in other countries, at least until online advertising auction prices become unbearable.

Let’s assume you’ve developed a great product, service or brand and determined your target market and brand positioning strategy. You now want to get your message to your prospects and turn them into customers. So where and how do you start? What’s the mix of offline and online activity, and how do they work together to command attention and persuade?

First, determine your promotion objective and strategy.

Five promotion strategies

There are five broad types of promotion strategy to consider:

1. Change image/perceptions; by increasing awareness or changing attitudes to brand. Building awareness is a vital precursor to selling any brand, as is changing perceptions, for those with flat or declining sales.

2. Trial; by creating (or increasing) new or renewed brand experience (retrial), perhaps through switching from a competitor. Most useful for new or low penetration brands.

3. Loyalty; by increasing brand buying frequency or usage. Also important for brands with flat or declining sales.

4. Relationship building; by understanding, acquiring, servicing, retaining and encouraging customer advocacy. Most common in business-to-business (B2B) markets, but increasingly so in business-to-consumer (B2C).

5. Stocking or display; by selling-in and encouraging display of an above average amount of product. Most useful for brands who promote or sell via intermediaries, such as distributors, wholesalers or retailers.

Five media strategies

To meet your promotion objective and maximise sales, your next challenge is to get your message across at the lowest possible cost. Whether via offline or online media, or a combination of both, there are five broad types of media strategy you can use. This is where it helps being a game-keeper!

1. Push

Probably the most common type of media strategy or the type you’ll be most familiar with. Involves promoting (pushing) a message to customers via some form of media, for example, mass channels like tv or radio, more niche channels such as magazines, or direct channels such as direct mail. In the digital world, main vehicles include email marketing (electronic direct mail to customers), online advertising via banners or pay-per-click (PPC) adverts (also called search engine marketing (SEM)).  It can also be argued that PPC advertising is a form of ‘pull’ marketing given the customer is in an active search mode, i.e.  searching using keywords.

2. Pull

This involves attracting (pulling) customers to your brand; for example, via store merchandising or an exhibition stand. Attracting customers to a website via the Internet is probably the ‘best’ example of ’pull’ marketing, whereby a website is designed to attract search traffic by optimising it for key search terms (search engine optimisation (SEO)).  This is akin to thinking about your website as bait or a lure to attract customers!

3. Fishing

Fishing

Fishing is enabled by digital technology and can also be considered a form of ‘push’ strategy. Involves placing adverts, or embedding links to drive clicks to your website, or capture customers. Likened to ‘fishing’ in that ‘nets’ or ‘squeeze’ pages’ (3) are placed in locations where there are large shoals of fish, to attract or catch large numbers of customers. Co-opting affiliates, or establishing price comparison sites or portals can be considered a form of ‘fishing’, whereby other fishermen, either individuals, businesses or high traffic websites are used to capture customers.

4. Nurturing

Nurturing

Involves building or buying a sales database and continuous promotion to attract, engage and build customer relationships. This type of strategy sits between marketing and sales, and is most commonly used by B2B businesses. Nurturing can also be considered a form of ‘push’ strategy. Originally enabled via direct mail, telephone and face-to-face, digital technology has inspired new communication possibilities.

5. Hiving

Hiving
Beehives in Cheshire. Courtesy and copyright ThePictureDrome 2011

This involves co-opting customers to a shared interest group. Thus building a community and enabling relationship building between community members and the brand. This type of strategy is used by both B2C and B2B businesses and has also been inspired by new digital technologies – the major social media platforms, particularly Facebook and LinkedIn, as well as purpose-built community platforms.

Marketing Inspiration

1. Change your view on individual media to see their role as part of the whole.

The questions to ask are .. what channel is the most effective for what message? And what combination will generate most leads and sales at the lowest cost?

It is better to think of media as a collective whole. Consider ways to combine media to increase message impact, drive interest and activate sales. Link offline to online worlds and vice versa. Promote your website url via all forms of advertising and integrate digital media, for example, blogs to website, Twitter and Facebook. Use the same creative across all media and over a series of campaigns. Avoid the temptation to change the creative lead too often as it is a recipe for customer confusion.

2.  Embrace digital for itself

Digital technology can change the role of each element of the marketing mix. It can enhance your product or service as well as inspire a range of new promotion opportunities. Start by considering the extra benefits that digital can add to your product or brand proposition. Potential benefits include, paper-free delivery, paper-free billing, savings on storage and cost, better control or personal management, education, entertainment and social benefits. Through content and stories it provides the ‘sticky stuff’ or ‘scent’, i.e. keywords to attract passing customers.

3. Make the website marketing central and a brand home

Websites are no longer simply a repository for information, acting as shop window per se, but serve a broadening range of functions including promotion, entertainment, customer services as well as a place to shop. Thus your website should be a hub for all marketing communication and relationship building activity, and a home for your brand, housing resources and downloads, under-pinned by content and customer management systems to store and retrieve everything and enable customer interactivity, purchasing and service.

4.  Create cut-through creative ideas

Set high creative standards for all media to command attention and interest. The difficulty with PPC advertising is that communication is dumbed-down to a limited number of characters, the same text font, and colours. This limits the brands ability to gain competitive advantage through creativity. By creating better branded communications and creating demand for your own brands and searched through phrases, it is possible to set up your own route to market. In game keeper parlance, help the dog see the rabbit. As Aleksandr Orlov has shown!

5. Measurement is vital for management

As Peter Drucker said, ‘what gets measured gets managed’ (4). Thus establish comparative measure for media cost per hundred or thousand impressions, and cost per sale. Then and only then will you be able to plan, test and learn where best to invest to maximise your return on media investment.

References:

(1)    Story, Louise; Anywhere the Eye can See, It’s Likely to See an Ad, New York Times, January 2007

(2)    Adapted from Arnold, Tim; Tomlinson, Guy; Chapter 31, Managing Digital Marketing, The Marketing Director’s Handbook (2012). 27 new pages that lift the lid on online trade marketing secrets, and help inspire strategies that give you the edge. Available FREE with purchases of The Marketing Director’s Handbook from The Marketing Directors’ website.

(3)    A squeeze page is a single website landing page designed for a specific promotion purpose and to capture a customer’s contact details. Arnold, John; Lurie, Ian; Dickinson, Marty; Marsten, Elizabeth; Becker, Michael; Web Marketing All-in-One Desk Reference for Dummies (2009)

(4)    Drucker, Peter F; The Practice of Management (1955)

Super-fast Broadband: Dream Pipe or Pipe Dream?

Super-fast broadband. Dream pipe or pipe dream

Our recent survey of broadband homes (1) for Berenberg Bank Telecom team, in the UK, Germany and Italy, reveals huge lack of customer awareness of current broadband speeds and that demand for super-fast broadband is presently limited. This calls into question the presently mooted EC initiative (2) to invest in fibre to bring superfast speeds to 50% of European households by 2020 and suggests marketing challenges to Governments and broadband suppliers alike.

Vast majority are unaware of their current broadband speed

In context, most broadband owners (over 60%) do not know what broadband speed they receive. Of those that do know their speed, the current average in Germany is twice that in the UK and Italy (32 megabytes per second (MB/s) vs 14/15 MB/s).

Majority are satisfied with their current speed

Customer satisfaction rates are also high and very similar in all three countries surveyed. Only 15% of respondents said they were dissatisfied with their current broadband speed. This tends to undermine the idea of a latent demand for super-fast speeds.

One third of broadband homes have a need for speed (which means two-thirds don’t)

Only about 35% of broadband owners currently see a need for faster broadband speeds, and only 20% are prepared to pay more for it.  Of the 35% who do want faster speeds, about half would like to see their broadband speed double within two years.

Modest willingness to pay for a faster speed

Among the 35% who want a higher broadband speed, there was only a modest willingness to pay more. Around 42% of those who want a faster speed would not be prepared to pay more for it. Another 25% would be prepared to pay up to €5pcm for their desired faster speed. About 15% would be prepared to pay over €15pcm for their desired faster speed.

Demand for super-fast broadband is unconvincing

Only c.14% of these currently see a need for speeds of 50MB/s or higher (that equates to only 5% of the total 3,000 customer sample, and would imply a total 9% penetration of super-fast broadband when added to the c.4% who already have speeds over 50MB/s).

Is a mass market for broadband speeds over 100MB/s fantasy?

If broadband owners do not currently think they need super-fast broadband speeds, then could technological developments and new broadband applications create demand for such speeds?

Experience leads us to conclude that one can never have enough processor speeds, storage space or memory. There is also evidence from the survey that speed begets speed. For example, German broadband homes already receive twice the speed of UK and Italian homes yet also seek double their current speed as do their UK and Italian counterparts.

Current thinking converges around the typical household being capable of generating demand (through simultaneous web browsing, multi-room HD TV streaming, uploading to cloud storage) of between 15Mb/s and 30Mb/s. The arrival of ultra-high definition TV (UHD TV; probably 10 years away from being mass-market) could raise this to 40-80MB/s, depending on developments in video compression technologies.

As Paul Marsch at Berenberg says, “Down through history, technology pundits have consistently underestimated the level of demand for successful technologies, but to believe that the mass market needs broadband speeds over 100MB/s, one does need to believe in technologies and applications that might presently be categorised as fantasy, such as 3D holographic video social networking (maybe it will be called HoloTwitter).”

There are, of course, other potential high-bandwidth applications and services such as HD distance-learning, remote medical diagnosis, e-health and e-government applications, but these are more likely to be B2B or G2B/G2G (government-to-business, government-to-government) services rather than B2C (business-to- consumer- or household-orientated, services).

Learnings from other international markets

Comparing international markets that are relatively advanced in rolling-out fibre to the home provides a possible glimpse of the future. For example:

• Portugal has among the most advanced fibre rollout in Europe. It has so far seen take-up rates of about 9% (in line with the 9% potential take-up indicated by our survey), resulting in only 5% of total primary households subscribing to fibre
• Netherlands fibre take-up is higher at c. one-third of households passed but this still only suggests under 4% of total Dutch households would subscribe to a fibre service
• Sweden has the most advanced European market on fibre to the building/home (FTTB/H) rollout and take-up, with 27% of households having access to fibre services, and 71% of those opting to subscribe  i.e. c. one fifth of Swedish households currently subscribe to fibre
• South Korean and Japanese take-up is even higher at 37% and 56% of households respectively. These markets are a reference point for the EC when discussing its fibre ambitions. However, in both markets, the Government took steps to encourage fibre as the technology of choice at a time when alternative advanced copper technologies were in their infancy. Japanese and South Korean broadband subscribers take fibre because that is what is available, and because it is cheap, and not, because their broadband usage demands fibre-like speeds.

Conclusions

1.       Super-fast broadband is presently a supply-push and not a demand-pull initiative

The present lack of customer awareness and low demand for super-fast services presents a significant challenge for the EC, national Governments and broadband suppliers seeking to invest and generate a return on investment. Similar to most technology marketing challenges, detailed understanding of the demand triggers and barriers will be required to communicate and drive awareness, interest and willingness to pay.

2.       Increased domestic fibre capital investment and risk is likely in the medium term

Whilst it is uncertain whether the EC will revise or meet its fibre ambitions, the capital expenditure requirements and regulatory and investment risks remain high. As explained by Stuart Gordon at Berenberg: “Fibre is a pipe dream, not a dream pipe, but wireline regulatory risk still remains high, and there is upside pressure on capital expenditure whether the EC gets its fibre wish or not”.

3.       Returns on fibre investment are likely to be poor, particularly beyond dense urban city centres

On present predictions, EC proposals to reduce copper network prices to stimulate investment in fibre technology is unlikely to result in a formal “recommendation” to the industry.  In part because the EC has limited powers to enforce technology choice and set industry targets, and also because former EC allies such as the Body of European Regulators for Electronic Communications (BEREC) have expressed serious concerns about the EC’s ideas.

4.       A compromise “hybrid” approach is more likely to be adopted

A compromise that incorporates the latest advances in copper broadband technology, combined with Long Term Evolution (LTE)  (new radio platform technology) for rural areas, is more likely to be adopted.

References

(1)     The Marketing Directors/Berenberg Bank, February 2012. Sample size: 3,000 broadband households (1,000 main bill payers in each of the UK, Germany and Italy)

(2)    EC Commissioner Kroes’ consultations on incentivising fibre investment are due to conclude in 2012. If Commissioner Kroes‘ plans are approved, the telecoms sector will embark on a €73bn-221bn fibre investment cycle to bring super-fast broadband connections to 50% of European households by 2020.

Traditional vs. digital market research methods. Does ‘new’ mean better?

Traditional vs. digital research methods.  Does ‘new’ mean better?

The advent of digital media has inspired many new forms of customer research, which businesses are embracing with a passion.  We have witnessed marketers foregoing more traditional approaches of gaining customer insights.  Primarily to generate cheaper and quicker results but also to be seen as trend-setting, being the first, and generally jumping on the bandwagon just because it is new.

Whether it is just because online is new or that it provides something that more traditional forms can’t deliver, what is clear is that there are lots of myths, perceptions and misconceptions surrounding it.  As one mobile phone marketer commented ‘let’s say we don’t wholly buy into the claims being made about online’.

Some social media websites

So what are the facts and considerations that need to be taken when choosing a research methodology?  New doesn’t necessarily mean better …. or does it?

Traditional research approaches, pros and cons

More traditional forms of research involve either face-to-face contact or verbal conversations in real-time such as;

• Qualitative focus groups – enables sharing, building and challenging of ideas; useful for idea generation and building e.g. conflict groups where respondents are recruited to have different views in order to challenge each other and uncover ways to overcome objections
• Depth interviews – face-to-face or telephone, enables in-depth understanding of individuals, their attitudes, beliefs and motivations; suitable for more confidential and sensitive topics e.g. healthcare, business-to-business
• Accompanied shops – provides a realistic shopping environment to understand real-life shopping motivations and behaviour
• Ethnography – observing individuals or groups in specific settings/environments, for example, a professional in their work environment; useful to observe true context, influences and behaviour, that may be unconscious and not reported
• Intercepts – stopping people in the street or other locations; useful for gaining high-level/fast insights, to understand motivations and quantify preferences, for example assessing reaction to products/brands in out-of-home eating establishments
  

  Face-to-face customer research

Traditional face-to-face or telephone approaches enable the moderator to intervene, challenge and question at any point in the proceedings.  There is an inbuilt ability to be flexible, go with the natural flow of the discussion.  The latter is cheaper than the former.

Findings or interpretations are based on what the respondent is saying but also the non-verbal indicators such as facial expressions, body language, seeing how they use and handle items, general behaviour and voice intonation.  In context, Albert H. Mehrabian found that body language accounts for 55%, tone of voice accounts for 38% and words only account for 7% of received communication (1). Thus non verbal communication provides extra richness and texture to information and gives a much deeper level of insight.

Traditional research approaches can be more time and cost intensive.  They sometimes require more time to set up. For example recruiting a very specific sample, such as frequent rail and air travellers with experience of mobile applications could take a couple of weeks.  This elongates the process.

Online research approaches, pros and cons

The massive growth in general internet use and specifically social networking sites, has enabled marketers and researchers to communicate with their consumers more easily.  New digital functionality such as wikis, video filming and uploading and SMS text messaging provide researchers with a new means of communicating with customers, and new means of capturing information. This helps researchers and customers work together and co-create ideas.

Some of the main online research approaches available are:

• Online surveys – respondents are emailed a link to answer a series of questions online. This is one of the first online methodologies, fast growing and now accounts for a large proportion of the research industry.  It has enabled rapid and more cost-effective quantitative research.
• Online focus groups – real-time online discussions over a set period e.g. 2 hours (so-called synchronous research); useful to reach remote/difficult to find respondents
• Online communities – respondents are co-opted to a community and set topics to discuss and questions to answer, interacting with each other and the moderator.  Useful for gauging reactions to communications and products, ‘pressure testing’ plans and building ideas.
• Bulletin boards – password protected forum, accessed via a browser, where respondents login at any time and respond to moderator led discussion. These usually last 3 to 6 days (so called asynchronous research);  useful for product placement, assessing first and subsequent impressions/experiences and developing ideas
• Social media sites e.g. Twitter, Facebook, LinkedIn, Ning – allow posts to followers; useful for anecdotes, dipstick findings, perhaps at the start of a new product development process
  

  Online customer research

Online research makes it easier to reach a wider geographic target, and across cultures. Some groups have a particular affinity with this world and are easier to engage e.g. kids/youth market.  For some the anonymity of the online world encourages participation, e.g. shy teenagers, to discuss their hygiene habits.

Some digital media provide an almost ‘instant’ sample.  For example, a biscuit brand running a poll on biscuit eating habits via Facebook and their 15,000+ followers recently generated fast and cost-effective insights. Online research also avoids the need to travel, thus time and money.

Although online research groups can be held in real-time the process can be mechanical and linear meaning it is hard to pursue all avenues of exploration.  There are also visual limitations. Zoomed in head shots of respondents, or screen size room views, make it difficult to see the big picture, and observe non-verbal responses to another respondent’s comments.

The default for many is to write little and provide superficial responses to questions. For example, an initial response to ‘what do you think?’ might be ‘because I like it’.  This is especially the case for the less literate.

Understanding and interpreting text is also difficult.  For example, how many times have you read a text or email and heard it tonally in your head? Such as forcefully or with passion. Then when reading it again, or talking with that person, you interpret it in a different way.

A summary of the pros and cons of each approach is outlined below.

Traditional vs. digital market research pros and cons

Conclusions

Digital methods can benefit the traditional research world and vice versa. Digital tools help automate research activities, for example, making some activities in the supply chain, such as recruitment, and fieldwork for quantitative, cheaper and quicker.  For example, online is a fast and cost-effective way to recruit respondents for traditional qualitative research. It ensures broader reach, and helps mitigate against serial groupies.

However, there will always be a need for a moderator, to facilitate the journey of discovery and dig into the detail. Online moderation is just more difficult. Witness any radio let alone text discussion.

Online preplanning also needs to be more exacting, rather than less so, to ensure respondents are capable of accessing and using systems. And this has a time-cost.

Technology can also fail. As a result, some online qualitative approaches advocate running research with two people. One to manage the IT systems, and another to moderate the discussion.

New hybrids that cross the lines of traditional and digital media offer the advantages of both worlds. For example, Skype is a boon for conducting remote face-to-face interviews, as those with a high quality webcam and fast broadband connection can be seen as well as heard.

Marketing Inspiration

1. Digital media is a welcome addition to the market research tool box.  It has created new ways to conduct research, providing complementary approaches to more traditional forms.  Researchers and marketers would be foolish to ignore the opportunities that digital media provides, equally the merits of face-to-face research must be remembered. Those with long memories may recall the hype surrounding internet businesses in the late 1990s, and belief that these required a new way of thinking, only to find that many failed through forgetting basic marketing principles. As Simon Carter said recently, “Marketers are becoming lazy by over-using social media and ignoring the skills and disciplines traditionally learned by marketers” (2).
2. The start-point for determining any research methodology is to start with objectives and requirements, and fully assess the pros and cons of each, to decide which is most fit for purpose.
3. Best practice marketing requires a true understanding of customers rather than technology.As Daryl Fielding, European Marketing Chief , Kraft Foods said recently,  “Marketers must remember they are talking to people”(3). There is a danger of technology getting in the way of understanding. Also, perhaps ironically to digital advocates, ethnography is essential to understand how consumers use digital media!
4. Experimentation is to be encouraged. If you don’t try and learn, you won’t. Just make sure it is not at the cost of, or detriment to achieving your objectives/desired outcomes.

Visit our website or get in-touch for more information about our market research services.

References

(1)      Mehrabian Albert H, ‘Silent Messages; Implicit Communication of  Emotions and Attitudes’ 2^nd edition 1981

(2)      Carter Simon, Managing Director, Fujitsu ‘Back to basics’ Marketing Week & Research Live April 2011

(3)      O’Reilly Lara ‘A blinkered digital vision makes marketers forget the customer’ Marketing Week 21 Oct 2011