Synopsis
A set of 10 specific marketing strategies to answer the customer's cry for help in a pressure-packed buying and selling environment. The authors explain how information technology can simplify rather than complicate matters, and simultaneously build brand loyalty and competitive advantage.
Extrait
From Part I: The Buying and Selling Environment in the Digital Age
Chapter 1: Too Much Choice
In the three short decades between now and the twenty-first century, millions of ordinary, psychologically normal people will face an abrupt collision with the future.
-- Alvin Toffler, opening statement, Future Shock, 1970
Developed economies were largely built on proliferation of choices. The notion of "more is better" became genetic code among twentieth-century consumers growing up in these economies. Now, with each passing day, more and more of these same consumers find that they have run headlong into a wall. The wall is their manageable threshold for the sheer number of decisions they are being asked to make, and they are throwing their hands up in despair. But in this frustration is a win-win opportunity to de-stress customers and, in so doing, to build brand equity and shareholder value.
How did we get to a consumer world of 40,000 products in a supermarket, hundreds of long distance and cellular calling plans, 52 versions of Crest toothpaste, magazine ads that show 37 available configurations of a Dodge Caravan on a single page, and the distribution of a thousand coupons per human being each year in the United States? How did we get to a business world confronted by more than 200 different brands of conference room chairs, 225 different models of mobile phone handsets, and 100-plus brands of desktop and laptop computers -- all marketing for mindshare above the daily din of the purchasing manager's voice mail and e-mail messages? Can the human brain sustain its ability to cope with such overwhelming choice in an age of a networked economy, higher productivity expectations, and shrinking leisure time? Is the resulting level of customer stress really such a big deal?
You bet it is.
Digital-Age Stress: A Day in the Life
To glimpse how radically purchase decisions have changed since publication of Alvin Toffler's seminal Future Shock in 1970, one only needs to peer into the digital-age lives of two people who could be your customers. Meet John Braxton and Lucy Chavez. John is a middle manager in a Fortune 500 company, the father of first- and fourth-grade children, and the husband of a real estate broker who works long hours. (John's wife is among the ranks of 75% of U.S. wives under age 65 who work -- compared to less than 40% in 1970.) Lucy is a thirty-something superstar director of information systems at one of the world's largest banks; her career has been all-consuming, and she hasn't yet had time for marriage or family (though lately she's been all too aware of the ticking of her biological clock).
Note that neither John nor Lucy, though technologically savvy, are bleeding-edge early adopters of new technologies in their personal lives. Like so many readers of this book, they are users of mainstream digital-age technologies like voice mail, cell phones, e-mail, and the Internet, but have not yet plunged deeply into the post-PC world of information appliances. So as you read about their day, remember that still awaiting them in the short-term future is the prospect of learning about and sorting through the burgeoning milieu of home computer networks, digital VCRs, portable Internet music players, wireless Web tablets, wristwatch phones, "smart" picture frames, networked washing machines, personal portable bar code scanners, and the next generation of handheld organizers. Forgetting for a moment that the post-PC world will bring even more clutter and confusion into the picture, let's first look in on John's day.
Before leaving to drive the kids to school on the way to his office, John has only a few minutes to glance at the morning paper while standing at the kitchen counter to wolf down some breakfast cereal. Seeing the business section reminds him that he really ought to invest that $7,000 bonus check he received over the holidays. He doesn't have time to evaluate individual stocks or bonds, so he's been thinking about mutual funds as a simpler approach. Today's newspaper happens to have an article on mutual funds, reporting on the fact that there are now more than 13,000 funds worldwide to choose from. Thirteen thousand! John had no idea, and suddenly what he thought would be an easy way out seemed formidable. What he had hoped could reduce his anxiety had just produced more. (Mutual funds, originally known as investment trusts, have been around for more than a century in the United Kingdom and nearly 80 years in the United States. Yet as recently as 1970, even with all that evolution, there were still only about 500 open-end funds to choose from compared to today's 13,000-plus.)
At the office, John overhears his assistant making airline reservations for his trip to London next month for a trade show. He rushes out from behind his desk to say, "Wait! Let me check my frequent flier miles before you commit to an airline. I think I'm close to a free ticket to Hawaii with either Delta or United, but I can't remember which. And one of them is having that big bonus miles promotion right now on overseas flights. You'll have to call them back after I log onto the Web and check my mileage plan account balances. (When Future Shock was published, there were no frequent flier programs. American Airlines launched the first in 1980.)
At lunch, John and a colleague only have enough time to run across the street to McDonald's. The menu board fills the wall with Value Meals, Chicken McNuggets with a choice of four sauces, Arch Deluxe with or without bacon, Happy Meals with action toys, two kinds of fish filet sandwiches and two kinds of chicken, fat-free Apple bran muffins, multiple salads with multiple dressings, and a host of additional menu variations. The number of choices is sufficiently incomprehensible that John hears himself ordering a number 2 Value Meal even though he doesn't really want or need the large order of fries that comes with it. (When Future Shock was published, "fast" food also implied "uncomplicated." McDonald's 1970 menu board was certainly uncomplicated compared with its nearly 60 different items in 1999 -- not counting nine Value Meal combinations. In contrast, the thriving and popular regional Los Angeles-based In-N-Out Burger chain still had the same menu in 1999 as in 1988; just burgers, cheeseburgers, fries, drinks, and shakes -- not that different from McDonald's 1970 menu.)
After lunch, John's assistant reminds him that today is the enrollment deadline for choosing an HMO in the company health plan, now that Human Resources has added more options for next year with different coverages and different levels of co-payment. (When Future Shock was published, John's company was simply telling employees, "Here is your health benefits package. Your coverage is with ABC Insurance." No HMOs, no co-payments.)
Before leaving the office, John picks up a voice message from his wife asking him to stop at the supermarket to pick up a few simple items to get the family through to the weekend: orange juice, bagels, Philadelphia cream cheese, Crest toothpaste, Coke, and some fresh lettuce for salads. John enters a Safeway supermarket on his way home; it contains about 37,000 different products with distinct SKUs (stockkeeping units). Inside the store, his little 2-inch Post-It Note-size shopping list becomes a 25-minute obstacle course as it explodes into more than 250 choices for only those six items on his list. (In 1970, the same six items combined offered just over 50 choices. The average supermarket contained only about 8,000 SKUs; the approximate number of new grocery product introductions in the United States was 800 in 1970, compared to more than 11,000 in 1998.) Table 1.1 shows a comparison of what John sees this evening, compared to what might have been a typical 1970 selection.
Table 1.1
Crest Toothpaste
1999
45 SKUs
(including tubes and pumps of gel, paste, tartar control, baking soda, glitter for kids, mint or original flavor)
1970
15 SKUs
(mint or original, one formula in tubes only)
Orange Juice
1999
70 SKUs
(six brands; from concentrate or not from concentrate, No Pulp, Some Pulp, Lots of Pulp, Double Vitamin C, Calcium-Fortified, frozen or fresh or fresh squeezed in the store; cartons or plastic bottles or 16-oz. glass bottles or single-serving six-packs or frozen tins; 70 SKUs is orange juice only, not counting blends like orange-pineapple, orange-tangerine, orange-mango, etc.)
1970
20 SKUs
(two or three brands plus private label; mostly from concentrate in frozen tins or cartons)
Bagels
1999
35 varieties, in the adjacent bagel shop (ranging from sugar-free sesame to whole wheat cranberry-orange)
1970
4 varieties (plain, egg, onion, poppy seed)
Philadelphia Cream Cheese
1999
30 SKUs
(block or soft or whipped; regular or light; 15 flavors, ranging from Roasted Garlic to Apple Cinnamon to Jalapeno)
1970
3 SKUs
(three sizes of one flavor in one foil-wrapped block cheese form)
Coke
1999
25 SKUs
(5 sizes: 12-OZ. cans or bottles, plus 16.9-oz., 1-liter, 20-OZ., or 2-liter plastic bottles; regular, cherry, diet, diet cherry, caffeine-free diet, caffeine-free regular, etc.)
1970
6 SKUs
(just classic Coke in cans or glass bottles; Diet Coke, cherry and caffeine-free versions were not introduced till the 1980s)
Lettuce
1999
9 varieties of whole lettuce plus 40 SKUs of packaged, fresh pre-cut lettuce/salad (among 433 total items in the fresh produce section)
1970
4 varieties of whole lettuce; no packaged, pre-cut product (only about 100 total items in the fresh produce section)
John finally gets to the checkout counter, only to be asked, "Do you have your Safeway Club card? Do you want paper or plastic bags this evening? Credit card or debit card?"
Home at last, John is putting the groceries on the counter next to a large bowl of fresh fruit when he notices the stickers on the bananas are carrying button-size micro-ads for ABC Television. The phone rings. MCI WorldCom is calling to tell him about a new long distance calling plan that is only available to customers of John's bank. With his and his wife's combined income and credit history, they qualify for a Platinum Visa card. The telemarketing rep tells John that if he moves his long distance service from Sprint to MCI and fills out an application for the Platinum Visa before a certain date, he will qualify for a preferred-customer lower APR on his Visa and for MCI's special Platinum calling plan. He responds, "Sorry, I can't deal with this now." (In 1970 there was only one class of BankAmericard before it later became Visa, one class of Master Charge before it later became MasterCard, and one class of American Express until it launched an exclusive Platinum card in 1983). For consumers at the end of the '90s, cards were regular, Gold, and Platinum Visa and MasterCard, branded not only by banks but co-branded as well, plus a Titanium Visa, plus American Express's 20+ options (green, gold, platinum, Optima, Optima Grace, etc.). Together they accounted for the lion's share of nearly 4 billion mail and phone credit card solicitations a year in the U.S. Visa estimates that in the U.S. alone, beyond single-bank cards there were co-branded Visa cards bearing more than 6,000 different brand names by 1999. (And relative to the call John just answered, in 1970 there was only one long distance provider -- AT&T -- and no packaged calling plans; today there are nine brands of long distance service available in his area, each with its own spin on calling plan options and pricing.)
One reason John couldn't deal with that call was because he had just spent two grueling hours the previous evening trying to figure out the best solution for upgrading his wireless phone service from his old analog cellular to digital PCS -- until the formidable tangle of handset features and battery types, pricing plans, calling areas, and special promotions from six different wireless carriers in his area finally led him to conclude, "I'll just keep what I have." (According to a 1998 Wirthlin Worldwide/Ameritech survey, 86% of consumers interested in wireless phone service said they were confused by the choices.)
After dinner, John quickly shuffles through the stack of today's 13 pieces of mail on the table. He notices a Gateway Computer ad on the back cover of PC World magazine. This single page ad contains five logos: Gateway's, the Intel Inside logo, the PC Magazine Editor's Choice seal, Pentium III, and Microsoft Windows. (The clutter of "ingredient branding" barely existed in consumer markets in 1970 beyond Dolby in stereo and DuPont's pioneering ingredient brands like Teflon and Lycra. But after NutraSweet and Intel in the '80s, the floodgates opened and today we have countless ingredient brands splattering their logos on the advertising, packaging, and promotional materials of countless host brands. Sometimes we now see even three layers of branding on the same product. One new personal TV receiver, for example, carries the Philips brand name alongside both the TiVo brand name (the company that licenses its personal TV service and technology to Philips) and the Quantum QuickView brand name (the branded enabling storage technology). The consumer buys a box with three brands emblazoned on it, all vying for mindshare even as they endorse each other.)
On his way to the trash can to throw away the plastic bag that the evening paper came wrapped in, John puts the discardable mail in the paper recycling container and the empty bottles from dinner in the glass recycling container. Later he'll put yesterday's newspaper in the separate newspaper recycling container. (In 1970, in the house that John grew up in, his parents didn't think about recycling -- much less using separate containers for sorting different materials every day -- so everything John just now did would have been one simple trip to the trash can. Today's scenario is certainly progress, but like many other forms of progress has mental clutter consequences.) John then remembers that tomorrow evening he needs to get some new tennis shoes before this weekend's tournament, so he reaches for the Yellow Pages -- only to be faced with a choice between the GTE Everything Pages and the Pacific Bell SMART Yellow Pages. (In 1970, there was only one Yellow Pages brand per market in most U.S. markets. Some now have four different brands distributed to the same household.)
When the kids are finally in bed, John and his wife decide to unwind by vegging out in front of the TV for a little while. John flips on the remote to see the TV Guide Channel's scrolling list of what's on -- on the nearly 300 channels they now get via digital cable. After using up 10 minutes of TV watching time just to sort through some of the choices, John sees that the year's first Monday night football game is on. But his wife thinks that the 1,050 ho...
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