Sales and marketing in a down market

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Sales and marketing in a down market - How to sell value not price. This slide show focuses on selling the intrinsic value of niche and luxury brands rather than discounting.

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Sales and marketing in a down market

  1. 1. Sales and Marketing in a Down Market: How to Sell Value Not Price Recession overview Understanding value Case studies Guerilla Marketing tools eMarketing tools Food trends
  2. 2. Sales and Marketing in a Down Market: How to sell value not price <ul><li>Premium and luxury brand marketers are now facing their biggest challenge in decades: </li></ul><ul><li>How to resist degrading their brand by selling price in a sustained down market </li></ul>
  3. 3. This program was designed for premium, high value marketers <ul><li>Passionate and firmly committed to their brand </li></ul><ul><li>Committed to maintaining their special form of brand integrity </li></ul><ul><li>Possibly benefit from the current economic “situation” </li></ul><ul><li>Sell value as a recession strategy </li></ul><ul><li>Wolfgang Puck </li></ul>
  4. 4. About Presenters <ul><li>David Schwartz </li></ul><ul><li>Katie Schwartz </li></ul><ul><li>SOS, a premium brand marketing company </li></ul><ul><li>Since 1984 - Branding, marketing, consulting and e-marketing premium brands </li></ul><ul><li>Clients: Godiva, Hain/Celestial, Mercedes Benz, Caffe D’Amore Whole Foods Market </li></ul>
  5. 5. SOS at Fancy Food Show
  6. 6. Recession & Price cutting <ul><li>Market dipped September 2008 </li></ul><ul><li>Current recession started December 2007 </li></ul><ul><li>Credit markets dried up </li></ul>
  7. 7. The recession <ul><li>11 economic recessions since 1945 </li></ul><ul><li>Defined by 2 quarters of negative Gross Domestic Product </li></ul><ul><li>Average duration of a recession has been 10 months. </li></ul><ul><li>Predicted to last until early 20010 </li></ul>
  8. 8. Recession in perspective
  9. 9. Price cutting in shrinking economy <ul><li>Shrinking markets </li></ul><ul><li>Pressure on the supply chain to cut prices </li></ul><ul><li>Destructive reaction </li></ul><ul><li>No reason to cut price if value is demonstrated </li></ul><ul><li>Don’t let your pricing be a victim of a hatchet job </li></ul>
  10. 10. Price cutting strategies <ul><li>Revenue loss comes out of margin </li></ul><ul><li>Not sustainable for a prolonged period of time </li></ul><ul><li>Cut price: Short term sales promotions only </li></ul><ul><li>Do not lower price indefinitely, send wrong signal </li></ul>
  11. 11. Understanding your market: Where to spend <ul><li>Recession is a contraction of your market </li></ul><ul><li>Spend majority marketing dollars with active customers: </li></ul><ul><li>60% Active customers </li></ul><ul><li>30% Inactive customers </li></ul><ul><li>10% Prospective customers </li></ul>
  12. 12. Maintain higher margins <ul><li>Be in high margin/medium to low volume business </li></ul><ul><li>Not in a low margin/high volume business </li></ul><ul><li>Don’t try to compete against discounters </li></ul><ul><li>Sell value, not price </li></ul>
  13. 13. Differentiation + Reinvention <ul><li>Customers buy price or value </li></ul><ul><li>Undifferentiated businesses fail </li></ul><ul><li>You business must be differentiated - Positioning </li></ul><ul><li>It is OK to reinvent yourself </li></ul><ul><li>Reinvented brand: IBM 1889 - Business machines 1955 – Punch card computers 1981 – PC’s 2005 – Software, consulting </li></ul>
  14. 14. Cost cutting <ul><li>Sharpen your pencil </li></ul><ul><li>Create and enforce efficiencies </li></ul><ul><li>Best ingredients/materials at lowest prices </li></ul><ul><li>Ask your existing vendors to help find ways to save you money </li></ul><ul><li>We should all be doing this, all the time </li></ul><ul><li>Insist on measurable marketing </li></ul><ul><li>Marketing ROI </li></ul>
  15. 15. Understanding Value
  16. 16. Value <ul><li>“Value” is important and misunderstood </li></ul><ul><li>Definition: “The monetary worth of something” </li></ul><ul><li>Everything has a value </li></ul><ul><li>Value is relative to values of customers </li></ul><ul><li>Know your customers </li></ul><ul><li>Know what your customers value </li></ul>Rolls Royce – Aspirational value
  17. 17. Core value is “Brand value” Robert Mondavi
  18. 18. <ul><li>Culture </li></ul><ul><li>Identity </li></ul><ul><li>Business Plan </li></ul><ul><li>Benefit </li></ul><ul><li>Promise </li></ul><ul><li>Quality </li></ul><ul><li>Taste </li></ul><ul><li>Performance </li></ul><ul><li>Aspiration </li></ul>Core value is “Brand value”
  19. 19. Value is “Presentation”
  20. 20. Value is “Presentation” <ul><li>85% of value </li></ul><ul><li>Packaging: “Trade Dress” </li></ul><ul><li>Point of sale </li></ul><ul><li>Location, lighting, cleanliness, orderliness </li></ul><ul><li>Customer service </li></ul><ul><li>Sales and customer service on-going training </li></ul>
  21. 21. Value is “Benefit”
  22. 22. Value is “Benefit” <ul><li>Benefit beyond quality, taste, prestige </li></ul><ul><li>Implied health </li></ul><ul><li>Energy </li></ul><ul><li>Functional </li></ul><ul><li>Rationalizations: Organic Fair trade Natural Non-GMO Vegan No-Trans fats Gluten free </li></ul>
  23. 23. Case Study: “Presentation”
  24. 24. Selling Value: Case study Godiva – “Presentation” <ul><li>Since 1928, Belgium </li></ul><ul><li>Founded by Master Chocolatier Joseph Draps </li></ul><ul><li>Handcrafted packaging </li></ul><ul><li>Multi-channel sales strategy </li></ul><ul><li>Positioning: Leader in premium confectionary category </li></ul><ul><li>“Taste”: Bought as “gift” </li></ul><ul><li>POS dominance </li></ul>
  25. 25. Case Study: “Exclusivity”
  26. 26. Selling Value: Case study Illy Coffee – “Exclusivity” <ul><li>Since 1933, Trieste, Italy </li></ul><ul><li>Founded by espresso machine inventor, Francesco Illy </li></ul><ul><li>Unique espresso blend & innovative packaging </li></ul><ul><li>Positioning: Super premium espresso </li></ul><ul><li>Only sells through premium channels – “Aspirational” </li></ul><ul><li>Multi-channel sales strategy </li></ul>
  27. 27. Case Study: “Service”
  28. 28. Selling Value: Case study Zabar’s – “Service” <ul><li>Since 1934, New York </li></ul><ul><li>“Best quality at fair price” </li></ul><ul><li>Retail, mail order – 500,000 customers </li></ul><ul><li>Family members run day-to-day business </li></ul><ul><li>Excellent customer service </li></ul><ul><li>Positioning: “Zabar’s is New York, New York is Zabar’s” </li></ul>Saul Zabar
  29. 29. Break :15 Next: Value Marketing Tools Guerilla Marketing eMarketing Traditional Marketing
  30. 30. Value marketing tools: High impact – Low cost <ul><li>E-mail marketing </li></ul><ul><li>Web 2.0 Social networking </li></ul><ul><li>Guerilla marketing </li></ul><ul><li>Web optimization/SEO </li></ul><ul><li>PPC – Google AdWords </li></ul><ul><li>Traditional media </li></ul>
  31. 31. Guerilla Marketing <ul><li>Viral </li></ul><ul><li>Creative </li></ul><ul><li>Humor </li></ul><ul><li>Loyalty </li></ul><ul><li>Fanaticism </li></ul><ul><li>Continuity </li></ul><ul><li>Word of mouth Red Bull Flugtag </li></ul>
  32. 32. Guerilla Marketing: SOS Case History <ul><li>Viral marketing street “farm animals” event </li></ul><ul><li>Kickoff retail redevelopment </li></ul><ul><li>Gourmet food oriented </li></ul><ul><li>Raised awareness, investment capital, city support </li></ul>
  33. 33. Web site optimization/SEO <ul><li>Keywords In tag In URL Density in doc text In anchor text In headings </li></ul><ul><li>Links Anchor text in inbound Origin of inbound From similar sites From .edu & .gov Number of backlinks </li></ul><ul><li>Metatags </li></ul><ul><li>Content Unique Freq. content change </li></ul>
  34. 34. Pay Per Click/PPC Google AdWords <ul><li>Keyword auction </li></ul><ul><li>Scalable pricing </li></ul><ul><li>You pick demographics </li></ul><ul><li>Competitive </li></ul><ul><li>Less effective than “organic” </li></ul><ul><li>Other Google programs </li></ul><ul><li>Measurable analytics </li></ul><ul><li>Must integrate with other programs </li></ul>
  35. 35. E-Mail marketing-Pro Active <ul><li>E-mail promotions </li></ul><ul><li>Strategy/Objectives </li></ul><ul><li>Landing page </li></ul><ul><li>Sticky site </li></ul><ul><li>Opt-in lists </li></ul><ul><li>Affinity lists </li></ul><ul><li>Newsletters </li></ul><ul><li>Measurable Analytics </li></ul>
  36. 36. Web 2.0 <ul><li>Cross platform Social networking </li></ul><ul><li>Customer in control Create community </li></ul><ul><li>Drive traffic to your site </li></ul><ul><li>Billions involved </li></ul><ul><li>Special interests </li></ul><ul><li>Blogs </li></ul><ul><li>Facebook </li></ul><ul><li>Twitter </li></ul><ul><li>YouTube </li></ul>
  37. 37. Social Networking <ul><li>Future of marketing </li></ul><ul><li>Customer driven </li></ul><ul><li>Marketer “influence” </li></ul><ul><li>Marketer becomes part of social networking fabric – or not </li></ul><ul><li>Create social network brand </li></ul><ul><li>Demographics: 12 – 45 GenX & GenY </li></ul><ul><li>Peet’s Coffee shown </li></ul>
  38. 38. Paid links: Use sampling to build customer database #1 Gmail link
  39. 39. Paid links: Use sampling to build customer database #2 Landing Page
  40. 40. Paid links: Use sampling to build customer database #3 Opt-in page
  41. 41. Traditional value media <ul><li>Sales promotions Short term “2 for 1” Couponing Co-op advertising TPR’s Rebates </li></ul><ul><li>Multiple sales channels </li></ul><ul><li>Alternative sales channels </li></ul><ul><li>Trade Magazines </li></ul><ul><li>Trade shows </li></ul><ul><li>Broadcast </li></ul>
  42. 42. Value selling <ul><li>Consultative selling strategy </li></ul><ul><li>Guerilla selling tactics </li></ul><ul><li>Pioneering </li></ul><ul><li>Dedicated sales force </li></ul><ul><li>Reps & Brokers </li></ul><ul><li>Distributors as sales reps </li></ul><ul><li>Sales management </li></ul><ul><li>Shakti with Whole Foods </li></ul>
  43. 43. Trends Giada De Laurentiis
  44. 44. Culture: Comfort, Rewards, Frugal, Benefits, At-Home <ul><li>Home Gourmet – Giada “Every Day Italian” </li></ul><ul><li>Traditional comfort foods – Mac & Cheese, Chocolate Chip Cookies, Meatloaf with Artisan/Exotic ingredients </li></ul><ul><li>Buy from Wal-Mart and Whole Foods Market </li></ul><ul><li>Lunch out, not dinner </li></ul><ul><li>Pre-prepared gourmet food </li></ul><ul><li>Variety, healthy, conscious </li></ul>
  45. 45. Food: Variety, Simplicity, Frugal, Value, Benefit <ul><li>Frozen ethnic – Indian, Asian </li></ul><ul><li>Benefit F&B – Teas, waters, foods </li></ul><ul><li>Artisan – Anything </li></ul><ul><li>Single Origin - Anything </li></ul><ul><li>Chocolate – Exotic, Stone ground </li></ul><ul><li>Noodles – Ramen, Udon, Soba </li></ul><ul><li>Smoked foods – BBQ craze </li></ul><ul><li>Regional – Produce, coffee roasters </li></ul><ul><li>Blog rated, not critic rated </li></ul>
  46. 46. “ We cannot direct the wind, but we can adjust our sails” Bertha Calloway “We just stayed after it” Sam Walton “Sell value” SOS
  47. 47. Selected Resources <ul><li>Research </li></ul><ul><li>http://reports.mintel.com </li></ul><ul><li>http://naturalspecialtyfoodsmemo.blogspot.com </li></ul><ul><li>www.webconfs.com SEO Tools & Webmaster Utilities </li></ul><ul><li>www.specialtyfood.com </li></ul><ul><li>Web sites/Books/Magazines </li></ul><ul><li>Guerilla Marketing online/Print </li></ul><ul><li>Web Marketing for Dummies /Print </li></ul><ul><li>Positioning-The Battle For Your Mind /Print </li></ul><ul><li>Internet Retailer online/Print </li></ul><ul><li>Sam Walton – My Story /Print </li></ul>
  48. 48. Q&A: Top 10 FAQ 2008 <ul><li>We need more sales </li></ul><ul><li>We need better quality accounts </li></ul><ul><li>We need alternative markets </li></ul><ul><li>We need to sell outside our niche (ethnic, Kosher, etc.) </li></ul><ul><li>We need to expand to foreign markets </li></ul><ul><li>We need to sell direct to stores </li></ul><ul><li>We need to sell to end user consumers </li></ul><ul><li>We need to look more premium </li></ul><ul><li>We need to get (more) distributors </li></ul><ul><li>We get lots of web traffic, little sales </li></ul>

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