These days, whenever we go shopping for groceries, clothes, shoes… staff at the check-out counters always asks if we have a membership card for earning incentive points, and then we’d dutifully take it out and let the staff to clock new points on to it. Bonus points, when accumulated to a certain amount, can be used to redeem gifts, discount coupons, or other offers under the same company group.

The idea of incentive rewards started many years ago with the gas stations (‘green stamps’), the airlines and credit card companies. Now, the idea has caught on as more and more retailers design similar schemes – to keep customers within their belts.

In Hong Kong, loyalty schemes have also been around for quite some time. One of the earlier players is Jusco. Its ‘J Card’ is very popular among housewives who do their shopping daily. This card offers products with discounts, members-only sales days, and newsletters with the latest promotional offers via email or posts.

Octopus card, with its enviable high penetration in the Hong Kong, launched ‘Octopus Rewards’ rebate scheme a while ago. Octopus now partners with different retail outlets to jointly promote loyalty schemes for mutual benefits.

‘MoneyBack’ is another similar scheme launched by Park’n’Shop a year ago. This programme started first with the supermarket chain, but is now extended to other non-supermarket outlets under the Hutchison Whampoa Group – such as Watsons, Fortress, hotels, internet and telephone services… Extending the catchment stores aims to expand the number and range of customers to beyond housewives.

Meanwhile, Jardines has joined hands with HangSeng Bank to launch ‘enJoy Card’ – another reward scheme hoping to share a slice of the already competitive market. Customers can earn reward points at all Jardines’ shops such as IKEA, Mannings, Maxims Catering and more. Although their network of shops is bigger than ‘Octopus Rewards’, their promotion is not as far reaching and therefore, customers still do not know how their reward scheme works.

These bonus point schemes are a type of loyalty programme. From a wider perspective, we call this ‘customer relationship management (CRM)’. There are other CRM methods available of course, such as collecting limited edition items, stamp cards, coupons…. All these have the ultimate aim of customer retention and make them come back for more spending.

The development of CRM is linked to technological advancement. Technology has made possible that a single click will enable marketers to check if we are a regular customer, where we live or work, our spending habits, and our income level. With these kinds of information, companies can customize special offers for their customer periodically.

CRM is a major marketing tool now. Besides offering discounts to customers, CRM also opens the door to new marketing opportunities, such as joint or cross promotions with offer of incentives and discounts and privileges for purchasing across brands. Financial institutions are active exploiters of CRM – their own branded credit cards are tools for capturing customer information for even more promotions.

Further good reads:

CRM Introduction: http://www.exforsys.com/tutorials/crm/crm-introduction.html

CRM data privacy: http://www.theclientsideblog.com/archives/ideas-experiences/the-future-of-crm-data-and-pri/

CRM for smaller business: http://www.youtube.com/watch?v=G0Ln4H_deGU

Barack Obama was elected the next president of the US on 4 November. His marketing strategies were widely discussed by the media and many of them deemed 4 November as ‘the biggest day ever in the history of marketing’, and Obama himself was even selected as the Marketer of the Year by executives in an annual conference in October.

Advertising Age said Obama’s campaign was a successful branding strategy – with his messages being consistent, simple, and relevant. These are important elements that all marketers should learn from. Obama does not have a long history in the political scene but managed to build up his own brand in 2 years. Moreover, Obama had strong opponents – Hillary Clinton and then later, John McCain. And, being the youngest among them, Obama’s résumé is the shortest. It looked like an impossible battle, but he won by having a better marketing approach than his opponents. This made him stand out from the rest and eventually ‘win the market share’.

1. Consistency
Comparing Obama, McCain and Clinton, Obama had successfully created a single message that is used throughout his campaign right from the start – ‘Change’. In fact, the consistency had forced his opponents to follow him and adopted ‘change’ as a key word in the final part of their campaigns. Clinton’s message was unclear and confusing. From the start of her campaign she was boasting her experience, and then shifted to ‘Countdown to change’, followed by ‘Solutions for America’. McCain, meanwhile, did employed ‘Country first’ as his main message, but changed the tune and called himself ‘the agent of change’. This message came a bit too late.

Not just ‘change’, Obama was consistently calling McCain a clone of Bush. No matter how McCain defended this allegation, Obama insisted that the ghost of Bush’s policy will still be there if McCain moved into the White House. Obama promoted his believes which McCain found it hard to deny.

2. Simplicity
Obama’s message is simple – ‘Change’, which is easy to get into the minds of voters, especially with the economy’s turbulence for the past year. Voters needed ‘change’, a change that could improve their lives, a change that could turn around the economic downturn, all these provoke their inner feelings and allow the whole incident closely connected to voters.

His opponents’ promotion was much more complicated and failed to coin into the minds of the voters.

3. Relevance
Obama has his relentless focus on change, which forced his opponents shifted their devotion to discuss the changes they proposed for the country, and how their plans were different from the previous term. All these talks distracted McCain and Clinton from talking about their strength, for example their experience, their international experience.

Utilisation of social media

Besides keeping his message simple and consistent, Obama’s communication mix was also well praised by marketers. He deployed technology and penetrated into different online and traditional media. He cleverly utilised social marketing tools and had successfully gained the attention of younger voters whom traditionally not interested in politics.

(Screenshot from BarackObama.com)

(Screenshots from youtube.com, 3 Nov 2008)

The above 2 images are taken from their respective youtube.com page with some short introductions about themselves.

Can you spot the difference?

• Obama’s Youtube channel had 18 million subscribers, while McCain’s only had 2 million.
• Obama employed Google checkout online payment systems to provide an easier channel for viewers to donate money to his campaign, and McCain did not.
• Obama set up his video channel on Youtube back in 2006, and McCain catch up the game 5 months later.
• McCain provided detailed instructions to viewers on how to ‘subscribe’ to his videos, while Obama did not.

From the above information, the differences in promotion strategies are obvious:

• Young vs Mature
• New media vs Traditional media
• Web 2.0 vs Web 1.0
• The Long Tail vs 20/80 Rule
• The ability to draw Netizen’s attention
• The demographic profile of voters (age, education, race, class, perceptions….)

‘Spare change, please?’

I had a very interesting encounter with a beggar while I was in Shenzhen a while go. I was approached by a beggar while waiting for a friend outside a well known mall in Shenzhen.

He asked me for some spare change. I had some time, so I asked him why he came to me.

‘I saw you from afar. … You are loaded with shopping bags, so you must have just spent some money in the mall and should not mind handing some change from the shopping. You also look like a generous person so I decided to ask you for some spare change’

I was amazed by his informed comment.

In general, people are afraid of beggars because of they way they look – scruffy, dirty, torn clothes and sometimes smelly. This beggar is different. Although he has most of the begging characteristics, but he is clean. He pointed out that he needs to stand out of other beggars to be less intimidating.

‘I know my SWOT’

‘I am conscious of my own strengths. People don’t find me intimidating if I have a clean look – and that is my strength.

‘I look at my opportunities too. The huge population and its flow offer me opportunities. Only if the passers-by outside this mall are willing to give ¥1 a day, the opportunities would be ¥30,000 a month. Of course in reality, not everyone would spare me a yuan, and I can’t ask all of them in a day either’.

He strategically identified his targets – the passers-by of the mall. He continued his business forecasting.

‘If 30% of the flow around this mall is my reachable patrons, and if my success rate is 70%, my chance of success would be 21% of those approached.’

Selecting the patrons

‘There are several groups of people I regard as potential patrons. They should be around 20-30 years old. If they are too young, they would not have the money and if they are too mature, or already married, their partners often have control of their money. My targets are:

1. Relatively young ones and well dressed – they would be more free with spending money;

2. Young couples – they would at least, act generous to avoid embarrassments in front of their partners;

3. Singles and pretty girls – they are always scared of being harassed by strangers and willing to spend money to avoid them.’

He works eight hours a day and applying his chance of success, he could end up with ¥300 a day. He confirmed that he makes about ¥200 a day on weekdays and around ¥500 on weekends

He went on to disclose his marketing tactics. ‘You cannot keep chasing your patrons. You would easily waste time on chasing a customer without any success. I need to decide at which time to give up and find a new target.’

‘The business of a beggar cannot rely on luck. I need to plan on every ¥1 of my taking.’

As many world records were broken in the Beijing Olympics, the 2008 Game itself has also set a record of its own as the most-watched Olympics ever.

According to a Nielsen report, the Beijing Olympics attracted a cumulative TV audience of 4.4 billion during the first 10 days of the Game (8-17 August). This number equates to almost two-thirds of the World’s population.

Marketers saw this as huge opportunities, and global sponsors were estimated to have spent US$3.2 billion to secure exclusive rights to sell their products through the Olympics. According to R3, a Beijing media consultancy, spending from the 12 top-line sponsors was 44% higher compared to the 2004 Athens Games.

This is not all. Sponsors are estimated to have spent another $54.3 billion on media advertising, 19% more than before. Besides the money spent on buying prime time media slots, a big amount went to the athletes. In China, you can see sports stars and supporting celebrities such as basketball player Yao Ming, hurdler Liu Xiang or Jackie Chan – anywhere from TV ads to a can of coke.

Nielsen’s consumer research had evidenced use of well-known Chinese athletes and celebrities in advertising campaigns are paying off. Actor Ge You, endorsing China Mobile had 80% of the consumers recalling his appearance in China Mobile advertisements. Other stars enjoy similar recall rates.

From a marketing communications point of view, it is pleasing that product and corporate brand profiles can be raised with the stars. When consumers can connect their favourite stars with a brand, they would take less notice of competitive products and shorten their buying decision process.

It’s all very good if the recall connections are correct. The same Nielsen report shows wrong associations – Jackie Chan with Coca-Cola, or Yao Ming with Nike, Adidas and Pepsi.

This is no surprise. When many brands (although very different products) are associated with the same star, consumers could be easily confused. Liu Xiang for example, can be found everywhere in China selling Coco-Cola, Visa, Cadillacs, Nike, Lenovo, etc. etc.

Marketers are best advised to consider the uniqueness of their promotion strategies to avoid mistaken identity.

Source: The Nielsen Company

Interesting Fact: Huge sums, but where did all these money go? The money is in, but who else is sharing the cake? Wang, the Assistant Officer from the Athletics Administrative Center under the China State’s General Sports Administration, told the media about how revenues from product endorsement are split: Athlete: 50% Trainer: 15% Local Municipal Bureau of Sport: 20% Chinese Athlete Association: 15% The athletes in China, especially the ones who compete on national ground, often do not have an ‘agent’ like other countries do. The Government manages their schedule and income sources.

Like it or not, we have to move with the times and keep up with the pace at which changes are occurring. We need to be creative in managing our work, teams and, indeed, ourselves.

Creativity is inherent in all individuals. How this is germinated, grown and harvested very much depends on the initiatives of managers, who may or may not recognize the importance of creativity and innovation to organizational survival. Gurteen (1982) considers creativity as the process of generating ideas. Creativity and innovation are concerned with the process of creating and applying new knowledge. Such knowledge is then used to initiate the development of new products and services, and also to enable an organization to learn better and faster than competitors and to gain and sustain competitive advantage.

Organisations wishing to mobilise creativeness in its employees must nurture a climate where creativity and empowerment are valued and encouraged. A creative culture will support an organisation’s quest to gain and sustain competitive advantage from its intellectual capital assets.

Organisations can create a supportive culture by:

• Developing a culture that facilities creativity, trust and empowerment,
• Providing a flatter, flexible, decentralized organization,
• Creating and utilising multi-disciplinary teams,
• Implementing knowledge-sharing systems such as suggestion schemes and IT information banks, and
• Forging external partnerships with suppliers, customers and competitors.

Creativity is not only necessary for the innovation of new products and services; it is also the conduit for knowledge to be generated, disseminated, utilised and managed.

(Adapted from an article by Jacqueline McLean in Manager, November/December 2007)

Governmental promotion campaigns are usually conventional, formal and boring. We had seen the Hong Kong SAR Government using prime time television for preaching – from the Basic Law to giving tips on how to keep ourselves clean.

The television as a channel for promotion is expensive, traditional and getting outdated. They are losing appeal to the younger generation who has now diverted to online channels, so there are calls for an innovative approach to get them back fold.

The Media Development Authority (MDA) in Singapore recently launched a video with the most senior officers rapping to urge for creativeness of the community. This video had sparked up much controversy and generated much noise as many Singaporeans rushed to publish comments on their own blogs, which in turn generated even more noise.

The MDA video was casual and funky yet at the same time portrayed a government body image. The comments from the public were diverse. Some Singaporeans thought that the rap video made their government looked silly and unprofessional, others (and a majority of them) thought this 'out-of-the-box’ approach, did reach out to the younger generation at least.

In the UK, Downing Street is steering away from its conservative image too. In May 2007, the then Prime Minister – Tony Blair, set up a ’10 Downing Street’ channel on YouTube and it has, ever since, became one of the official channels to broadcast messages to the younger audiences. Blair’s congratulatory message to the new French President was one of the most-viewed clips.

Following the success, the Queen has also established her own channel on YouTube – the Royal Channel. (www.youtube.com/the royalchannel)

The HK Tourism Board is also catching up on promotion technology. They are also on YouTube (http://youtube.com/hongkong) and have begun utilising Facebook – the most popular social network platform, to promote Hong Kong to a world-wide audience with a relatively low budget. In addition, they are using MSN emoticons to facilitate downloading of Chinese New Year e-cards.

There is also a strategic partnership with YouTube and Baidu (「 百 度 」– the most popular search engine in China), and possibly also Google and Flickr – the online photo album website.
When will we see the Hong Kong government catching up with the fad? Soon, as the grape vine said they are scouting for unconventional promotional ideas.

Every business needs a persona for it to be identified by customers. Logos and slogans are the vehicles for businesses and brands to catch the eyes of the public. They are the first point of contact in the chase for customers, so well designed logos with distinguishing styles and colours and slogans conveying appropriate messages can bring forth direct competitive advantage and marketing success. Companies are willing to invest heavily for that success. Now, this need is not confined to businesses.

Public organisation such as educational establishments, research organisations and professional institutions are seeing that they have customers too, so they need to seek for recognition of their presence and the value of their work.

Universities and professional institutions see the advantage of having support from their stakeholders – students, members, employees and the government. They also need recognition from other businesses and employers.

Visual Identify programmes have to be designed with a strong fashion sense. They have to be in trend and should not be restricted to local applications. As the world has become closer (thanks to technology and communication advancement), styles and designs must have global appeals. The HSBC slogan of ‘The World’s Local Bank’ is an excellent example of designing with an international and local flavour.


‘Tradition’ has always been a symbol of quality – that the products or services have stood the test of time. The royal crests in Britain are symbols of respect and authority, and used for selling the values of history and ‘tradition’. However, crests are now being seen to be somewhat complicated for the eye and symbols of being out of touch. University of Warwick, among other traditional universities in the UK, felt that their crest does not reflect well on their modern and innovative philosophy so they have now updated their image with a modernised, ‘clean-cut’ visual and typography.

ACCA have had several logo changes in the last two decades. In 2007, they were criticised for spending £85,000 on a new logo. Neil Stevenson, the Marketing Director of ACCA explained that the new logo is more suitable for the internet age. Besides the logo, the professional body refreshed their advertisements and publicity materials. It was claimed that the new approach to publicity could be a major reason for the 6.1% increase in membership in 2007.

In Hong Kong, the Hong Kong Institute of Chartered Secretaries (HKICS) also revamped their visual identity. Along with a new logo, they also have a new tagline – ‘More than meets the eye’. By these new images, HKICS hopes to enhance their professional profile and the value of their members in strategic decisions within an organisation. Although quantifiable results are still unknown, professional recognition and contribution of HKICS is strongly felt in the community.

Visual Identify is only a part of any Corporate Identity programme. For any effort for corporate image refreshing to be effective, updating of the logos and slogans must be carried out in sync with other publicity plans. Corporate communications experts and writers T.C. Melewar and Sibel Akel, have stressed that corporate imaging projects need to be approached with serious consideration being given to Communication and Visual Identity, Behaviour, Corporate Culture and Market Conditions. Without these, organisations’ corporate communication plans will not be effective, and money involved would easily go down the drain.

The Internet is no longer an out-of-reach, outer-space know-how for technology freaks. The e-commerce boom has caught on – as 40% of the online population are using virtual technology to buy things they need (surveyed by Nielsen Company).

Some products are easier for online purchasing than others. Books retailers started their businesses early and have been enjoying a steady 7% growth in the last 2 years. On the other hand, wearing apparels suppliers as new entrants to this mode of selling are registering a dramatic 16% increase since 2005.

While South Koreans are leaders of Internet purchasing – buying once every three months, Chinese consumers come second. In a separate report by the China Internet Network Information Centre, Chinese Internet users have increased from 73 million in 2006 to more than 210 million, and nearly 50% of which were between age 18 and 30. Within this mass, about 22% of the online users (46 million) reported having made an online purchase in the last six months.

The reason why China did not come first in the survey can be explained by the constraints of making payment. Internet purchases are paid for by credit cards, PayPal or bank transfers. China has a relatively low credit card penetration, so buyers have been handicapped by the options they have to pay. To overcome this, ‘e-tailers’ in China go for the antiquated ‘Cash-On-Delivery’ system and the online purchasers welcome this because they have a chance to inspect the goods before paying.

Kaiser Kuo, Ogilvy China director, gave insights to the rising popularity of e-commerce in China. ‘Online retail channels for items like cosmetics and fashion are huge in these markets’ because customers can have a wider choice of merchandise than from local stores. Many consumers are finding brands which are not yet available in China, and some times cheaper as they may escape from ‘luxury tax’.

In China, the most popular Chinese online shopping site is TaoBao.com. They reported a 156% growth in 2007, with 53 million users. The website is a close cousin to eBay in their method of doing business – conducting auctions and operating virtual agency stores. They owe their success to the foreign brands still failing to wake up to the potential of the Chinese market.

E-commerce is growing fast to become a mainstream place for shopping, especially for geographical dispersed market. Traditional retailers should be aware of this and work hard to branch out to ‘e-tailing’ soon.

(Adapted from: Trends in Online Shopping –
The Nielsen Company, Feb 2008
B. Lowther, The TaoBao Phenomenon, Women’s Wear Daily, Feb 2008)

According to a report published by Datamonitor, consumer expenditure on premium foods in the UK is on the rise – increasing annually at 27% since 2003. The economy in general is good and people are more willing to spend on quality products, in spite of higher prices.

The general perception of consumers is that higher price and better quality are synonymous. Scientists at the California Institute of Technology have proved that prices influence perceptions and consumers get more excited by products that are more expensive. According to Jeffery Young (Allegra Strategies), as discretionary income increases, demand for higher quality products grows. The food industry, for example, saw growing popularity of deli concepts, more and more people going to farmer markets, and less and less people drinking instant coffee.

The crave for premium labels in supermarkets has given new opportunities to marketers by ‘premiumising’ products. Premiumisation is about adding value to existing products and servicing and relabeling them as new but higher quality products.

Interestingly, popularity of premium products was originally pushed up by the middle classes in new economies. They are looking for confirmation of their social status, and chase for the latest trends, and giving opportunities to marketers to trade up.
Why the change in habits? In short, the world has become smaller as communication and contacts get easier. Increased travel and exposure to different cultures have broaden the visions of people and created the urge to try out new things.

Hong Kong consumers are looking for products and services with better quality too. The latest fad is to take a cruise holiday, buy foods carrying an organic, low carb, fair trade label.

Marketers – be innovative!