Why pay for something you could otherwise get for free?

Earlier this week I was shopping in my local supermarket when I noticed a customer loading up a trolley full of bottled water. Upon seeing the customer loading case after case of water into the trolley, one thought instinctively crossed my mind. Why on earth would someone pay for something that you could otherwise get for free?

You only realise you are truly a marketer when instead of taking every day things on face value, you begin to question everything! I must start by saying that personally I do not buy bottled water unless absolutely necessary, so this is a biased perspective. 

According to Ibis World, the bottled water industry in Australia is worth a staggering $681m and is predicted to grow by 2.8% in 2015. In fact, the industry has seen steady growth for the last five years with shifts in health conscious consumers seeking healthier alternatives and an increasing need for convenience.

Buy why exactly do people buy bottled water?

Brands such as Evian are extracted from natural sources and springs, which can act as a point of difference for the product. Many bottled waters are actually just plain ordinary tap water that has been filtered. By and large, there are actually very few differences between the H2O coming from either the tap or bottle. The health arguments for bottled water are often overstated, although there can be some differences in taste.

Source: thedrum.com

The major difference between bottled and tap water is the price. A typical branded bottle of water comparatively is more expensive than petrol and more than 1000 times more expensive than water directly coming from the tap. Would you really consider paying over 1000 times the standard price for any other product on the market?

It is also important to consider the incurred cost to the planet, which is often overlooked.  The bottling of water has many negative environmental impacts caused by its extraction, production, transportation and ultimately ending up as either litter, or even worse, landfill. The story of how water is produced is brilliantly explained in the story of stuff project at www.storyofbottledwater.org.

Have we all fallen for a big “water con” or are we simply purchasing bottled water as a way to exercise our freedom? The natural and pure images often conjured up by major brands marketing water is something we all identify with. You only have to look at Evian’s “Live Young” campaign to really get a sense of how they are looking to market to our desire for youth and vitality.

As a responsible modern day marketer I am fully aware of the ethical, social and environmental implications of selling bottled water. Bottled water does have a use, particularly in parts of the world where there is a lack of access to clean water sources.

So, next time you are considering buying a bottle of water, please remember that Australian tap water is clean, safe and the most sustainable option. While the packaging of many brands promotes nature’s beauty, it is actually the natural world that is ultimately paying the biggest price.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Collaborative Consumption Takes Over

An emerging trend, the idea of “sharing economy”, otherwise known as collaborative consumption, will greatly impact the society in which we live. As consumers, businesses and companies move away from private ownership of assets, we are slowly moving towards sharing assets.

What exactly is collaborative consumption? According to collaborative lab, collaborative consumption is an economic model based on sharing, swapping, trading or renting products and services, enabling access over ownership. It is reinventing not just what we consume but HOW we consumer.

Many established brands are implementing this model into the structure of their business, taking on a collaborative lifestyle. A prime example would include Airbnb, where global consumers have the opportunity to reinvent the idea of sharing through renting out their homes and apartments, giving world travellers the opportunity to “belong anywhere”.

Another prime example would be eBay, in which their use of collaborative consumption can be seen through the redistribution or “transfer or ownership” of new and pre-owned goods. Lastly, the third main form of collaborative consumption can be seen through the idea of a product service system such as Zipcar, where consumers pay to access the benefit of a product versus needing to own it outright.

A key driver pushing the growth of collaborative consumption is the ever-evolving Internet, and the many technological platforms, along with the multitude of social media channels that are becoming easier and easier to use. From this we can see the introduction of more “share platforms” that allow consumers to share things from the click of a button.

Perhaps another driver impacting the move towards a shared economy could be peoples' need to connect with others in a meaningful way. This idea of sharing goods and services is not new. Many of us can trace the use of borrowed tools and equipment, hand-me-down clothes and shared babysitters back to our parents and even our grandparent’s generation. The only difference is that this is the first time that we can see a joint shift in consumption patterns, ones that have very little to do with marketing or retail accessibility.

If we were to sit back and try to predict where consumers and their consumption patterns are going, the simple answer would be “they are taking the consumption model into their own hands and controlling when, how and why.”

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

The Business of Fashion with Collette Dinnigan

As an avid follower of all things business and fashion, I was thoroughly looking forward to hearing Collette speak about her success as a Fashion Designer in a very global industry. As the first Australian Designer to have been invited to show on the official schedule of Ready to Wear Paris Fashion Week in 1995, her legacy has always been about breaking boundaries, but at the same time, she’s managed to maintain consistency across her brand, and really hone into who her customer is and what they want.

Although there were numerous insights Collette shared about her journey as a Designer, it was her thoughts on the business side of things that were the most compelling. From a retail perspective, it was really interesting hearing her talk about her relationships with key retailers over the course of her time in business. Anyone with a good understanding of branding knows the value of the right associations, and it’s very clear that Collette’s pursuit of overseas opportunities with retailers like Barneys New York and Harvey Nichols was what really set her up for success.  Later down the line, she has sought more mass market partnerships with UK department store M&S and Target Australia, in an effort to expand her business, and has now partnered with cult women’s clothing and accessories retailer Anthropologie, as she begins to re-surface her brand in the marketplace.

Putting her business model aside, Collette also had some amazing advice for emerging business leaders. I couldn’t help but jot down a particular quote as I sat there in the audience, and it’s one I feel that reflects greatly on her work ethic, and approach as a business leader; “When you’re passionate about something you want to keep going. Nothing’s ever good enough”.

As an aspiring business leader in this industry, I couldn’t help but feel a little awed after hearing her speak, and her unwavering passion for her brand was more than a little infectious. Whatever happens in my career, it’s good to know that hard work will get you somewhere, but at the same time, it’s being business savvy and having a clear understanding of your brand and industry that will set you apart.

Salil Kumar
Alumnus of the Master of Marketing program at the University of Sydney Business School 

Jurassic World: Product placement at its best!

What do Merdedez-Benz, Beats by Dre, Coca-Cola, Verizon, Samsung, Starbucks and Margaritaville have in common? They all recently made a starring appearance in the blockbuster Jurassic World!

In its second week, Jurassic World has made a whopping $981.3 million at the worldwide box office. But the ticket sales won’t be the only profits generated for the movies' producers. Product placement has become part and parcel of big Hollywood movies and a major source of revenue. Mega hits cost mega bucks so its no major surprise as to why these products find their way somewhat inconspicuously onto our screens.

Call me a cynic, but these days I can’t seem watch a movie without looking for the product placements. Starbucks was the most obvious offender in the movie, with the leading female character noticeably drinking from their iconic cup. Less noticeable was Chris Pratt sipping on a Coca-Cola while fixing his bike. The movie itself even seemed to poke fun at the idea of product placement and mocked the idea of creating a new sponsor themed dinosaur named “Pepsi-saurus”. I have to admit, I did laugh at that one!

Source: http://www.emercedesbenz.com/

Did anyone else notice the man running away with two margaritas in his hands when the dinosaurs began to attack? That was none other than the American singer-songwriter and owner of the restaurant Margaritaville. The small cameo was a really great way to gain some subtle promotion for the restaurant chain.

Corporate tie-ins have become an increasingly valuable tool for marketers to promote products. Blockbuster movies have mainstream international appeal and will be replayed for many years to come. The danger is featuring the product too prominently, risking the films integrity and the product's genuineness.  Everybody knows James Bond drinks his Martini shaken and not stirred. Yet in the movie Skyfall, he is clearly seen drinking from a green Heineken bottle. The beer manufacturer reportedly paid $70 million to feature in the film.

On the whole, I thought the product placements in Jurassic World added to the movie's authenticity and helped the park feel like a real place. For the most part, the brands found a way to be part of the action of the movie rather than detracting from it.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

The Art of Storytelling in Marketing is to be “Ruthlessly Consistent”

In the transparent age in which we live, marketers need to become more ruthless when delivering consistent brand messages. However, with this being said, they have been warned that messages lacking validity and authenticity may backfire.

In most cases, successful brands sit apart from the rest by both telling a simple story that builds an affinity with the brand and sticking to a certain brand message. On the other end of the spectrum, those brands that are deemed not as successful or just mediocre are unable to articulate what they stand for and thus, struggle to get cut through with consumers says, Rowena Millward, Director of Partnerships at Seven West Media and a partner at marketing agency, Morgan..

“When you think about the brands that continue to be number one, and you look back at the history of their communications, they are ruthlessly consistent about their story,” Millward said. “Brands that succeed tell their story simply and consistently at every touch point.”

Much of what Millward speaks about revolves around the notion that when delivering brand messages to your consumers, it is important to ensure you are being authentic to the brand. In an era where technology plays such a large part it, becomes easier and easier to become quickly exposed. 

A prime example of what happens when companies’ stop becoming authentic can be seen with Woolworths regarding the Anzacs. Not only this, but it is important to keep in mind that brands are generally part of a larger corporation, so if disconnect between stories becomes evident, there will be a larger impact on how your brand story is understood by consumers.

Nike has successfully maintained their brand message for 25 years, depicting people overcoming adversity. Their success lends itself back to the notion of  “gelping you win when the odds were against you.” Even though Nike is a brand that breaks the rules, it still maintains to deliver the same message each time in multiple ways.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

Oculus Rift: Virtual Reality the next big game changing platform

If you have read any of my posts on the Marketing Matters blog, you have probably worked out one thing about me. I LOVE TECHNOLOGY!

So it will come as no surprise that I am incredibly excited to try the new Oculus Rift headset! What’s Oculus you say? Well I’m glad you asked, because soon it will be changing your life forever.

Oculus VR, otherwise known as “The Rift”, is a virtual reality head mounted display currently in development. Virtual reality really isn’t a new thing. I can remember as a teenage going to the arcade and playing VR games. But do not mistake “The Rift” for this same primitive and clunky technology of the past.

OK…I sense you're not yet sold on the idea of virtual reality.

Well, the Oculus team only began prototyping their concept in 2012 after raising $2.4 million from a kickstarter crowdfunding campaign. Fast forward two years and Facebook paid a whopping $400 million in cash and $1.6 billion in Facebook stock, plus a further $300 million subject to conditions.

I am pretty sure I have your attention now! The Oculus team certainly were able to grab Facebook’s attention drawing that much money for a two-year-old project.

News broke earlier this week that in early 2016 we will finally get to see the first consumer version of the headset available for sale. The VR of the new headset is a completely immersive experience. It is quite unlike anything you will have ever experienced before and is like stepping into another world. This is not a gimmick like 3D TV’s; this is very much a game-changing platform.

Source: Gizmodo.co.uk

The implications for marketing are going to be unbelievable. This is a new platform with a new way to connect with consumers. So, I guess with a statement like that I should give some bold predictions to what we could expect in the future. I am going to preface this by staying that all new technologies usually take at least two generations before they become widely adopted. That being said, here are some things to consider:

1. VR is going to be huge in the gaming community. I can see this headset being popular with hard-core gamers, but it will quickly become mainstream. In fact, Xbox maker Microsoft have already teamed up with Oculus to support Xbox-to-windows game streaming.
2. Death of the cinema. Or at least as we currently know it. Who is going to want to watch 2D or 3D films anymore? When you can be transported into a new augmented world rather than simply watching it.
3. University teaching will change. How will classes be delivered? The Universies who do best will be the ones who embrace this new generation of technology and integrate it seamlessly into the learning experience.  
4. Doctors will use VR as part of standard medical practice. They already spend small fortunes on simulators and headsets for performing surgical procedures.

Mark Zuckerberg said that virtual reality is the next major computing platform. With a budget the size of Facebooks supporting this aim, we would be foolish to think differently. I look forward to looking back at this blog in five to ten years time and seeing how many of these predictions I got right.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

The future of marketing as we know it

Where does the future of marketing lie? What changes must we implement in order to better market our discipline?

Time and time again you come across people who don’t really understand what marketing is and don’t really quite get what marketers do. So with this being said, what can marketing do to market itself better? An odd question you might think, however, it’s a no-brainer: launch a new campaign, improve social media, host a extravagant event, plant a couple media stories, hire a new marketing manager, devise a digital content strategy, set up an online community…the list goes on. Surprised? Don’t be, this is not too dissimilar from how marketing is perceived by many today.

At the other end of the scale, there are academic talks and papers circulating matters on marketing leadership, which has said to have revolutionised the way marketing is perceived. Mahesh Enjeti, Managing Director of SAI Marketing Counsel, mentions a paper based on the future of marketing, named “Six Visionaries Speak”. One of my favourite visionaries, Seth Godin, advises today’s marketers to create things that matter. What does he mean by this? The term “things that matter”, refers to a creation or innovation that generates a buzz amongst its targeted audience, opposed to marketers being stuck on creating the buzz itself.

Unilever’s, Marc Mathieu, reiterates a quote which resonated with me, stating, “Marketing is no longer about creating a myth and selling it, but finding a truth and sharing it.” A quote so powerful, yet simplistic, stresses the importance of sustainability, transparency and trust within our discipline.

If we as marketers are meant to progress from our roles today and lead the aspirational future, we must start to look beyond the confines of our own discipline, because “marketing will cease to be a strait-jacketed function and will soon assume the mantle of a facilitator and fountain head.”

 “Six Visionaries Speak” interestingly discusses how the future of customer needs will revolve around the notion of well-being, and sustainability. “Research will investigate how products and services actually fit into peoples lives. Metrics around market cap of brand value will be talked about in the same breath as brand health. Market segments will make way for channel and hour of day clusters, and so on.”

So then what? The important challenge for us is being able to manage this transition, so others who are practicing marketing, as it exists today, will be able to lead the business of tomorrow built on completely new models.

This is a time where influential groups such as the Australian Marketing Institute can lead exponential change. Through a continual learning of the marketing discipline, organisations such as AMI can start to prepare marketers for a future where their roles within the discipline could be completely transformed, enabling them to perform more efficiently within their roles and begin the initial steps for change.

We all have to learn how to speak the language of both profit and purpose, bridging the gap between art and science, whilst at the same time promoting a culture of customer intimacy across the discipline. The 4Ps as we have been taught in the many marketing subjects at university may take on a new significance as those in the profession “pursue marketing careers and networks, perform to their peak, progress in their roles while enabling their businesses to prosper”.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

Your Instagram feed is about to change: paid advertising on the way

My morning routine pretty much starts exactly the same way every day. Open my eyes, turn off my alarm and then spend the next few minutes browsing through my friend’s photos on Instagram. But my routine this morning was a little different. As I scrolled down the stream of new content, a video that happened to be automatically playing caught my eye. This video wasn’t from one of my friends, but from the drinks company J2O!

My initial reaction told its own story, “What’s this doing in my newsfeed?” I mumbled to myself with my eyes half open, wondering if I was still dreaming. Now don’t get me wrong, I’m not anti-advertising. Well-positioned and targeted advertisements can be a fantastic way to grab your potential customer segments attention. But why was J2O advertising in “my” newsfeed? I don’t even drink orange juice!

Source: Robert Brunning

In 2012 Facebook brought Instagram for $1 billion dollars and had kept the platform relatively free of advertising. But last week the company announced new plans to open up Instagram to advertisers to target its 300 million users. Tests have also begun on adverts that will allow users to purchase online items including downloading paid-for-apps and content.

While the service is currently only for large brands such as Levi, Burberry and Lexus, it will soon be available for anyone who wishes to advertise. In the official Instagram blog, the team wrote, "Advertisers also want to target their messages in more effective ways and reach people not just because of their age, location and gender, but because of the people, places and things they love."

Source: http://www.thedrum.com/

With Facebook cashing in on Instagram’s popularity, one can only begin to imagine how much profit the company will make with its change to paid advertising. However, they must be careful not to oversaturate the users' feeds with advertisements, or risk disrupting their satisfaction. They must tread lightly and take a cautious approach to the adverts that allow. The appeal of Instagram is viewing visually beautiful imagery, so the prospect of “ugly” ads could greatly dissatisfy the end user.

My feelings on advertising through Instagram are mixed. From a personal perspective it feels like an invasion of a “sacred” place that should be left alone. However, from a business perspective I think it could be incredibly successful given the large amount of data users are willingly sharing with Facebook. Mobile platforms offer the potential for incredibly lucrative advertising space. That being said, these advertisements need a high level of targeting if they are going to be effective.

So, my morning routine will continue as usual for now, but I still won’t be drink orange juice!

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Corrupt FIFA ruining the world game: Where does this leave the sponsors?

It’s been quite a week for FIFA with their reputation falling to an all time low. The football federation is the governing body of world football (soccer), and responsible for organising major international events, most notably the World Cup. 

Source: http://worldsoccertalk.com/

Last week saw Swiss police interrupting FIFA’s annual meeting arresting six high-ranking senior officials on corruption charges leading from an FBI investigation. This comes after months of allegations of money laundering, bribery and corruption charges for the bidding process of the Russia 2018 and Qatar 2022 World Cup. Three days after the arrests the President, Sepp Blatter, was re-elected for a historic fifth term as president of the organisation.

With his position becoming untenable amid the corruption scandal, Sepp Blatter called a press conference at FIFA Head Quarters on Wednesday to announce he is stepping down as president. “I will organise an extraordinary congress for a replacement for me as president and I will not stand,” said Blatter.

As a not-for-profit organisation, FIFA is responsible for championing the idea of “Fair play” and using football as a vehicle for uniting and educating the world. FIFA’s World Cup Sponsors are some of the most powerful multinational companies in the world. The reputations of McDonalds, Adidas, Visa, Budweiser and Coca-Cola are very much at risk in their response to this crisis.

In the aftermath of the corruption investigation last year, both Sony and Emirates opted against signing new contracts, while Castrol, Continental Tyres and Johnson & Johnson also chose not to renew their sponsorship agreements. Looking back at the events of last week, this may have been a very wise decision. Visa has already made a statement expressing their disappointment and concern with FIFA and informed the organisation that they will be reassessing their sponsorship. Coca-Cola said, “This lengthy controversy has tarnished the mission and ideals of the FIFA World Cup and we have repeatedly expressed our concerns about these serious allegations.”

Source:  http://www.bbc.com/sport/0/football/3294214

The following few weeks should bring some new insight into the direction of the sponsors. As key partners, it is vital that they have a say in the reform of the organisation or risk negative backlash from customers.  Leaving the sinking ship of the FIFA regime would make a big statement. However, they could be walking away from the biggest mainstream exposure that is the phenomenon of the World Cup. With sponsors contributing at least $1.5bn to FIFA every four years, they will have a big say in the direction of the organisation. Ultimately, I believe the sponsors will be the ones who play a major role in the reform the organisation going forward.

Upon Blatter’s resignation, Coca-Cola released a statement saying, “We believe this decision will help FIFA transform itself rapidly into a much-needed 21st century structure and institution”.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School