Your Startup Guru client Corrio is applying to present by panel discussion at SXSW PanelPicker Online 2021. Your Startup Guru created a pitch deck for Corrio which allowed them to fundraise as well as enter into a private group of international members comprising an angel investor networks.
Corrio was accepted last year but with the pandemic, plans had to change.
Pabst Blue Ribbon’s (or PBR) rise and fall is a story of a market finding a product — unfortunately, it 170 years for it to happen. PBR has been around for 170 years but only in 2008 enjoyed a 6 year boom in popularity (outside of a brief moment in the 1970s). If hipsters were around 170 years ago, it wouldn’t have taken one hundred seventy years for PBR to find popularity.
It is better to find an under-served market and create a product/service for them than wait for a market to find your product/service.
Hipsters are known for following the latest trends and fashions, while eschewing things regarded as being within the cultural mainstream. Hence the term, “I was into __________ before it was cool.”
So why did hipsters like PBR? To put it simply, it was “retro chic”, anti-mainstream, and with many people still trying to recover from an economic recession, Pabst Blue Ribbon’s low price point was an attractive option. This brings us to a tool in marketing used to find customer groups — psychographic segmentation.
What is Psychographic Segmentation for Business?
Psychographic segmentation is used in market research as a way to divide consumers into sub-groups based on shared psychological characteristics, including subconscious or conscious beliefs, motivations, and priorities to explain and predict consumer behavior. Any dimension can be used to segment a group of consumers such as style, variety, availability, price, etc.
Hipsters avoided things that were popular and some of them were not price sensitive so they were willing to consider a range of beers that occupied a certain psychographic zone.
As PBR’s popularity grew, it was departing from the zone of consideration – the region of price and popularity where hipsters were willing purchase from. Also, as hipsterism became more mainstream, the association of PBR with hipsters caused a self-fueling downward cycle.
How to Use Psychographic Segmentation for Business?
Your Startup Guru used psychographic analysis to differentiate our client’s brand from that of their competitors yet stay true to their envisioned identity:
How to Do Market Research for Business?
There are many sources at your disposal to gain a deeper insight into who your customers are and segments within that market.
Ask potential customers: Surveying is a form of primary market research. Ask them how they use their product, what they like/dislike about it. How long they have used it, is it expensive, how does it make them feel, etc. These questions will give you valuable insight on the psychology of the user.
Pose as a customer and visit your competitor’s store/website. Learn how they do what they do. See what they do well, what they can improve on. Sometimes employees are very happy to share details you cannot find anywhere else.
Industry and trade publications for your particular sector are also a great source of information. Some are free while some require memberships.
So What Should Pabst Blue Ribbon Do?
Given that hipsterism is on the way out, a brand extension with Pabst [pick your color] Ribbon which is guerilla marketed to a new niche market segment such as Yuccies: Young Urban Creatives (that are a slice of Gen Y) with product placement on their YouTube channels is a viability…or wait another +100 years.
Contact us today to get started on market research that will help pinpoint your target market.
Loewy had an uncanny sense of how to make things fashionable. He said to sell something novel, make it familiar; and to sell something familiar, make it novel — Loewy called his approach “Most Advanced Yet Acceptable” – MAYA
Raymond Loewy is one of the most influential industrial designers / marketers that you’ve probably never heard of.
His firm designed mid-century icons like the Exxon logo, the Lucky Strike pack, the Greyhound bus, as well as Frigidaire ovens and Singer vacuum cleaners. Even the blue nose on Air Force One was his idea.
Loewy had an uncanny sense of how to make things fashionable. He believed that a balance must be struck between two concepts: the curiosity about new things and a fear of anything too new. He said to sell something surprising, make it familiar; and to sell something novel, make it novel. Loewy called his approach “Most Advanced Yet Acceptable” — MAYA.
Loewy wasn’t the only one to embrace this marketing strategy. Alfred Sloan, the CEO of General Motors, saw that changing a car’s style and color every year, trained consumers to crave new versions of the same product. To sell more stuff, American industrialists worked with designers to make new products beautiful and cool.
MAYA doesn’t just apply to new product design…
In The Power of Habit by Charles Duhigg, he describes how the song “Hey Ya!” by OutKast failed to gain traction with listeners. Hey Ya! was by all measures supposed to be a hit. A company named Polyphonic HMI, formed by artificial intelligence experts and statisticians, created a program called Hit Song Science that analyzed the mathematical characteristics of a song and predicted its popularity. Hit Song Science predicted Norah Jones’s Come Away with Me would be a hit after many industry experts dismissed the album, as well as “Why Don’t You and I” by Santana. Hey Ya! scored one of the highest scored recorded at the time. However, when stations would play it, people would switch stations during the song.
It wasn’t until DJs sandwiched Hey Ya! between two familiar songs, people stopped switching stations. After a few weeks, listeners became familiar with Hey Ya! and it gained the traction that Polyphonic HMI predicted it would.
…MAYA Also Works in Reverse
Inserting a familiar song within unfamiliar songs also works. This was the case for Matt Ogle, who, helped build Spotify’s Discover Weekly, a personalized list of 30 songs delivered every Monday to tens of million of users. The original version of Discover Weekly was supposed to include only songs that users had never listened to before. In its first internal test at Spotify, a bug in the algorithm included songs that users had already heard.
However, after Ogle’s team fixed the bug, engagement with the playlist actually fell. It turned out that having a bit of familiarity bred trust. According to Ogle, “If we make a new playlist for you and there’s not a single thing for you to hook onto or recognize—to go, ‘Oh yeah, that’s a good call!’—it’s completely intimidating and people don’t engage.” It turned out that the original bug was an essential feature: Discover Weekly was a more appealing product when it had even one familiar band or song.
MAYA is Everywhere but Comes in Steps
Notice the new hard seltzer craze? It’s everywhere. White Claw, Wild Basin, Truly, even Bud Light has gotten into the game.
But before the bevy of new beverages Zima was the novel beverage about town. Introduced in 1993, Zima is a clear, lightly carbonated alcoholic beverage marketed as an alternative to beer, or coolers as they were called at the time. However, if the ill-fated Zima is any indication, hard seltzer was a jump the market wasn’t quite ready to handle. It had to take something familiar…namely, a subtly flavored, non-alcoholic beverage whose popularity took everyone by surprise: La Croix.
Although the exact formulation between sparkling malt beverages and hard seltzers may be different, the taste profile and market demographics are similar enough that if Zima came about 15 years later, it may have found greater success than it did.
Your Startup Guru provides in depth industry and market research as part of our Strategy Consulting services. Use the contact form here to start developing the best strategy for your business.
You have probably noticed the deluge of advertising that is targeted to the new reality of being at home. This is obviously a response to the global pandemic we are all being affected by. The following is a breakdown of what is happening and how your business can harness the post powerful trait: adaptability.
Adapt Through Marketing Strategy Marketing
Aired prior to the COVID-19 crisis but replayed recently Campbell’s realized that people are stockpiling canned food. Set to a wholesome and nostalgic soundtrack without pandering to panic buying, they capitalized on an opportunity to remind customers of a classic pairing. On a side note, the music choice was oddly relevant — Thank You For Being a Friend was the theme song to the ’80s sitcom The Golden Girls and the elderly are among the most vulnerable to COVID-19.
Also, more people are telecommuting and are realizing their home computers might not be suitable for work so Dell aired a commercial for one of their newest laptops. Peloton, home office chairs, etc. are all advertising the benefits of being healthy and productive at home. Also, mental health app Talkspace, Delta Airlines offering free flights for medical volunteers, online education, bidets, and more are using this opportunity to advertise their products and services.
Adapt by Seizing the Opportunity
When disruptions happen, it is important to consider alternatives in order to adapt to the new environment. I have advised a new restaurant client to pivot their business model from a brick and mortar location to a commercial kitchen or food truck and adjusted their ad hoc financial projection model to reflect the pivot. Of course, depending on the stage of a business pivoting to a commercial kitchen or truck is not an option; which is why I always provide tailored consultations to each client.
Many people have a lot of downtime now with not having to go into work. It is a good time to take a break from watching the news and start mapping out the idea that you’ve been mulling. Who is your target market? Where will you be located? What are your startup costs? These are all questions you should know the answers to or be actively seeking if you are serious about taking the next step. If you do not know the answers or want a second opinion on, I always provide free consultation so send me an email. Afterwards, those pushup challenges on social media are also a good healthy distraction too from all the dire news.
These are better practices than gouging prices like that hand sanitizer guy.
Not recommended for small new businesses because of course with every controversial ad, there will be criticism. However, such a campaign will instantly give your brand more personality, and fans may become even more loyal.
Small Business Saturday saw a record 112 million shoppers this year, setting a new record for the retail event. This was a 13% increase over last year’s SBS.
Part of this increase is greater awareness with 72 percent of U.S. consumers now know about Small Business Saturday. That’s a slight uptick from the 70 percent in 2015. Additionally, almost nine in 10 Americans view small businesses favorably, according to a poll conducted on behalf of the Public Affairs Council.
When selling something as ubiquitous as water, differentiation from your competitors is key. How do you differentiate? One way is through the right marketing mix. The marketing mix is comprised of: Product, Promotion, Price, and Placement. Also known as the 4 P’s of Marketing.
Product: Of course it’s not just water. There is value added features, such as electrolytes, flavors, caffeine, anti-oxidising manganese, etc. that companies are emphasizing to differentiate their product from the competition.
There was Life, Volvic, Ugly, Sibberi (birch or maple), Plenish, What A Melon watermelon water, Vita Coco, Coco Pro, Coco Zumi, Chi 100% Pure Coconut Water, Rebel Kitchen Coconut Water and coconut water straight from the nut (“you have to make the hole yourself”, explained a shop assistant). Also: an electrolyte-enhanced water pledging to hydrate you with 40% less fluid than ordinary water (Overly Fitness), a birch water offering “a natural source of anti-oxidising manganese” (Tapped) and an alternative birch water promising to “eliminate cellulite” (Buddha). There was also a “water bar” – a tap in the corner of the shop – that, according to the large sign hanging from the ceiling, offered, for free, the “cleanest drinking water on the planet”, thanks to a four-stage process conducted by a “reverse osmosis deionising water filter”.
You can read more about the concept of “product” from a marketing standpoint in my post about the failed McPizza.
Price: Another way to differentiate yourself from the crowd is by pricing your product/service at a rate that is considerably higher than your competition. How about a $100,000 bottle of water?
This self-proclaimed “champagne of waters” quickly won FoodBev Media’s Beverage Innovation award for the “World’s Best Still or Sparkling Water”. A case of 24 500ml bottles is $72, while a bottle from the “Luxury Collection, Diamond Edition” will cost you $100,000. It has a white gold cap set with more than 850 white and black diamonds and holds the profoundly questionable honour of being the world’s most expensive bottle of water. If you buy it, Riese will present the bottle to you in person at a private water tasting anywhere in the world.
Promotion: Promotion goes beyond just advertising. What do you communicate? Once you’ve exhausted the typical “it’s delicious!” “it’s cool!” “it’s a great value!” You can go into educating the market about the process, the people, the ingredients, etc. that goes into your product/service. It might be the same things as your competitors, but if you say you “add double the standard amount of X” while your competitors just say “they’re delicious!” then your market might assume your competitor does not add double the amount of X.
Fiji water, for example, contains 210mg TDS, including 18mg sodium, 13mg magnesium and 18mg calcium. (Fiji appears to have pulled off some fairly heavy-duty trademarking, including “Untouched by man™” and “Earth’s finest water™”.) Compare those numbers to San Pellegrino, which contains quadruple the TDS, at 925mg, including 33.6mg sodium, 53.8mg magnesium and 178mg calcium. Fiji, with far fewer solids, tastes smoother, while the San Pellegrino is bolder, saltier and naturally fizzy.
Melted iceberg essentially has no taste, having the lowest TDS (9mg) of any water on earth. It is like the ur-water, the water that pre-dates all other waters. “This is your starting point,” said Leonard, gravely. “Your baseline.”
Surprising right? Now tell me you’re not at least a little curious as to how the various waters taste. If the marketers did their jobs right, you might at least be open to trying the product once.
Placement: Placement mainly deals with distribution. Which is, where does your customer purchase your product/service. You’re not going to sell a $10 bottle of water at a gas station. You have to sell your product/service at where your market is. They are upper-middle class, baby boomers living in Massachusetts? Distributing through Whole Foods or Wegmans is a start, if you can meet their supply chain management requirements.
The dress code of the clientele in Planet Organic, Notting Hill is gym chic. On a hot day in mid-August, the men wore mid-thigh shorts, pectoral-enhancing vests, neon Nikes; the women were in black leggings and intricate ensembles of sports bras and cross-strapped Lycra. They had all either just worked out, were about to work out, or wanted to look as if working out was a constant possibility.
They examined the shelves. As well as the usual selection of kale crackers and paleo egg protein boosters, there were promises of wizardry, such as a packet of Alchemy Organic Super Blend Energy Elixir (£40 for 300g of powder). But never mind the food. Life, in 2016, is liquid. Opposite a display of untouched pastries and assorted bread products (who, in Planet Organic in Notting Hill, still eats bread?), were the waters.
The marketing of bottled water is pretty amazing amazing. Some is ridiculous snake-oil shilling. Some may have benefits, depending on the needs of the individual, that regular water cannot meet. Nonetheless, it is a $5 billion dollar industry in the US that is projected to grow 5-6% over the next five years.