Entrepreneur's Gut Feel Predictions for 2010

MarketingRx for Jan 1-010 and Jan 8, 2010

The entrepreneur's gut feel for 2010 (part 1)

or 7 gut feel predictions for 2010

Happy New Year! For this week's column, the junior MRxer looked into his magic entrepreneur's gut to give you seven market predictions for 2010. Here we go:

# 1. In 2010 money will continue to flow in from OFWs all over the world. The World Bank got it wrong, says, economist Bernardo Villegas. The self-proclaimed prophet of bloom, in the midst of all the gloom prophets, has already been proven right. OFW money is not tightening. There's even an increase in remittances. Why? Pinoy OFWs have not been among those axed for employment by companies in the worldwide tightening of belts. Villegas has funny anecdotal evidence as well, which he shares when he makes the rounds of the speaking circuit. “Filipinos take a bath every day—sometimes even twice a day.” Was one reason he cited. The hotel and restaurant industry likes the fact that Pinoys smell good. The workers of nationalities that smell like a deodorant-free underarm at the end of a long hot day? Bye bye! Nothing personal, okay?

Because of this, expect the current growth in retail to be sustained. And we're not talking about single digit growth baby, we're looking at double digit growth! There's a reason why the Sys and Ayalas also have double digit grins this year—and that's definitely one of them (albeit a SM Mall going under water during Ondoy for the Sys and a sensational daytime armed robbery in upscale Greenbelt 5 for the Ayalas.)

So what to do with the continued flow of money from our Expat Pinoys? Don't hold back on promoting your real estate projects (especially those that are above sea level). Go get your lion's share of the 13^th and 14^th month bonuses that were released and remitted. Offer trade-ins for water damaged properties? Hmm. Whatever, the offer is, go and get business.

#2. Pinoy consumers become even more "savings savvy". Despite the continued spending splurge mentioned above, Pinoys will save more. Well, never mind the “kaputting” of Rural Banks owned by the Legacy group that went under at the start of 2009. Banks are reporting that Filipinos are saving more money with double digit growth in the savings deposits. That's a good sign since Pinoys are one of the worst savers in Asia. We are not a nation of conscientious savers. One of the blessings, I guess of the global economic crisis, is that it has taught us to be savvier with our money. Government has done it's small part by doubling the amount that your deposits are insured to P500,000, thereby instilling more than a sliver of confidence in consumers. Still, banks offer investment vehicles that offer rates that are just a little over the inflation rate. With author/speakers like Topaks Colayco (Pera Mo, Paluaguin Mo and One Wealthy Nation founder), Chinkee Tan (For Richer or For Poorer and 'Till Debt Do Us Part), Bo Sanchez (8 Ways to be Truly Rich) and Larry Gamboa (Think Rich Pinoy!) educating more and more consumers on how to invest and be smart with their money—there is opportunity in this area for marketers of legitimate investment vehicles.

"Your money is best invested in a business" is the sentiment of many. Marketers of affordable franchises, especially food cart franchises will boom. So take advantage of the Entrepreneurship fever. On the other hand,  Mutual fund offerings will be in again. Companies like Citisec online will benefit. Insurance companies offering investment products other than the usual insurance-alone options will see a boom in 2010. Gold will continue to increase in value and be a safe haven for investors (as compared to the dollar and even the Euro), so companies that will offer investment vehicles based on Gold or gold itself, instead of the usual cash currencies, will literally be Geese that will be laying golden eggs.

#3. Feel Good Luxury Products will continue to do good this 2010. The middle class whose cars and houses were flooded and water damaged during Ondoy and Pepeng, will turn to products that will make them feel good. They will want to treat themselves to something they think “they deserve” because of all that they have been through. It was marketing author and guru, Josiah Go who first mentioned this in his fearless post-Ondoy marketing predictions that he published in his Facebook account (and which my father and I later re-published in our MarketingRx column last October). It is worth echoing here.

Think Royce luxury chocolates from Japan. Have you tasted their Dark Chocolate coated Macadamias? Probably not, because they were still out of stock, the last time I checked. But they do have enough “I-deserve-this” chocolates stocked in their small stores in Rockwell and Greenbelt 5 to serve those who want to feel not just good, but much better after the turmoil of 2009 (from both man made and natural made disasters). Concerts and the movie industry will make a comeback (actually the growth of the movie industry in the US is eye-popping, thanks a lot to movies like Avatar. Consumers in the US are treating themselves to more movies as an escape from the reality of unemployment scares and subprime mortgage realities knocking on their doors.) Here in the Philippines, the movie industry has been so sickly for so long, it is definitely poised for a stunning turn around. Who knows? Wapakman might have been the answer if Dionisia Pacquiao were in it!

Don't forget to register to vote before the new deadline runs out again! We're out of space but not out of well wishes for all of our readers.Have a blessed new year! Send us your comments or questions to marketingrx@pldtdsl.net or drnedmarketingrx@gmail.com

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 MarketingRx for Jan 8, 2010

The entrepreneur's gut feel for 2010 (conclusion)

Happy New Year! Last week the junior MRxer looked into his magic gut to give you the first 3 of  seven market predictions for 2010.

Here are the remaining 4; here we go:

                

#4.  Let's go tripping! Biyahe na Pinoy! Tourism and travel executives will be smiling. With the so called “democratization” of travel a result of the price wars still going on in the airline industry (thank you Cebu Pacific for starting this!), domestic tourism will continue to also grow by double digits in 2010. Spurred by travel blogs (think of Anton Diaz's Our Awesome Planet blog) and online search for the best deals, Pinoy consumers will be plunking down paychecks into good travel deals. Expect excuses like “time to visit the long lost relatives in Cagayan de Oro, so might as well do some white water rafting” to crop up this year. Literally cool places will be favorite destinations of families again. Baguio will make a comeback (thank you Ad Congress for propping them up with your donation) and Tagaytay's roads will be merrily clogged again this Holy Week. Subic will benefit from the spanking, stateside-like highway also. The addition of the Philippines in NatGeo's List of Must Visit Places in 2010 will add up well for the travel industry. But here's hoping that places like Camsur and Bohol don't go the way of overcrowded-overdeveloped Boracay.

Pinoys will be happy travelling campers this season and it doesn't take a rocket scientist to figure out how to take advantage of this.

               

#5. Consumers as Healthy, Wholesome and Wise. Week-end markets like the Saturday Salcedo Market and the Sunday Legaspi Markets in Makati have been attracting the growing middle class. Films like Food, Inc are wising up consumers to choose what they put into their and their families mouths wisely. Worldwide, Walmart is now marking and labelling which products are organic – and thereby labelling the rest that are not as “inorganic” or less healthy. And we are not just talking about vegetables and fruits. Include meats in that list. What Walmart does, the rest of the retailing world usually follows. So expect a surge in “organic” consciousness. So while it is early, go and make the effort to grow organic and offer meats and food that has not been produced in “farm factories”. Be the first to offer beef and chicken labeled as “Hormone and antibiotic free”. (Just last week, a bill was filed to require even Dog Food marketers to list the ingredients of their products.) Expect new market entrant, Human Nature, which brands itself as "100 percent organic, 100 percent Philippine-grown and 100 percent chemical-free personal care products" to have explosive growth with its decision to go through the direct sales channel (and donate part of the proceeds to its advocacy, Gawad Kalinga. Human Nature is founded by Anna Meloto-Wilk and Camille Meloto, the daughters of GK Founder, Tony Meloto.) We received their products as Christmas gifts from our staff and their affordable and SLS-Free shampoos and lotions could give Body Shop a run for their money.

Seize this segment of the market and be first in it. Please. I will be your first customer and most viral of advocates.

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#6. Consumers will shop beyond the traditional. This means that “non traditional” distribution and sales channels will continue to grow thanks to more Filipinos trusting in the channels itself. Think of the internet and the thousands of Mom and Pop Multiply-type makeshift e-commerce sites. Think of the fastfood chains set up for internet ordering. Think of the movie ticket and concert ticket reservations online (more than half of Charice Pempengco's launch concert at the MOA recently was sold via Friendster). Ayala Mall's Sureseats online reservation system allowed this writer to buy tickets online 6 weeks before the Pacquiao-Cotto fight.) Christmas pasalubong shoppers will look online for special deals. Now that the online population of the Philippines has doubled (from 10% to more than 20%), you can't ignore this anymore. 

Finally, you can't count out the Direct Selling channel. Look at this non-traditional channel to sustain growth beyond Christmas. Just think of FernC, the vitamin C supplement that is now a billion peso brand thanks to its direct selling approach. This is something that it's older competitors have failed to do via the traditional Mercury Drug approach. At an international publishing conference in Kenya, I met the marketing director of a Brazilian publishing firm that has sold hundreds of thousands of books, including trendy pink leather bibles for girls, through direct selling giant, Avon.  The market in the Philippines is ripe for that kind of traditional products through non-traditional selling channels.

#7. Manny Pacquiao will knock out Floyd Mayweather (in court or in the ring). IF the biggest fight in boxing history pushes through this year, Filipino consumers (around the world) will be in a carry over fiesta mode from Pacquiao's victory.  Never mind that his Wapakman is a flop or that he won't be able to spend his way into winning a seat in congress in May. (Win or lose Manny should bring home a good chunk of the US$25M that he is reportedly guaranteed for the fight.)Think of this win over Mayweather as the equivalent of giving San Mig Coffee to a hyperactive 2 year old boy. That's what the Pacman's win (and his election spending spree) will do for the national economy and psyche. 

Manny's winning always gives us a break from bad news and bad numbers. Remember the 4 back to back typhoons that devastated the Philippines in 2009? Thanks to the Pacman's victory last 14^th of November,  the country all but forgotten those numbers—albeit even for a day or two. The victory has given us the permission to smile wide, open the wallet somewhat wider and spend to celebrate. And that always bodes well for the food and entertainment industry.

With election money expected to pour in the coming months leading to May, we hope that our inflation rate stays at the lowest is has ever been in more than 20 plus years. And if we elect a president that is smarter than Pumba and as brave and non-corruptible like Simba, then next Christmas Holiday season in 2010, we can all continue to say, as the Kenyans say in Swahili, “Hakuna Matata!” (No worries!). 

Have a blessed new year! Send us your comments or questions to marketingrx@pldtdsl.net or drnedmarketingrx@gmail.com

New Year's greetings and The Entrepreneurs Gut Feel of 2010 - part 1

Two days into 2010 and I feel hope and anticipation in the air. Many are hopeful that the perseverance and character that was sowed in 2009 by all the trials that marketers have been through will reap a harvest of blessings. 

Dr Ned and I wish all of our MarketingRx readers a new year filled with hope, prosperity, love and miracles! Here's to new life.

http://business.inquirer.net/money/columns/view/20091231-244894/The-entrepreneurs-gut-feel-for-2010

How to market Noynoy Aquino for President in 2010

MarketingRx for October 2-09

Marketing "Noynoy for President"? - part 1

By Dr Ned Roberto & Ardy Roberto

Q:  We work for an NGO advocating for change and for Noynoy in the coming 2010 election.  We read your column some 2 or 3 months ago saying that voters have a low involvement regard for the coming election and this is why the top 5 or 6 presidentiables have very close voting percentages.  To be frank, we disagreed and still do with your analysis and didn’t like at all what you predicted.  We were like the group who asked you the question in that column.  But we are different in that we believe many of the concepts about changing public behavior we found in your social marketing book. 

You wrote that column before the Noynoy phenomenon.  But now without the kind of Villar’s extra heavy ad campaign and without the other candidates’ shameless advertorial plugs, we’ve all seen how out of nowhere Noynoy grabbed the lead in the presidential race with an unbelievable 49% votes.  Surely, you can no longer say voters still have a low involvement regard for the coming election.  So what does your social marketing have to say now about our voters, our presidentiables that include Noynoy, and who will win in the coming election?

A:  You wrote an excellent brief note.  Thank you for your endorsement of the senior MR-er’s social marketing book.  Next, we’d like to go directly and respond to your questions. 

First, do voters no longer have a low involvement regard for the coming election? 

There are at least two important things to consider here.  The first of these is Noynoy’s 49% share of votes.  We probably can say that for those 49%, the low involvement attitude has been left probably in favor of the high at least for the present.  But as you probably still remember from your statistics, the flip side of that 49%  is the 51% who were not touched by Noynoy or by what happened to his Mom, Cory Aquino.  So the most we can say about the 49% statistic is that the playing field is now probably even between the low versus the high involvement voters.

This conclusion holds IF the 49% ratio represents a trend data.  But it is not a trend data.  It’s a single data point as of the date of that scientific and credible survey that did the reading.  To validly conclude about its voter behavior implication with regard to the likelihood of Noynoy’s winning the coming election, we need to see at least two more successive data points.  If that 49% is more or less maintained in the next two surveys, then it becomes reasonable to conclude that there’s a trend in favor of half the voter population sticking to Noynoy.  If, on the other hand, the next two surveys show an increase for each of these 2 surveys, then the trend is for the 49% to even increase further.  That will make Noynoy a stronger presidential candidate on the verge of becoming a dominant leading candidate.  Finally, if in the next 2 surveys, the 49% declines, then that 49% was no trend.  It was an “outlier” statistics representing a “surprise” or what author Nassim Taleb refers to as a “Black Swan” phenomenon that would, just as quickly as it appeared would just disappear or level off about the norm.

In all these 3 likelihoods, what’s of strategic significance is to understand the social force or forces underlying that 49%.  What made 49% of voters to suddenly want Noynoy for their president this coming election?  Without such an explanation, anyone’s intrepretation and recommendation are just as good as any other.         

That’s one social marketing answer to your question on who will win the coming election.  If we transform the question to relate specifically to Noynoy, we therefore ask: 

“Will Noynoy win the election?”  

Or translating the question to refer to your advocacy stand and resoluteness, the question becomes: “What will it take for Noynoy to win the election?”

The ideal would be for Noynoy to hold on to the 49% and if there should be a decline in this voting ratio, to arrest the decline to the lowest level of 30% or 34%.   Recall that Fidel Ramos won at a 24% share of votes.  That’s our benchline in this portion of the analysis.  Now, come May 2010, the final share of votes for any candidate will be determined first by the voters’ final voting decision and behavior.  But the other half in a candidate’s final share of votes is his or his party’s political machinery.  That other big factor is what we do not and cannot have from the survey. 

The political machinery includes, especially for the incumbent party, its capability and experience with a “hello-Garci” maneuver or many others of this type of vote hijacking.  Presumably, a 10% lead (i.e., 34% versus 24%) would represent too numerous a number of voters to hide under a “dagdag-bawas” (vote adding-vote deducting) manipulation.  So Noynoy can gain a decisive win with a low 34% or a high 49% SOV that he now commands.

Just how can your NGO and allies make this happen? Since we are out of space, we'll answer that question next Friday! 

Thanks for your questions. Keep sending them to drnedmarketingrx@gmail.com or marketingrx@pldtdsl.net or text us at 0918-3386412. God bless! 

MarketingRx for October 9-09

Marketing "Noynoy for President"? - conclusion

By Dr Ned Roberto & Ardy Roberto

Here's a repeat of the question posed last week by an NGO advocating for change and "marketing" Noynoy for President in 2010. They ask:

Q:  We read your column some 2 or 3 months ago saying that voters have a low involvement regard for the coming election and this is why the top 5 or 6 presidentiables have very close voting percentages.  To be frank, we disagreed and still do with your analysis and didn’t like at all what you predicted....

(But) you wrote that column before the Noynoy phenomenon.  But now without the kind of Villar’s extra heavy ad campaign and without the other candidates’ shameless advertorial plugs, we’ve all seen how out of nowhere Noynoy grabbed the lead in the presidential race with an unbelievable 49% votes.  Surely, you can no longer say voters still have a low involvement regard for the coming election.  So what does your social marketing have to say now about our voters, our presidentiables that include Noynoy, and who will win in the coming election?

Here's the continuation and conclusion to our answer from last Friday. (For those who missed it, visit our blog at marketingrx.org)

Word of Mouth and stickiness

First, find out the social force or forces underlying Noynoy's 49% share of votes (SOV).  That reason or reasons make up the raw materials for crafting Noynoy’s campaign message.  Then, that message has to be spread and, more importantly, kept at top-of-mind  consciousness among the voter population.  How to effectively accomplish this is found today in the growing word-of-mouth (WoM) marketing literature.

WoM marketing shows that the spread of a message can be multiplied by its “conversation value.”   That’s the quality of a message that makes it to its audience “buzzable” or, if you will, “Boy-Abunda-ble.”  Its initial recipients will like to talk to others about the message. 

If talking about your message takes only one or two rounds, its spread and top-of-mind character will be short-lived.  It needs another pass-on quality.  That’s the quality of “stickiness” according to Malcolm Gladwell in his best seller book, The Tipping Point.  Message stickiness, comes from the appropriate and timely use of message source and message context. 

When a message source is a celebrity or a respected figure of authority, the message source gives the message an enhanced stickiness.  It is stickiness that gets the message to be passed on more than 2 or more rounds. 

The powerful message context, according to Gladwell, is controversy.  But using controversy is a double-edged sword because it has positive as well as negative consequences.

Controversy

Conversation value and stickiness find its ultimate and ingenious application in Mel Gibson’s pre-selling of the movie, “The Passion of the Christ.”  Gibson did the following.  First, he spread the news that the Jewish communities were “mad at me because they said the movie made them look bad; it’s anti-semitic, they said.”  He then got emails to circulate in the Christian communities defending the movie.  Next, he somehow was able to get Entertainment Weekly to name the movie “the most controversial film of all times.”  This was followed by a movie review from the foremost movie critic Robert Ebert saying: “The full 10 minutes of flogging makes this the most violent film I have ever seen. … No level-minded parent should ever allow children to see this movie.”  That practically assured an eager children’s crowd for the movie.  Through all of these, the movie-going public talked about the movie and the media continued to do so as well.

So how did Gibson sustain the conversation value and stickiness of his WoM campaign for his movie?  He created a serial WoM “campaign” of sorts whose changing but unrelenting conversation value and stickiness held movie fans in suspended anticipation until the movie’s release and they all lined up to see it.  That’s the kind of WoM campaign that Noynoy requires for keeping his 49% SOV or for making sure its decline would stop at 34%.  His campaign message must have conversation value and stickness.  Then that message must be reformulated repeatedly and played in a serial schedule until election time.

We close by saying something about the social marketing model we applied above for shaping and directing voter behavior.  Among other things, the model versatility.  It can work for any other presidentiables.  An appropriate WoM campaign can be developed for the #2, #3 or even the #4 candidate aimed at matching and then excelling Noynoy’s SOV.  It’s a matter of having the necessary voter response and behavior data.  

Thanks for your questions. Keep sending them to drnedmarketingrx@gmail.com or marketingrx@pldtdsl.net or text us at 0918-3386412. God bless! Our writer's fees for this and last week goes to Operation Blessing's medical mission for Typhoon Ondoy victims. Please support relief efforts for the victims of Typhoon Ondoy. God bless!  God bless!

the missing link - part 2 of Are Loyal Customers Really Profitable

Thanks to Tara who called my attention about the missing part 2 of our column. Here it is. Click on the link and it will take you to Inquirer.net

Are loyal customers really profitable?

The debate rages on

After declaring to our readers the past two weeks that "Loyal customers are not your most profitable customers" we have received quite 

a typhoon of responses to our "contrarian" statement. 

Some were in disbelief (thank you to one reader, Paolo, who sent a terrific argument) while some came out of the closet to declare that it does cost too much to maintain "loyal customers". A few were clarifying or asking for clarification. Even one of the authors of the book, Loyalty Myths, Tim Keiningham wrote to us (we asked permission from him to reprint his letter and article on customer loyalty myths as well, which we hope to publish.)

We don't have space to publish all the responses that we received, but we will start with one from Dickie Soriano, from BCD Pinpoint. Disclosure:   Dickie is a friend, no, actually a very loyal friend. But he does have the credentials and not just the relationship with us--that's why we're printing his letter first. (Dickie is in the customer loyalty game as a business. His agency is into CRM -- Customer Relationship Management--and is one of the pioneers and largest in Asia.)

So here's Dickie's response to our invitation in our last column to share your thoughts on the issue.

Hi Dr Ned and Ardy

I read your column here in Vietnam and since I had some time I
decided to respond to your challenge of getting your readers to
contribute to the discussion.

Being a fan of your column, and having been a guest in several of your
events, I am relieved to have read  the question: 

Are loyal customers really profitable? 

I say ‘relieved’ because there is an unfortunate
tendency amongst some  entrepreneurs and businesses  to simplify the
business of customer loyalty, reduce it to a program that offers
discounts to everyone, and then proclaim that, voila’ they have a
customer loyalty program just like everyone else.

There is, I believe, an unfortunate tendency amongst us to apply only
the most visible remedies to a problem, regardless of their actual
effects. Just look at the number of  signs  telling us to be ‘careful
when driving because accidents take place here’  or the irritating
tendency to put humps on roads – when the real problem to solve is
that no one bothers to enforce – or even teach – driving discipline.

What is customer loyalty really?

So let’s start with some definitions: loyalty is the act of someone
sticking by you, regardless of your actual traits or behaviour. It is
probably when you are at your most abrasive – when most people will
talk badly of you and shun you – that you find out who amongst your
friends are truly loyal, and who were just there for the ride. I would
argue that in the same manner, when your brand is at its lowest point
– perhaps because one of your products had a defect, or a new
competitor came in with a much better value proposition – that you
find out just how important loyal customers are.

If you attracted ‘loyal’ customers through a run-of-the-mill discount
program, are you truly developing loyalty to the brand? Or are you
encouraging deal shopping? (My wife, practical person that she is, has
a wallet full of ‘loyalty  cards’ that grant her all manner of points
and discounts – an irony that never ceases to escape my attention,
given that I am in the business of helping clients develop loyalty to
their brands).

Some customers are worth losing...

So the answer to the question – are loyal customers really profitable?
– will have to depend on context and definition. If  by loyal
customers you simply mean card-carrying people in a database, earning
points and discounts, I would argue that a number of them may not be
profitable.  Some may, in fact, be worth losing as they cost you too
much – the most obvious example of this was when customers would
badger either Globe or Smart for a new phone, even if their phone
bills were not commensurate to such a privilege.

At the end of the day...
Or here’s a more recent example. I am writing to you from Ho Chi Minh,
and yesterday I was witness to what I consider a great customer
loyalty program. I was brought around the city by the brand manager of
Vietnam’s largest paint company. We stopped by one housing
development, and she showed me how their field agents would go around
looking for houses that were being built, befriend the home owner and
the contractor, get data on the estimated square meters of surface
area that would have to be painted, and enter the data into a
web-based database. So far, those would be today’s textbook
approaches.

What blew me away was when the home-owner commended one of the field
agents, who, she said, even went to the extent of driving for her, and
running errands for her. All in the name of selling her paint! Now,
there is no doubt in my mind that this home-owner is now a loyal
customer – but it will likely be at least 4 years before she will be
in a frame of mind to re-paint her home. What was the cost of
engendering her loyalty, against the revenue the paint company would
generate from her?

The best way to find out if loyal customers are profitable, is,
unfortunately, the hardest way.   Fortunately, it is also the best way

to make your company profitable: force the discipline of critical
thought on the organization. Go beyond applying obvious remedies of
discount cards, and develop a truly brand-true, strategic program
aimed not just at developing customer loyalty, but of developing
profitable customer relationships 

- Dickie Soriano, Founder, BCD Pinpoint, BCDPinpoint.com

Thanks for sharing this with us Dickie! 

Keep your questions and comments coming.  Send them to us at MarketingRx@pldtDSL.net ordrnedmarketingrx@gmail.com text us at 0918-3386412. God bless!

Are loyal customers really profitable?

Click the title to read one of the most controversial columns that we've had so far...

Best of MarketingRx for Brand Execs now out!

Fresh from the publishing oven is our second in a series of MarketingRx book compilations of your favorite columns. This one was specially compiled for marketing and brand executives. Thanks to Anvil Publishing and PDI. It should be available at National and Powerbooks by next week or so.