Predicting Profits

Big Data that Helps Sales People Find the Best Potential Customer
November 27, 2012, 6:19 PM ET
Rachael King

    In the Wall Street Journal article titled "Big Data that Helps Sales People Find the Best Potential Customer,"  Rachael King discusses companies overspending of time and energy on customers who are not profitable or worth the effort. 
     In order to minimize time put on the wrong customers, companies are investing more and more in predictive analytics. King uses the example of Startup Lattice Engines, a company which has pioneered the industry since its start in 2006. The company utilizes external and internal corporate systems to research customers behavior. 
    Further, King proclaimed: "The salesPRISM big data analytics platform integrates external information sources such as Experian, LexisNexis, public records and social media and internal databases including customer purchase history, customer service calls and Web site visits. After the product combines information from these sources, it uses predictive analytics – mathematical algorithms —  to identify behavioral and purchase patterns."

    Ultimately, by identifying the most valuable customers, companies can take the data and execute the information to benefit their sales, as well as, updating their talking points to fit customer needs.


In my opinion, I do not see why a company would not focus on predictive analytics. Lattice Engines, such as the one talked about in the article, allow easy tracking of consumers purchase patterns. Through sorting and analyzing deep background knowledge, the consumers are open to data analyze. The information discovered here and used properly aligns companies money to the right places. 

By aligning to the correct customers, companies will be more likely to be profitable. Therefore, I think that utilizing these engines will give companies a competitive advantage. 

Topics: sales, predictive analytics, lattice engines
WSJ ARTICLE LINK

Buying More and Paying Less

Cyber Monday Points Up New Trend in Buying Patterns

 By Karen Talley 
 November 30, 2012, 10:38 a.m. ET

    In Karen Talley's Wall Street Journal article titled, "Cyber Monday Points Up New Trend in Buying Patterns" the topic of holiday discount is discussed. With an astounding 1.46 Billion dollars spent on Cyber Monday, retailers can walk away satisfied with their business profits. The high revenues are a result of a change in business dynamics for most companies for the holiday season. The concept is for consumer to participate in buy more and spend less expenditures. The more items for less money has caused a margin consternation for customers, which has led them to spread out their purchases. 

   In order to follow this growing holiday trend, "Retailers discounted more," said Jay Henderson, strategy director for the Smarter Commerce arm of IBM. "They knew there were savvy shoppers online looking for deals. They were enticing customers to put more merchandise in their cart, but even with that additional merchandise, the average order volume fell."

   As a result, companies such as Amazon, Wal-Mart, and Target saw significant gains from their Cyber Monday discounts. 

   Conclusively, the 17% gain for online spending compared to Cyber Monday of 2011 is reflective of companies abilities to provide customers with discounts and sales at various pricing points. 


In my opinion, I think that the buy more and spend less idea is genius. I personally know that when I go shopping, I would prefer to spend 100 dollars on five items, rather than 100 dollars on one item. The concept of spreading my money over several purchases makes the items seem more worth while. Also, it makes me believe that I am not spending as much, even though $100 dollars on five items is the same amount as $100 on one. 

Although, I do not believe that my thoughts reflect the U.S. consumer population, I do think that these same believes among other shoppers could be a reason that companies are thriving in this environment.


Topic: Holiday Discounts

WSJ Article

Betty Boop Pops Back Onto the Scene

Turning to a Screen Siren to Introduce a Mascara

By ANDREW ADAM NEWMAN

Published: November 12, 2012

    According to the article written by Andrew Newman for the Wall Street Journal, Lancome cosmetic brand has received an licensing agreement for its new mascara Hypnose Star.  This licensing agreement allows Lancome to use the infamous 1930's character Betty Boop. 


   The company has incorporated Betty Boop into print ads and online video's promoting their  world renowned mascara. The print ad, done by Publicis 133, shows a larger picture of an upclose shot of supermodel Daria Werbowy. With a overlapping smaller picture of Betty Boop leaning against a container of Hypnose Star. 

     The print ad is set to appear in magazines Harper's Bazaar, Elle, Glamour, as well as, People. 

    
     The online video, on the other hand, shows a scene of Werbowy in a dressing room trying to say "Boop-oop-a-doop." As she struggles to perfect the statement she is accompanied by the animated Betty Boop. 


    Newman stated: "According to the Q Scores Company, which tracks the popularity of celebrities and licensed characters, the last time consumers were polled on Betty Boop, in 2007, 90 percent of women aged 18 to 49 recognized the character, but only about 12 percent said she was one of their favorite characters — what the company calls a Q Score of 12."

     With 200 licensed Betty Boop products in the United States and over 400 licensed products outside the U.S., Lancome calls upon a historic character to gain attention of women everywhere.

   

   In my opinion, I believe that this will help Lancome. The cosmetic brand targets upperclass females from the ages of 18 to 45. With that being said, the company's decision to expose the product to the demographics of fashion magazines allows them to reach their markets, all while distributing the product to places that suit these demographics needs such as Bloomingdales, Sephora, and Nordstrom.

   While strategically suits their target markets needs, the company's ads incorporate a mix of a youthful supermodel and a traditional icon in Betty Boop. In this case the divergence brings together women of all ages. The older and the younger can move connect to these advertisement ideas. Thus, I think that the ad campaign will be successful.

New York Time Article

   

Topics: Brand, Advertising, Licensing, Demographics

   

AEG and EBAY Partnership

Ticket Firm AEG, StubHub to Align

November 11, 2012, 7:20 p.m. ET

By ETHAN SMITH And GREG BENSINGER

     In the article "Ticket Firm AEG, StubHub to Align" written by Ethan Smith and Greg Bensinger for the Wall Street Journal, the readers learn about a new partnership in the works. According to the article, Anschutz Entertainment Group has planned to unite with EBay to make StubHub an official partner of AEG. 

     AEG claims that within the next year customers will be able to buy a ticket on AEG, and then be capable of either buying or selling on StubHub. This focus is on giving the consumers the options to do as they please. 

     While they traffic their business to StubHub for every ticket sold or bought on StubHub, AEG picks up an undisclosed amount of commission. 

      There are several goals of the partnership besides profit. For starters, AEG wants to gain control of the high prices that result from third parties and scalpers. Secondly, the companies hope that they can together buy startups, and even create new technologies. And lastly, the main purpose to begin to compete more virgorously with the LiveNation's ticketmaster. 

     All of this comes after learning that AEG is being sold. According to Smith: "AEG, owned by Denver billionaire Phil Anschutz's Anschutz Co., owns roughly 100 large venues around the world, including the O2 arena in London and Staples Center in Los Angeles. Anschutz is in the process of selling AEG, for a price expected to top $7 billion."


     In my opinion, I think that this was a smart decision for AEG, but I failing to see the positives for StubHub. From what I have read and began to understand they are not really gaining anything significant. In fact, they are just most losing commission. I acknowledging that they are reaching the finances and backing of a large company such as Anschutz Entertainment Group, however, the returns do not seem to stand out as crucial investments. 
     In turn, collectively I believe in terms of competing with LiveNation that this will help both companies. Inarguably, LiveNation has hold on the ticketing and entertainment industry. With that being said, the partnership of two popular companies will most likely be able to garner enough attention to gain customer's valuable ticket sales and buys. Ultimately, I am really unsure how this will all work out, but I am really curious. I plan to follow this partnership and all of its aspects closely starting from the beginning.

Topics: Partnership, Competition
Wall Street Journal Article

Do You Need Help?

Attacking Ailments With Small Doses

By ELIZABETH OLSON

Published: November 8, 2012

     

     According to Elizabeth Olson's article found in the New York Times, small pop-up pharmacy named "Help Remedies" is making a serious break into the pharmaceutical market. After being founded in 2008, the company for a while saw small improvements in consumer basis. However, as of recently, the company is exploding onto the scene.  

     

     Elizabeth Olson explained that today, "The company’s products are found in major pharmacy outlets like Duane Reade and CVS, as well as Target and Walgreens. Last year, the company reached $4 million in sales and is set to expand after Washington to San Francisco; Seattle; Portland, Ore.; Austin, Tex.; Chicago; and Miami."

     The mission of the company is supply people with low doses of everyday woes. Such examples are nausea, headaches, stomachaches, blisters, and even insomnia. Each of these daily illnesses are coupled with a quirky catch line. For example, "Help, I can't sleep."

The simplicity of the marketing is the beauty behind their operation. 

     Marketing is the strong suit of the company due to the collaboration of its two founders both of which were previously marketers. They found that their simple solutions tell the details of the products better than any fancy advertisement could.

     Their offbeat approach to marketing entices consumers to seek their help. The details of their marketing incorporate tactile packaging, performance, windows, and viral videos. With quite the budget Help Remedies has focused on a fun and zany approach to spreading their brand. 

    Lastly, in order to spread their remedies the company has also chosen to distribute the packets where they see fit. For example, they reported to the Republican National Committee headquarters to hand out Nausea packs to the dishearten group after their recent loss in the presidential election.

      Personally, I have never heard of this brand or any of their products. With that being said, I believe their concept is brilliant. Reading this article definitely forced me to have one of those moments where you sit back and think "why didn't I think of that?"

      As frustrating as it is, I can really foresee myself use some of their packets. It is so simple. It focuses on particular solution and does not leave room for excess tablets. That concept alone I think it big enough to carry the company into a successful market place. Without the little inconvenience of unnecessary packets consumers will not feel like they wasted money on excess. This point will be particularly important for Americans who prefer simple, fast, and easy solutions. 

     In conclusion, I think that as long as they continue to minimize advertising costs and continue to maximize their distribution techniques that they will be a force to reckon with in no time.

    I predict that within the next three years this couple will have spread to a household product, if not even earlier. And lets be honest, having their name written all over an article in one of the biggest newspapers in America does not hurt their chances.

Topics: Advertising, Brand, Product, Packaging 

New York Times Article

Taking a Journey With Coca-Cola

Coke Revamps Web Site to Tell Its Story

By STUART ELLIOTT

Published: November 11, 2012

In recent news, Stuart Elliot reported in the New York Times that Coca-cola has invested in a "multimillion dollar effort over multiyears." Surprisingly, this big move is not a new product launch, rather it is a makeover to their website.

"The Web site draws about 1.2 million unique visitors a month, executives said, a figure they hope will grow substantially with the more consumer-focused philosophy. When the site went live in 1995, it represented the first Internet venture for the Coca-Cola Company. A website devoted to the Coca-Cola brand followed, with an extensive presence for the company and its brands in social medialike Facebook, LinkedIn, Twitter and YouTube."

The company claims that is this their most ambitious digital project ever. The larger than life plans call for a online magazine titled Coca-Cola Journey, named after a magazine called Journey that was written by employees from 1987 to 1997. 

While on the "Journey" customers can read up on articles regarding entertainment, health and sports, or even the environment.  They may also follow interviews, video clips, photos, and blogs about the beloved brand of Coca-cola. Lastly, Coca-Cola has stated there will also be job postings and biographies about executives. 

The goal of the new site is to market in the nonconventional way, but recently popular style of storytelling. Within this approach, Coca-cola wants the the storytelling to be subjective through opinion columns. The executives believe that they will make mistakes along the way, like any company does, and they want their customers to tell them. 

To get the word out about the revamped site Coca-Cola has decided to utilize search engine marketing on google, as well as, ads on linkedIN. The hope is to spread the word about the refreshed site to their loyal customers, partners, and fans worldwide.

I like this idea for Coca-Cola, but I am curious how it will play out. Undoubtedly, Coca-Cola is one of the biggest brand names in the world and their website intersects a lot of traffic. With that being said, this is a huge change that brings a lot new dimensions. The refreshed page worries me because of Coca-Cola's tradition. 

The Coca-Cola company has succeed on the value of tradition. With such drastic variations, I am concerned that their consumers will not respond positively. This could be incredibly detrimental because of the amount of time and money invested into this project.

However, ultimately, I believe this inside scoop of the company makes them seem relatable and approachable. Somehow, a company that is larger than life is allowing consumers to become apart of their story with tools such as the opinion blogs. In my opinion that alone will have a sufficient impact on how Coca-Cola pushes forward in their "journey."

Topics: Brand, Search Engine Marketing, Digital Technology

http://www.nytimes.com/2012/11/12/business/media/coke-revamps-web-site-to-tell-its-story.html?ref=advertisingandmarketing

Starbucks and Square Wallet

Starbucks Now Accepting Payments With Square Wallet

11/08/2012 @ 10:44AM

Kelly Clay

    In the article written by Kelly Clay for Forbes.com, the readers learn that starting in November, Coffee powerhouse Starbucks has began to accept Square Wallet in around 7000 stores across the UK and Canada. After a three-month wait following the announcement of the technological advance, Starbucks nationwide are ready to use the mobile application.

    With either an Andriod or IOS powered cellphone, customers can download the mobile app known as Square Wallet. The "wallet" is connected to a debit or credit card, and thus never has to be reloaded. 

    After ordering their Mocca Lattes, customers simply tap the "pay here" with their screen and enter their QR code, and then they are off on their way without any time wasted on cash registers and search for pocket change.

    The company is extremely excited about this move. Cheif Digital officer Adam Brotman stated:
       
      “We look forward to continuing to create amazing connections with our customers –  both in our stores and outside of our stores and offering our customers choices in how they want to pay. Starbucks was the first national retailer to offer its own mobile payment technology combined with a world-class loyalty program in January 2011, and we have seen a tremendous response from our customers with more than 100 million mobile transactions occurring in our U.S. stores since its launch."

   The partnership with Square provides Starbucks customers with a convenient, quick, and refreshing experience that they cannot find at other places. This competitive advantage will continue to grow with the increasingly positive technological advances such as Square's ability to tip waitresses in 2013.


     In my opinion, the future is bright for these cellphone wallets. Personally for me I know how easy it is to forget my credit card or cash when I am rushing out. However, one thing I never forget is my phone. Having the ability to put everything into one device makes everything so much easier.  
   
     In this day and age, cellphones are used for so much more than phone calls. With email, credit cards, and internet, why not incorporate our money. By connecting all of these tools, Starbucks is satisfying the consumers and their goal to be time-efficent. I think more companies will begin to utilize Square Wallets or something of a similiar purpose, but until then Starbucks will separate themselves from their competition. 

Topics: Partnership, Competitive Advantage

Forbes Original Article