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Cutting Edge: Our weekly analysis of marketing news

Cutting Edge: Our weekly analysis
of marketing news
15 April 2015
Welcome to our weekly analysis of the most useful marketing news for CIM and CAM members.
Quick links to sections
Marketing trends and issues
Consumer response to energetic ads
This study investigates the relationship between
“consumer activation” (arousal) created by different
forms of media and their response to “energetic”
commercials. High-energy commercials, which are
defined as ads that are active, exciting and arousing
to the viewer, are becoming the norm in advertising.
The findings from six studies, including one involving
video service Hulu, suggest that advertisers who
launch commercials in a media context which induce
a “deactivating” emotion (sadness, relaxation or
contentment), should avoid highly energetic
commercials. Consumers who experience a
deactivating emotion are less likely to watch highly
energetic ads. They are also less able to recall the
advertisers compared with those consumers who are
not experiencing a deactivating emotion.
Journal of Marketing, Vol 79(2) 2015, pp1-18 (Puccinelli
et al)
Teaser ads and word-of-mouth
Advertisers have been using teaser advertising and
product pre-announcements to create buzz around
forthcoming products and services but little research
has been done into how this affects consumers’
word-of-mouth (WOM) behaviour. Through two
studies the authors demonstrate that “futureframed” marketing is extremely effective in creating
positive WOM for new products. They find that
product pre-announcements significantly increase
consumers' product interest and WOM behaviour.
Journal of Advertising Research, Vol 55(1) 2015, pp73-80
(Thorbjornsen et al)
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Brands and branding
Creating the super brand
March saw the publication of the Superbrands and
Business Superbrands rankings. Despite the impact
of digital brands, British Airways topped the list of
both B2B and B2C brands which just goes to show
that gaining a good reputation is a long process.
This article examines what makes a brand “super”,
how it remains at the top and what B2B brands
need to do in order to gain “super” status.
B2B Marketing, April 2015, pp10-11
Brand architecture strategy
Brands are important intangible assets for
businesses and should be managed strategically in
order to maximise brand equity. Brand architecture
strategy provides guidance on which products and
services the business should introduce and how they
should be branded. It should be well-designed and
well-implemented to provide a roadmap for the
brand. The author contends that it is very difficult to
manage and maximise brand equity without a clear
brand architecture strategy. He proposes a threestep process whereby a firm can design and
implement such a strategy and offers examples to
illustrate his argument.
Journal of Brand Management, Vol 21(9) 2015, pp702715 (Keller)
Interactive campaigns
Brand storytelling is changing as technology creates
interactive experiences allowing consumers to
become participants in the narrative. Honda
Europe’s marketing director, Martin Moll, explains
how the company uses interactivity to emphasise
the differences between two of its models, the Civic
and the sporty Civic Type R, through a campaign
entitled “The other side”. He argues that consumers
who are used to interactivity expect a “two-way
Cutting Edge: Our weekly analysis of marketing news
environment.” Although the audience for the
campaign is much bigger than the actual number of
car buyers, it provides an opportunity to create
brand advocacy among non-buyers who might
influence others who are thinking about buying a
new car.
Marketing, April 2015, pp58-59
Conferences and events
Globalisation of agencies
UK event agencies are expanding their overseas
presence in response to demand from clients and
opportunities for growth. Noble Events has just
opened an office in Dubai and Ashfield Meetings &
Events has opened its third office in the US.
Agencies believe that by having a local presence
they can better identify new client opportunities.
The Appointment Group is about to start recruiting
in the US to support the logistics needs of its local
client base. International agencies are also showing
greater interest in the UK conference and events
market with overseas agencies, such as Filmmaster
Events, setting up bases in the UK.
Conference & Incentive Travel, April 2014, pp20-21
Consumer behaviour
Made with love
The authors examine how the stated mode of
production – handmade or machine-made – affects
the attractiveness of the product. A series of four
studies suggest that handmade products have a
positive effect on product attractiveness which is
largely created by perceptions that handmade
products are symbolic of love. Consumers show
stronger purchase intentions for handmade products
when they are buying for loved ones but not for
people who are more distant from themselves. They
are also prepared to pay more for handmade gifts
when they are purchased to show love than when
they are acquiring a product simply because it is the
Journal of Marketing, Vol 79(2) 2015, pp98-110 (Fuchs et
Marketing to the ageing population
Many societies have ageing populations but Japan is
ahead in this respect, with one in four Japanese
being over the age of 65. They also account for twofifths of personal consumption and many companies
have adjusted their offerings to target the ‘grey
yen’. A major problem is that of marketing to the
elderly: older consumers do not like being reminded
that they are old and ad campaigns have to be
tactful in the way they approach age. Toyota uses
silver-haired middle-aged models to target babyboomers while Wacoal has created separate brands
and marketing for its products designed for older
consumers for fear of hurting the young image of its
core brand. Brands in other countries will
© Copyright 2015 CIM
increasingly have to find ways to market to the old
without alienating younger consumers.
The Economist, 11 April 2015, p66
Customer relations
Delivering service excellence
The customer should be at the centre of what the
company does which means that an excellent level
of service should be delivered consistently across all
customer touchpoints. This should be reflected
throughout both customer-facing and non-customerfacing employees which may require a shift away
from a goods-dominant to a service-dominant
approach. In this article the author considers the
customer-centric view of managing companies,
defines customer excellence and sets out some tips
for delivering good customer service. She also
provides brief case studies of Avis, Disney and
Journal of Strategic Marketing, February-March 2015,
pp19-23 (Chinje)
Direct marketing
Managing customer acquisition risk
Managing risk is an important part of customer
retention strategy but the authors argue that
managing risk in customer acquisition is equally as
important. They develop a framework for businesses
to manage customer acquisition risk using cooperative databases which help to pool data across
direct marketing firms and refine marketing
strategies. The framework is illustrated in the
context of the selection of customers for direct mail
using a “buy now, pay later” payment in which the
acquisition risk takes the form of consumers who
respond but do not pay. Using a large-scale DM
campaign, they demonstrate that their model
outperforms other targeting schemes which don’t
take into account bad debt risk.
Journal of Interactive Marketing, Vol 29 February 2015,
pp39-56 (Liu et al)
Welcome campaigns pay off
E-mail campaigns which contain a welcome message
in their subject line are far more likely to engage
subscribers than those which don’t have one.
According to research by Return Path, welcome
messages were read by 34% of recipients compared
with 24% for all messages. But it isn’t all good news
because recipients were more likely to complain
about welcome messages. Customers who read at
least one welcome message tended to read more
than 40% of messages from the sending brand over
the following six months. People who read three
Database Marketing, March 2015, p17
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ICO - greater powers over nuisance calls
Last week the UK’s Information Commissioner’s
Office acquired the extra powers to fine
telemarketers who spam people with nuisance calls
and texts, the fines can be anything up to £500,000.
Until now the ICO has had to prove that an
unsolicited communication had caused “substantial
damage or substantial distress” before action could
be taken, but this is no longer the case., 6 April 2015
EU cookie survey
An EU working party (WP29) has recently conducted
a “cookie sweep” of nearly 500 websites across
eight member states to investigate the use of
cookies, the information provided and the controls in
place. This action serves as a reminder that EU
regulators still have their eyes on cookie compliance.
The review came up with some interesting statistics
regarding both session (temporary) and persistent
(those which remain after the website has been
closed) cookies. These included the fact that more
than 85% of the average website’s cookies were
persistent; that over 70% of sites had third party
cookies (those not set by the website owner);
almost a quarter of sites had no cookie notification;
and some cookies had expiry dates running to
almost 8,000 years!, 9 April 2015
Protecting against copycats
Joseph Joseph was set up in 2003 to produce
slightly unconventional kitchenware. But copycat
products soon started appearing and the company
started to spend more on defending its products
against counterfeits than on designing new
products. The company believes that its problems
were in part due to its success in overseas markets,
notably China and the Far East. Copycats are
“trading off your goodwill and your brand but selling
as their own brand”, says IP lawyer Victor Foo. This
article includes four steps to safeguarding your
The Times, 13 April 2015, pp46-47
Written proposals and customer value
The author argues that value is important
throughout the business development lifecycle but it
is often overlooked in the initial proposal. Value can
be hard to quantify: for the business customer the
more tangible the benefits the better because they
have to make an internal business case for spending
the money. To create value it is important to first
find out what is important to the customer and then
convert the features and advantages of what you
are proposing into benefits. It is essential to express
this value throughout the proposal by constructing a
© Copyright 2015 CIM
value story. This value can be expressed in words or
graphics demonstrating that you understand the
customer and their business.
Winning Edge, March-April 2015, pp28-30
Middle managers – shaping strategy
The author cites a recently-published article, entitled
Adapting a book to make a film: how strategy is
adapted through professional practices of marketing
middle managers, which challenges the assumption
that strategy-making is the domain of top-level
managers. It argues that mid-level marketing
managers have an important part to play in shaping
corporate strategy to help meet customer demands
in changing environments. This article summarises
the findings of the research and looks at the
Journal of Strategic Marketing, February-March 2015,
pp40-41 (Kleyn)
Upgrading sales and marketing for growth
Business leaders are expected to deliver abovemarket growth, but this requires certain internal
capabilities and in particular commercial capabilities
in marketing and sales. Developing a marketbeating company requires organisational change yet
less than a third of transformations succeed as
expected. This article examines a new approach to
commercial transformation through upgrading
marketing, sales and pricing capabilities. The
authors claim that 90% of companies which use this
approach have delivered above-market growth and
sustained it over time. Two-thirds of companies
using these transformations are achieving growth in
either profitability or revenue while a quarter are
achieving it in both. Here are six steps to transform
your sales and marketing capabilities., March 2015 (hatami et al)
Market research
Check-all vs. yes-no
Self-administered questionnaires on the web or on
paper typically use two formats: respondents are
asked to tick all the boxes which apply or are forced
into a yes-no answer. There is much debate in the
survey research literature over which response
results in the most reliable data for self-administered
surveys. The authors undertake a review and
analysis of the available research which compares
the two formats and introduce the “acquiescence
bias” hypothesis as an explanation for their findings.
International Journal of Market Research, Vol 57(2),
pp203-223 (Callegaro et al)
Public relations
Are you content with your content?
Many marketers aren’t trained writers so find it hard
to create good content. In contrast journalists have
been taught to produce informative, easy-to-read
content. Here are seven tips to help you think like a
Cutting Edge: Our weekly analysis of marketing news
journalist. They include: successfully interpreting
your audience’s needs; placing the most interesting
part of the story first; and using different types of
content media such as blogs or video.
B2B Marketing, April 2015, p40
Corporate social responsibility as crisis risk
This paper looks at the nature of CSR-based
challenges, how they can become threats to
businesses and how businesses can respond to
these threats. CSR has become an important part of
corporate reputation and is one of the dimensions
used to evaluate a corporation’s crisis. Yet CSR itself
can be regarded as a crisis risk rather than just an
asset used to protect reputations during a crisis.
This study looks at the process whereby CSR is
transformed from a crisis resource to a crisis threat
and provides a set of insights into CSR-based
Corporate Communications: An International Journal, Vol
20(2) 2015, pp144-162 (Coombs and Holladay)
Barcelona – sponsorship takes priority
Barcelona FC is the world’s biggest mutual because
it is owned by 145,000 members or socios. This
makes it hard for the club to be taken over by
oligarchs or hedge fund managers. The board
requires the socios to back their decisions, including
the choice of Qatar Airways as the club’s first shirt
sponsor. They had previously refused to consider
advertising on the club’s shirts. However, the
influence of these socios is decreasing as TV and
sponsorship revenues have risen. TV rights,
sponsorship and tickets each represent about a third
of revenue.
The Times, 10 April 2015, p47
Agriculture, fishing
and forestry
Cod could become sustainable
New research suggests that North Sea cod stocks
are improving and could be certified as sustainable
within the next few years. Cod has been one of the
most over-fished species and the research reveals
that only one in nine inshore fisheries around Britain
are operating sustainably. North Sea cod has been
recovering steadily since 2006 and could obtain MSC
certification within a few years. Cod is the most
popular of the five favourite species of fish eaten in
the UK which make up 60% to 75% of all seafood
eaten in the country.
The Guardian, 9 April 2015, p10
Diversification in the dairy business
There are business advantages to diversification
which go beyond simply expanding the product line
but diversification has to be well-controlled. This
© Copyright 2015 CIM
article offers advice for those in the dairy business
who wish to diversify. It defines the different
diversification options – passive, core business and
new business – and offers three key points to
consider including how profitable the diversification
will be and how you will market and sell the
products., 8 April 2015
Building industry
When it comes to tendering for work there are
certain features that differentiate the successful
from the unsuccessful. Consultancy MarketingWorks
in association with the University of Reading
conducted a survey into tendering habits. It
revealed that last year the average cost of winning a
tender was £60,208 for a contractor and £23,821 for
a consultant. Firms that won one in five projects
could spend up to 22% of operational turnover on
tendering for work. Yet in the case of 11% of bids
won and 15% of bids lost the reasons for the
outcome are not known. MarketingWorks MD, Philip
Collard, says that the industry is suffering from a
combination of clients not providing sufficient
feedback and bidders not asking for it.
Construction News, 10 April 2015, pp20-22
Connected cities getting smarter
Cities are getting smarter as innovative projects,
such as a solar-powered road in the Netherlands
and cardless ATMs in Chicago, take off. Wired lists
20 urban projects for the connected streetscape.
They include billboards in Lima which claim to filter
pollution as efficiently as 1,200 trees; Buildingeye
alerts in San Francisco which give information on
planning permits; and sewer scans in Boston which
might be able to identify disease before they can
spread around the city.
Wired, May 2015, pp30-31
Businesses and strategy
Digital platforms
Many businesses offer digital platforms which
connect users for communication or commercial
purposes. Entrepreneurs are attracted to such
platforms because of the value they create, the
relatively low cost and their network effects which
help to protect their competitive advantage.
However, such platforms pose start-up problems
because they need to attract many users and
different types of users. For ten years Professor Ben
Edelman has been studying platform businesses and
strategies for launching them. Here he offers a
framework for building a successful platform
business which involves asking five basic questions.
Harvard Business Review, April 2015, pp90-97 (Edelman)
Cutting Edge: Our weekly analysis of marketing news
Plugging the skills gaps as over-50s leave
A new CIPD report warns that employers could be
left with future skills shortages because of the many
people who will be leaving the workforce when they
retire. Avoiding the demographic crunch: labour
supply and the ageing workforce says that most of
the 9.2m over-50s (30% of all employees) will leave
their jobs over the next two decades. In particular
this is likely to affect agriculture, real estate, health
and social work. The CIPD report offers suggestions
for engaging older employees and addressing the
skills gaps.
People Management, April 2015, p13
A benchmark of innovative management
In the 1980s attention shifted from American to
Japanese businesses as a source of inspiration for
best management and organisational practices.
Toyota and Honda were both noted for their quality
and production systems. Now management
innovation can be found around the world. Haier, a
Chinese non-state owned business, is one of the
world’s biggest and fastest-growing home appliance
makers. The company has experienced three stages
of strategic development each of which represents a
major feat of management innovation. It is unusual
for a company to maintain business growth and
ground-breaking innovation over a sustained time
period. Its success is based on five foundations
which are described in this article.
London Business School Review, Issue 1 2015, pp24-30
Business transformation
However large a business is, it cannot afford to rest
on its laurels: according to Richard Foster, a Yale
professor, the average lifespan of a Standard & Poor
company in the 1920s was 67 years but now it is
just 15. In the future it could take a mere eight
years for S&P’s list to contain companies that we
haven’t even heard of yet. Traits, such as honesty,
boldness and speed of capacity for reinvention, are
supplement explores related topics including eight
steps to successful change management; business
collaboration; and consumers as drivers of
The Times (Raconteur: Business Transformation), 9 April
2014, pp1-15
SMEs on the road
Small Australian businesses are taking to the road to
make their businesses truly mobile, and we’re not
talking mobile devices here. This article profiles four
companies: a hairdresser, a massage business, a
charitable mobile laundry and the “Shark in a Bus”
marine museum., 9 April 2015
© Copyright 2015 CIM
Charities and NGOs
Posters can’t do everything
It is difficult for charities to communicate their
messages when complex issues are involved. The
author argues that a poster campaign alone cannot
convey everything that is at stake. Instead posters
are often used as shop windows which can be
sufficient to raise awareness to the extent that
people will take action. But simply raising awareness
is not enough: the campaign also has to provide the
impetus for people to continue the conversation.
This article makes reference to South Africa’s
Salvation Army campaign which piggybacks on the
viral white and gold/black and blue dress, and
Women’s Aid’s interactive digital billboard.
Third Sector, April 2015, p25
Save the Children leads reading campaign
The “Read On. Get On” campaign has been
launched by a bunch of charities, businesses and
authors to encourage professionals and parents to
help children improve their reading. Save the
Children has been using social media to get people
to tweet pictures of themselves or their children
reading in their favourite places. The aim of the
initiative is to ensure that, by 2025, every child can
read well by the time they leave school. Save the
Children has recently published a new report to
coincide with the general election, entitled The
Power of Reading: How the next government can
unlock every child’s potential through reading., 10 April 2015
Durable consumer goods
Shipping that bed – not offensive says ASA
A campaign for the bed company Bedworld has been
cleared by the ASA after ten people complained
about the use of the word “ship” in the ads.
Complainants said that the word too closely
resembled a swear word. The ASA decided that the
ad, in which the phrase “ship this bed” is used
repeatedly, should not be banned but that it should
not be shown to children. Bedworld claims that the
word was used to reinforce its free shipping., 8 April 2015
Retail prices continue to fall
British retail prices are falling at their fastest rate on
record which is good for consumers but of concern
to the Bank of England. Last month the cost of high
street goods fell by 2.1% compared with a year ago,
a trend attributed to cheap oil, a strong pound and
the supermarket price war. Prices have been
declining for 23 months and the trend is likely to
continue. In the short term this is good news but in
the long term deflation will put a strain on shops,
Cutting Edge: Our weekly analysis of marketing news
and shoppers may postpone purchases in the hope
of even greater savings in the future.
The Times, 8 April 2015, p36; The Guardian, 8 April 2015,
customers need to play a part in tackling global
warming. Utilities that are open to change can profit
from building smart systems, distributed generation
and storage. They can also guide the consumer
through the choices they need to make.
Eurozone fortunes
The Eurozone is beginning to experience a
turnaround in part due to the weakness of the Euro
which is helping it to sell more goods and services
abroad. The falling price of oil is also helping to cut
companies’ energy and raw material costs while
raising consumer spending power. Credit conditions,
especially for SMEs, are also getting easier. Not
everyone is benefiting: it all depends on size of
company, sector and sales. The question is whether
the Eurozone can continue to grow. The conclusion
is that the recovery will most benefit those
businesses that have had the foresight to look
outside Europe for growth.
The Economist, 11 April 2015, pp61-62
The Economist, 11 April 2015, pp67-68
Energy and utilities
Printing – the future is sustainable
Seacourt, a green printing company based in
Oxford, has developed a printing press which it
claims is the first in the world to combine waterless
printing technology with an instant drying technique
powered by LEDs. Commercial printing is the fifthbiggest manufacturing industry in the UK but is a
heavy user of both water and energy as well as
producing various harmful pollutants. The new
LightTouch printing press is heralded as offering a
sustainable future for the printing industry.
Shell-BG takeover – mistaken identities
The news that Royal Dutch Shell is to acquire BG
Group resulted in a flurry of social media activity
from British Gas customers who were concerned
that the utility company would be affected by the
takeover. In fact BG Group and British Gas (owned
by Centrica) have been separate since 1997.
However, confusion remains because of the similar
names which continue to be used by parts of the
two companies. The takeover of BG Group is not
expected to have a great effect on the UK utilities
market., 9 April 2014
Biggest quoted company
The Shell/BG deal will create a £200 billion company
making Britain’s biggest quoted company which will
compete with Exxon Mobil, the world’s biggest oil
company. The Daily Telegraph speculates that the
takeover may spark off a “string of new oil and gas
deals”. It is likely that Chinese oil and gas
companies will be eyeing up the $30 billion-worth of
assets which Shell said it would shed from the
merged group. The Times reports on the likelihood
of Shell pulling out of Arctic drilling following the
takeover of BG. This should please Greenpeace
The Daily Telegraph, 9 April 2015, ppB1-2,B5; The Times,
9 April 2015, p35; The Times, 10 April 2015, p45
Cutting electricity use
Last year advanced industrialised countries used
0.9% less electricity than the previous year. A UN
Environment Programme study attributes this to two
factors: rising prices have led to consumers using
less energy, and there has been more use of
energy-saving technology. But both utilities and
© Copyright 2015 CIM
UK switching rates down
A new report from Centre Forum states that UK
household energy switching rates have been falling
since 2012. This is despite new Ofgem rules which
are meant to ensure that customers of the Big Six
should be made aware of the cheapest rates. Centre
Forum found that switching rates were 13% in the
UK compared with an EU average of 6%. It blames
the way in which the energy companies present
information to customers.
The Independent, 13 April 2015, p50
The Business Magazine – Thames Valley, April 2015, p22
Changing consumer attitudes
Governments and conservation groups usually tackle
illegal poaching by trying to crack down on the
poachers. But at a recent 32-country conference in
Botswana the emphasis changed to acquiring a
better understanding of the market forces which
drive the illegal trade. In particular attention has
turned to China, the biggest exploiter of wild
animals and the largest consumer of elephant ivory.
The trend is fuelled by both China’s consumer power
and consumer ignorance. Public awareness
campaigns across China may just be working and
demand for ivory is falling but it could take a couple
of generations to reduce the financial incentives for
New Scientist, 11 April 2015, p14
Ethical spending
Ethical Consumer magazine’s annual report reveals
that ethical or environmentally friendly products are
now worth £32 billion to the UK economy. The
ethical market has grown by 9%, with sales of
electric and hybrid cars up by 78% and ethical food
and drink up by 8%.
The Independent, 13 April 2015, p14
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WWF says chicken worse than beef
WWF claims that the biggest environmental problem
in the UK associated with British diets is chicken.
Previously beef had been singled out as the main
culprit but the charity claims that chicken is worse
because it is intensively reared and needs high
levels of water and feed. The British Poultry
Association argues that poultry reared by indoor
farming is one of the most sustainable methods of
meat production. WWF Germany has just published
a report which found that Germany’s consumption of
pork is the biggest cause of environmental damage.
The Grocer, 11 April 2015, pp16-17,44
Koovs reports high marketing costs
Koovs, the Indian fashion e-tailer, is looking for
additional funding because of higher than
anticipated marketing costs. Marketing costs have
increased by over £2m, which Koovs attributes to
fast growth in the Indian e-commerce market. The
level of expenditure on marketing is expected to
continue as the Indian e-commerce market expands
from £1.54 billion to £21.5 billion over the next five
Retail Week, 10 April 2015, p13
Google Images – a fashionable development
In 2000 the most popular search query Google had
ever received was in the shape of Jennifer Lopez
wearing a revealing Versace dress at the 2000
Grammy Awards. This event is credited with having
kick-started Google Images. But it was not just a
landmark for internet search – it also helped to
resurrect Versace’s fortunes!
The Daily Telegraph, 9 April 2015, p2
Asos cuts marketing spend
As part of a cost-cutting exercise, online retailer
Asos reduced its marketing spend by 16% in the six
months to 28 February. The business suffered a
10% fall in profits for the period although CEO Nick
Robertson has insisted that brand awareness is
growing thanks to digital marketing activities.
Marketing Week, 9 April 2015, p4
Financial services
Enhancing the client experience
Banks are facing numerous challenges including
compliance and competition but one of the most
critical is achieving excellence in customer
experience. Banks rely on their bankers to develop
relationships with clients and to deliver a proposition
which enables the prospective client to recognise the
value but this is rarely done in an effective way. The
author describes the qualities which he believes the
problem-finders rather than solvers; understand the
© Copyright 2015 CIM
client’s mindset; and can connect with the client
through visualisation and storytelling. Each of these
is explored in some detail.
London Business School Review, Issue 1 2015, pp34-39
The SME market
SMEs make up 99.9% of all private sector business
yet often have trouble in acquiring funding. The UK
Government has been trying to address this with
initiatives including lowering the barriers to entry for
new “challenger” banks. This article looks at the
strategies lenders can use to revolutionise the
market for lending to SMEs. It includes a case study
of Bristol-based Ultimate Finance, which has been
lending to SMEs for 12 years, and last year
rebranded to Inspired Capital plc.
Market Leader, Q2 2015, pp12-13 (Mazur)
Crowdfunding around the world
Last year crowdfunding platforms raised $16.2
billion. Regulatory reform and international
expansion have contributed to the rise of
crowdfunding and investors are increasingly anxious
to get a return on their money. The highest growth
occurred in Asia, with a 320% increase in funding,
making it the second-largest crowdfunding continent
after North America.
The Economist, 4 April 2015, p85
Cash still rules although digital is on the rise
More consumers are making digital payments using
their mobile phones or tablets and retailers are
installing digital payment services such as Paym and
Zapp. The rise of digital payments comes at a time
when banks are reporting a fall in cash withdrawals
and cheque transactions. Yet analysts claim that
reports of cash being replaced by digital are
exaggerated. A report from the Payments Council
states that cash is still “the single most commonly
used payments method”.
Financial Times, 14 April 2015, p4
Champagne loses out to Prosecco
British sales of Prosecco overtook those of
Champagne for the first time last year. Prosecco
volume sales doubled to 21m litres which was more
than Champagne (6.5m litres) and cava (13m litres)
together. However, while overall champagne sales
have fallen, value sales of Moët & Chandon have
grown by double digits.
The Grocer, 11 April 2015, p43; The Independent, 13 April
2015, p14
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Celebrity wine
Most celebrity wines simply involve placing the
person’s name on the label in exchange for a
generous payment. It is rare for the star to own
their own vineyard but Brad Pitt and Angelina Jolie
are producing wine grown on their own estate in
Provence. They have released a limited edition 2014
Miraval Côtes de Provence Rosé which is being sold
at Marks & Spencer. Other celebrities who have
owned their own wine estate are Francis Ford
Coppola, Gérard Depardieu and Sir Cliff Richard.
The Times, 11 April 2015, p15
Robinsons has thirst for new campaigns
Soft drinks maker Robinsons plans to address the
declining mature squash market by introducing new
campaigns, packaging and seven new flavours. It
has just launched a 60-second “Play Thirsty” ad and
a “Drink More Water” print campaign. This forms
part of owner Britvic’s three-point growth plan.
Marketing Week, 9 April 2015, p5
Cosmetics and toiletries
Fake tans wear off
Sales of fake tanning products have fallen by 19.3%
in the 52 weeks to 4 January. It appears that the
“Towie” (The Only Way is Essex) effect is beginning
to diminish. Reality TV shows have been described
as “ongoing ads for fake tan products” but they
appear to have peaked.
The Grocer, 11 April 2015, p5
Shock food ads
A recent billboard campaign from Carlsberg enabled
passers-by to help themselves to beer. The
billboard, which was placed outside the Truman
Brewery in London, incorporated a built-in beer
pump as part of the “If Carlsberg Did” initiative.
Shock stunts from food and drink companies, such
as Pizza Hut’s Hot Dog Stuffed Crust, are on the
increase. This article argues that, while you cannot
deny the novelty of these products or events, they
are making the consumer into a shop window:
Twitter and Instagram are full of pictures of silly
food which means that the company concerned can
spend less on advertising!
The Independent, 10 April 2015, p39
Baked potatoes take over evening meal
Baked potatoes are growing faster than any other
food as a choice for evening meals. This is a bit of a
turnaround for the baked spud which last May was
being rejected in favour of frozen options. According
to Kantar Worldpanel fresh baked potatoes grew
twice as fast as curry as a dinner choice in 2014.
Display ban in small stores
Last week the UK introduced a tobacco display ban
in small shops. This follows the introduction of a
display ban in large stores and supermarkets in
2012. Although the ban has been welcomed by
campaign groups such as Action on Smoking and
Health (Ash), it has been criticised by the Tobacco
Retailers' Alliance which points out that the display
ban in larger shops hasn’t yet been evaluated., 6 April 2015
Government and
public sector
British vs. US elections
A brief article compares political campaigning in US
and British elections. Whereas the UK election
campaign started in March and will end on 7 May,
US election campaigning “has no beginning and no
end”. One could argue that politics in which there is
permanent campaigning makes the politician
continuously accountable, but it is their performance
as a campaigner that is being measured rather than
their ability in government. Perpetual campaigning is
all about short-term tactics, headlines, social media
and shortening public attention spans. But does all
this mean that the UK is better-governed than the
Bloomberg Businessweek, 6-12 April 2015, p10
Chinese opinion polls
For years the Chinese Communist Party spoke for
the population of China but now it is increasingly
using opinion polls to establish the public’s views on
big issues and on some policies. Yuan Yue pioneered
commercial polling in the country when he launched
Horizon Research in 1992. Chinese opinion polls
cover a huge range of subjects but Mr Yuan says
that many are so-called “customer satisfaction
surveys” that are being used extensively by local
governments. Although the government is still
regarded as repressive, its need to canvas opinion
increasingly shows that what people think matters.
The Economist, 11 April 2015, pp57-58
Health and pharmaceuticals
Google - from search to surgery
Johnson & Johnson’s subsidiary Ethicon has joined
forces with Google to build advanced surgical
robots. Google’s data-gathering will lead to surgeons
having better imaging and analysis tools when
operating robotically. Google has already teamed up
with Apple to gather medical data for devices.
New Scientist, 11 April 2015, p19
The Grocer, 11 April 2015, p45
Healthcare sustainability
The number of people in the world aged over 60 has
doubled since 1980 and will account for more than
© Copyright 2015 CIM
Cutting Edge: Our weekly analysis of marketing news
one in five by 2050. As people live longer they are
developing chronic diseases such as heart
conditions, dementia or diabetes. This has led to
rising healthcare costs which places a strain on
governments, insurers and patients. It also places a
question mark over the sustainability of existing
healthcare models. This supplement examines some
of the issues, including product development, the
cost of drugs and the Internet of Things.
Financial Times (Sustainable Healthcare), 7 April 2015,
Acquiring assets in the race to beat cancer
Pharmaceutical companies are fighting to acquire
assets in a class of medicines that are considered to
be one of the most important developments in the
battle against cancer: cancer immunotherapies.
Novartis and Merck have teamed up to strengthen
their position in the race to develop such therapies.
Other companies are rushing to form alliances, with
some large pharma companies partnering with small
biotech outfits in their bid to find the right approach.
Financial Times, 8 April 2015, p17
IT and telecoms
Amazon develops cloud business
Amazon is the largest e-commerce group in the
world by sales. Yet Amazon Web Services, its cloud
service, has become one of the most valuable parts
of the company’s business. AWS’s customers include
Fortune 500 companies and the US government but
it is facing competition from the likes of Google and
Microsoft. In addition computing and data storage is
a low-margin business and AWS is looking to rise up
the value chain into areas such as software and
enterprise services.
Financial Times, 14 April 2015, p17
Leisure and tourism
Team GB has stories to tell
The London 2012 Olympic Games represented a
huge sporting and marketing success. Team GB is
building itself up for the Rio 2016 Games but it will
be hard to meet consumer expectations. It has
tweaked its marketing strategy to focus on content
and the stories surrounding athletes are central to
this. Research has shown that consumers are twice
as likely to be interested in stories about athletes as
about other sporting teams such as rugby or
football. Team GB hopes that its stories will be
spread through marketing partnerships and
investment. Furniture retailer DFS, which signed a
sponsorship deal last year, believes that Team GB’s
philosophy aligns with its own vision and values.
Marketing, April 2015, pp54-55
© Copyright 2015 CIM
UK climbing on the ascent
Climbing as a UK sport is attracting an increasing
number of people, particularly middle-class citydwellers. Climbing walls are becoming more popular
according to the British Mountaineering Council
(BMC). The clothing and climbing equipment sectors
are benefiting from the trend but it is a fragmented
market and hard to break into. Although there is a
expeditions, brands want more than just a good
climber: they need people who can promote
themselves and the brand. Some brands won’t
sponsor athletes who don’t have a good online
presence. Older climbers may find this hard to deal
with while some younger climbers are making the
most of the opportunity!
Management Today, April 2015, pp42-44
Materials and mining
3D printing process to shake up industry
A new system known as “continuous liquid interface
production” looks set to transform the 3D printing
industry by making the process of creating plastic
objects up to 100 times faster. Developed by Carbon
3D, a Silicon Valley start-up, the process was
inspired by a scene from the Terminator 2 film
which shows the android rising out of a pool of
metallic liquid. Experts warn that some of the “first
to market” 3D printing companies may disappear as
did the early computer companies of the 1980s but
so far the big incumbents are making high profit
Financial Times, 10 April 2015, p17
Authors’ attitudes towards publishers
A new survey has revealed that publishers need to
communicate better with their authors, pay them
more and use their skills to market books. The Do
You Love Your Publisher? survey was conducted
among 812 writers in the UK and US. It asked them
about publisher satisfaction, agents and selfpublishing. Some 75% of authors said that they had
never been asked for feedback by their publisher
while 28% felt that communication with their
publisher was inconsistent. The survey also covered
the topics of loyalty, publishers’ editorial input and
author attitudes towards Amazon.
The Bookseller, 10 April 2015, pp6-7
Paper sales
E-books now make up about 30% of all published
books and nearly 50% of adult fiction, but the
decline in print sales is slowing and e-book growth is
beginning to tail off. Millennials are still buying
paperbacks while sales of children’s literature rose
Cutting Edge: Our weekly analysis of marketing news
by 9% last year as teens, twenty and
thirtysomethings buy fiction marketed at young
adults. Publishers Picador and Bloomsbury are
hoping that people’s love of print will allow the
industry to survive the digital age. Some publishing
companies are emerging as e-book-only ventures.
Official Charts Company website ahead of Record
Store Day on 18 April.
The Observer, 12 April 2015, p43
The huge choice of media and information sources
has made it hard for publishers to retain readers.
Loyalty programmes are a way of offering incentives
to consumers especially when encouraging them to
subscribe and regularly visit websites. Customer
retention is central to the business and helps to
measure how well the company is creating value for
customers. The author lists the three main retention
levers and describes how digital agency Clock (of
which he is account director) worked with The Times
and The Sunday Times (News UK) to develop a
subscriber loyalty programme.
No need to dash to the shops
Amazon is offering its Prime users in the US a
chance to install a physical button in their homes
which can be used to order everyday products that
they have run out of, such as coffee or toilet rolls.
Users simply press the branded “Dash” button,
which is preset to a particular product, and the order
will be delivered to them the next day. The aim is to
automate shopping so that the customer doesn’t
have to think about it. Another example of
automated shopping (and the Internet of Things) is
the smart fridge which can potentially tell the owner
when they have run out of milk.
Retail Week, 10 April 2015, p28; New Scientist, 11 April
2015, p19
Online advertising comes of age
Advertisers spent 14% more last year on internet
and digital marketing according to the Digital
Adspend Study from the Internet Advertising Bureau
and PwC. Last year a record £7.2 billion was spent
on online advertising. Mobile advertising has been
slow to rival traditional forms of advertising but,
thanks to the rise of smartphones and advertisingbased apps, 23% of all digital spend targeted
phones in 2014, up from 16% in 2013. Meanwhile
advertising aimed at tablets more than doubled to
£87m. The IAB said that “online advertising has
come of age”.
The Times, 10 April 2015, p49
Mobile optimisation – star performers
Research by the Internet Advertising Bureau reveals
that Disney, Tesco and Lego are among the highest
scorers out of 250 UK brands with regard to their
mobile optimisation of websites and apps. The
brands were scored out of ten with those achieving
nine or above designated as “star performers”, these
include HSBC, Vodafone and Save the Children.
Marketing Week, 9 April 2015, p5
Vinyl back in the charts
The UK’s first weekly vinyl record chart has been
launched in recognition of the booming sales of vinyl
singles and albums. Last year vinyl sales reached
their highest for 18 years at 1.29m and are
predicted to grow by another 70% this year to reach
past two million. The charts will be published on the
© Copyright 2015 CIM, 13 April 2015; The Times, 13 April 2015,
Market Leader, Q2 2015, pp18-19 (Gilbert)
Focusing on content past and present
Like the music industry, magazines and newspapers
are beginning to use Backlists (their archives) to
attract new readers and encourage people to spend
more time on their sites. In 2014 The New York
Times’s Machine Site was re-launched containing
issues from 1851 to 1980 while The Guardian’s
archives date back to 1791. Publishers are
developing new tools to repackage the content to
help readers find what they want. Social media is a
key channel through which adults in the US get their
news. As companies become publishers, they are
looking at new ways to showcase the increasing
amount of content they produce which is regarded
as a valuable asset.
Financial Times, 10 April 2015, p12
Social media
Snapchat has lucrative new ad model
In January messaging app Snapchat introduced
Discover, a menu of free channels from 11 media
companies which publish video clips and news
stories directly on Snapchat. Although Snapchat has
so far remained reticent about how it plans to make
money, the 11 Discover channels sell their own ads,
which gives Snapchat a cut of the takings. The
youthful audience (over 100m) which Snapchat
attracts, are coveted by advertisers and Discover
channels can charge them $100 per 1,000 views,
which is around twice the ad rates of YouTube and
Bloomberg Businessweek, 6-12 April 2015, pp28-29
Who owns LinkedIn data?
Over 225m people use LinkedIn as a business tool
but employers should be aware of the problems
which can arise from its use in the workplace,
particularly when an employee leaves the business.
Cutting Edge: Our weekly analysis of marketing news
LinkedIn enables people to build up a list of contacts
including clients, prospective clients, customers and
suppliers. The employee would expect to take their
LinkedIn account with them to the new employer
who could be a competitor and there has been an
increasing amount of litigation on the subject. This
article asks who owns the LinkedIn account and
what practical steps employers can take to protect
themselves., 9 April 2015
Facebook uses old-fashioned appraoch
Facebook has turned to traditional media for its own
ad campaigns. The social network has spent £6m on
conventional media in the UK, which includes
London Underground and TV campaigns. Until
recently Facebook built its business by word-ofmouth but this is a definite change of approach. Last
year it launched its first billboard campaigns in Los
Angeles and Chicago; this year it is using mass
media in Canada and Australia. Google and other
digital media companies have also been turning to
older ways of brand building.
Financial Times, 13 April 2015, p22
BBC turns to online
The BBC plans to compete with services such as
Netflix and Amazon as part of its aim of becoming
an “internet first” broadcaster. The corporation has
recognised that young people increasingly watch TV
and listen to radio on catch-up or on-demand
services on mobile devices. Matthew Postgate, the
BBC’s chief technology officer, has the job of
creating a dedicated team to move the business
towards digital production.
The Times, 9 April 2015, p3; Financial Times, 9 April 2015,
Live streaming
Two new apps enable people to share what is
happening around them in real time. Periscope and
Meerkat allow smartphone owners to broadcast their
surroundings to others. It is still not clear when
these apps should be used or indeed what for. Other
video services, such as a YouTube and Vine, have
enabled people to become video stars by attracting
millions of followers and entering into expensive ad
deals. Will Periscope go the same way?
New Scientist, 11 April 2015, p19
EU to tackle plastic bag use
The average European throws away up to 200
plastic bags a year, most of which have only been
used once. The European Parliament’s environment
committee wants to introduce new rules to reduce
the use of plastic bags. They propose that EU
© Copyright 2015 CIM
countries can choose between two approaches: ban
free plastic bags in shops by the end of 2018 or
ensure that by 2019 each citizen uses no more than
90 bags a year and no more than 40 bags a year by
2025. The final vote will take place on 28 April., 31 March 2015
M&S steps up a gear
Marks & Spencer has reported like-for-like growth in
its general merchandise division for the first time in
four years: the fourth quarter saw total general
merchandise sales rise by 1.3%. The retailer has
also seen growth in e-commerce sales thanks to
online improvements in search, navigation and
speed. Even the fashion press has been
complimentary about some of M&S’s new offerings,
but CEO Marc Bolland is continuing with his “step by
step” policy rather than claiming that the company
has turned a corner.
Retail Week, 10 April 2015, p2
Aldi overtakes Waitrose
Aldi has become the sixth-biggest supermarket in
Britain with 5.3% share of the grocery market,
having overtaken Waitrose which has a 5.1% share.
Meanwhile the “Big Four” supermarkets have their
lowest market share for a decade which illustrates
just how much the British grocery market is
changing. Waitrose will probably remain unfazed by
the news because, along with Aldi and Lidl, it is one
of only three supermarkets to increase its market
share. Aldi plans to focus on expansion in London
this year by opening nine new stores.
The Daily Telegraph, 9 April 2015, pB3; The Times, 9 April
2015, p9; The Guardian, 9 April 2015, p21
CMA investigates 99p Stores takeover
The Competition and Markets Authority (CMA) has
warned that Poundland’s takeover of 99p Stores
could be in breach of competition rules. It plans to
look more closely at the £55m takeover after it
found that 80 locations and various planned sites
could lead to a “substantial lessening of
The Independent, 10 April 2015, p54
Airbnb – the sharing economy
Airbnb is a well-known player in the sharing
economy. A UK government bill could result in the
relaxation of planning regulations which would allow
Londoners to let their residential properties for up to
90 days. Research suggests that Airbnb’s awareness
in the UK is nearly twice as high among Generation
Y business travellers than among older generations.
The sharing economy has yet to take off and it is
still only used by 2.6% of business travellers. Yet
residential event-related accommodation accounts
Cutting Edge: Our weekly analysis of marketing news
for 36% of domestic hotel demand in the main
Western markets, so the sharing economy could
ultimately pose a threat to hotels.
Meetings & Incentive Travel, March-April 2015, pp39-40
Pret is ready for evening service
Pret A Manger is expanding into the after work
market by trialling its A Good Evenings service in
London. The new service, which will stay open until
11pm, will offer hot dishes and salads plus wine and
beer. Pret is not alone amongst daytime food and
drink services which have expanded into the evening
market: Starbucks recently launched Starbucks
The Times, 8 April 2015, p35; Financial Times, 11 April
2015, p17; The Grocer, 11 April 2015, p8
Parcel services – can they deliver?
Citylink, which collapsed three months ago, is not
the only parcel delivery service to be struggling in
the UK. The rise of internet shopping should have
benefited the delivery industry but firms such as
Yodel and UK Mail Group have had difficulty
adjusting to increased volumes and customer
demands, such as 30-minute slots. The FedEx-TNT
merger is not regarded as an immediate threat to
the UK parcel business because it does not operate
in the B2C market but the newly-merged business
may just spot an opportunity to get a piece of the
The Independent, 10 April 2015, p57
Will Zoopla make the right move?
Zoopla and Rightmove (the market leader) are the
leading property portals in the UK. They allow estate
agents to advertise properties to buy or rent, the
decline in print ads has been attributed to the rise of
such services. But now these sites have taken a hit
in the form of OnTheMarket, a rival outfit set up by
a group of disenchanted estate agents. Just a week
after the latter’s launch, Zoopla reported having lost
11% of its 19,000 estate agency advertisers. This
article profiles Zoopla founder Alex Chesterman.
Financial Times, 8 April 2015, p12
Transport and travel
Car registrations – best month this century
Last month more cars were registered in the UK
than in any other month for the last 16 years
according to the Society of Motor Manufacturers &
Traders (SMMT). This is attributed to new products,
financial packages and low interest rates which have
encouraged companies to buy fleet cars with more
confidence. The SMMT expects UK car production to
overtake pre-recession levels this year.
Europe’s population continues to age. The UK is the
biggest scooter market in Europe with an estimated
80,000 being sold every year. Scooters are also the
subject of numerous articles, tweets and blogs
which include both positive and negative press. This
article examines Electric Mobility, one of the biggest
players in the UK mobility market. It also compares
scooter buying behaviour with that of cars, in which
people trade up from a second hand to new and
premium models. The topics of obesity, styling and
competition are also covered.
Management Today, April 2015, pp46-48
Driverless city
M City is a $6.5m, 23-acre mini-city which has been
built by the University of Michigan. It offers facilities
for vehicle makers to test out driverless cars by
replicating traffic jams, pedestrians’ behaviour and
so on. Big automakers such as Ford, General Motors
and Toyota, have already expressed huge interest in
the concept. To date autonomous vehicles, such as
Google’s Toyota Priuses, have been tested on public
or private roads and test tracks. The city, which
opens on 20 July, will eventually see hundreds of
driverless cars in its streets. The market for
driverless technology is expected to grow to $42
billion a year by 2025.
Bloomberg Businessweek, 6-12 April 2015, pp19-20
Ola and Uber - head on collision in India
Ola Cabs is India’s answer to Uber, the taxi app
service. The two are fierce competitors, a situation
which has been reinforced by Ola’s recent takeover
aggregator. Uber suffered a setback when it
received a temporary ban in New Delhi last year
after one of its drivers was accused of sexual
assault. Ola is to receive fresh investment of $314m
from Russian- and US-based investors. In India Uber
plans to fuel the rivalry by launching uberAuto, a
service allowing people to book rickshaws in New
Financial Times, 10 April 2015, p16
Van sales benefit from online shopping
Van sales have benefited from the increase in online
shopping with a record 100,000 vehicles being
registered in the first quarter of 2015, up by 22.3%
year-on-year. The SMMT has reported that 108,456
vans and lorries were registered in the first three
months, the highest number sold since 1987. The
Ford Transit was the best seller of the quarter while
Vauxhall Vivaro came second and the VW
Transporter third., 13 April 2015
The Independent, 9 April 2015, p58
Mobility – remaining fleet of foot
Mobility scooters are a growing phenomenon as
© Copyright 2015 CIM
Cutting Edge: Our weekly analysis of marketing news
Buzz phrases
Boomerang boarders
This is an expression applied to adult children who
have come back from university but can’t afford
their own homes and are living with their middleincome parents. In the UK 37% of people can’t
afford to buy their own property as house prices
continue to rise faster than wages. According to
Experian there are around 1.56m boomerang
boarders in the UK. It argues that brands should be
targeting these consumers and their relatively high
disposable incomes and should adjust their
strategies to take account of “multi-generational
households”. Hempstead Valley in Kent has been
identified as having the highest proportion of
boomerang boarders.
Written by CIM’s Knowledge Services Team
© Copyright 2015 CIM
The views expressed in Cutting Edge are not
necessarily those of The Chartered Institute of
Marketing Week, 9 April 2015, pp22-23
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