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Cutting Edge: Our weekly analysis
of marketing news
7 February 2018
Welcome to our weekly analysis of the most useful marketing news for CIM and CAM members.
Quick links to sections
in 2004 with the slogan: “Always handpaint”. A
Marketing trends and issues hand-painted wall sign can cost up to $90,000 but
people are prepared to spend time looking at the
Advertising ads because they are works of art.
Extensions ‒ protecting the parent product The Times, 3 February 2018, p46
Brand and product extensions are increasingly being
used in product innovation. Such extensions can KFC tops most complained about ads 2017
have a positive or negative impact on consumer The most complained-about ad of 2017 was KFC’s
evaluation of the parent product, leading to so “The Whole Chicken” which received 775 complaints
called spillover effects. Two studies suggest how out of the 30,000 received by the Advertising
marketers can use the right communication and Standards Authority (ASA). The ad was criticised for
messaging types in advertising, to create positive being disrespectful to chickens and upsetting for
spillovers, or to avoid negative ones, in product line vegans and vegetarians but the ASA ruled that it
extensions. was unlikely to cause widespread offence.
Journal of Marketing Communications, Vol 24(2) 2018, Meanwhile moneysupermarket.com’s ad featuring
pp169-189 (Liu and Wu)
“strutters and builders” has remained among the top
ten most complained-about for a third successive
Audibility measurement – the way forward year. Two-thirds of the top ten, including those by
The audio part of digital advertising is becoming Dove and McDonald’s, were removed by the
popular for measurement purposes but is not as advertiser before the ASA could investigate. Guy
easy to measure as viewability. This makes things Parker, chief executive of the ASA, says that it needs
difficult for advertisers on non-visual digital to look carefully at the audience and context before
channels, such as radio or podcasts. The Media deciding whether an ad should be banned.
Rating Council (MRC) is working to find a way marketingweek.com, 1 February 2018
forward by proposing a future project to research
and define audibility metrics. In the meantime it
says that an “Audible Ad Impression” requires that UK growth to slow this year
an ad is played for a minimum of two continuous The UK ad market is expected to slow this year,
seconds. from expected growth of 3.4% in 2017 to 2.8% in
2018, as digital growth slows. This is according to
bizreport.com, 1 February 2018 (Leggatt)
the latest Expenditure Report from the Advertising
Association and Warc. Mobile ad spend is expected
Going to the wall – hand-painted ads to have passed the £5 billion mark in 2017, with
Painters, known as “wall dogs”, have been painting much of the investment going into video and social
walls in New York with giant images advertising media. While total digital ad spend rose by 9.9%
Adidas trainers, Delta airlines and Samsung phones. last year, TV, OOH, national news and magazine
Hand-painted adverts went out of fashion with the brands and cinema all suffered a decline.
advent of large-scale printing and digital media. Now marketingweek.com, 31 January 2018 (Tesseras)
social media, along with the vintage and artisanal
trend, has helped to revive the wall dog profession.
The leader in hand-painted ads is Colossal, founded
Don’t forget, reading this publication can
count towards your annual CPD record. 1
www.cim.co.uk/charteredcpdCutting Edge: Our weekly analysis of marketing news
Brands and branding offer dedicated executive boardrooms, business
lounges and hotel-style accommodation. The
Brand storytelling
University of Birmingham is opening a 172-bedroom
The author considers best practices for brand
hotel and conference centre at its Edgbaston
storytelling with a focus on social media. He
campus. A case study of College Court, University of
recommends using internal subject matter experts
Leicester, is included.
and guidelines but emphasises that all content
Meetings & Incentive Travel, January 2018, pp24-27
should be “valuable, credible and unique”. He
(Moore)
reports a 277% increase in online traffic within six
months as a result of using “matter-led” brand
storytelling. This paper also outlines a process for Business events delegates – spending habits
implementing a social media employee advocacy New research by VisitBritain/Visit England found that
programme that tells a brand’s story. business delegates who extend their stay for leisure
Journal of Brand Strategy, Vol 6(3) 2017-18, pp237-241
purposes would, on average, double their spend in
(Hall) Britain compared to those travelling home straight
after the event. The Business Events Research;
Delegate Spend and Trip Extension report measures
Genericisation – the ultimate goal?
delegate spend at business events in Britain and the
Marketers dream of making a brand so well-known
behaviour of delegates who are extending their trips
that it becomes a generic expression. However,
for leisure. It finds that international events attract
“genericisation” can also result in “genericide” when
significantly higher average spend than domestic
a brand loses its identity. This article identifies 50
events because overseas delegates stay longer while
brand names that have become generic, household
international events charge much higher registration
words. They include: linoleum, a floor covering and
fees.
victim of genericide when it lost its trademark back
eventindustrynews.co.uk, 30 January 2018 (Parry);
in 1878; bubble wrap, invented in 1957 by the
https://www.visitbritain.org/sites/default/files/vb-
Sealed Air Corporation which has managed to hang corporate/Documents-Library/documents/England-
on to the brand; frisbee, owned by Wham-O which documents/report_business_events_research_modules_1_3_final.
continues to hold the trademark; the onesie, which pdf
is owned by Gerber Childrenswear; and the memory
stick, whose trademark is still owned by Sony. Consumer behaviour
lovemoney.com, 31 January 2018 False claims – fallout amongst consumers
Companies often make selective or deceptive claims
Children aimed at increasing demand or discouraging
Concerns over gadget-addicted children consumers from moving to different products but
Data from the Office for National Statistics suggest this can have a negative impact on the consumer.
that children in Britain spend just 16 minutes a day The authors set out to measure the consequences in
outside in parks or open spaces: for children in their terms of falling consumer demand, which companies
teens the figure falls to ten minutes. A separate that make false claims suffer when caught. The
report from Childwise found that young people aged study is conducted in the context of the food
between five and 15 spend 2.5 hours a day viewing industry, focusing on four popular products which
footage on screens, with more time spent on were brought before the Federal Trade Commission.
devices than on TV sets. Childwise has also found These resulted in termination of the false claims.
that 42% of nine to 16-year-olds use voice The findings suggest that there was a significant fall
recognition gadgets at home, the most popular in demand for the products following the cessation
being Siri. There are concerns about how children, of claims, which resulted in a 12%-67% loss of
who are exposed to these gadgets, will learn to revenue across the four products.
communicate, such as saying “please” or Journal of Marketing Research, Vol 54, December 2017,
pp968-989 (Rao and Wang)
“thankyou”.
The Times, 31 January 2018, p9; The Daily Telegraph, 1
February 2018 Customer relations
Sustainable customer experience
Conferences and events Three expressions ‒ customer service, customer
Academic venues ramp up services experience and customer centricity ‒ are all high-
Academic venues are places for people to debate, visibility phrases due to the current emphasis on the
discuss and learn, which makes them ideal for customer but there seems to be little understanding
conferences or corporate events. Not only do they as to their true meaning. The author defines what is
have the necessary event spaces and meeting meant by each and explains that the reason it is so
rooms, they also have good AV equipment. From difficult to maintain a focus on customer experience
being just niche players a few years ago, academic is because it is hard to join the pieces together. He
venues have raised their profile to compete with uses the analogy of a jigsaw puzzle to show how all
conventional events spaces. Nowadays they even the pieces – customer personas, brand proposition,
© Copyright 2018 CIM 2Cutting Edge: Our weekly analysis of marketing news
customer journeys, customer focused measurement, Law
experience improvement & design and customer Trademarks are changing
experience communications – fit together to produce EU trademark law is changing to include new types
a customer centric culture which “enables the of trademarks, such as motion marks, audiovisual
sustainable differentiation” of the business. marks and holograms. The requirement to represent
Cambridge Marketing Review, Issue 13 Winter 2017-18, all marks graphically, in words or drawings, is being
pp16-19 (Golding) phased out. In future any “sign” will be allowed
provided it distinguishes the goods and services
Sainsbury’s buys Nectar from those of others. The new requirements are
Sainsbury’s has acquired the UK Nectar loyalty being finalised by national IP offices in the EU in
business for £60m so that it can get “to know our preparation for full implementation of national
customers better than anyone else”. Sainsbury’s trademarks in January next year. Whether the UK
has become Nectar’s largest partner because of its diverges from the new rules will depend on what
breadth of coverage in groceries, clothing, financial type of relationship it eventually has with the EU.
services and energy. The move will give the retailer technology-law-blog.co.uk, 31 January 2018 (Teare)
access to consumer habits within its own business
as well as other operators, such as Vue Cinema, Ted Red Bull loses energy with colour trademark
Baker and eBay; this will allow it to refine its The continuing problem of protecting colour
products, pricing and marketing. trademarks within the EU has been highlighted by a
marketingweek.com, 1 February 2018 (Hammett); recent case involving Red Bull. It had originally
Financial Times, 2 February 2018, p17
registered two European trademarks for its blue and
silver colour combinations in 2002 and 2010, but
Prime membership boosts loyalty and sales with different descriptions. They both acquired
Amazon has achieved its best-ever results with net trademarks due to the colours “acquired
sales rising by 31% to $177.9 billion in 2017. Mintel distinctiveness through use”. However, all this
says that growth in a company this size is changed when Optimum Mark, a Polish company,
“exceptional” and is down to a number of factors. It applied to invalidate the registrations. The EU
highlights the fact that more new paid members General Court decided that the registrations were
joined Amazon Prime last year than at any other indeed invalid because the descriptions allowed for
time and argues that Prime is the “lifeblood of too many different arrangements of the two colours.
Amazon on the retail side”. Amazon knows that lexology.com, 31 January 2018 (Flynn and Bleahene);
attracting as many members as possible can help it lexology.com, 29 January 20178 (Tsai)
to achieve long-term loyalty.
mintel.com, 2 February 2018 Maasai to take ownership of their brand
Kenya’s Maasai tribe is taking steps to protect its
Direct marketing intellectual property using a legal approach. Isaac
Direct mail – digital integration? ole Tialolo, chairman of the Maasai Intellectual
Email continues to be one of the most important Property Initiative Trust, is busy educating his
marketing channels for B2C and B2B. On the other community about the value of the Maasai brand and
hand, direct mail is in decline, albeit a very slow has even hired lawyers to persuade international
one. The DMA reports that direct mail volumes have companies that they should recognise the Maasai
fallen by 1.9% a year since 2015 yet the household trademark. The Maasai have proved attractive to an
response rate to direct mail (5%) is still a lot higher estimated 1,000 companies, including Louis Vuitton,
than email, paid search or social media. Direct mail Calvin Klein and Jaguar Land Rover, who want to
has the potential to be used as an integrated use it to establish certain brand values. Royalties
element of a multi-channel marketing programme. could be worth millions of pounds but it could also
With today’s emphasis on multiple touchpoints, it is cost the Maasai a fortune to register their
important to develop marketing metrics which trademarks.
evaluate how channels reinforce each other. Two ft.com, 19 January 2018
questions to be considered are: whether a direct
mail strategy reinforces digital and vice versa; and Marketing
whether direct mail should be personalised alongside Marketing paradigms for sustainability
digital. Ultimately direct mail might evolve in the Adopting marketing behaviour that leads to
same way as bricks-and-mortar retailing, which sustainability requires a shift in marketing
reinvented itself in the digital space. management but this represents a huge challenge.
dmnews.com, 25 January 2018 (Davis) This is because of the relationship between
marketing thought and economic thought ‒
economic theories can help to shape marketing
models which in turn can have a positive or negative
impact on the ability of marketers to contribute to
© Copyright 2018 CIM 3Cutting Edge: Our weekly analysis of marketing news
sustainability. The authors identify three marketing The importance of pilot testing your research
paradigms that are important for sustainable Without user input, organisations risk spending huge
marketing management: “make-and-sell”, “sense- amounts on products and services that could fail.
and-respond” and “guide-and-co-create”. Stephanie Marsh, author of a new book entitled User
Social Business, Vol 7(3-3) 2017, pp359-390 (Hurth and Research, explains how you can choose the right
Whittlesea) method for your user research. She highlights the
importance of pilot testing the research before
Localising marketing strategies undertaking the real thing. Pilot testing is also useful
These days global brands are present in most for helping to decide which methodology will work
countries and locales which makes it even more best, particularly when first starting out.
important that messaging and content appeal to koganpage.com, 24 January 2018 (Marsh)
local tastes. Some 56.2% of consumers say that Book discounted via John Smith’s
having information in their own language is more
important than price while 95% of Chinese online Public relations
consumers want websites in their own language, yet Corporate crises and country reputation
just 1% of US online retailers have sites that are Organisational crises can damage the way in which
customised for China, according to the Globalisation the organisation’s home country is perceived in
and Localisation Association. The author looks at the addition to the reputation of the organisation itself.
issues, which include attracting locals into the For example, the recent VW scandal drew attention
marketing industry. to its home country of Germany which led
Gulf Marketing Review, Issue 275, December 2017- politicians, who were concerned with the country’s
January 2018, pp62-63 (Malouf) image, to make public responses. This study
investigates the impact of associations between a
SMEs ‒ marketing made simple country and a company as reported in the media, on
Kelvin Golding, a course director at CIM, provides an perceived associations between the two during an
extract from his forthcoming guide to marketing for organisational crisis. It assesses how differences in
small businesses. In this article he describes how perceived associations lead to different assessments
marketing and branding provide a platform through of crisis responsibility and reputational damage
which to succeed. He outlines the essentials of (organisation vs country).
marketing including techniques which will help to Journal of Communication Management, Vol 22(1) 2018,
enhance the business from the perspective of its pp96-112 (Buhmann et al)
intended audience. Topics covered include audience
insight, developing target personas, creating a value Sponsorship
proposition and the benefits of a strong brand. He Uefa – expanding sponsorship opportunities
also defines aspects of online marketing while Uefa, the football body that hosts the Champions
emphasising the need to blend traditional marketing League and European Championship, is looking at
with digital marketing to prevent the creation of silos new platforms and audiences to deliver value for its
within the organisation. sponsors which include Santander and Nissan for
Cambridge Marketing Review, Issue 13 Winter 2017-18, the 2018 to 2021 season. Peter Willems, who is
pp52-56 (Golding) responsible for marketing and sponsorship deals, is
looking at ways of reaching new audiences, such as
Market research using influencers. Here he discusses the sponsorship
From staff surveys to collective intelligence opportunities for Uefa.
Most large businesses conduct regular surveys to thedrum.com, 6 February 2018 (Lepitak)
help them understand how staff feel about the
organisation. Often such surveys are too Aldi turns to British winter Olympics icons
quantitative without enough qualitative or open- Aldi has launched a humorous ad campaign starring
ended questions to enable real insight. Michael Eddie “The Eagle” Edwards and Torvill and Dean in
Silverman, a psychologist and former head of the run up to the 2018 Winter Olympics. Aldi is
employee insight at Unilever, set up a company to Team GB’s official supermarket partner. The ad,
design the Crowdoscope, a tool that uses collective created by McCann UK, shows customers using
intelligence to gain better insight into employees. It snowy streets to achieve Olympic-style feats.
allows people to connect and build discussions prolificnorth.co.uk, 1 February 2018
through an open forum. A traditional staff survey,
on the other hand, lacks interaction between people
in terms of rating others’ suggestions and ideas.
Impact, Issue 20, January 2018, p77 (Bainbridge)
© Copyright 2018 CIM 4Cutting Edge: Our weekly analysis of marketing news
Boring company raises money for tunnelling
Agriculture, fishing Elon Musk hopes to build a network of tunnels
beneath US cities through his tunnelling business,
and forestry The Boring Company. Now he has raised $10m by
A weedbot for small gardens selling 20,000 flamethrowers, costing $500 each,
Franklin Robotics, a Massachusetts-based start-up, branded with the logo of the business. He has also
has developed the Roomba, a small, solar-powered offered “overpriced” Boring Company fire
robot which can travel around your garden cutting extinguisher! The Boring Company’s mission is to
down weeds with a “weed whacker”. At $300, the reduce traffic jams by constructing tunnels though
robots are being targeted at the home market but which cars can be carried. Mr Musk also wants to
the company’s founders hope to expand into develop faster, more effective tunnelling machines.
landscaping and farming by using larger robots. The Times, 3 February 2018, p46
Other, more expensive robotic mowers on the
market tend to cut down every plant on a pre-set
path, which makes them unsuitable for gardens.
Businesses and strategy
CEO activism
Bloomberg Businessweek, 29 January 2018, p26
A new trend is emerging in US politics whereby
some CEOs are taking a public stand on political
India’s dairy farmers hit by cow protection issues even though these may bear no relation to
Although India’s Supreme Court blocked the their company’s business. Apple’s Tim Cook and
Government’s attempted ban on the sale of cattle Salesforce’s Marc Benioff are among those
for slaughter, such is the veneration of cows in advocating causes such as LGBTQ rights,
India, that vigilantes have been attacking cattle immigration and the environment. The authors
traders. This is affecting India’s 5.3 trillion-rupee consider whether CEO activism can change public
dairy industry. It means that farmers can’t expand opinion and policies and look at the risks and
their herds because they have no way of disposing rewards involved. One finding is that consumers
of older animals. Prohibitions on cow slaughter cost tend to view CEO activism in terms of their own
farmers an estimated 250 billion rupees a year and political views which means that it can lead to both
result in 20m abandoned cows which is why the positive and negative responses. However,
number of cow sanctuaries in India is rising. Yet maintaining silence on a prominent issue in the age
Indians’ consumption of milk products has grown at of Twitter could be just as risky…
an average annual rate of 4.3% over the past two Harvard Business Review, Vol 96(1) 2018, pp78-89
decades. (Chatterji and Toffel)
Bloomberg Businessweek, 29 January 2018, pp38-39
Animal feeds – protecting the supply chain
Charities and NGOs
Racial diversity
A new report says that retailers should look at
A 2013 report from the Institute of Fundraising (IoF)
alternative animal feeds as a way of improving the
found that 87% of fundraisers identified themselves
sustainability of their meat and fish chains. The Feed
as white. Further research by the IoF last year
Behind Our Food report from the Protein Challenge
suggested that the picture hadn’t changed regarding
2040 coalition claims that traditional feed crops are
the numbers of black, Asian and minority ethnic
exacerbating climate change and threatening global
backgrounds in the charity sector. The sector has
food security. Almost half of the world’s agricultural
some catching up to do, according to Peter Lewis,
land and over a fifth of fish caught is being used to
IoF chief executive. One of the strategies being
produce animal feed.
considered is the introduction of bursaries and
The Grocer 3 February 2018, p45
scholarships to help people with BAME backgrounds
to get the necessary training.
Building industry Third Sector, January-February 2018, pp36-37
Professional roles set to soar
Demand for professional and managerial workers in Boosting online donations
the construction industry is expected to rise by 7.8% Social media provides an important channel for
and 5.6% respectively over the next five years, charities to raise awareness and attract followers but
according to the Construction Industry Training it is not always easy to convert likes and follows into
Board (CITB). It predicts that 150,000 construction giving. The author makes four suggestions for
jobs will be created, with site trades also in strong boosting online fundraising efforts which are to:
demand. Steve Radley, CITB policy director, believes create and sustain relationships with supporters;
that, by 2022, employment will be close to its 2008 stay authentic and true to the charity’s core
peak so the industry faces a huge recruitment and message; know when to follow up a communication;
training challenge. and to reduce your website’s bounce rates.
constructionenquirer.com, 5 February 2018 (Prior) charitydigitalnews.co.uk, 30 January 2018 (Green)
© Copyright 2018 CIM 5Cutting Edge: Our weekly analysis of marketing news
and housing, with a particular spike in debt
Durable consumer goods enquiries during January. The other major source of
worry is government policy – after the Brexit vote
Portmeirion – heritage continues to deliver there was a surge in searches about residency and
Phil Atherton, group sales & marketing director at employment rights.
Portmeirion Group, reflects on 2017 and the year Wired, January-February 2018, pp18-19
ahead. He points to the rising demand for brands
with heritage and the fact that this has enabled the
company to build relationships with consumers “on UK manufacturing trends
many levels”. He covers Portmeirion’s use of social UK manufacturing, which accounts for 10% of UK
media, the importance of online selling and online economic output (gross value added), is continuing
content and working with influencers and bloggers. to show signs of growth. In the three months to
He also touches on the role of research in November 2017 manufacturing output rose by 1.4%
developing a deeper understanding of customers compared with the previous three months, with 12
while enables the company to deliver relevant out of the 13 sub-sectors experiencing growth.
products and services. However, In January 2018 the Markit/CIPS UK
Manufacturing PMI fell to 55.3, down from
Tableware International, Vol 139(6) January-February
2018, pp50-51 November’s 51-month high of 58.2. Nevertheless
this is the seventh consecutive month in which the
index has been above 55.
Swiss watches grow sales one-handed…
parliament.uk, Manufacturing: Key Economic Indicators,
After a period of declining exports, Switzerland’s 1 February 2018
watchmakers enjoyed single-digit export growth last
year. Famous watchmakers are experiencing growth
but this is not necessarily among their best-known Eurozone factories see rising output
watches as buyers are increasingly demanding Factory orders, output and employment grew
individuality. One trend to have emerged is the one- strongly in all 19 Eurozone countries in January,
handed or single-hand watch. Brands such as according to the IHS Markit purchasing managers’
MeisterSinger, Van Cleef & Arpels and Reservoir, are index. Greece has had its best performance for a
all producing watches with just one hand. As this decade (55.2) while the Netherlands leads the pack
article says “it takes only one hand to inspire a with record growth (62.5). The growth is attributed
second look”, presumably as the wearer works out to the European Central Bank’s decision to reduce
what the time is! interest rates to zero and then to follow the US
Federal Reserve and Bank of England with
Bloomberg Businessweek, 29 February 2018, p73
quantitative easing.
The Guardian, 2 February 2018, p35
…while Swatch goes it alone
Last year Swatch announced better than expected
results as it took market share from its competitors Energy and utilities
while fending off the threat from smartwatches. Citizens Advice ‒ the cost of not switching
Battery watches do not seem to have suffered from Citizens Advice has warned that customers who do
the introduction of the smartwatch. Meanwhile not switch their energy, broadband or insurance
exports of more expensive watches are recovering providers could be paying out an extra £1,000 a
(See above). To date Swatch has rejected the idea year. It wants the Competition and Markets
of working with Silicon Valley as rival TAG Heuer has Authority (CMA) to investigate this “extra price of
done. Instead it wants to develop its own operating loyalty”. The charity has found that it is common for
system and is calling for better rules on “Swissness” long-term, loyal customers to be charged more than
but this could be a risky strategy. A separate FT new customers. Many of those who don’t switch are
article looks at how Tag Heuer saw Apple’s digital aged over 65 and on low incomes. The CMA says it
disruption as an opportunity. is already looking at the problem.
Financial Times, 31 January 2018, p12; Financial Times, 5 bbc.co.uk/news, 1 February 2018
February 2018, p24
Solar energy ‒ Perovskites
Economy Perovskites, a compound of calcium, titanium and
Citizens Advice – barometer of public anxiety oxygen, are being used in a new type of solar cell by
Citizens Advice attracts over 450,000 searches a Oxford Photovoltaics and Saule Technologies.
year on its website, and these provide a good Saule is allowing Skanska, a European construction
insight into the nature of public anxiety. The company, to incorporate perovskite sheets into
organisation, which provides free, confidential some of its components, such as facades, allowing
advice to the British public, began tracking search the walls of a building to generate energy. This will
entries three years ago. It found that the most lower the building’s carbon footprint and make it
common questions asked related to debt, benefits more self-sufficient. Perovskites could become a
© Copyright 2018 CIM 6Cutting Edge: Our weekly analysis of marketing news
serious challenge to silicon solar cells but there are intentions of customers more than the reputation
barriers to bringing them to market, such as cost and expertise of the primary bank. The bank’s
and having to compete with the incumbent solar- reputation, expertise and the competitor’s price are
power industry. also contributory factors.
The Economist, 3 February 2018, pp73-74 International Journal of Bank Marketing, Vol 36(1) 2018,
pp2-18 (Vyas et al)
Environment Link fee reduction will hit ATM operators
Stations might introduce drinking fountains
The announcement that banks are to reduce the
Network Rail is looking at introducing drinking fees that they pay cash machine operators has
fountains at main stations as a way of encouraging already reduced the value of some ATM companies,
people to carry refillable bottles. This was after such as NoteMachine and Cardtronics. Link, which
Thérèse Coffey, the Suffolk Coastal MP, wrote a represents banks and cash machine operators, has
letter to the company. Now she plans to write to decided to cut the fee paid by card issuers for cash
airport operators and motorway service stations. In withdrawals from 25p to 20p over four years. Cash
his November budget, Chancellor Philip Hammond machine operators are warning that this will create
promised to investigate how tax could be used to “ATM deserts”. Cardtronics, which is calling for an
reduce single-use plastics. Some coffee chains have enquiry, argues that the ATM network will no longer
recently introduced free water in their outlets (See be able to respond to changes in banking such as
Cutting Edge 31 January 2018) branch closure. However, Link is concerned that if
Financial Times, 2 February 2018, p3
doesn’t reduce fees, some card issuers will defect to
Visa or MasterCard.
Green tea? Financial Times, 1 February 2018, p18
The Co-op has promised to develop a plastic-free
teabag and will start testing out a new type of bag
on its 99 tea. Tea bags use small amounts of plastic FMCG
to seal them so that the tea doesn’t escape. The Co-
op has teamed up with Typhoo and Ahlstron- Beverages
Munksjö, a sustainable fibre solutions specialist to Chinese drinks giant – growing pains
develop a way of heat-sealing bags. Some premium The most valuable liquor company in the world is
tea producers already use plastic-free bags but made in Maotai, southwestern China. Here the
others are concerned that shoppers will not want to Kweichow Moutai Co. makes its grain alcohol, baijiu.
bear the additional cost. Demand for it has driven the company’s value to
The Grocer, 3 February 2018, p4 over $145 billion, greater than that of Diageo.
Bottles of baijiu sell for $150 (969 yuan). The
production method, which involves the drink being
Fashion buried in urns for at least four years, limits the
H&M – hasn’t kept an eye on the future amount the company can make. This makes it
Hennes & Mauritz, the Swedish fashion retailer has difficult for Yuan Renguo, the company’s chairman,
grown to become the second largest clothes vendor to grow the company…
in the world since being founded in 1947, but its Bloomberg Businessweek, 29 January 2018, p17
operating profit fell by 13% last year. Karl-Johan
Persson, chief executive, attributes the decline to
underperforming physical stores and the growth of Marketing effectiveness tool gives better RoI
online shopping. He admits that H&M had “made Diageo’s marketing effectiveness initiative has
some mistakes” but is now working to improve its allowed it to spend £60m more on marketing during
online operation and to integrate its physical and the first half of its 2018 financial year. It has
digital stores. focused on boosting productivity and efficiency
through initiatives such as a new digital interface
The Times, 1 February 2018, p45
called Catalyst which was developed with partners.
Catalyst is being used by Diageo’s 1,200 marketers
Financial services in 55 countries to plan and distribute marketing
Competitor marketing and cross-buying spend. This has led to improved rates of return on
It is important to understand the impact of investment and the ability to optimise marketing
competitors’ marketing activities in addition to one’s spend based on current data.
own. This paper investigates the role of competing marketingweek.com, 25 January 2018 (Tesseras)
banks’ marketing activities (price and product
variety) and the primary bank’s characteristics Aiming a jab at consumer goods firms
(reputation and expertise) in the cross-buying On 29 January JAB Holding, a Luxembourg
intentions of customers of banks in India. It reveals investment group, said it would acquire Dr Pepper
that competitors’ pricing influences cross-buying Snapple for $18.7 billion. JAB’s focus on consumer
© Copyright 2018 CIM 7Cutting Edge: Our weekly analysis of marketing news
goods, mainly coffee businesses in the US, suggests the River Wear in 2015. Birds Eye says it will amend
that it might be seeking to compete with the likes of the ad to remove references to cold water.
Nestlé and Starbucks. It has previously acquired The Times, 2 February 2018, p25
Krispy Kreme and Panera Bread, a bakery chain.
Last year JAB sold Jimmy Choo following a failed Household
foray into luxury goods. However, it is hard to judge Kimberley-Clark suffers from falling birth rate
what JAB has in mind owing to the secretive nature Kimberly-Clark, owner of well-known brands
of its German owners. including Kleenex tissues, Andrex and Huggies
The Economist, 3 February 2018, p62 nappies, is to reduce its global workforce by up to
13% (5,500 jobs). It will also close ten out of its 91
Coke to close two plants factories as it streamlines to save costs and compete
Coca-Cola is to lose 300 jobs and close two of its with Amazon’s paper products. The company has
main UK sites next year. The company says this will also suffered from falling birth-rates in countries
help to improve productivity and efficiency. It such as the US and South Korea, which has reduced
reported a 1.5% fall in revenue for the third quarter demand for nappies. As Thomas J Falk, chief
owing to a decline in some of its brands. The executive said, you can’t encourage people to buy
popularity of Coke Zero Sugar in the UK has failed to more nappies if they don’t have babies!
make up for the shortfall. Bloomberg Businessweek, 29 January 2018, p9;
The Grocer, 3 February 2018, p58 bbc.co.uk/news, 23 January 2018
Cosmetics and toiletries Tobacco
Body Shop – a natural makeover PHE wants e-cigs on prescription
Natura Cosméticos, a Brazilian company, has Public Health England (PHE) recommends that e-
unveiled a new corporate brand called Natura&Co, cigarettes should be available on prescription
which will bring together The Body Shop (which it because they have been successful in helping people
acquired last year) and Aesop of Australia. Roberto to give up smoking. A review of the evidence
Marques, the executive chairman who is overseeing published by PHE concludes that 20,000 people a
the brands, says it wants to “rejuvenate” the brand year are giving up cigarettes thanks to e-cigarettes.
and make sure it becomes “its own activist voice”. It also claims that they are 95% less harmful than
The Body Shop has been struggling due to smoking. PHE is calling for manufacturers to “get an
competition from other brands which offer products easier route” to obtaining a medical licence.
based on natural ingredients. Natura sources many bbc.co.uk/news, 6 February 2018; The Daily Telegraph, 6
February 2018, p10
of its raw materials from the Amazon by working
with farmers, scientists and indigenous people.
Financial Times, 5 February 2018, p15 Government and
Food public sector
What price shrinkflation? Matt Hancock MP ‒ new social network
With shrinkflation constantly in the news, the BBC Matt Hancock, the culture secretary, has launched a
decided to compare the size and price of 19 biscuit network called “Matt Hancock MP” which allows
and chocolate products over the past four years. It members to watch and comment on live streams,
found that 18 out of the 19 products have become post updates, make friends and have group chats.
smaller. Manufacturers usually blame this on the The app, which is available on Android and iOS, was
rising cost of ingredients or efforts to reduce the built by Disciple Media, a London start-up which
number of calories involved but insist that they are helps influencers to create apps for their followers.
still providing value for money. The BBC found that The Guardian, 2 February 2018, p21
most had raised their prices but that, rather
surprisingly, the price of four products had actually “Firefighter” suggestion leads to hate mail
gone down: Yorkie, Snickers, Toblerone and Jaffa Dany Cotton, the first female commissioner of the
Cakes. London Fire Brigade said she had received hate mail
bbc.co.uk/news, 1 February 2018 after she had launched a campaign suggesting that
the term “firemen” should be replaced by
Cold water poured on Birds Eye ad “firefighter”. She had also received abuse after
Birds Eye has withdrawn a TV ad which shows suggesting that Fireman Sam should be renamed
Captain Birds Eye and his grandson jumping off a “Firefighter Sam” as part of a campaign to attract
boat into cold water because it might encourage women into the fire brigade.
people to do the same thing. This was after it was The Guardian, 2 February 2018, p7
pointed out that a 14 year-old boy had suffered
cold-water shock and drowned after jumping into Health and pharmaceuticals
© Copyright 2018 CIM 8Cutting Edge: Our weekly analysis of marketing news
Getting the best out of data Microsoft head in clouds with hybrid offering
John Racine, director of marketing at Geriatric Microsoft has reported a 55% gross margin for its
Medical, a B2B medical supply distribution company, commercial cloud computing business, up from 48%
explains how the company has embraced advances in the previous year. Microsoft was a latecomer to
in analytics and data. It uses customers’ interests cloud computing – its rival, Amazon, took an early
and hobbies, such as travelling and shopping, to lead – but sales of its Azure cloud package rose by
generate content that meets the needs of both the 98% last year. Satya Nadella, chief executive,
customer and the company. This has allowed attributes this success to Microsoft’s “architectural
Geriatric Medical to generate higher levels of trust, advantage”. It benefits companies that are mixing
to reduce barriers to entry and create a brand that on-site and off-site operations in what he calls a
appeals to both existing and new customers. “hybrid cloud”. Either way this leaves the pair way
Journal of Brand Strategy, Vol 6(3|) 2017-18, pp210-220 out ahead of rivals, IBM and Google.
(Racine)
Financial Times, 2 February 2018, p12
Tech companies to transform health care
On 24 January Apple announced the next big update Leisure and tourism
for its iPhone, which will include something called CMA takes action on free online bets
“Health Records”. This will allow users to view, The Competition and Markets Authority (CMA) says
manage and share their medical records, using data that gambling companies must end their misleading
from hospitals and clinics in the US. Other big tech “free bet” offers which lure gamblers to gaming
companies, such as Amazon and Alphabet, are also websites with the promise of bonus funds and
progressing with medical services. So far the tech require players to put in their own money. The CMA
companies have not gone beyond wearable devices has ordered the changes to be implemented across
but in the future they want to provide real medical the sector or face regulatory action from the
services for individuals. To this end they are busy Gambling Commission. According to the CMA three
hiring medical expertise and buying up health-care operators have committed to updating their terms
start-ups. This article looks at how big tech is likely and conditions relating to bonus funds: Ladbrokes,
to change the face of health care but asks whether William Hill and PT Entertainment. It says that this
people will trust these companies enough to handle should set a standard of how terms and conditions
their most sensitive personal data. “must be fair to their customers”. The Gambling
The Economist, 3 February 2018, pp59-61 Commission says that it supports the CMA’s findings
and expects all gambling businesses to take
Nestlé ‒ misleading baby milk ads immediate action to comply or to remove their
According to a report from the Changing Markets promotions until they can.
Foundation, Nestlé has been using misleading telegraph.co.uk, 1 February 2018; The Times, 2 February
2018, p28; out-law.com, 2 February 2018
marketing for its baby milk by using claims such as
“closest to” and “inspired by” human breast milk in
several countries. This is despite a ban on Super Bowl – can big ad spend last?
advertising that equates baby milk products with Despite declining TV audiences, Sunday’s Super
breast milk by the World Health Organisation Bowl audience was expected to exceed 110m, with
(WHO). The study, ranging across 40 countries, NBC, the broadcaster, charging more than $5m for a
found that Nestlé often contradicted its own 30-second ad. In fact NBC expects to rake in $1.4
nutritional advice in its advertising. billion this month as a result of its coverage of Super
The Guardian, 2 February 2018, p24 Bowl and the Winter Olympics. Live events are
attractive to consumer brands and, although
PepsiCo, AB InBev, P&G and Kraft, are all trying to
IT and telecoms reduce their costs, it has not stopped them paying
Apple – biggest profit despite iPhone fall out for Super Bowl ads. The question is how long
Apple achieved its biggest ever quarterly profit ($20 can Super Bowl pull in the crowds in the face of
billion) during the last three months of 2017. This competition from Fifa and the Premier League.
was after the launch of the iPhone X (costing £999) Financial Times, 31 January 2018, p16
in November and the iPhone 8 in September. Apple
sold 77m iPhones in the quarter, although this
F1 axes grid girls
represented a 1% fall compared with the same
Formula One has announced that it is to abandon its
period last year. Sales of the iPad rose slightly but
so-called “grid girls” ‒ girls dressed in revealing
sales of Mac computers fell.
outfits ‒ at its events. Sean Bratches, MD of
The Daily Telegraph (Business), 2 February 2018, p1
commercial operations at F1, said that there were a
number of areas that needed “updating” and that
the use of grid girls “does not resonate with our
brand values”. This comes shortly after the
© Copyright 2018 CIM 9Cutting Edge: Our weekly analysis of marketing news
Professional Darts Corporation decided to end the offers some brief advice to brand-owners and
practice of using women to escort male players to suggests that the UK offers a good, basic level of
the stage following requests by TV companies. The help for IP infringement.
Women’s Sport Trust has called for all sports to end lexology.com, 31 January 2018 (Ferguson)
similar practices involving women.
The Times, 1 February 2018, p3; The Daily Telegraph, 1 Social media
February 2018, p9
Social media – role in brand-building role
Little research has been undertaken into the effect
Materials and mining of social networking sites on brands. This study
Untapped reserves in Pakistan proposes a model to evaluate the impact of users’
Pakistan has huge mineral wealth which remains participation in social media on brand awareness
largely unexploited. Samar Mubarakmand, who and brand attitude. Focusing on “brand like” pages
founded a coal-gasification company in Thar, one of on Facebook, the study reveals that users’
the largest coal reserves in the world, has just shut participation has a positive and direct impact on
it down. Environmentalists argue that the coal brand awareness. Brand attitude also benefits from
should not be mined while others say that Pakistan user participation but this relationship is affected by
shouldn’t focus on coal at the expense of using solar brand awareness.
energy, which is becoming cheaper. Engro, Journal of Marketing Communications, Vol 24(2) 2018,
pp146-168 (Langaro et al)
Pakistan’s largest private conglomerate, owns the
rights to one of Thar’s 13 blocks. It founded the
Sindh Engro Coal Mining Company, the country’s Facebook asked to ditch Messenger Kids app
biggest public-private partnership. Now Engro also Parents, teachers and other groups are asking
has its eye on Reko Diq, a huge copper mine in Facebook to withdraw its Messenger Kids app
Balochistan. because it could harm children’s mental health and
The Economist, 3 February 2018, pp63-64 development. The app, which was launched in the
US late last year, is aimed at users as young as six.
The Campaign for a Commercial-Free Childhood has
Media written a letter to Mark Zuckerberg in which it
argues that “raising children in our new digital age is
Books difficult enough”. Zuckerberg had recently pledged
New book strategy for WH Smith to sort out Facebook after last year’s scandals.
WH Smith is launching a new strategy for its books Financial Times, 31 January 2018, p16
to help tackle falling High Street revenues. This will
start with a trial that is taking place in its Reading Television
store which will also receive new signage celebrating Costa and Co-op on Coronation Street
WH Smith’s 225th anniversary. As well as ITV has formed a partnership with Costa Coffee and
refurbishing stores, the retailer plans to focus on the the Co-op allowing them to feature in Coronation
children’s market. It also recognises that most of its Street. Shopfronts, posters, bags and cups will be
customers are “light readers” and wants to become integrated into the show in what will be ITV’s
a place of “reassurance and recommendation”. One biggest ever product placement deal. The first ever
tactic will be to reduce the range and place the TV product placement in Britain took the form of a
books facing outwards so that people may be Nationwide cash machine in Coronation Street.
encouraged to pick them up. It also plans to “hero” Viewers do not always react favourably to product
big-brand authors, such as Lee Child and James placement, but Gemma Butler, associate director of
Patterson, by placing their books in protruding marketing at CIM, said that the new ITV deal could
shelves, an initiative that will be supported by make other placements more acceptable. She also
publishers. points out the increasing difficulties for advertisers
The Bookseller, 2 February 2018, pp4-5 (Campbell) as more people view programmes through catch-up.
The Guardian, 31 January 2018, p7
Internet
Domain removals reach record numbers
Video
The number of internet domain names removed
doubled to 16,632 from November 2016 to October YouTube takes steps to win back advertisers
2017, according to Nominet, the operator of UK- Google has been taking steps to clean up YouTube
based domain names. This was largely thanks to the in the wake of terrorist recruitment videos and
activities of The Police Intellectual Property Crime unsuitable material appearing on YouTube’s channel
Unit (PIPCU) which investigates the sale of for children. Google has promised to hire 10,000
counterfeit websites with the help of brand-owners. people to remove inappropriate content and improve
There has been a rise in the number of domain the rating system for advertisers who use its
identity thefts and other illegal activities. This article Premium Package. A second tier of video creators
© Copyright 2018 CIM 10Cutting Edge: Our weekly analysis of marketing news
will also be able to run ads but newcomers will have appeal mostly to an older, more affluent
to prove themselves. The creation of this so-called demographic who have reached “peak stuff”.
“walled garden” is a huge departure for YouTube The Times, 1 February 2018, p45
which has hitherto allowed any video creator to
make money on its site. This may threaten its ability
to attract and retain talented creators. However, it
Services
also emphasises YouTube’s need to win back London’s private clubs expand overseas
advertisers that have boycotted the site. Some private London clubs are looking to expand
Bloomberg Businessweek, 29 January 2018, pp21-22
overseas due to rising demand. Robin Birley,
founder of a private club in London with a waiting
list of 3,000 applicants, is hoping to open a venue in
Packaging Manhattan, while Groucho Club, another London
More recycled plastic to go into bottles club, is also looking for a New York location. This
The Government is considering forcing drinks expansion reflects the continued popularity of
companies to use a minimum level of recycled private members clubs that combine exclusivity with
plastic in bottles to encourage greater recycling. Its contemporary lifestyles, but that are somewhat
plans are due to be set out in a strategy paper this different from the traditional clubs of London’s Pall
year. The initiative follows China’s ban on imports of Mall. However, these clubs are experiencing
certain types of waste which it receives for recycling. competition from high-end “hybrid co-working
Evian and Coca-Cola have both made pledges to spaces” which combine working areas with
increase the amount of recycled material in bottles relaxation and leisure activities such as a gym.
but other companies use lower percentages of Bloomberg Businessweek, 29 January 2018, p72
recycled plastic because low oil prices make it more
cost effective to make the bottles. McDonald’s up on cheap burgers
The Times, 1 February 2018, p10 McDonald’s sales rose by 5.5% in the last quarter of
2017, surpassing forecasts and reversing the decline
Retailing that the company has been suffering due to falling
Luxury retailing customer numbers. A policy of lower prices and
Hind Abdul Hamied Seddiqi is chief marketing and redesigned restaurants has resulted in the
comms officer of Seddiqi, which retails luxury brands company’s first US growth since 2012. Discounting
in the UAE, including Swiss watches, jewellery and seems to be a trend across consumer industries as
accessories from international brands. In this big brands struggle with poor sales. Competition is
interview she explains how customer experience has also pushing down the cost of groceries which
become important for delivering the right products encourages people to eat at home rather than in
and services to customers. restaurants.
Financial Times, 31 January 2018, p14
Gulf Marketing Review, Issue 275, December 2017-
January 2018, pp40-43 (Seddiqi)
Transport and travel
Morrisons to cut 1,500 management jobs Bill to develop UK space industry
Morrisons, the supermarket, wants to cut costs and This House of Commons briefing paper gives an
put more staff on the shop floor. As part of this overview of the Space Industry Bill 2017-2019. It
strategy it will axe 1,500 middle-management jobs reveals that the Government wants the UK to be a
and create 1,700 in-store posts to improve customer leading player in the space industry now that the
service. Sainsbury’s and Tesco are taking similar cost of launching small satellites is coming down,
action as supermarkets respond to aggressive allowing greater use of satellite data which in turn
competition from discounters Lidl and Aldi, the rise benefits sectors and industries. This will also present
of online grocery shopping and the use of opportunities for commercial space travel and
convenience stores. tourism. The new Bill will create a regulatory
The Guardian, 2 February 2018, p35 framework for the expansion of commercial space
activities and the creation of a UK space port.
M&S to close up to 14 stores parliament.uk, 2 February 2018
Despite trying to reinvent itself over the last two
decades, M&S has failed to appeal to sufficient Google app predicts plane delays
numbers among the younger generation. Now it Google has launched a Flights app which uses
plans to close up to 14 stores including some that artificial intelligence to inform passengers of possible
have been on UK high streets for over 80 years. flight delays even before the airlines announce
M&S has suffered from the usual retail trends – too them. The forecasts, which are intended to “manage
much floor space and competition from online expectations”, are based on historical data to
shopping – but a major problem is that it tends to identify patterns based on routes, flight times,
© Copyright 2018 CIM 11Cutting Edge: Our weekly analysis of marketing news seasons and weather. Routes such as Keflavik in Iceland to Glasgow are known to be among the worst for delays. However, Mark Skilton of Warwick Business School says that the app is “all part of the attention economy” and that people are overloaded with information ‒ they may just decide to turn their Written by CIM’s Knowledge Services Team phones off! The Times, 2 February 2018, p23 © Copyright 2018 CIM Harley turns to electric as sales fall The views expressed in Cutting Edge are not Harley Davidson reports that shipments fell by 7.9% necessarily those of The Chartered Institute of in 2017 and it is forecasting a further fall this year. Marketing. Harley, which is failing to attract enough millennial consumers, is turning to the electric market to expand its customer base. It aims to launch its first electric motorcycle in 18 months’ time. The company will also close its Kansas plant with the loss of 400 jobs. Financial Times, 31 January 2018, p13 © Copyright 2018 CIM 12
Cutting Edge: Our weekly analysis of marketing news
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