The 411 on GROUPON: Part I

Most of us are familiar with Groupon, many of us have used it, and quite a few of us are even subscribed to receive the “Groupon of The Day.”  So how does it work?  Who benefits from it?

According to the Groupon their website, the site strives to “[make you] feel comfortable venturing out and trying something new-just because it’s featured on Groupon.”  The company partners with businesses to bring about great deals on both services and products.  

Of course consumers benefit through the purchase of a great Groupon (half off a manicure, no way!), but do the local businesses who offer them?  Well Groupon obviously takes a cut of the proceeds made from each sale.  No websites that I ventured gave any actual figures, however http://www.grouponworks.com said that Groupon only makes money if the advertised business makes money.  Therefore no out of pocket payment is required to be featured on the website. 

In addition, http://www.grouponworks.com listed four main reasons for any business to try Groupon:

1. Valuable new customers, guaranteed

2. Efficient, measurable marketing

3. Become the talk of the town

4. Big exposure, bigger word of mouth

Apparently, there isn’t much actual research on Groupon and how it benefits and/or hurts businesses both large and small.  I will do my digging, and hopefully within the next month have new information on the Groupon premise.  Stay tuned!

Product Placement is Key

In ADPR 1400, a group of classmates and I did a brand analysis on Levi Jeans.  One of the main concerns that we had for the label was the physical placement in stores.  For men, shopping is an in and out event.   They don’t go to the store or mall to roam around, trying on lots of different items and browsing at different styles.  No, they grab what they like and checkout- often not even trying anything on.

Therefore, it is critical for a brand- such as Levi- to make sure that their men’s product is front and center.  That their jeans are the first ones the men see, that their jeans are the ones they pick up and walk to the register with.

On a recent trip to Kohl’s Department Store, the physical approach that Levi jeans took was very different in the males section as compared to the females.  In the men’s section, there was an immaculate display that screamed “Levi’s!” complete with jeans both hanging up and lying flat.  Many different washes and styles existed on the display so that shoppers could walk right to the jeans section and see their beloved Levi’s.  However in the junior’s section, a Levi’s display was practically nonexistent.  The jeans simply hung on a rack mixed in with all the other brands. 

Men's Levi's Display in Kohl's Department Store

Yes, women are more prone to looking thoroughly through the department to find their perfect fit, style, and brand.   But is it beneficial to just rely on that? I firmly believe that if Levi didn’t take such a laid back approach to selling jeans to the female audience, many more women would actually own them.   Men do make up a much larger share of the product audience, and it is extremely evident why that is by simply taking a look at the in-store product displays. 

The More You Know: Economics & Marketing

During an offseason for any company, revenues can decrease dramatically.  Yes, the recession is somewhat to blame for the bottom line being low but there’s a lot more that has to do with it too.

How many people in Wisconsin can say they plan on buying a pool for their backyard in January?  How many people want a Christmas tree in the middle of summer?  The answer: very few.  Therefore these businesses must be well informed of the industry they are getting themselves into.  A Halloween store must know that almost no one is going to buy a costume any other month besides October when they decide to get into the costume selling business.

What happens very often in the off season is what we call a temporary shutdown.  In economics you learn that sometimes it is better for a certain amount of time to just incur the fixed costs, such as rent, and stop production all together (and stop all variable costs).  Instead of remaining open and paying the heating, water, and electricity costs, some businesses will close for a fixed amount of time to avoid losing more money than if they were to stay open and not sell anything. 

An example of this is a store that I came across in Bay View Wisconsin.  Babes ice cream shop had a sign on the door saying “Frozen for the Season. Reopening February 23.”  Some walking by may think that this meant Babes was going out of business, however the principals of economics tells us that this instead was just the smart thing to do.  The ice cream shop owners know that the winter months are not a popular time for cold treats, and therefore closed their store until the demand for their product increases. 

Learning to make sound business choices and understanding decisions that other businesses make is a key part in marketing.  Since supply and demand create the market, we must learn to take advantage of all they have to offer.  And so, we learn that economics is the basis for everything in the advertising and marketing industries.

She's Back!

Most of us are familiar with the infamous Crazy Target Lady. She only comes out at this time of the year, during the two month span of November and December. She's the lady who does warm ups pushing shopping carts in stilettos and a red jumpsuit. She's the one who makes her own glitter and is spotting crying hysterically reading the newspaper sale ads. She's the face of the Target-after Thanksgiving Sale and if you don't know who this is, you are clearly missing out.

The woman behind the glitz is Maria Bamford, a comedian and actress from Minnesota.  Target first introduced this over the top character during the holiday season of 2009, and the campaign seems to be a pretty big hit.  This is the first year where stores have begun to open up as early as 10 pm at night (Wal-Mart) instead of the usual 4 or 5am. The Crazy Target Lady has been a successful way to showcase the excitement of post-Thanksgiving holiday shopping and get even more customers involved in the now late night shopping. 

As for me, seeing the yearly holiday commercials has become some sort of a staple in the shopping season.  Although most shoppers are not as excited as she, the Crazy Target Lady does embrace the spirit of the Christmas season.  It is not all about the material things… well maybe just a little bit.

The Power of a Catchy Jingle

While lying on the couch the other night, a familiar song rung through the house. It wasn't one that would be on the Billboard Top 100 list; rather it was from a commercial that I had seen many times before. The song aired during a commercial on AM radio for Lowe's, the home improvement store. Before the narrator even spoke, I knew what it was for and immediately envisioned the commercial of a happy lady dancing around her apartment, sequentially showing her throughout her life.

The power of a simple song brought me to thinking about the company and enabled me to relate to a radio advertisement without words. Bravo, Lowe's!

Anything-But-Traditional Advertising

Traditional advertising has gone as far as billboards, television, radio, and most recently, the internet. The new race however, is to think outside of the box. More and more companies are marketing their product through unusual campaigns that are anything but conventional.

The most recent that I had noticed was in my menu at The Cheesecake Factory. When given the menu, I noticed how big and heavy it was... My first response, "They have a TON of food here!" proved to be not completely accurate. 

The Cheesecake Factory has become part of a growing number of businesses renting out space for advertising.  Their menu, held together by a thick spiral, contained three different advertisements throughout its pages of pastas, entrées, soups, and desserts.  The ads varied in their message, but remained on the same placement throughout the menus. Guests would theoretically come in, sit down, and be inclined to buy a certain product from an outside source while deciding on their food order. 

Whether or not this tactic has been profiable, I am unsure.  I do know however, that our table found the strange placement of ads somewhat comical.  We all had been out running around (like most other guests who had come from the mall) and just wanted something to eat; Not perfume. 

I found the advertisements to be a waste of time for the companies who purchased the space and thought they concurrently helped The Cheesecake Factory lose a bit of its class.

Breast Cancer Awareness Month

As you probably already know, October represents not only Halloween but the quest to find a cure for breast cancer.  Years ago the initiative was not nearly as great, but today everyone does their part- even the unexpected businesses.   It seems that the pink ribbon has become a way to sell a product, after all sometimes only 1% (or less) can go to support the cause. 

The large popcorn bucket, the biggest
seller at the movie theatre, has gone PINK!

Marcus theatres embraced pink large popcorn containers for the month with some unknown percentage going toward finding a cure.

Kohl's has also been known to be a major supporter of the cause.  They play a huge role in the Susan G. Komen Race for a Cure each year, and have several product lines dedicated to raising money.  This year, they even went as far as changing the color of their sign pink.  A statue in the entranceway explains the initiative.

And now for the quirky, a billboard posted along the Marquette Interchange says that Silk Exotic, a Milwaukee Gentlemans club, will donate 10% of their cover charge during the month of October to breast cancer research.  The irony in the billboard is  is proof enough that everyone is trying to get in on the action!

It seems that the breast cancer initiative has turned into a giant FOR profit business.  Companies are stamping a pink ribbon onto a product and in turn donating only a few pennies off the dollar.  While more and more money is being raised, so too are the questions as to the ethical nature in which the money is being raked in.  How much does a consumer think they are donating when they purchase a product or service? 

And if they knew, would they still buy it?