Monday, February 23, 2015

How Starbuck's Became Successful Without Advertising

As a director of a small agency I get to meet with a lot of start-up companies looking to grow their business. One of the things I get a lot is how they want to grow and be successful without any advertising "just like Starbuck's". What blows my mind is that the people I meet are smart and capable, but they are under the assumption that "classic" advertising is no longer needed. They come to our studio with a product or idea seeking to grow. They are looking for the magic formula of getting customers without advertising or by relying on social media alone and hitting it big just like "Starbucks".
Starbuck's success combined with the rise of social media seems to feed the myth that entrepreneurs do not need marketing or advertising to succeed. With this in mind, I'd like to demystify the wonderful brand of Starbucks and the elements that made it successful without the need of investing in advertising:
1. Product 
Howard Schultz managed to transform coffee from a commodity to an upscale experience. He had the vision to create a "third place" for Americans between home and work. In this sense he was an innovator, he did not just sell premium coffee but he sold an experience. His offering completely changed the way Americans consumed coffee and made coffee experts out of his consumers.
2. Experiential Branding
The first component was Starbucks "live coffee" mantra. The company prided in offering the highest-quality coffee in the world and they controlled as much of the supply chain as possible overseeing the bean growers, custom-roasting and distribution.
The second component was service, or what they called "customer intimacy". This is where the barista called you by your name and custom-made your drink.
The third brand component was atmosphere, with comfortable sitting areas that encouraged lounging and an upscale yet inviting environment where people wanted to linger.
3. Core Values
The company culture fostered excellence, joy, innovation, respect, teamwork, social profit and integrity. Schultz believed that employee satisfaction led to customer satisfaction. Employees, called "partners" received health insurance, and stock options at entry level. Partner satisfaction was at 80%-90% range making Starbuck's one of the best places to work according to Fortune Magazine.
4. First Mover's Advantage Immediately after buying Starbuck's, Schultz began opening new stores. He was aggressive in his growth and the company rapidly took over other small-scale coffee chains. Soon after he took the company public, through this move he had a first mover's advantage and quickly locked-in the best locations and distribution channels. By 2002 the company had well over 5,000 stores and opening an average of three new store a day.
5. Marketing and Advertising
North American marketing primarily consisted of point-of-sale materials and local-store marketing and the investment was far less than the industry average. However, having stores located in prominent high-traffic locations doubled as a massive outdoor advertising campaign.

The success of Starbuck's has many components that are not so easy to replicate. The genius of Schultz was to have a vision and be aggressive in pursuing it. He had an idea that completely disrupted the market and he was wise to quickly lock-in distribution channels by investing the most money in getting the best locations for his stores. By displaying the beautiful logo and large iconic green and white signage in virtually every corner, he made sure to create brand recognition and recall. His strategy was simple, clean and smart. It is important to understand that there are many elements leading to Starbuck's success. The complexity of what made this brand successful without any advertising can't be oversimplified, and entrepreneurs looking to follow Schultz steps should carefully evaluate their strategy. In a competitive market the need for marketing and advertising should not be overlooked without deep analysis. What are your thoughts, do you think a company can make it by advertising through social media alone?

Contact SEED Branding Studio to get a free consultation305.454.4106 or visit SEED Branding Studio .

Wednesday, February 18, 2015

Revealed: Chinese New Year ads that bring prosperity

Companies that conduct or want to conduct business in a global arena can't miss the opportunity to be present during the Chinese New Year. This is a critical period for marketers across Asia and marketers are starting to take notice. As reported by 9 to 5 Mac, for the first time Apple will be releasing an ad specifically made for the Chinese New Year similar to it's Christmas "The Song Ad"

A report by TNS Global presented insights on what resonates with the Chinese audience during this Critical period for advertisers. Here we share the types of advertising that create short-term involvement and build long-term brand memories during the Chinese New Year: 

1. Don't settle for short-term impact
Focus on delivering your brand's point of difference and making long-term connections. Brands that focus on momentary fun without communicating what makes their brand great tend to be quickly forgotten. 

2. Be relevant to your audience and to the occasion
Address themes and stir emotions that are relevant to the audience of the Chinese New Year. It is not enough to connect emotionally, the connections must be relevant to the festival itself.

3. Don't be afraid to be yourself
Stick to your core values. There is no need to change the brand in order to make it "fit" into the Chinese New Year. Brands should maintain their core values and build meaningful connections from there. As an example Ferrero Rocher did very good by creating a high-end ad with family reunion appeal.

4. Be novel but not irreverent
When creating novelty don't go against the themes of the festival or those celebrating it. The Seaweed brand Gurume, created an ad where people decorated themselves with seaweed, it failed to connect with audiences because it lacked relevance to the festival. 

5. Use symbols but don't rely on them
Focus on values not on symbols. The symbols of the God of prosperity made a couple of cameos on various ads. Using symbols is no substitute for putting the values of Chinese New Year at the heart of the campaign. 

Marketers looking to gain brand equity in Asia can't afford to ignore this event. By sticking to their core values and tailoring a campaign around the themes of  "reunion", "family" or "welcome" brands should be able to connect emotionally and increase their recognition and recall. 

Like what you are reading? Visit SEED Branding Studio 
or contact us at 305.454.4106 

Valentine's Marketing Statistics

Marketers love, love, love statistics. They drive decisions for many successful campaigns and form the basis of effective strategies. When you combine Valentine's with great statistics you have the perfect gift for your marketing geek. To continue with the love celebration we share some interesting statistics on this $18.6 billion event:

- 62% of all consumers celebrate Valentine's Day (Statistic Brain)
- The top gifts, in order from most popular are candy, flowers, jewelry, greeting cards, an evening out, clothes and gift cards. According to Retail Industry Foundation
- Amount spent, per person, for Valentine's Day in the U.S: $126 (Econsultancy)
- Amount spent, per person, for Valentine's Day in Asia: $274 (Econsultancy)
- Amount spent on pets annually in the U.S.: $367 million (Econsultancy)
- The U.S. is behind Spain, France, the U.K., Canada, Brazil and Australia in per-person spending (Econsultancy)
- 53 percent of women say they would end a relationship if they didn't receive anything for Valentine's (Econsultancy)
- 15 percent of women send themselves flowers on Valentine's (Econsultancy)
- It is not the most popular holiday for greeting cards according to the Greeting Card Association.
- Men account for 73 percent of Valentine's Day flower sales (Woman's Day)

Did any of the stats surprise you?

Like what you are reading? Follow SEED Branding Studio for information and advice in Marketing and Advertising. 

Friday, February 6, 2015

How US Hispanics Shop Online

A report by Adroit Digital reported insights on how Hispanics shop online and respond to web advertising. The Hispanic population in the US tends to be much younger than the rest of the population in general, this means Hispanic earning power stands to increase exponentially by 2024. To be precise the largest chunk of the US Hispanic population can be categorized as Millennials or those in the 15-to-34-year old bracket. 

When it comes to Internet use based on nativity the Pew Hispanic Center reports that Hispanics 16 years of age and older born in the US are much more likely to use the Internet than foreign-born Hispanics, 85% versus 51%. With an increase of 62% in the last 15 years, the Hispanic demographic is the largest contributor to population growth in the US. To put it into perspective in 2013 the entire US population grew by 0.7% while the US Hispanic population grew by over 2% to bring the total number of US Hispanics to 50.5 million. According to Adroit Digital, Hispanics will represent one-third of Americans by 2050. In order for any brand to be successful, they can not afford to ignore this growing market.

The Study revealed how to Convert Hispanics into Shoppers
The report revealed the top offerings that entice US Hispanics to make a purchase. In order to incentivize this demographic marketers should focus on the offers that pay off the most:

- 81% respond to price discounts
- 74% are enticed by free shipping
- 35% are lured by loyalty points
- 34% act on freebies
- 17% respond to personalized messages

The Study Also Showed Hispanic's Behaviors When Shopping Online:

- 72% spend more time shopping on laptops or PCs than smartphones or tablets.
- 78% ages 45 and over opt to shop on PCs, making this market the heaviest users.
- 73% of females and 70% of males are slightly more likely to purchase on PCs
- 16% purchase predominantly on smartphones.
- 58% use a retailer's website instead of an app for mobile shopping.

Adroit Digital Provided Insights on Media to Motivate Purchase

The found that ad media makes little difference, US Hispanic shoppers tend to make decisions equally among different media outlets. A little over 35% are motivated by TV, online and social media. While a little over 40% respond to mobile, online video, and magazine ads.

Marketers should understand the unique ways in which US Hispanics behave online, in order to earn their spot in this growing and important demographic.

Learn more about how to reach the US Hispanic shopper. Contact SEED Branding Studio today at 305.454.4106 or visit

Monday, February 2, 2015

Super Bowl XLIX Best and Worst Ads

It is advertising's biggest game of the year. Commercials featuring proud girls and sad puppies where the biggest hits with consumers according to the data coming in this morning. Our review is based on social media mentions and analytics.

As reported by Tech Crunch, P&G's "Like a Girl" ad for Always, which showcases empowering and inspirational messages was the big winner sparking the most buzz on social media outlets. A report by Networked Insights, supported the impact of "Like a Girl" and found that the ad generated emotional response, with consumers feeling joy, happiness, and trust while the ad aired.

Always #LikeAGirl - Super Bowl XLIX

Another ad that resonated with viewers was Budweiser's "Lost Dog", which tells the story of a lost puppy separated from his human owner and friends. Making the brand a big winner.

Budweiser "Lost Dog" - Super Bowl XLIX

Other ads that generated positive responses and social media chatter include: Loctite Super Glue's fanny pack-taculrar "Dance", Avocados from Mexico "#FirstDraftEver", Dove's daddy-focused ""RealStrength", Esurance's "Say My Name", and Snickers' "The Brady Bunch".

And for the big losers. The least impact was created by ads from carmakers including Mercedes-Benz, Lexus and Toyota. However, the biggest loser was Nationwide's "Make Safe Happen" which features a boy talking about his death.

Amazingly this ad violated the basic rules of advertising by focusing on the negative aspect of the message. The spot generated lots of social media buzz, but the reaction was mostly negative. As Networked Insights reported: "The ad really angered consumers with the implication that their kids might die in a horrific accident." Not good.

Nationwide "Make Safe Happen" - Super Bowl XLIX

Take full advantage of your brand's messaging through the impact of advertising. Contact SEED Branding Studio today at 305.454.4106, or visit SEED Branding Studio.