Everyone who is ever been to a supermarket will have seen the famous potato chips brand Lay’s. The brand is marketed as a division of Frito-Lay, who is a company owned by PepsiCo.
Lay’s sells different kind of chips in every country depending on their culture and food taste. They also try to make it ‘healthier’ by baking it in sunseed oil and using less salt, because nowadays a lot of consumers are paying attention what they consume.
Lay’s also try to involve to consumer in the process of creating. Last year they introduce a competition between consumers to create a new flavour for Lay’s potato chips. The winner gets a price of 25.000 Euro and 1% of the sales turnover. The winner of 2011 was the ‘patatje joppie’ in the Netherlands. The battle for a new taste and winning the big price started again this year.
The battle is divided in different rounds. First of all, you need to think of a new unique taste with a catchy name and convince the jury why your taste would sell the best. Secondly all created forms of taste are going to battle with eachother and the people in Holland are going to choose the taste which they like. In the thirth round, will the jury pick the best 8 tastes and after that, the all the people can vote for there 2 finalist. The last step is choosing the winner!
It sounds maybe complicated, but what they really trying to do is to find the taste that will sell the best according the people in the Netherlands.
Last monday we had a very interesting guest-lecture from Irene van den Brink, from VODW. In her presentation she showed us how VODW creates ideas for companies or specific products. It seems to me very difficult to start with such a new idea. Because, how can you find out what a customer wants?
Irene van den Brink explains to us how difficult this can be, but more important in which way you can try it. It can be complex, especially for marketeers I think, because we cannot switch of our knowledge. We cannot see ourselves as representative consumers any more. That makes it more difficult to imagine what costumers think of advertisements for instance. And this is a key factor for successful marketing for a company. Especially because the value of a product is perceived and determined by the consumer, not by the firm (slides session 10). Of course we know how to use marketing research, but will this bring a representative outcome in each case? Or is this almost impossible, since customers are more and more interested in transparent companies and increase their knowledge about marketing.
In this way we also talked about how Apple, especially Steve Jobs, uses marketing. Are they making special and good products, without research and sell it directly to the customers? Or do they know exactly what customers want by extensive marketing research? In any case, a company like Apple will have to be creative, innovative and different!
Steve Jobs about what customers want (is it megabytes, megahertz, or is it expression):
Steve Jobs about what customers want
A funny ad about what customers want:
What customers want
It was some years ago, but still people are talking about it. The band Radiohead decided to use the online channel in their own advantage, instead of considering it their enemy in the form of illegal online downloading. Dimitris used this example in class, illustrating how business (or bands) can use the new channels to their benefit. I was curious what the end result of this experiment was. The following article answers that question:
Radiohead’s “In Rainbows” Experiment was a Success
CNN/Fortune hated the idea so much that they listed it in their 101 Dumbest Moments in Business article. In 2007, Radiohead made their album In Rainbows available for download before physical copies were available in stores. You could choose to simply download the album or voluntary pay an amount of your choice. Radiohead didn’t reveal any statistics related to the download; the known data comes from comScore, who reported that:
- 62% of the downloaders chose to pay nothing
- The remaining 38% voluntarily paid an average of $6 for the album
Based on these numbers and Radiohead’s silence, the CNN/Fortune article inlcuded the sneering line “Can’t wait for the follow-up album, In Debt.”
It turns out that Radiohead’s experiment was actually a success. Techdirt points to a report onMusic Ally that says that Radiohead’s publisher Warner Chappell will tell all about the In Rainbows experiment at the “You are in Control” music conference now taking place in Iceland.
The “success” of which they speak isn’t the hand-wavy “artistic”, “critical” or “proving a point” kind, but the sort of success that bottom-line thinkers like: In Rainbows made more money beforethe the album was physically released than the total sales for the previous album, Hail to the Thief. Even when preceded by a free or “pay what you can” downloads, In Rainbows has still sold 1.75 million copies of the CD to date, and it’s still in the top 200 selling CDs in the U.S. and U.K..
The Music Ally article has more details and includes these statistics:
- After being made available online for free for 3 months, In Rainbows hit number one on both U.S. and U.K. charts.
- 30,000 copies were sold on iTunes in its first week.
- 1.75 million CDs of the album have been sold since its release.
- 100,000 box sets have been sold through Radiohead’s sales and merchandising site,W.A.S.T.E..
- 17 million plays on last.fm.
- 1.2 million fans will see their tour.
- The digital income from the experiment made a material difference to Warner Chappell Music’s UK digital revenue this year.